EXHIBIT 10.37
WHEN RECORDED, RETURN TO:
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (this "Mortgage")
is made as of the 29th day of January, 1998, between SHOWBOAT
LAND, LLC, a Nevada limited liability company ("Mortgagor") whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, and COLUMN FINANCIAL, INC., a Delaware corporation
("Mortgagee"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND
NO/100 DOLLARS ($10.00), AND OTHER VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED,
MORTGAGOR HEREBY IRREVOCABLY MORTGAGES, GRANTS, BARGAINS, SELLS,
CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND ASSIGNS, AND GRANTS A
SECURITY INTEREST, TO MORTGAGEE, ITS SUCCESSORS AND ASSIGNS, with
power of sale, in all of Mortgagor's estate, right, title and
interest in, to and under any and all of the following described
property, whether now owned or hereafter acquired (collectively,
the "Property"):
(A) All that certain real property situated in the County
of Atlantic, State of New Jersey, more particularly described on
Exhibit A attached hereto and incorporated herein by this
reference (the "Real Estate"), together with all of the
easements, rights, privileges, franchises, tenements,
hereditaments and appurtenances now or hereafter thereunto
belonging or in any way appertaining and all of the estate,
right, title, interest, claim and demand whatsoever of Mortgagor
therein or thereto, either at law or in equity, in possession or
in expectancy, now or hereafter acquired;
(B) All structures, buildings and improvements of every
kind and description now or at any time hereafter located or
placed on the Real Estate (the "Improvements");
(C) All furniture, furnishings, fixtures, goods, equipment,
inventory or personal property owned by Mortgagor and now or
hereafter located on, attached to or used in and about thc
Improvements, including, but not limited to, all machines,
engines, boilers, dynamos, elevators, stokers, tanks, cabinets,
awnings, screens, shades, blinds, carpets, draperies, lawn
mowers, and all appliances, plumbing, heating, air conditioning,
lighting, ventilating, refrigerating, disposals and incinerating
equipment, and all fixtures and appurtenances thereto, and such
other goods and chattels and personal property owned by Mortgagor
as are now or hereafter used or furnished in operating the
Improvements, or the activities conducted therein, and all
building materials and equipment hereafter situated on or about
the Real Estate or Improvements, and all
warranties and guaranties relating thereto, and all additions
thereto and substitutions and replacements therefor (exclusive of
any of the foregoing owned or leased by tenants of space in the
Improvements);
(D) All easements, rights-of-way, strips and gores of land,
vaults, streets, ways, alleys, passages, sewer rights, and other
emblements now or hereafter located on the Real Estate or under
or above the same or any part or parcel thereof, and all estates,
rights, titles, interests, tenements, hereditaments and
appurtenances, reversions and remainders whatsoever, in any way
belonging, relating or appertaining to the Property or any part
thereof, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by
Mortgagor;
(E) All water, ditches, ▇▇▇▇▇, reservoirs and drains and
all water, ditch, well, reservoir and drainage rights which are
appurtenant to, located on, under or above or used in connection
with the Real Estate or the Improvements, or any part thereof,
whether now existing or hereafter created or acquired;
(F) All minerals, crops, timber, trees, shrubs, flowers and
landscaping features now or hereafter located on, under or above
the Real Estate, and all riparian, littoral, mineral, oil, and
gas rights now or hereafter acquired and relating to all or any
part of the Real Estate;
(G) All cash funds, deposit accounts and other rights and
evidence of rights to cash, now or hereafter created or held by
Mortgagee pursuant to this Mortgage or any other of the Loan
Documents (as hereinafter defined) including, without limitation,
all funds now or hereafter on deposit in the Impound Account (as
hereafter defined);
(H) All leases, licenses, concessions and occupancy
agreements of the Real Estate or the Improvements now or
hereafter entered into and all rents, royalties, issues, profits,
revenue, income and other benefits (collectively, the "Rents and
Profits") of the Real Estate or the Improvements, now or
hereafter arising from the use or enjoyment of all or any portion
thereof or from any lease, license, concession, occupancy
agreement or other agreement pertaining thereto or arising from
any of the Contracts (as hereinafter defined) or any of the
General Intangibles (as hereinafter defined) and all cash or
securities deposited to secure performance by the tenants.
lessees or licensees, as applicable, of their obligations under
any such leases, licenses, concessions or occupancy agreements,
whether said cash or securities are to be held until the
expiration of the terms of said leases, licenses, concessions or
occupancy agreements or applied to one or more of the
installments of rent coming due prior to the expiration of said
terms, subject to, however, the provisions contained in Section
1.11 hereinbelow;
(I) All contracts and agreements now or hereafter entered
into covering any part of the Real Estate or the Improvements
(collectively, the "Contracts") and all revenue, income and other
benefits thereof, including, without limitation, management
agreements, service contracts, maintenance contracts, equipment
leases, personal property, leases and any contracts or documents
relating to construction on any part of the Real Estate or the
Improvements (including plans, drawings, surveys, tests, reports,
bonds and governmental approvals) or to the management or
operation of any part of the Real Estate or the Improvements;
(J) All present and future monetary deposits given to any
public or private utility with respect to utility services
furnished to any part of the Real Estate or the Improvements;
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(K) All present and future funds, accounts, instruments,
accounts receivable, documents, causes of action, claims, general
intangibles (including without limitation, trademarks, trade
names, servicemarks and symbols now or hereafter used in
connection with any part of the Real Estate or the Improvements,
all names by which the Real Estate or the Improvements may be
operated or known, all rights to carry on business under such
names, and all rights, interest and privileges which Mortgagor
has or may have as developer or declarant under any covenants,
restrictions or declarations now or hereafter relating to the
Real Estate or the Improvements) and all notes or chattel paper
now or hereafter arising from or by virtue of any transactions
related to the Real Estate or the Improvements (collectively, the
"General Intangibles");
(L) All water taps, sewer taps, certificates of occupancy,
permits, licenses, franchises, certificates, consents, approvals
and other rights and privileges now or hereafter obtained in
connection with the Real Estate or the Improvements and all
present and future warranties and guaranties relating to the
Improvements or to any equipment, fixtures, furniture,
furnishings, personal property or components of any of the
foregoing now or hereafter located or installed on the Real
Estate or the Improvements;
(M) All building materials, supplies and equipment now or
hereafter placed on the Real Estate or in the Improvements by or
on behalf of Mortgagor and all architectural renderings, models,
drawings, plans, specifications, studies and data now or
hereafter relating to the Real Estate or the Improvements and
owned by Mortgagor;
(N) All right, title and interest of Mortgagor in any
insurance policies or binders now or hereafter relating to the
Property including any unearned premiums thereon;
(O) All proceeds, products, substitutions and accessions
(including claims and demands therefor) of the conversion,
voluntary or involuntary, of any of the foregoing into cash or
liquidated claims, including, without limitation, proceeds of
insurance and condemnation awards paid or payable to Mortgagor;
and
(P) All other or greater rights and interests of every
nature in the Real Estate or the Improvements and in the
possession or use thereof and income therefrom, whether now owned
or hereafter acquired by Mortgagor.
FOR THE PURPOSE OF SECURING:
(1) The debt evidenced by that certain Promissory Note
(such Note, together with any and all renewals, modifications,
consolidations and extensions thereof, is hereinafter referred to
as the "Note") of even date with this Mortgage, made by Mortgagor
to the order of Mortgagee in the principal face amount of ONE
HUNDRED MILLION AND NO/100 ($100,000,000.00), together with
interest as therein provided;
(2) The full and prompt payment and performance of all of
the provisions, agreements, covenants and obligations herein
contained and contained in any other agreements, documents or
instruments now or hereafter evidencing, securing or otherwise
relating to the indebtedness evidenced by the Note (the Note,
this Mortgage, and such other agreements, documents and
instruments, together with any and all renewals, amendments,
extensions and modifications thereof, are hereinafter
collectively referred to as the "Loan Documents") and the payment
of all other sums therein covenanted to be paid; and
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(3) Any and all additional advances made by Mortgagee to
protect or preserve the Property or the lien or security interest
created hereby on the Property, or for taxes, assessments or
insurance premiums as hereinafter provided or for performance of
any of Mortgagor's obligations hereunder or under the other Loan
Documents or for any other purpose provided herein or in the
other Loan Documents (whether or not the original Mortgagor
remains the owner of the Property at the time of such advances);
and
(4) Any and all other indebtedness now owing or which may
hereafter be owing by Mortgagor to Mortgagee, however and
whenever incurred or evidenced, whether express or implied,
direct or indirect, absolute or contingent, or due or to become
due, and all renewals, modifications, consolidations,
replacements and extensions thereof.
(All of the sums referred to in Paragraphs (1) through (4) above
are herein sometimes referred to as the "secured indebtedness" or
the "indebtedness secured hereby").
TO HAVE AND TO HOLD the Property unto Mortgagee, its
successors and assigns forever, for the purposes and uses herein
set forth.
PROVIDED, HOWEVER, that if the principal and interest
and all other sums due or to become due under the Note,
including, without limitation, any prepayment fees required
pursuant to the terms of the Note, shall have been paid at the
time and in the manner stipulated therein and all other sums
payable hereunder and all other indebtedness secured hereby shall
have been paid and all other covenants contained in the Loan
Documents shall have been performed, then, in such case, this
Mortgage shall be satisfied and the estate, right, title and
interest of Mortgagee in the Property shall cease, and upon
payment to Mortgagee of all costs and expenses incurred for the
preparation of the release hereinafter referenced and all
recording costs if allowed by law, Mortgagee shall release this
Mortgage and the lien hereof by proper instrument.
AND, PROVIDED, FURTHER, that this Mortgage and the
security interests created hereby shall be subject and
subordinate to the Ground Lease (as hereinafter defined) and the
rights of the ground lessee thereunder.
ARTICLE 1.
COVENANTS OF MORTGAGOR
For the purpose of further securing the indebtedness
secured hereby and for the protection of the security of this
Mortgage, for so long as the indebtedness secured hereby or any
part thereof remains unpaid, Mortgagor covenants and agrees as
follows:
1.1. Warranties of Mortgagor. Mortgagor, for itself and its
successors and assigns, does hereby represent, warrant and
covenant to and with Mortgagee, its successors and assigns, that:
(a) Mortgagor has good and marketable fee simple
title to the Property, subject only to those matters expressly
set forth on Exhibit B attached hereto and by this reference
incorporated herein (the "Permitted Exceptions"), and has full
power and lawful authority to grant, bargain, sell, convey,
assign, transfer and mortgage its interest in the Property in the
manner and form hereby done or intended.
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Mortgagor will preserve its interest in and title to the Property
and will forever warrant and defend, or cause to be warranted and
defended, the same to Mortgagee against any and all claims
whatsoever and will forever warrant and defend, or cause to be
warranted and defended, the validity and priority of the lien and
security interest created herein against the claims of all
persons and parties whomsoever, subject to the Permitted
Exceptions. The foregoing warranty of title shall survive the
foreclosure of this Mortgage and shall inure to the benefit of
and be enforceable by Mortgagee in the event Mortgagee acquires
title to the Property pursuant to any foreclosure;
(b) No bankruptcy or insolvency proceedings are
pending or contemplated by Mortgagor or, to the best knowledge of
Mortgagor, against Mortgagor or by or against any direct or
indirect principal of Mortgagor or by or against any endorser,
cosigner or guarantor of the Note;
(c) All reports, certificates, affidavits, statements
and other data furnished by Mortgagor to Mortgagee in connection
with the loan evidenced by the Note are true and correct in all
material respects and do not omit to state any fact or
circumstance necessary to make the statements contained therein
not misleading;
(d) The execution, delivery and performance of this
Mortgage, the Note and all of the other Loan Documents have been
duly authorized by all necessary action to be, and are, binding
and enforceable against Mortgagor and/or Mortgagor's affiliate
that is a party thereto in accordance with the respective terms
thereof (subject, as to the enforcement of remedies, to the
effect of applicable bankruptcy, reorganization, insolvency and
similar laws and to the effect of general principles of equity)
and do not contravene, result in a breach of or constitute (upon
the giving of notice or the passage of time or both) a default
under the operating agreement, articles of incorporation or other
organizational documents of Mortgagor or such affiliate or any
contract or agreement of any nature to which Mortgagor or such
affiliate is a party or by which Mortgagor or such affiliate or
any of its respective property may be bound and do not violate or
contravene any law, order, decree, rule or regulation to which
Mortgagor or such affiliate is subject;
(e) Neither Mortgagor nor any of its affiliates is
required to obtain any consent, approval or authorization from or
to file any declaration or statement with, any Governmental
Authority or agency in connection with or as a condition to the
execution, delivery or performance of this Mortgage, the Note or
the other Loan Documents which has not been so obtained or filed;
(f) Mortgagor and its affiliates have obtained or
made all necessary (i) consents, approvals and authorizations and
registrations and filings of or with all Governmental Authorities
and (ii) consents, approvals, waivers and notifications of
partners, stockholders, creditors, lessors and other non-
governmental persons and/or entities, in each case, which are
required to be obtained or made by Mortgagor and/or such
affiliates in connection with the execution and delivery of, and
the performance by Mortgagor and such affiliates of their
respective obligations, if any, under, the Loan Documents;
(g) Mortgagor and the managing member of Mortgagor,
have filed all federal, state and local tax returns required to
be filed and has paid or made adequate provision for the payment
of all federal, state and local taxes, charges and assessments
payable by Mortgagor and its managing member.
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Mortgagor and its managing member believe that their respective
tax returns properly reflect the income and taxes of Mortgagor
and said managing member, if any, for the periods covered
thereby, subject only to reasonable adjustments required by the
Internal Revenue Service or other applicable tax authority upon
audit;
(h) Mortgagor is not an "employee benefit plan", as
defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is subject to
Title I of ERISA and the assets of Mortgagor do not constitute
"plan assets" of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101;
(i) to the best knowledge of Mortgagor, the Real
Estate and the Improvements and the intended use thereof by
Mortgagor comply with all applicable restrictive covenants,
zoning ordinances, subdivision and building codes, flood disaster
laws, applicable health and environmental laws and regulations
and all other ordinances, orders or requirements issued by any
state, federal or municipal authorities having or claiming
jurisdiction over the Property. The Real Estate and Improvements
constitute a separate tax parcel for purposes of ad valorem
taxation. The Real Estate and Improvements do not require any
rights over, or restrictions against, other property in order to
comply with any of the aforesaid governmental ordinances, orders
or requirements.
(j) to the best knowledge of Mortgagor, all utility
services necessary and sufficient for the full use, occupancy,
operation and disposition of the Real Estate and the Improvements
for their intended purposes are available to the Property,
including water, storm sewer, sanitary sewer, gas, electric,
cable and telephone facilities, through public rights-of-way or
perpetual private easements approved by Mortgagee;
(k) to the best knowledge of Mortgagor, all streets,
roads, highways, bridges and waterways necessary for access to
and full use, occupancy, operation and disposition of the Real
Estate and the Improvements have been completed, have been
dedicated to and accepted by the appropriate municipal authority
and are open and available to the Real Estate and the
Improvements without funkier condition or cost to Mortgagor;
(l) to the best knowledge of Mortgagor, all curb
cuts, driveways and traffic signals shown on the survey delivered
to Mortgagee prior to the execution and delivery of this Mortgage
are existing and have been fully approved by the appropriate
governmental authority;
(m) There are no judicial, administrative, mediation
or arbitration actions, suits or proceedings pending or
threatened against or affecting Mortgagor or any of Mortgagor's
members or affiliates or the Property which, if adversely
determined, would materially impair either the Property or
Mortgagor's or such member's or affiliate's ability to perform
the covenants or obligations required to be performed by
Mortgagor or such affiliates under the Loan Documents;
(n) to the best knowledge of Mortgagor, the Property
is free from delinquent water charges, sewer rents, taxes and
assessments;
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(o) to the best knowledge of Mortgagor, as of the
date of this Mortgage, the Property is free from unrepaired
damage caused by fire, flood, accident or other casualty;
(p) As of the date of this Mortgage, no part of the
Real Estate or the Improvements has been taken in condemnation,
eminent domain or like proceeding nor is any such proceeding
pending or to Mortgagor's knowledge and belief, threatened or
contemplated;
(q) Mortgagor possesses all franchises, patents,
copyrights, trademarks, tradenames, licenses and permits adequate
for the conduct of its business substantially as now conducted at
the Property;
(r) to the best knowledge of Mortgagor, the
Improvements are structurally sound, in good repair and free of
defects in materials and workmanship and have been constructed
and installed in substantial compliance with the plans and
specifications relating thereto. All major building systems
located within the Improvements, including without limitation the
heating and air-conditioning systems and the electrical and
plumbing systems, are in good working order and condition;
(s) Mortgagor has delivered to Mortgagee true,
correct and complete copies of all Contracts and all amendments
thereto or modifications thereof;
(t) Mortgagor and the Property are free from any past
due obligations for sales and payroll taxes;
(u) There are no security agreements or financing
statements affecting any of the Property other than (i) as
disclosed in writing by Mortgagor to Mortgagee prior to the date
hereof and (ii) the security agreements and financing statements
created in favor of Mortgagee;
(v) Mortgagor has delivered a true, correct and
complete schedule (the "Rent Roll") of all leases to which
Mortgagor is a party affecting the Property, (collectively,
"Leases") as of the date hereof, which accurately and completely
sets forth in all material respects for each such Lease, the
following: the name of the tenant, the lease expiration date,
extension and renewal provisions, the base rent payable, and the
security deposit held thereunder;
(w) No Lease or Contract or easement, right-of-way,
permit or declaration (collectively all such instruments are
referred to hereinafter as "Property Agreements") provides any
party with the right to obtain a lien or encumbrance upon the
Property superior to the lien of this Mortgage, except that the
Mortgage is subject and subordinate to the Ground Lease;
(x) Except as previously disclosed to Mortgagee in
writing, there are no brokerage fees or commissions payable by
Mortgagor with respect to the leasing of space at the Property
and there are no management fees payable by Mortgagor with
respect to the management of the Property;
(y) All Security Deposits, if any, are held in a
segregated account and Mortgagor is in compliance with all legal
requirements relating to such Security Deposits;
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(z) There are no outstanding options or rights of
first refusal to purchase all or any portion of the Property or
Mortgagor's ownership thereof except as set forth in the Ground
Lease. No condition exists whereby Mortgagor or any future owner
of the Property may be required to purchase any other parcel of
land which is subject to any Property Agreement or which gives
any person or entity a right to purchase, or right of first
refusal with respect to, the Property;
(aa) The Property is free and clear of any mechanics'
liens or liens in the nature thereof, and no rights are
outstanding that under law would give rise to any such liens, any
of which liens are or may be prior to, or equal with, the lien of
this Mortgage, except those which are insured against by the
title insurance policy insuring the lien of this Mortgagee;
(bb) To the extent required by Mortgagee, Mortgagor
has delivered to Mortgagee true, correct and complete copies of
all Property Agreements;
(cc) No default exists, or with the passing of time or
the giving of notice or both would exist, under any Property
Agreement which would, in the aggregate, have a material adverse
effect on the ability of Mortgagor to perform any obligations
under any Loan Document (collectively, a "Material Adverse
Effect");
(dd) To the best knowledge of Mortgagor, no offset or
any right of offset exists respecting continued contributions to
be made by any party to any Property Agreement except as
expressly set forth therein. Except as previously disclosed to
Mortgagee in writing, no material exclusions or restrictions on
the utilization, leasing or improvement of the Property
(including non-compete agreements) exists in any Property
Agreement;
(ee) All work, if any, to be performed by Mortgagor
under each of the Property Agreements has been substantially
performed, all contributions to be made by Mortgagor to any party
to such Property Agreement have been made, and all other
conditions to such party's obligations thereunder have been
satisfied;
(ff) The Property is taxed separately without regard
to any other real estate and constitutes a legally subdivided lot
under all applicable legal requirements (or, if not subdivided,
no subdivision or platting of the Property is required under
applicable legal requirements), and for all purposes may be
mortgaged, conveyed or otherwise dealt with as an independent
parcel; and
(gg) The representations and warranties contained in
this Mortgage and the other Loan Documents, or the review and
inquiry made on behalf of the Mortgagor therefor, have all been
made by persons having the requisite expertise and knowledge to
provide such representations and warranties. No statement or fact
made by or on behalf of Mortgagor in this Mortgage or in the
other Loan Documents, or in any certificate, document or schedule
furnished to Mortgagee pursuant hereto or thereto, contains any
untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or
therein not misleading (which may be to Mortgagor's best
knowledge where so provided herein or therein). There is no fact
presently known to Mortgagor which as not been disclosed to
Mortgagee which would have a Material Adverse Effect.
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1.2. DEFENSE OF TITLE. If, while this Mortgage is in force,
the title to the Property or the interest of Mortgagee therein
shall be the subject, directly or indirectly, of any action at
law or in equity, or be attached directly or indirectly, or
endangered, clouded or adversely affected in any manner,
Mortgagor, at Mortgagor's sole expense, shall take all necessary
and proper steps for the defense of said title or interest,
including the employment of counsel approved by Mortgagee, the
prosecution or defense of litigation, and the compromise or
discharge of claims made against said title or interest.
Notwithstanding the foregoing, in the event that Mortgagee
reasonably determines that Mortgagor is not adequately performing
its obligations under this Section and Mortgagee notifies
Mortgagor in writing of such inadequate performance and such
inadequate performance is not cured within ten (10) days of such
notice, Mortgagee may, without limiting or waiving any other
rights or remedies of Mortgagee hereunder, take such steps with
respect thereto as Mortgagee shall deem necessary or proper and
any and all costs and expenses incurred by Mortgagee in
connection therewith, together with interest thereon at the
Default Interest Rate (as defined in the Note) from the date
incurred by Mortgagee until actually paid by Mortgagor, shall be
immediately paid by Mortgagor on demand and shall be secured by
this Mortgage and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note.
1.3. PERFORMANCE OF OBLIGATIONS. Mortgagor shall pay when
due the principal of and the interest on the indebtedness
evidenced by the Note. Mortgagor shall also pay all charges,
fees and other sums required to be paid by Mortgagor as provided
in the Loan Documents, and shall observe, perform and discharge
all obligations, covenants and agreements to be observed,
performed or discharged by Mortgagor set forth in the Loan
Documents in accordance with their terms. Further, Mortgagor
shall promptly and strictly perform and comply with all
covenants, conditions, obligations and prohibitions required of
Mortgagor in connection with any other document or instrument
affecting title to the Property, or any part thereof, regardless
of whether such document or instrument is superior or subordinate
to this Mortgage.
1.4. INSURANCE. Mortgagor shall, at Mortgagor's expense,
maintain or cause to be maintained, in force and effect on the
Property at all times while this Mortgage continues in effect the
following insurance:
(a) "All-risk" and "special causes" coverage
insurance against loss or damage to the Property from all-risk
perils. The amount of such insurance shall be not less than one
hundred percent (100%) of the full replacement cost of the
Improvements, furniture, furnishings, fixtures, equipment and
other items (whether personally or fixtures) included in the
Property and owned by Mortgagor from time to time, without
reduction for depreciation. The determination of the replacement
cost amount shall be adjusted annually to comply with the
requirements of the insurer issuing such coverage. Full
replacement cost, as used herein, means, with respect to the
Improvements, the cost of replacing the Improvements without
regard to deduction for depreciation, exclusive of the cost of
excavations, foundations and footings below the lowest basement
floor, and means, with respect to such furniture, furnishings,
fixtures, equipment and other items, the cost of replacing the
same. Each policy or policies shall contain a replacement cost
endorsement and either an agreed amount endorsement (to avoid the
operation of any co-insurance provisions) or a waiver of any co-
insurance provisions, all subject to Mortgagee's approval.
(b) Broad form Comprehensive general liability
insurance for personal injury, bodily injury, death and property
damage liability in amounts not less than $l,000,000.00 per
occurrence, $10,000,000.00 aggregate (inclusive of umbrella
coverage). Mortgagee hereby retains the right to
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periodically (but not more often than once in any three- (3-)
year period) review the amount of said liability insurance being
maintained by Mortgagor and to require an increase in the amount
of said liability insurance should Mortgagee deem an increase to
be reasonably prudent under then existing circumstances.
(c) Insurance covering the major components of the
central heating, air conditioning and ventilating systems,
boilers, other pressure vessels, high pressure piping and
machinery, elevators and escalators, if any, and other similar
equipment installed in the Improvements, in an amount equal to
one hundred percent (100%) of the full replacement cost of the
Improvements which policies shall insure against physical damage
to and loss of occupancy and use of the Improvements arising out
of an accident or breakdown covered thereunder.
(d) Business interruption insurance in amounts
sufficient to compensate Mortgagor for all Rents and Profits
after a casualty during the period beginning on the date on which
the Property, or any portion thereof, is damaged or destroyed and
ending not earlier than the date that is 90 days after the date
on which a certificate of occupancy is issued for the completed
restoration work performed at the Property after such casualty,
provided that during any period in which the tenant under the
Ground Lease or the guarantor under the Guaranty of Lease, dated
as of even date herewith, made by Showboat, Inc. for the benefit
of Mortgagor, is an entity whose securities have an investment
grade rating, Mortgagor shall be required to maintain such
business interruption insurance but with coverage for a period of
not less than one year after the occurrence of a casualty
affecting the Property.
All such insurance shall (i) be with insurers
authorized to do business in the state within which the Real
Estate is located and who have and maintain a Best rating of A-
XII or better, (ii) contain the complete address of the Real
Estate (or a complete legal description), (iii) be for a term of
at least one year, and (iv) contain deductibles no greater than
$1,000,000 as to the insurance required under paragraph (a) of
this Section 1.4.
Mortgagor shall as of the date hereof deliver to
Mortgagee evidence that said insurance policies have been paid
current as of the date hereof and certified copies of such
insurance policies and original certificates of insurance signed
by an authorized agent evidencing such insurance satisfactory to
Mortgagee and all other policies of insurance maintained with
respect to the Property. Mortgagor shall renew all such insurance
and deliver to Mortgagee certificates evidencing such renewals at
least thirty (30) days before any such insurance shall expire.
Without limiting the required endorsements to insurance policies,
Mortgagor further agrees that all such policies shall provide
that proceeds thereunder, to the extent payable to Mortgagor,
shall be payable to Mortgagee, its successors and assigns,
pursuant and subject to a loss payee clause (without
contribution) of standard form attached to, or otherwise made a
part of, the applicable policy and that Mortgagee, its successors
and assigns, shall be named as an additional insured under all
liability insurance policies. Mortgagor further agrees that all
such insurance policies: (i) shall provide for at least thirty
(30) days' prior written notice to Mortgagee prior to any
cancellation or termination thereof and prior to any modification
thereof which affects the interest of Mortgagee; (ii) shall
contain an endorsement or agreement by the insurer that any loss
shall be payable to Mortgagee in accordance with the terms of
such policy notwithstanding any act or negligence of Mortgagor
which might otherwise result in forfeiture of such insurance; and
(iii) shall either name Mortgagee as an additional insured or
waive all rights of subrogation against Mortgagee. The delivery
to Mortgagee of the insurance
10
policies or the certificates of insurance as provided above shall
constitute an assignment of all proceeds payable under such
insurance policies by Mortgagor to Mortgagee as further security
for the indebtedness secured hereby. In the event of foreclosure
of this Mortgage, or other transfer of title to the Property in
extinguishment in whole or in part of the secured indebtedness,
all right, title and interest of Mortgagor in and to all proceeds
payable under such policies then in force concerning the Property
shall thereupon vest in the purchaser at such foreclosure, or in
Mortgagee or other transferee in the event of such other transfer
of title. Approval of any insurance by Mortgagee shall not be a
representation of the solvency of any insurer or the sufficiency
of any amount of insurance. In the event Mortgagor fails to
provide, maintain, keep in force, or cause to be provided,
maintained and kept in force, or to deliver and furnish to
Mortgagee the policies of insurance required by this Mortgage or
evidence of their renewal as required herein, Mortgagee may, but
shall not be obligated to, procure such insurance and Mortgagor
shall pay all amounts advanced by Mortgagee, together with
interest thereon at the Default Interest Rate from and after the
date advanced by Mortgagee until actually repaid by Mortgagor,
promptly upon demand by Mortgagee. Any amounts so advanced by
Mortgagee, together with interest thereon, shall be secured by
this Mortgage and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note. Mortgagee
shall not be responsible for nor incur any liability for the
insolvency of the insurer or other failure of the insurer to
perform, even though Mortgagee has caused the insurance to be
placed with the insurer after failure of Mortgagor to furnish
such insurance.
Notwithstanding anything on this Section 1.4 to the
contrary, Mortgagor shall be deemed to have performed its
obligations with respect to the insurance described in clauses
(a) through (d) above if such insurance is maintained, in full
compliance with the terms of this Mortgage, by one or more
affiliates of Mortgagor; provided that if any such insurance
shall cease to be so maintained by such affiliate(s), Mortgagor
shall immediately effect actual (as opposed to deemed)
performance of its obligation to maintain such insurance.
1.5. PAYMENT OF TAXES. Mortgagor shall pay or cause to be
paid, except to the extent provision is actually made therefor
pursuant to Section 1.6 of this Mortgage, all taxes and
assessments which are or may become a lien on the Property or
which are assessed against or imposed upon the Property.
Mortgagor shall furnish Mortgagee with receipts (or if receipts
are not immediately available, with copies of canceled checks
evidencing payment with receipts to follow promptly after they
become available) showing payment of such taxes and assessments
prior to the applicable delinquency date therefor.
Notwithstanding the foregoing, Mortgagor may in good faith, by
appropriate proceedings and upon notice to Mortgagee, contest, or
permit to be contested, the validity, applicability or amount of
any asserted tax or assessment so long as (a) such contest is
diligently pursued, (b) such contest suspends the obligation to
pay the tax and nonpayment of such tax or assessment will not
result in the sale, loss, forfeiture or diminution of the
Property or any part thereof or any interest of Mortgagee
therein, and (c) prior to the earlier of the commencement of such
contest or the delinquency date of the asserted tax or
assessment, Mortgagor deposits in the Impound Account (as
hereinafter defined) an amount determined by Mortgagee to be
adequate to cover the payment of such tax or assessment and a
reasonable additional sum to cover possible interest, costs and
penalties; PROVIDED, HOWEVER, THAT Mortgagor shall promptly cause
to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all interest, costs and penalties
thereon, promptly after such judgment becomes final: and PROVIDED
FURTHER THAT in any event each such contest shall
11
be concluded and the taxes, assessments, interest, costs and
penalties shall be paid prior to the date any writ or order is
issued under which the Property may be sold, lost or forfeited.
1.6. TAX AND INSURANCE IMPOUND ACCOUNT. When required by
Mortgagee pursuant to the next following sentence and subject to
the last sentence of this Section 1.6, Mortgagor shall have the
right to establish and maintain at all times while this Mortgage
continues in effect an impound account (the "Impound Account")
with Mortgagee or a financial institution designated by Mortgagee
for payment of insurance premiums and real estate taxes and
assessments on the Property and as additional security for the
indebtedness secured hereby. After the occurrence of a default
hereunder and Mortgagee's request, Mortgagor shall be obligated
to deposit in the Impound Account an amount determined by
Mortgagee to be necessary to ensure that there will be on deposit
with Mortgagee an amount which, when added to the monthly
payments subsequently required to be deposited with Mortgagee
hereunder on account of real estate taxes, assessments and
insurance premiums, will result in there being on deposit in the
Impound Account an amount sufficient to pay the next due annual
installment of insurance premiums, real estate taxes and
assessments on the Property at least one (1) month prior to the
delinquency date thereof (if paid in one installment). Commencing
on the first monthly payment date under the Note after the
occurrence of such default and Mortgagee's request for deposits
into the Impound Account and continuing thereafter on each
monthly payment date under the Note, Mortgagor shall pay to
Mortgagee, concurrently with and in addition to the monthly
payment due under the Note and until the Note and all other
indebtedness secured hereby is fully paid and performed, deposits
in an amount equal to one-twelfth (1/12) of the amount of the
annual insurance premiums, real estate taxes and assessments that
will next become due and payable on the Property as estimated and
determined by Mortgagee. So long as no default hereunder or under
the other Loan Documents has occurred and is continuing, all sums
in the Impound Account shall be held by Mortgagee in the Impound
Account to pay said insurance premiums, taxes and assessments in
one installment before the same become delinquent. Mortgagor
shall be responsible for ensuring the receipt by Mortgagee, at
least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all
taxes, assessments and insurance premiums to be paid from the
Impound Account, and so long as no default hereunder or under the
other Loan Documents has occurred and is continuing, Mortgagee
shall pay the governmental authority or other party entitled
thereto directly to the extent funds are available for such
purpose in the Impound Account. In making any payment from the
Impound Account, Mortgagee shall be entitled to rely on any ▇▇▇▇,
statement or estimate procured from the appropriate public office
or insurer without any inquiry into the accuracy of such ▇▇▇▇,
statement or estimate and without any inquiry into the accuracy,
validity, enforceability or contestability of any insurance
premium, tax, assessment, valuation, sale, forfeiture, tax lien
or title or claim thereof. The Impound Account shall not, unless
otherwise explicitly required by applicable law, be or be deemed
to be escrow or trust funds, but Mortgagee shall hold the Impound
Account in a separate account. No interest on funds contained in
the Impound Account shall be paid by Mortgagee to Mortgagor. The
Impound Account is solely for the protection of Mortgagee and
entails no responsibility on Mortgagee's part beyond the payment
of insurance premiums, taxes and assessments following receipt of
bills, invoices or statements therefor in accordance with the
terms hereof and beyond the allowing of due credit for the sums
actually received. Upon assignment of this Mortgage by Mortgagee,
any funds in the Impound Account shall be fumed over to the
assignee and any responsibility of Mortgagee, as assignor, with
respect thereto shall terminate. If the total funds in the
Impound Account shall exceed the amount of payments actually
applied by Mortgagee for the purposes of the Impound Account,
such excess shall be credited by Mortgagee on subsequent payments
12
to be made hereunder. If, however, the Impound Account shall not
contain sufficient funds to pay the sums required when the same
shall become due and payable, Mortgagor shall, within ten (10)
days after receipt of written notice thereof, deposit with
Mortgagee the full amount of any such deficiency. If Mortgagor
shall fail to deposit with Mortgagee the full amount of such
deficiency as provided above, Mortgagee shall have the option,
but not the obligation, to make such deposit and all amounts so
deposited by Mortgagee, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by
Mortgagor on demand and shall be secured by this Mortgage and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. If there is a default under
this Mortgage which is not cured within any applicable grace or
cure period, Mortgagee may, but shall not be obligated to, apply
at any time the balance then remaining in the Impound Account
against the indebtedness secured hereby in whatever order
Mortgagee shall subjectively determine. No such application of
the Impound Account shall be deemed to cure any default
hereunder. Upon full payment of the indebtedness secured hereby
in accordance with its terms or at such earlier time as Mortgagee
may elect, the balance of the Impound Account then in Mortgagee's
possession shall be paid over to Mortgagor and no other party
shall have any right or claim thereto. Notwithstanding anything
in this Section 1.6 to the contrary, Mortgagee shall not require
Mortgagor to establish and maintain an Impound Account during any
period when the tenant under the Ground Lease is maintaining an
impound or escrow account for the payment of real estate taxes
and insurance premiums at the request or demand, and for the
benefit, of such tenant's mortgagee(s).
1.7. Intentionally omitted.
1.8. Intentionally omitted.
1.9. CASUALTY AND CONDEMNATION. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty
affecting, or the institution of any proceedings for eminent
domain or for the condemnation of, the Property or any portion
thereof. All insurance proceeds on the Property payable to
Mortgagor pursuant to the Ground Lease or otherwise, and all
causes of action, claims, compensation, awards and recoveries
pertaining to Mortgagor for any damage, condemnation or taking of
all or any part of the Property or for any damage or injury to it
for any loss or diminution in value of the Property, are hereby
assigned to and shall be paid to Mortgagee. To the extent that
Mortgagor has the right or the option to do so, Mortgagee may
participate in any suits or proceedings relating to any such
proceeds, causes of action, claims, compensation, awards or
recoveries and Mortgagee is hereby authorized, in its own name or
in Mortgagor's name, to adjust any loss covered by insurance or
any condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith,
and Mortgagor shall from time to time deliver to Mortgagee any
instruments required to permit such participation; PROVIDED,
HOWEVER, THAT Mortgagee shall not have the right to participate
in the adjustment of any loss payable to Mortgagor which is not
in excess of the lesser of (i) ten percent (10%) of the then
outstanding principal balance of the Note and (ii) $250,000.00.
Mortgagee shall apply any sums received by it under this Section
first to the payment of all of its costs and expenses (including,
but not limited to, legal fees and disbursements) incurred in
obtaining those sums, and then, as follows:
(a) In the event that less than sixty percent (60%) of the
Improvements located on the Real Estate have been taken or
destroyed, then if:
13
(1) no default is then continuing hereunder or under any
of the other Loan Documents and no event has occurred which, with
the giving of notice or the passage of time or both, would
constitute a default hereunder or under any of the other Loan
Documents, and
(2) the Property can, in Mortgagee's judgment, with
diligent restoration or repair, be returned to a condition at
least equal to the condition thereof that existed prior to the
casualty or partial taking causing the loss or damage within the
earlier to occur of (i) six (6) months after the receipt of
insurance proceeds or condemnation awards by either Mortgagor or
Mortgagee, and (ii) the stated maturity date of the Note, and
(3) all necessary governmental approvals can be obtained
to allow the rebuilding and reoccupancy of the Property as
described in subsection (a)(2) above, and
(4) there are sufficient sums available (through insurance
proceeds or condemnation awards and contributions by Mortgagor,
the full amount of which shall at Mortgagee's option have been
deposited with Mortgagee) for such restoration or repair
(including, without limitation, for any costs and expenses of
Mortgagee to be incurred in administering said restoration or
repair) and for payment of principal and interest to become due
and payable under the Note during such restoration or repair, and
(5) the economic feasibility of the Improvements after
such restoration or repair will be such that income from their
operation is reasonably anticipated to be sufficient to pay
operating expenses of the Property and debt service on the
indebtedness secured hereby in full with the same coverage ratio
considered by Mortgagee in its determination to make the loan
secured hereby, and
(6) Mortgagor shall have delivered to Mortgagee, at
Mortgagor's sole cost and expense, an appraisal report in form
and substance satisfactory to Mortgagee appraising the value of
the Property as so restored or repaired to be not less than the
appraised value of the Property considered by Mortgagee in its
determination to make the loan secured hereby, and
(7) Mortgagor so elects by written notice delivered to
Mortgagee within five (5) days after settlement of the aforesaid
insurance or condemnation claim, then, Mortgagee shall, solely
for the purposes of such restoration or repair, advance so much
of the remainder of such sums as may be required for such
restoration or repair, and any funds deposited by Mortgagor
therefor, to Mortgagor in the manner and upon such terms and
conditions as would be required by a prudent interim construction
lender, including, but not limited to, the prior approval by
Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of
permits, bonds, lien waivers, invoices, receipts and affidavits
from contractors and subcontractors in form and substance
satisfactory to Mortgagee in its discretion, with any remainder
being applied by Mortgagee for payment of the indebtedness
secured hereby in whatever order Mortgagee directs in its
absolute discretion.
(b) In all other cases, namely, in the event that sixty
percent (60%) or more of the Improvements located on the Real
Estate have been taken or destroyed or Mortgagor does not elect
to restore or repair the Property pursuant to clause (a) above,
or otherwise fails to meet the requirements of clause (a) above,
then. in any of such events Mortgagee shall elect. in Mortgagee's
absolute discretion and without regard to the adequacy of
Mortgagee's security to do either of the following: (1)
accelerate the
14
maturity date of the Note and declare any and all indebtedness
secured hereby to be immediately due and payable and apply the
remainder of such sums received pursuant to this section to the
payment of the indebtedness secured hereby in whatever order
Mortgagee directs in its absolute discretion, with any remainder
being paid to Mortgagor, or (2) notwithstanding that Mortgagor
may have elected not to restore or repair the Property pursuant
to the provisions of Section 1.9(a)(7) above, require Mortgagor
to restore or repair the Property in the manner and upon such
terms and conditions as would be required by a prudent interim
construction lender, including, but not limited to, the deposit
by Mortgagor with Mortgagee, within thirty (30) days after demand
therefor, of any deficiency necessary in order to assure the
availability of sufficient funds to pay for such restoration or
repair, including Mortgagee's costs and expenses to be incurred
in connection therewith, the prior approval by Mortgagee of plans
and specifications, contractors and form of construction
contracts and the furnishing to Mortgagee of permits, bonds, lien
waivers, invoices, receipts and affidavits from contractors and
subcontractors in form and substance satisfactory to Mortgagee in
its discretion, and apply the remainder of such sums toward such
restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the indebtedness
secured hereby in whatever order Mortgagee directs in its
absolute discretion.
Any reduction in the indebtedness secured hereby
resulting from Mortgagee's application of any sums received by it
hereunder shall take effect only when Mortgagee actually receives
such sums and elects to apply such sums to the indebtedness
secured hereby and, in any event, the unpaid portion of the
indebtedness secured hereby shall remain in full force and effect
and Mortgagor shall not be excused in the payment thereof.
Partial payments received by Mortgagor, as described in the
preceding sentence, shall be applied first to the final payment
due under the Note and "thereafter to installments due under the
Note in the inverse order of their due date. If Mortgagor elects
or Mortgagee directs Mortgagor to restore or repair the Property
after the occurrence of a casualty or partial taking of the
Property as provided above, Mortgagor shall promptly and
diligently, at Mortgagor's sole cost and expense and regardless
of whether the insurance proceeds or condemnation award, as
appropriate, shall be sufficient for the purpose, restore,
repair, replace and rebuild the Property as nearly as possible to
its value, condition and character immediately prior to such
casualty or partial taking in accordance with the foregoing
provisions, and Mortgagor shall pay to Mortgagee all costs and
expenses of Mortgagee incurred in administering said rebuilding,
restoration or repair, provided that Mortgagee makes such
proceeds or award available for such purpose. Mortgagor agrees
to execute and deliver from time to time such further instruments
as may be requested by Mortgagee to confirm the foregoing
assignment to Mortgagee of any award, damage, insurance proceeds,
payment or other compensation. Mortgagee is hereby irrevocably
constituted and appointed the attorney-in-fact of Mortgagor
(which power of attorney shall be irrevocable so long as any
indebtedness secured hereby is outstanding, shall be deemed
coupled with an interest, shall survive the voluntary or
involuntary dissolution of Mortgagor and shall not be affected by
any disability or incapacity suffered by Mortgagor subsequent to
the date hereof), with full power of substitution, subject to the
terms of this Section, to settle for, collect and receive any
such awards, damages, insurance proceeds, payments or other
compensation from the parties or authorities making the same, to
appear in and prosecute any proceedings therefor and to give
receipts end acquittances therefor.
1.10. MECHANICS' LIENS. Mortgagor shall pay, or cause
to be paid, when due all claims and demands of mechanics,
materialmen, laborers and others for any work performed or
materials delivered for the Real Estate or the Improvements;
PROVIDED, HOWEVER, that Mortgagor shall have the right to
contest, or
15
permit to be contested, in good faith any such claim or demand,
so long as it does so diligently, by appropriate proceedings and
without prejudice to Mortgagee and provided that neither the
Property nor any interest therein would be in any danger of sale,
loss or forfeiture as a result of such proceeding or contest. In
the event Mortgagor shall contest, or permit to be contested, any
such claim or demand, Mortgagor shall promptly notify Mortgagee
of such contest and thereafter shall, upon Mortgagee's request,
promptly provide a bond, cash deposit or other security
satisfactory to Mortgagee to protect Mortgagee's interest and
security should the contest be unsuccessful. If Mortgagor shall
fail to discharge or provide security against any such claim or
demand as aforesaid within 30 days of receiving notice of the
existence of such claim or demand, with respect to discharge, or
within 10 days of Mortgagee's request, with respect to providing
security, Mortgagee may do so and any and all expenses incurred
by Mortgagee, together with interest thereon at the Default
Interest Rate from the date incurred by Mortgagee until actually
paid by Mortgagor, shall be immediately paid by Mortgagor on
demand and shall be secured by this Mortgage and by all of the
other Loan Documents securing all or any part of the indebtedness
evidenced by the Note.
1.11. RENTS AND PROFITS. As additional and collateral
security for the payment of the indebtedness secured hereby and
cumulative of any and all rights and remedies herein provided
for, Mortgagor hereby absolutely and presently assigns to
Mortgagee all existing and future Rents and Profits which
assignment is outright, immediate, continuing and absolute.
Mortgagor hereby grants to Mortgagee the sole, exclusive and
immediate right, without taking possession of the Property, to
demand, collect (by suit or otherwise), receive and give valid
and sufficient receipts for any and all of said Rents and
Profits, for which purpose Mortgagor does hereby irrevocably
make, constitute and appoint Mortgagee its attorney-in-fact with
full power to appoint substitutes or a trustee to accomplish such
purpose (which power of attorney shall be irrevocable so long as
any indebtedness secured hereby is outstanding, shall be deemed
to be coupled with an interest, shall survive the voluntary or
involuntary dissolution of Mortgagor and shall not be affected by
any disability or incapacity suffered by Mortgagor subsequent to
the date hereof). Mortgagee shall be without liability for any
loss which may arise from a failure or inability to collect Rents
and Profits, proceeds or other payments. However, until the
occurrence of a default under this Mortgage which has not been
cured within any applicable notice and grace or cure period, and
not a limitation or as a condition hereof, but as a personal
covenant only to Mortgagor and its successors and not to any
lessees or any other person, Mortgagor shall have a revocable
license to collect and receive the Rents and Profits when due and
prepayments thereof for not more than one month prior to due date
thereof. Upon the occurrence of a default hereunder which has
not been cured within any applicable grace or cure period,
Mortgagor's license shall automatically terminate without notice
to Mortgagor and Mortgagee may thereafter, without taking
possession of the Property, collect the Rents and Profits itself
or by an agent or receiver. From and after the termination of
such license, Mortgagor shall be the agent of Mortgagee in
collection of the Rents and Profits and all of the Rents and
Profits so collected by Mortgagor shall be held in trust by
Mortgagor for the sole and exclusive benefit of Mortgagee and
Mortgagor shall, within one (1) business day after receipt of any
Rents and Profits, pay the same to Mortgagee to be applied by
Mortgagee as hereinafter set forth. Neither the demand for or
collection of Rents and Profits by Mortgagee shall constitute any
assumption by Mortgagee of any obligations under any agreement
relating thereto. Mortgagee is obligated to account only for
such Rents and Profits as are actually collected or received by
Mortgagee. Mortgagor irrevocably agrees and consents that the
respective payors of the Rents and Profits shall, upon demand and
notice from Mortgagee of a default hereunder, pay said Rents and
Profits directly to Mortgagee without liability to determine the
actual existence of any default claimed by Mortgagee. Mortgagor
hereby waives any right,
16
claim or demand which Mortgagor may now or hereafter have against
any such payor by reason of such payment of Rents and Profits to
Mortgagee, and any such payment shall discharge such payor's
obligation to make such payment to Mortgagor. All Rents and
Profits collected or received by Mortgagee may be applied against
all expenses of collection, including, without limitation,
attorneys' fees, against costs of operation and management of the
Property and against the indebtedness secured hereby, in whatever
order or priority as to any of the items so mentioned as
Mortgagee directs in its sole subjective discretion and without
regard to the adequacy of its security. Neither the exercise by
Mortgagee of any rights under this Section nor the application of
any Rents and Profits to the secured indebtedness shall cure or
be deemed a waiver of any default hereunder. The assignment of
Rents and Profits hereinabove granted shall continue in full
force and effect during any period of foreclosure or redemption
with respect to the Property. Mortgagor has executed an
Assignment of Leases and Rents dated of even date herewith (the
"Assignment") in favor of Mortgagee covering all of the right,
title and interest of Mortgagor, as landlord, lessor or licensor,
in and to any leases, licenses and occupancy agreements relating
to all or portions of the Property, intending that such
instrument create an outright, immediate, continuing and absolute
assignment of the Rents and Profits. All rights and remedies
granted to Mortgagee under the Assignment shall be in addition to
and cumulative of all rights and remedies granted to Mortgagee
hereunder.
1.12. Leases and Licenses.
(a) Mortgagor shall submit to Mortgagee for Mortgagee's
approval, prior to the execution thereof, any proposed lease,
license or occupancy agreement of the Property. Except to the
extent required by the New Jersey Casino Control Commission (the
"Commission"), Mortgagor shall not execute, modify, amend,
supplement, cancel, terminate or accept the surrender of any
lease, license or occupancy agreement for all or a substantial
portion of the Property without the prior written approval of
Mortgagee, and shall at all times promptly and faithfully
perform, or cause to be performed, all of the covenants,
conditions and agreements contained in all leases, licenses and
occupancy agreements with respect to the Property, now or
hereafter existing, on the part of the landlord, lessor or
licensor thereunder to be kept and performed. If Mortgagor shall
be required or have the right to grant or withhold its consent to
any action of a tenant, licensee or occupant of the Property,
Mortgagor shall not grant or withhold such consent or approval
without the prior written approval of Mortgagee to so do.
Mortgagor shall not do or suffer to be done any act that might
result in a default by the landlord, lessor or licensor under any
such lease, license or occupancy agreement or allow the tenant,
lessee or licensee thereunder to withhold payment or rent and,
except as otherwise expressly permitted by the terms of Section
1.13 hereof, shall not assign any such lease, license or
occupancy agreement or any such rents. Mortgagor, at no cost or
expense to Mortgagee, shall enforce, short of termination, the
performance and observance of each and every material condition
and covenant of each of the parties under such leases. Mortgagor
shall not, without the prior written consent of Mortgagee, waive
or release any other party from the performance or observance of
any obligation or condition under such leases except in the
normal of course of business in a manner which is consistent with
sound and customary leasing and management practices for similar
properties in the community in which the Property is located.
Mortgagor shall not permit the prepayment of any rents under any
of the leases for more than one month prior to the due date
thereof.
(b) Each lease, license and occupancy agreement executed
after the date hereof affecting Mortgagor's interest in any of
the Real Estate or the Improvements must provide, in a manner
approved by
17
Mortgagee, that the tenant, lessee or licensee, as appropriate,
will, to the extent permitted by law, recognize as its landlord,
lessor or licensor and attorn to any person succeeding to the
interest of Mortgagor upon any foreclosure of this Mortgage or
deed in lieu of foreclosure. Each such lease, license and
occupancy agreement shall also provide that, upon request of said
successor in interest, the tenant, lessee or licensee shall
execute and deliver an instrument or instruments confirming its
attornment as provided for in this Section; provided, however,
that neither Mortgagee nor any successor-in-interest shall be
bound by any payment of rental for more than one (1) month in
advance, or any amendment or modification of said lease or rental
agreement made without the express written consent of Mortgagee
or said successor-in-interest.
(c) Upon the occurrence of a default under this Mortgage
which is not cured within any applicable grace period, whether
before or after the whole principal sum secured hereby is
declared to be immediately due or whether before or after the
institution of legal proceedings to foreclose this Mortgage,
forthwith, upon demand of Mortgagee, Mortgagor shall surrender to
Mortgagee and Mortgagee shall be entitled to take actual
possession of the Property or any part thereof personally, or by
its agent or attorneys. In such event, Mortgagee shall have, and
Mortgagor hereby gives and grants to Mortgagee, the right, power
and authority to make and enter into leases, licenses and
occupancy agreements with respect to the Property or portions
thereof for such rents and for such periods of occupancy and upon
conditions and provisions as Mortgagee may deem desirable in its
sole discretion, and Mortgagor expressly acknowledges and agrees
that the term of such lease, license or occupancy agreement may
extend beyond the date of any foreclosure sale of the Property;
it being the intention of Mortgagor that in such event Mortgagee
shall be deemed to be and shall be the attorney-in-fact of
Mortgagor for the purpose of making and entering into leases,
licenses or occupancy agreements of parts or portions of the
Property for the rents and upon the terms, conditions and
provisions deemed desirable to Mortgagee in its sole discretion
and with like effect as if such leases, licenses or occupancy
agreements had been made by Mortgagor as the owner in fee simple
of the Property free and clear of any conditions or limitations
established by this Mortgage. The power and authority hereby
given and granted by Mortgagor to Mortgagee shall be deemed to be
coupled with an interest, shall not be revocable by Mortgagor so
long as any indebtedness secured hereby is outstanding, shall
survive the voluntary or involuntary dissolution of Mortgagor and
shall not be affected by any disability or incapacity suffered by
Mortgagor subsequent to the date hereof. In connection with any
action taken by Mortgagee pursuant to this Section, Mortgagee
shall not be liable for any loss sustained by Mortgagor resulting
from any failure to let the Property, or any part thereof, or
from any other act or omission of Mortgagee in managing the
Property (unless such act or omission constitutes gross
negligence on the part of Mortgagee), nor shall Mortgagee be
obligated to perform or discharge any obligation, duty or
liability under any lease, license or occupancy agreement
covering the Property or any part thereof or under or by reason
of this instrument or the exercise of rights or remedies
hereunder. Mortgagor shall, and does hereby, indemnify Mortgagee
for, and hold Mortgagee harmless from, any and all claims,
actions, demands, liabilities, loss or damage which may or might
be incurred by Mortgagee under any such lease, license or
occupancy agreement or under this Mortgage or by the exercise of
rights or remedies hereunder and from any and all claims and
demands whatsoever which may be asserted against Mortgagee by
reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants or agreements
contained in any such lease, license or occupancy agreement other
than those finally determined to have resulted solely from the
gross negligence or willful misconduct of Mortgagee. Should
Mortgagee incur any such liability, the amount thereof,
including, without limitation, costs, expenses and attorneys'
fees, together with interest thereon at the Default Interest Rate
from the date incurred by Mortgagee until actually paid by
18
Mortgagor, shall be immediately due and payable to Mortgagee by
Mortgagor on demand and shall be secured hereby and by all of the
other Loan Documents securing all or any part of the indebtedness
evidenced by the Note. Nothing in this Section shall impose on
Mortgagee any duty, obligation or responsibility for the control,
care, management or repair of the Property, or for the carrying
out of any of the terms and conditions of any such lease, license
or occupancy agreement, nor shall it operate to make Mortgagee
responsible or liable for any waste committed on the Property by
the tenants or by any other parties or for any dangerous or
defective condition of the Property, or for any negligence in the
management, upkeep, repair or control of the Property. Mortgagor
hereby assents to, ratifies and confirms any and all actions of
Mortgagee with respect to the Property taken under this Section.
(d) Notwithstanding anything in this Section 1.12 to the
contrary, Mortgagor may, without obtaining the prior written
consent of Mortgagee, but with prior notice to Mortgagee, consent
to the transfer or assignment of the interest of the tenant under
the Ground Lease to an entity that is at least fifty-percent
(50%) beneficially owned, directly or indirectly, by Showboat,
Inc. or, after the contemplated acquisition of Showboat, Inc. by
▇▇▇▇▇▇'▇ Entertainment, Inc. ("▇▇▇▇▇▇'▇"), by ▇▇▇▇▇▇'▇ provided
that (i) the successor tenant has a net worth at least equal to
that of the original tenant, (ii) concurrently with such transfer
or assignment, Showboat, Inc. or ▇▇▇▇▇▇'▇, as applicable, (A)
delivers to Mortgagee a written confirmation from each of the
rating agencies rating the certificates issued under the
Securitization (as hereinafter defined) stating that such
transfer or assignment will not adversely affect or change the
then-current rating of any class of certificate issued under the
Securitization and (B) delivers to Mortgagee and to the rating
agencies one or more nonconsolidation opinions with respect to
the Mortgagor, the successor tenant and their respective direct
and indirect owners (after such transfer or assignment) that are
acceptable to the rating agencies, and (iii) the successor tenant
assumes in writing all of the obligations of the tenant under the
Ground Lease.
1.13. Alienation and Further Encumbrances.
(a) Mortgagor acknowledges that Mortgagee has relied upon
the principals of Mortgagor and the ownership and organizational
structure of the Mortgagor in connection with the closing of the
loan evidenced by the Note. Accordingly, except as specifically
allowed hereinbelow in this Section and notwithstanding anything
to the contrary contained in Section 4.6 hereof, in the event
that the Property or any part thereof or interest therein shall
be sold, conveyed, disposed of, alienated, hypothecated, leased
(except in accordance with the provisions of Section 1.12
hereof), assigned, pledged, mortgaged, further encumbered or
otherwise transferred or Mortgagor shall be divested of its title
to the Property or any interest therein, in any manner or way,
whether voluntarily or involuntarily, without the prior written
consent of Mortgagee being first obtained, which consent may be
withheld in Mortgagee's sole discretion, then the same shall
constitute a default hereunder and Mortgagee shall have the
right, at its option, to declare any or all of the indebtedness
secured hereby, irrespective of the maturity date specified in
the Note, immediately due and payable and to otherwise exercise
any of its other rights and remedies contained in Article III
hereof. If such acceleration is during any period when a
prepayment fee is payable pursuant to the provisions set forth in
the Note, then, in addition to all of the foregoing, such
prepayment fee shall also then be immediately due and payable to
the same end as though Mortgagor were prepaying the entire
indebtedness secured hereby on the date of such acceleration.
For the purposes of this Section: (i) in the event either
Mortgagor or any of its members is a corporation or trust, the
sale, conveyance, transfer or
19
disposition of any of the issued and outstanding capital stock of
Mortgagor or any of its members or of the beneficial interest of
such trust (or the issuance of new shares of capital stock in
Mortgagor or any of its members) shall be deemed to be a transfer
of an interest in the Property; and (ii) in the event Mortgagor
or any members of Mortgagor is a limited or general partnership,
a joint venture or a limited liability company, a change in the
ownership interests in any general partner, any joint venturer or
any member, either voluntarily, involuntarily or otherwise, or
the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of the
interest of any such general partner, joint venturer or member in
Mortgagor or such member (whether in the form of a beneficial or
membership interest or in the form of a power of direction,
control or management, or otherwise), shall be deemed to be a
transfer of an interest in the Property.
(b) In the event that Mortgagee shall consent, without in
any way implying any obligation on the part of Mortgagee to so
consent, to a further encumbrance of the Property, the documents
evidencing or creating such encumbrance shall be subject to the
prior written approval of Mortgagee and shall expressly provide,
in addition to any other items required by Mortgagee, that: (i)
they are subordinate, secondary, junior and inferior in all
respects to the lien of this Mortgage, to the security provided
by the other Loan Documents and to any and all rights of
Mortgagee set forth therein, including, without limitation,
Mortgagee's right to payment under the Note and the rights of
Mortgagee set forth herein with respect to any insurance proceeds
and condemnation awards which are a part of the Property; and
(ii) they shall remain subordinate, secondary, junior and
inferior in all respects to any amendments, modifications,
extensions or changes in this Mortgage and the other Loan
Documents thereafter entered into by Mortgagee and Mortgagor or
any indemnitor or guarantor under any indemnity or guaranty
executed in connection with the loan secured hereby; and (iii)
they are subordinate, secondary, junior and inferior in all
respects to all existing and future leases of the Property or any
portion thereof and the holder thereof shall, upon request of
Mortgagee, specifically subordinate the lien of such encumbrance
to all leases of the Property or any portion thereof executed
after the date of such encumbrance; and (iv) the holder of such
subordinate mortgage acknowledges and agrees that a conveyance of
all or any portion of the Property to such holder by foreclosure,
deed in lieu of foreclosure or otherwise shall constitute a
default under this Mortgage.
(c) Notwithstanding anything in this Section 1.13 to the
contrary, Mortgagor may, without obtaining the prior written
consent of Mortgagee, but with prior written notice to Mortgagee,
transfer all of its right, title and interest in and to the
Property, subject to this Mortgage, to another single-purpose,
bankruptcy-remote entity that is at least fifty percent (50%)
beneficially owned, directly or indirectly, by Showboat, Inc. or,
after the consummation of the contemplated acquisition of
Showboat, Inc. by ▇▇▇▇▇▇'▇, by ▇▇▇▇▇▇'▇, and a change in the
ownership of Mortgagor may be effected without obtaining the
prior written consent of Mortgagee (but with prior written notice
to Mortgagee) so long as Showboat, Inc. or ▇▇▇▇▇▇'▇, as
applicable, shall beneficially own, directly or indirectly, at
least fifty percent (50%) of the interests in Mortgagor, provided
that concurrently with such transfer, (i) Showboat, Inc. or
▇▇▇▇▇▇'▇, as applicable, delivers to Mortgagee a written
confirmation from each of the rating agencies rating the
certificates issued under the Securitization (as hereinafter
defined) stating that such transfer will not adversely affect or
change the then-current rating of any class of certificate issued
under the Securitization, (ii) Showboat, Inc. or ▇▇▇▇▇▇'▇, as
applicable, delivers to Mortgagee and to the rating agencies one
or more nonconsolidation opinions with respect to the Mortgagor
and its direct and indirect owners (after such transfer) that are
acceptable to the rating agencies, and (iii) with respect to a
transfer of the Property, the
20
transferee agrees in writing to assume and perform all of
Mortgagor's obligations hereunder and under the other Loan
Documents and to be bound by all of the terms, covenants and
conditions of the Loan Documents pertaining to Mortgagor.
1.14. PAYMENT OF UTILITIES, ASSESSMENTS, CHARGES, ETC.
Mortgagor shall pay, or cause to be paid, when due all utility
charges which are incurred by Mortgagor or which may become a
charge or lien against any portion of the Property for gas,
electricity, water and sewer services furnished to the Real
Estate and/or the Improvements and all other assessments or
charges of a similar nature, or assessments payable pursuant to
any restrictive covenants, whether public or private, affecting
the Real Estate and/or the Improvements or any portion thereof,
whether or not such assessments or charges are or may become
liens thereon.
1.15. ACCESS PRIVILEGES AND INSPECTIONS. Mortgagee and
the agents, representatives and employees of Mortgagee shall,
subject to the rights of tenants, have full and free access to
the Real Estate and the Improvements and any other location where
books and records concerning the Property are kept at all
reasonable times for the purposes of inspecting the Property and
of examining, copying and making extracts from the books and
records of Mortgagor relating to the Property, the cost of which,
except after the occurrence and during the continuance of a
default, shall be paid by Mortgagee. Mortgagor shall lend
assistance to all such agents, representatives and employees of
Mortgagee. Mortgagee shall reasonably endeavor not to
unreasonably interfere with the conduct of business at the
Property in exercising its rights under this Section 1.15.
1.16. WASTE; MAINTENANCE. Mortgagor shall not commit,
suffer or permit any waste on the Property nor take any actions
that might invalidate any insurance carried on the Property.
Mortgagor shall maintain or cause to be maintained the Property
in good condition and repair.
1.17. ZONING. Without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld,
Mortgagor shall not seek, make, suffer, consent to or acquiesce
in any change in the zoning or conditions of use of the Real
Estate or the Improvements. Mortgagor shall comply with and
make, or cause to be complied with and made, all payments
required under the provisions of any covenants, conditions or
restrictions affecting the Real Estate or the Improvements.
Mortgagor shall comply with, or cause to be complied with, all
existing and future requirements of all governmental authorities
having jurisdiction over the Property. Mortgagor shall keep, or
cause to be kept, all licenses, permits, franchises and other
approvals necessary for the operation of the Property in full
force and effect. Mortgagor shall operate, or cause to be
operated, the Property as a casino and hotel for so long as the
indebtedness secured hereby is outstanding unless such operation
is prohibited by law. If, under applicable zoning provisions,
the use of all or any part of the Real Estate or the Improvements
is or becomes a nonconforming use, Mortgagor shall not cause or
permit such use to be discontinued or abandoned without the prior
written consent of Mortgagee. Further, without Mortgagee's prior
written consent, Mortgagor shall not file or subject any part of
the Real Estate or the Improvements to any declaration of
condominium or cooperative or convert any part of the Real Estate
or the Improvements to a condominium, co-operative or other form
of multiple ownership and governance.
1.18. FINANCIAL STATEMENTS AND BOOKS AND RECORDS. Mortgagor
shall keep accurate books and records of account of the Property
and its own financial affairs sufficient to permit the
preparation of
21
financial statements therefrom in accordance with generally
accepted accounting principles. Mortgagee and its duly
authorized representatives shall have the right to examine, copy
and audit Mortgagor's records and books of account at all
reasonable times. So long as this Mortgage continues in effect,
Mortgagor shall provide to Mortgagee, in addition to any other
financial statements required hereunder or under any of the other
Loan Documents, the following financial statements and
information, all of which must be certified to Mortgagee as being
true and correct by Mortgagor or the entity to which they
pertain, as applicable, be prepared in accordance with generally
accepted accounting principles consistently applied and be in
form and substance acceptable to Mortgagee:
(a) copies of all tax returns filed by Mortgagor, within
thirty (30) days after the date of filing;
(b) annual balance sheets for the Property and annual
financial statements for Mortgagor, each principal or member in
Mortgagor, and each indemnitor and guarantor under any indemnity
or guaranty executed in connection with the loan secured hereby
within one hundred twenty (120) days after the end of each
calendar year audited by an independent certified public
accountant; and
(c) such other information with respect to the Property,
Mortgagor, the principals or members in Mortgagor, and each
indemnitor and guarantor under any indemnity or guaranty executed
in connection with the loan secured hereby, which may be
requested from time to time by Mortgagee, within a reasonable
time after the applicable request.
Mortgagor agrees that any and all materials furnished
hereunder are the property of Mortgagee (and Mortgagee's
servicer) and may be released to such parties as Mortgagee or its
servicer deems appropriate, including FNMA, FHLMC, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and any affiliates, any
issuer, underwriter, certificateholder or trustee with respect to
securities issued in connection with the sale of this Mortgage,
or any rating agency responsible for rating such securities from
time to time.
1.19. FURTHER DOCUMENTATION. Mortgagor shall, on the
request of Mortgagee and at the expense of Mortgagor: (a)
promptly correct any defect, error or omission which may be
discovered in the contents of this Mortgage or in the contents of
any of the other Loan Documents; (b) promptly execute,
acknowledge, deliver and record or file such further instruments
(including, without limitation, further mortgages, deeds of
trust, security deeds, security agreements, financing statements,
continuation statements and assignments of rents or leases) and
promptly do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of this
Mortgage and the other Loan Documents and to subject to the liens
and security interests hereof and thereof any property intended
by the terms hereof and thereof to be covered hereby and thereby,
including specifically, but without limitation, any renewals,
additions, substitutions, replacements or appurtenances to the
Property; (c) promptly execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically
any financing statement) deemed advisable by Mortgagee to
protect, continue or perfect the liens or the security interests
hereunder against the rights or interests of third persons; and
(d) promptly furnish to Mortgagee, upon Mortgagee's request, a
duly acknowledged written statement and estoppel certificate
addressed to such party or parties as directed by Mortgagee and
in form and substance supplied by Mortgagee, setting forth all
amounts due under the Note, stating whether any event has
occurred which, with the passage of time or the
22
giving of notice or both, would constitute an event of default
hereunder, stating whether any offsets or defenses exist against
the indebtedness secured hereby and containing such other matters
as Mortgagee may reasonably require.
1.20. PAYMENT OF COSTS; REIMBURSEMENT TO MORTGAGEE.
Mortgagor shall pay all costs and expenses of every character
incurred in connection with the closing of the loan evidenced by
the Note and secured hereby or otherwise attributable or
chargeable to Mortgagor as the owner of the Property, including,
without limitation, appraisal fees, recording fees, documentary,
stamp, mortgage or intangible taxes, brokerage fees and
commissions, title policy premiums and title search fees, uniform
commercial code/tax lien/litigation search fees, escrow fees and
attorneys' fees. If Mortgagor defaults in any such payment,
which default is not cured within any applicable grace or cure
period, Mortgagee may pay the same and Mortgagor shall reimburse
Mortgagee on demand for all such costs and expenses incurred or
paid by Mortgagee, together with such interest thereon at the
Default Interest Rate from and after the date of Mortgagee's
making such payment until reimbursement thereof by Mortgagor.
Any such sums disbursed by Mortgagee, together with such interest
thereon, shall be additional indebtedness of Mortgagor secured by
this Mortgage and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note. Further,
Mortgagor shall promptly notify Mortgagee in writing of any
litigation or threatened litigation affecting the Property, or
any other demand or claim which, if enforced, could impair or
threaten to impair Mortgagee's security hereunder Without
limiting or waiving any other rights and remedies of Mortgagee
hereunder, if Mortgagor fails to perform any of its covenants or
agreements contained in this Mortgage or in any of the other Loan
Documents and such failure is not cured within any applicable
grace or cure period, or if any action or proceeding of any kind
(including, but not limited to, any bankruptcy, insolvency,
arrangement, reorganization or other debtor relief proceeding) is
commenced which might affect Mortgagee's interest in the Property
or Mortgagee's right to enforce its security, then Mortgagee may,
at it option, with or without notice to Mortgagor, make any
appearances, disburse any sums and take any actions as may be
necessary or desirable to protect or enforce the security of this
Mortgage or to remedy the failure of Mortgagor to perform its
covenants and agreements (without, however, waiving any default
of Mortgagor). Mortgagor agrees to pay on demand all expenses of
Mortgagee incurred with respect to the foregoing (including, but
not limited to, fees and disbursements of counsel), together with
interest thereon at the Default Interest Rate from and after the
date on which Mortgagee incurs such expenses until reimbursement
thereof by Mortgagor. Any such expenses so incurred by
Mortgagee, together with interest thereon as provided above,
shall be additional indebtedness of Mortgagor secured by this
Mortgage and by all of the other Loan Documents securing all or
any part of the indebtedness evidenced by the Note. The
necessity for any such actions and of the amounts to be paid
shall be determined by Mortgagee in its discretion. Subject to
the Ground Lease, Mortgagee is hereby empowered to enter and to
authorize others to enter upon the Property or any part thereof
for the purpose of performing or observing any such defaulted
term, covenant or condition without thereby becoming liable to
Mortgagor or any person in possession holding under Mortgagor.
Mortgagor hereby acknowledges and agrees that the remedies set
forth in this Section 1.20 shall be exercisable by Mortgagee, and
any and all payments made or costs or expenses incurred by
Mortgagee in connection therewith shall be secured hereby and
shall be, without demand, immediately repaid by Mortgagor with
interest thereon at the Default Interest Rate, notwithstanding
the fact that such remedies were exercised and such payments made
and costs incurred by Mortgagee after the filing by Mortgagor of
a voluntary case or the filing against Mortgagor of an
involuntary case pursuant to or within the meaning of the
Bankruptcy Reform Act of 1978, as amended,
23
Title 11 U.S.C., or after any similar action pursuant to any
other debtor relief law (whether statutory, common law, case law
or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable to Mortgagor,
Mortgagee, any guarantor or indemnitor, the secured indebtedness
or any of the Loan Documents. Mortgagor hereby indemnifies and
holds Mortgagee harmless from and against all loss, cost and
expenses with respect to any default hereof, any liens (i.e.,
judgments, mechanics' and materialmen's liens, or otherwise),
charges and encumbrances filed against the Property, and from any
claims and demands for damages or injury, including claims for
property damage, personal injury or wrongful death, arising out
of or in connection with any accident or fire or other casualty
on the Real Estate or the Improvements or any nuisance made or
suffered thereon, including, in any case, attorneys' fees, costs
and expenses as aforesaid, whether at pretrial, trial or
appellate level, and such indemnity shall survive payment in full
of the indebtedness secured hereby. This Section shall not be
construed to require Mortgagee to incur any expenses, make any
appearances or take any actions.
1.21. SECURITY INTEREST. This Mortgage is also intended
to encumber and create a security interest in, and Mortgagor
hereby grants to Mortgagee a security interest in all sums on
deposit with Mortgagee pursuant to the provisions of Section 1.6
hereof or any other Section hereof and Mortgagor's interest in
all fixtures, chattels, accounts, equipment, inventory, contract
rights, general intangibles and other personal property included
within the Property, all renewals, replacements of any of the
aforementioned items, or articles in substitution therefor or in
addition thereto or the proceeds thereof (said property is
hereinafter referred to collectively as the "Collateral"),
whether or not the same shall be attached to the Real Estate or
the Improvements in any manner. It is hereby agreed that to the
extent permitted by law, all of the foregoing property is to be
deemed and held to be a part of and affixed to the Real Estate
and the Improvements. The foregoing security interest shall also
cover Mortgagor's leasehold interest in any of the foregoing
property which is leased by Mortgagor. Notwithstanding the
foregoing, all of the foregoing property shall be owned by
Mortgagor and no leasing or installment sales or other financing
or title retention agreement in connection therewith shall be
permitted without the prior written approval of Mortgagee.
Mortgagor shall, from time to time upon the request of Mortgagee,
supply Mortgagee with a current inventory of all of the property
in which Mortgagee is granted a security interest hereunder, in
such detail as Mortgagee may require. Mortgagor shall promptly
replace all of the Collateral subject to the lien or security
interest of this Mortgage when worn or obsolete with Collateral
comparable to the worn out or obsolete Collateral when new and
will not, without the prior written consent of Mortgagee, remove
from the Real Estate or the Improvements any of the Collateral
subject to the lien or security interest of this Mortgage except
such as is replaced by an article of equal suitability and value
as above provided, owned by Mortgagor free and clear of any lien
or security interest except that created by this Mortgage and the
other Loan Documents and except as otherwise expressly permitted
by the terms of Section 1.13 of this Mortgage. All of the
Collateral shall be kept at the location of the Real Estate
except as otherwise required by the terms of the Loan Documents.
Mortgagor shall not use any of the Collateral in violation of any
applicable statute, ordinance or insurance policy.
1.22. SECURITY AGREEMENT. This Mortgage constitutes a
security agreement between Mortgagor and Mortgagee with respect
to the Collateral in which Mortgagee is granted a security
interest hereunder, and, cumulative of all other rights and
remedies of Mortgagee hereunder, Mortgagee shall have all of the
rights and remedies of a secured party under any applicable
Uniform Commercial Code. Mortgagor hereby agrees to execute and
deliver on demand and hereby irrevocably constitutes and appoints
Mortgagee the
24
attorney-in-fact of Mortgagor to execute and deliver and, if
appropriate, to file with the appropriate filing officer or
office such security agreements, financing statements,
continuation statements or other instruments as Mortgagee may
request or require in order to impose, perfect or continue the
perfection of the lien or security interest created hereby.
Except with respect to Rents and Profits to the extent
specifically provided herein to the contrary, Mortgagee shall
have the right of possession of all cash, securities,
instruments, negotiable instruments, documents, certificates and
any other evidences of cash or other property or evidences of
rights to cash rather than property, which are now or hereafter a
part of the Property and Mortgagor shall promptly deliver the
same to Mortgagee, endorsed to Mortgagee, without further notice
from Mortgagee. Mortgagor agrees to furnish Mortgagee with
notice of any change in the name, identity, corporate structure,
residence, or principal place of business or mailing address of
Mortgagor within ten (10) days of the effective date of any such
change. Upon the occurrence of any default hereunder not cured
within any applicable grace or cure period, Mortgagee shall have
the rights and remedies as prescribed in the Mortgage, or as
prescribed by general law, or as prescribed by any applicable
Uniform Commercial Code, all at Mortgagee's election. Any
disposition of the Collateral may be conducted by an employee or
agent of Mortgagee. Any person, including both Mortgagor and
Mortgagee, shall be eligible to purchase any part or all of the
Collateral at any such disposition. Expenses of retaking,
holding, preparing for sale, selling or the like (including,
without limitation, Mortgagee's attorneys' fees and legal
expenses), together with interest thereon at the Default Interest
Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be paid by Mortgagor on demand and shall be
secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the
Note. Subject to the Ground Lease, Mortgagee shall have the
right to enter upon the Real Estate and the Improvements or any
real property where any of the property which is the subject of
the security interest granted herein is located to take
possession of, assemble and collect the same or to render it
unusable, or Mortgagor, upon demand of Mortgagee, shall assemble
such property and make it available to Mortgagee at the Real
Estate, a place which is hereby deemed to be reasonably
convenient to Mortgagee and Mortgagor. If notice is required by
law, Mortgagee shall give Mortgagor at least ten (10) days prior
written notice of the time and place of any public sale of such
property or of the time of or after which any private sale or any
other intended disposition thereof is to be made, and if such
notice is sent to Mortgagor, as the same is provided for the
mailing of notices herein, it is hereby deemed that such notice
shall be and is reasonable notice to Mortgagor. No such notice
is necessary for any such property which is perishable, threatens
to decline speedily in value or is of a type customarily sold on
a recognized market. Any sale made pursuant to the provisions of
this Section shall be deemed to have been a public sale conducted
in a commercially reasonable manner if held contemporaneously
with the foreclosure sale as provided in Section 3.1(e) hereof
upon giving the same notice with respect to the sale of the
Property hereunder as is required under said Section 3.1(e).
Furthermore, to the extent permitted by law, in conjunction with,
in addition to or in substitution for the rights and remedies
available to Mortgagee pursuant to any applicable Uniform
Commercial Code:
(a) In the event of a foreclosure sale, the Property may,
at the option of Mortgagee, be sold as a whole; and
(b) It shall not be necessary that Mortgagee take
possession of the aforementioned Collateral, or any part thereof,
prior to the time that any sale pursuant to the provisions of
this Section is conducted and it shall not be necessary that said
Collateral, or any part thereof, be present at the location of
such sale; and
25
(c) Mortgagee may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident
to any sale held by Mortgagee, including the sending of notices
and the conduct of the sale, but in the name and on behalf of
Mortgagee.
The name and address of Mortgagor (as Debtor under any applicable
Uniform Commercial Code) are:
Showboat Land LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
The name and address of Mortgagee (as Secured Party under any
applicable Uniform Commercial Code) are:
Column Financial, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
1.23. EASEMENTS AND RIGHTS-OF-WAY. Mortgagor shall not
grant any easement or right-of-way with respect to all or any
portion of the Real Estate or the Improvements without the prior
written consent of Mortgagee unless such grant is required
pursuant to the terms of the Ground Lease. The purchaser at any
foreclosure sale hereunder may, at its discretion, disaffirm any
easement or right-of-way granted in violation of any of the
provisions of this Mortgage and may take immediate possession of
the Property free from, and despite the terms of, such grant of
easement or right-of-way. If Mortgagee consents to the grant of
an easement or right-of-way, Mortgagee agrees to grant such
consent without charge to Mortgagor other than expenses.
Including, without limitation, attorneys' fees, incurred by
Mortgagee in the review of Mortgagor's request and in the
preparation of documents effecting the subordination.
1.24. COMPLIANCE WITH LAWS. Mortgagor shall at all
times comply, or cause to be complied, with all statutes,
ordinances, regulations and other governmental or quasi-
governmental requirements and private covenants now or hereafter
relating to the ownership, construction, use or operation of the
Property, including, but not limited to, those concerning
employment and compensation of persons engaged in operation and
maintenance of the Property and any environmental or ecological
requirements, even if such compliance shall require structural
changes to the Property; PROVIDED, HOWEVER, that, Mortgagor may,
upon providing Mortgagee with security satisfactory to Mortgagee,
proceed diligently and in good faith to contest, or permit to be
contested, the validity or applicability of any such statute,
ordinance, regulation or requirement so long as during such
contest the Property shall not be subject to any lien, charge,
fine or other liability and shall not be in danger of being
forfeited, lost or closed. Mortgagor shall not use or occupy, or
allow the use or occupancy of, the Property in any manner which
violates any lease of or any other agreement applicable to the
Property or any applicable law, rule, regulation or order or
which constitutes a public or private nuisance or which makes
void, voidable or cancelable, or increases the premium of, any
insurance then in force with respect thereto.
26
1.25. ADDITIONAL TAXES. In the event of the enactment
after this date of any law of the state where the Property is
located or of any other governmental entity deducting from the
value of the Property for the purpose of taxation any lien or
security interest thereon, or imposing upon Mortgagee the payment
of the whole or any part of the taxes or assessments or charges
or liens herein required to be paid by Mortgagor, or changing in
any way the laws relating to the taxation of mortgages or
security agreements or debts secured by mortgages or security
agreements or the interest of the mortgagee or secured party in
the property covered thereby, or the manner of collection of such
taxes, so as to adversely affect this Mortgage or the
indebtedness secured hereby or Mortgagee, then, and in any such
event, Mortgagor, upon demand by Mortgagee, shall pay such taxes,
assessments, charges or liens, or reimburse Mortgagee therefor;
PROVIDED, HOWEVER, that if in the opinion of counsel for
Mortgagee (a) it might be unlawful to require Mortgagor to make
such payment, or (b) the making of such payment might result in
the imposition of interest beyond the maximum amount permitted by
law, then and in either such event, Mortgagee may elect, by
notice in writing given to Mortgagor, to declare all of the
indebtedness secured hereby to be and become due and payable in
full sixty (60) days from the giving of such notice.
1.26. SECURED INDEBTEDNESS. It is understood and agreed
that this Mortgage shall secure payment of not only the
indebtedness evidenced by the Note but also any and all
substitutions, replacements, renewals and extensions of the Note,
any and all indebtedness and obligations arising pursuant to the
terms hereof and any and all indebtedness and obligations arising
pursuant to the terms of any of the other Loan Documents, all of
which indebtedness is equally secured with and has the same
priority as any amounts advanced as of the date hereof. It is
agreed that any future advances made by Mortgagee to or for the
benefit of Mortgagor from time to time under this Mortgage or the
other Loan Documents and whether or not such advances are
obligatory or are made at the option of Mortgagee, or otherwise,
made for any purpose, and all interest accruing thereon, shall be
equally secured by this Mortgage and shall have the same priority
as all amounts, if any, advanced as of the date hereof and shall
be subject to all of the terms and provisions of this Mortgage.
1.27. MORTGAGOR'S WAIVERS. To the full extent permitted
by law, Mortgagor agrees that Mortgagor shall not at any time
insist upon, plead, claim or take the benefit or advantage of any
law now or hereafter in force providing for any appraisement,
valuation, stay, moratorium or extension, or any law now or
hereafter in force providing for the reinstatement of the
indebtedness secured hereby prior to any sale of the Property to
be made pursuant to any provisions contained herein or prior to
the entering of any decree, judgment or order of any court of
competent jurisdiction, or any right under any statute to redeem
all or any part of the Property so sold. Mortgagor, for
Mortgagor and Mortgagor's successors and assigns, and for any and
all persons ever claiming any interest in the Property, to the
full extent permitted by law, hereby knowingly, intentionally and
voluntarily with and upon the advice of competent counsel:
(a) waives, releases, relinquishes and forever forgoes all rights
of valuation, appraisement, stay of execution, reinstatement and
notice of election or intention to mature or declare due the
secured indebtedness (except such notices as are specifically
provided for herein); (b) waives, releases, relinquishes and
forever forgoes all right to a marshalling of the assets of
Mortgagor, including the Property, to a sale in the inverse order
of alienation, or to direct the order in which any of the
Property, shall be sold in the event of foreclosure of the liens
and security interests hereby created and agrees that any court
having jurisdiction to foreclose such liens and security
interests may order the Property sold as an entirety; and (c)
waives, releases, relinquishes and forever forgoes all rights and
periods of redemption provided under applicable law. To the full
extent
27
permitted by law, Mortgagor shall not have or assert any right
under any statute or rule of law pertaining to the exemption of
homestead or other exemption under any federal, state or local
law now or hereafter in effect, the administration of estates of
decedents or other matters whatever to defeat, reduce or affect
the right of Mortgagee under the terms of this Mortgage to a sale
of the Property, for the collection of the secured indebtedness
without any prior or different resort for collection, or the
right of Mortgagee under the terms of this Mortgage to the
payment of the indebtedness secured hereby out of the proceeds of
sale of the Property in preference to every other claimant
whatever. Further, Mortgagor hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel,
waives, releases, relinquishes and forever forgoes all present
and future statutes of limitations as a defense to any action to
enforce the provisions of this Mortgage or to collect any of the
indebtedness secured hereby the fullest extent permitted by law.
Mortgagor covenants and agrees that upon the commencement of a
voluntary or involuntary bankruptcy proceeding by or against
Mortgagor, Mortgagor shall not seek a supplemental stay or
otherwise pursuant to 11 U.S.C. Section 105 or any other
provision of the Bankruptcy Reform Act of 1978, as amended, or
any other debtor relief law (whether statutory, common law, case
law, or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, to stay,
interdict, condition, reduce or inhibit the ability of Mortgagee
to enforce any rights of Mortgagee against any guarantor or
indemnitor of the secured obligations or any other party liable
with respect thereto by virtue of any indemnity, guaranty or
otherwise.
1.28. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(A) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVICE OF COMPETENT COUNSEL, (I) SUBMITS TO PERSONAL JURISDICTION
IN THE STATE OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING BY
ANY PERSON ARISING FROM OR RELATING TO THE NOTE, THIS MORTGAGE OR
ANY OTHER OF THE LOAN DOCUMENTS, (II) AGREES THAT ANY SUCH
ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW
YORK, (III) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (IV)
TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT
NOTHING HEREIN SHALL AFFECT THE RIGHT OF MORTGAGEE TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). MORTGAGOR FURTHER
CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE
MORTGAGOR AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 4.5
HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT
NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTLVENESS OF
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).
(B) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT
28
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO THE INDEBTEDNESS
SECURED HEREBY OR ANY CONDUCT, ACT OR OMISSION OF MORTGAGEE OR
MORTGAGOR, OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN EACH OR THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
1.29. CONTRACTUAL STATUTE OF LIMITATIONS. Mortgagor
hereby agrees that any claim or cause of action by Mortgagor
against Mortgagee, or any of Mortgagee's directors, officers,
employees, agents, accountants or attorneys, based upon, arising
from or relating to the indebtedness secured hereby, or any other
matter, cause or thing whatsoever, whether or not relating
thereto, occurred, done, omitted or suffered to be done by
Mortgagee or by Mortgagee's directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or
in tort or otherwise, shall be barred unless asserted by
Mortgagor by the commencement of an action or proceeding in a
court of competent jurisdiction by the filing of a complaint
within one (1) year after Mortgagor first acquires or reasonably
should have acquired knowledge of the first act, occurrence or
omission upon which such claim or cause of action, or any part
thereof, is based and service of a summons and complaint on an
officer of Mortgagee or any other person authorized to accept
service of process on behalf of Mortgagee, within thirty (30)
days thereafter. Mortgagor agrees that such one (1) year period
of time is reasonable and sufficient time for a borrower to
investigate and act upon any such claim or cause of action. The
one (1) year period provided herein shall not be waived, tolled
or extended except by the specific written agreement of
Mortgagee. This provision shall survive any termination of this
Mortgage or any of the other Loan Documents.
1.30. Intentionally Omitted.
1.31. Hazardous Waste and Other Substances.
(a) Mortgagor hereby represents and warrants to Mortgagee
that, as of the date hereof: (i) to the best of Mortgagor's
knowledge, information and belief, the Property is not in direct
or indirect violation of any local, state or federal law, rule or
regulation applicable to the Property pertaining to environmental
regulation, contamination or clean-up (collectively,
"Environmental Laws"), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 ET SEQ. and 40 CFR Section
302.1 ET SEQ.), the Resource Conservation and Recovery Act of
1976 (42 U.S.C.Section 6901 ET SEQ.), The Federal Water Pollution
Control Act (33 U.S.C. Section 1251 ET SEQ. and 40 CFR Section
116.1 ET SEQ.), and the Hazardous Materials Transportation Act
(49 U.S.C. Section 1801 ET SEQ.), the Industrial Site Recovery
Act, N.J.S.A. 13:1K-6 ET SEQ., the Leaking Underground Storage
Tank Act, N.J.S.A. 58:10A-21 ET SEQ., the Spill Compensation and
Control Act, N.J.S.A. 58:10-23.11 ET SEQ., and the regulations
promulgated pursuant to said laws, all as amended; (ii) to the
best knowledge of Mortgagor, no hazardous, toxic or harmful
substances, wastes, materials, pollutants or contaminants
(including, without limitation, asbestos, polychlorinated
biphenyls, petroleum products, flammable explosives, radioactive
materials, infectious substances or raw materials which include
hazardous constituents) or any other substances or materials
which are included under or regulated by Environmental Laws
(collectively, "Hazardous Substances") are located on or have
been handled, generated, stored, processed or disposed of on or
transported, released or
29
discharged from the Property (including underground
contamination) except in the ordinary course of Mortgagor's
business and in compliance with all Environmental Laws; (iii) the
Property is not subject to any private or governmental lien or
judicial or administrative notice or action relating to Hazardous
Substances; (iv) there are no existing or closed underground
storage tanks or other underground storage receptacles for
Hazardous Substances on the Property; (v) Mortgagor has received
no notice of, and to the best of Mortgagor's knowledge and
belief, there exists no investigation, action, proceeding or
claim by any agency, authority or unit of government or by any
third party which could result in any liability, penalty,
sanction or judgment under any Environmental Laws with respect to
any condition, use or operation of the Property nor does
Mortgagor know of any basis for such a claim; and (vi) Mortgagor
has received no notice of and, to the best of Mortgagor's
knowledge and belief, there has been no claim by any party that
any use, operation or condition of the Property has caused any
nuisance or any other liability or adverse condition on any other
property nor does Mortgagor know of any basis for such a claim.
(b) Mortgagor shall keep or cause the Property to be kept
free from Hazardous Substances (except those substances used in
the ordinary course of business at the Property and in compliance
with all Environmental Laws) and in compliance with all
Environmental Laws, shall not install or use, or permit to be
installed or used, any underground storage tanks, shall expressly
prohibit the use, generation, handling, storage, production,
processing and disposal of Hazardous Substances by all tenants of
the Property, and, without limiting the generality of the
foregoing, during the term of this Mortgage, shall not install in
the Improvements or permit to be installed in the Improvements
asbestos or any substance containing asbestos.
(c) Mortgagor shall promptly notify Mortgagee if Mortgagor
shall become aware of the possible existence of any Hazardous
Substances on the Property or if Mortgagor shall become aware
that the Property is or may be in direct or indirect violation of
any Environmental Laws. Further, immediately upon receipt of the
same, Mortgagor shall deliver to Mortgagee copies of any and all
orders, notices, permits, applications, reports, and other
communications, documents and instruments pertaining to the
actual, alleged or potential presence or existence of any
Hazardous Substances at, on, about, under, within, near or in
connection with the Property. Mortgagor shall, promptly and when
and as required, at Mortgagor's sole cost and expense, take, or
cause to be taken, all actions as shall be necessary or advisable
for the clean-up of any and all portions of the Property or other
affected property, including, without limitation, all
investigative, monitoring, removal, containment and remedial
actions in accordance with all applicable Environmental Laws (and
in all events in a manner satisfactory to Mortgagee), and shall
further pay or cause to be paid, at no expense to Mortgagee, all
clean-up, administrative and enforcement costs of applicable
governmental agencies which may be asserted against the Property.
In the event Mortgagor fails to do so after notice from Mortgagee
and a reasonable time to perform, subject to the Ground Lease,
Mortgagee may, but shall not be obligated to, cause the Property
or other affected property to be freed from any Hazardous
Substances or otherwise brought into conformance with
Environmental Laws and any and all costs and expenses incurred by
Mortgagee in connection therewith, together with interest thereon
at the Default Interest Rate from the date incurred by Mortgagee
until actually paid by Mortgagor, shall be immediately paid by
Mortgagor on demand and shall be secured by this Mortgage and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Mortgagor hereby grants to
Mortgagee and its agents and employees access to the Property
and, subject to the ground lease of the Real Estate (as
heretofore amended, the "Ground Lease"), dated October 26, 1983,
between Resorts International, Inc. and Ocean Showboat, Inc. a
license to remove any items constituting Hazardous
30
Substances and to do all things necessary to bring the Property
in conformance with Environmental Laws. Mortgagor covenants and
agrees, at Mortgagor's sole cost and expense, to indemnify,
defend (at trial and appellate levels, and with attorneys,
consultants and experts acceptable to Mortgagee), and hold
Mortgagee harmless from and against any and all liens, damages,
losses, liabilities, obligations, settlement payments, penalties,
assessments, citations, directives, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or of any nature whatsoever (including,
without limitation, reasonable attorneys', consultants' and
experts' fees and disbursements actually incurred in
investigating, defending, settling or prosecuting any claim,
litigation or proceeding) which may at any time be imposed upon,
incurred by or asserted or awarded against Mortgagee or the
Property, and arising directly or indirectly from or out of: (i)
the presence, release or threat of release of any Hazardous
Substances on, in, under or affecting all or any portion of the
Property or any surrounding areas, regardless of whether or not
caused by or within the control of Mortgagor; (ii) the violation
of any Environmental Laws relating to or affecting the Property,
whether or not caused by or within the control of Mortgagor;
(iii) the failure by Mortgagor to comply fully with the terms and
conditions of this Section 1.31; (iv) the breach of any
representation or warranty contained in this Section 1.31; or (v)
the enforcement of this Section 1.31, including, without
limitation, the cost of assessment, containment and/or removal of
any and all Hazardous Substances from all or any portion of the
Property or any surrounding areas, the cost of any actions taken
in response to the presence, release or threat of release of any
Hazardous Substances on, in, under or affecting any portion of
the Property or any surrounding areas to prevent or minimize such
release or threat of release so that it does not migrate or
otherwise cause or threaten danger to present or future public
health, safety, welfare or the environment, and costs incurred to
comply with the Environmental Laws in connection with all or any
portion of the Property or any surrounding areas. The indemnity
set forth in this Section 1.31(c) shall also include any
diminution in the value of the security afforded by the Property
or any future reduction in the sales price of the Property by
reason of any matter set forth in this Section 1.31(c).
Mortgagee's rights under this Section shall survive payment in
full of the indebtedness secured hereby and shall be in addition
to all other rights of Mortgagee under this Mortgage, the Note
and the other Loan Documents.
(d) Upon Mortgagee's request, at any time after the
occurrence of a default hereunder or at such other time, but not
more than once in any twelve (12) month period, as Mortgagee has
reasonable grounds to believe that Hazardous Substances are or
have been released, stored or disposed of on or around the
Property or that the Property may be in violation of the
Environmental Laws, Mortgagor shall provide, at Mortgagor's sole
cost and expense, an inspection or audit of the Property prepared
by a hydrogeologist or environmental engineer or other
appropriate consultant approved by Mortgagee indicating the
presence or absence of Hazardous Substances on the Property or an
inspection or audit of the Improvements prepared by an
engineering or consulting firm approved by Mortgagee indicating
the presence or absence of friable asbestos or substances
containing asbestos on the Property. If Mortgagor fails to
provide such inspection or audit within thirty (30) days after
such request, Mortgagee may order the same, and Mortgagor hereby
grants to Mortgagee and its employees and agents access to the
Property, subject to the Ground Lease, and a license to undertake
such inspection or audit. The cost of such inspection or audit,
together with interest thereon at the Default Interest Rate from
the date incurred by Mortgagee until actually paid by Mortgagor,
shall be immediately paid by Mortgagor on demand and shall be
secured by this Mortgage and by all of thc other Loan Documents
securing all or any part of the indebtedness evidenced by the
Note.
31
(e) Without limiting the foregoing, where recommenced by a
"Phase I" or "Phase II" assessment or otherwise required by
Mortgagee, Mortgagor shall establish and comply with an
operations and maintenance program relative to the Property, in
form and substance acceptable to Mortgagee, prepared by an
environmental consultant acceptable to Mortgagee, which program
shall address any Hazardous Substances (including asbestos
containing material or lead based paint) that may now or in the
future be detected on the Property. Without limiting the
generality of the preceding sentence, Mortgagee may require (i)
periodic notices or reports to Mortgagee in form, substance and
at such intervals as Mortgagee may specify, (ii) an amendment to
such operations and maintenance program to address changing
circumstances, laws or other matters, (iii) at Mortgagor's sole
expense, supplemental examination of the Property by consultants
specified by Mortgagee, (iv) subject to the Ground Lease, access
to the Property, by Mortgagee, its agents or servicer, to review
and assess the environmental condition of the Property and
Mortgagor's compliance with any operations and maintenance
program, and (v) variation of the operations and maintenance
program in response to the reports provided by any such
consultants.
1.32. Indemnification; Subrogation.
(a) Mortgagor shall indemnify, defend and hold Mortgagee
harmless against: (i) any and all claims for brokerage, leasing,
finders or similar fees which may be made relating to the
Property or the secured indebtedness, and (ii) any and all
liability, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including Mortgagee's
reasonable attorneys' fees, together with reasonable appellate
counsel fees, if any) of whatever kind or nature which may be
asserted against, imposed on or incurred by Mortgagee in
connection with the secured indebtedness, this Mortgage, the
Property, or any part thereof, or the exercise by Mortgagee of
any rights or remedies granted to it under this Mortgage;
provided, however, that nothing herein shall be construed to
obligate Mortgagor to indemnify, defend and hold harmless
Mortgagee from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and
expenses enacted against, imposed on or incurred by Mortgagee
solely by reason of Mortgagee's willful misconduct or gross
negligence.
(b) If Mortgagee is made a party defendant to any
litigation or any claim is threatened or brought against
Mortgagee concerning the secured indebtedness, this Mortgage, the
Property, or any part thereof, or any interest therein, or the
construction, maintenance, operation or occupancy or use thereof,
then Mortgagor shall indemnify, defend and hold Mortgagee
harmless from and against all liability by reason of said
litigation or claims, including reasonable attorneys' fees
(together with reasonable appellate counsel fees, if any) and
expenses incurred by Mortgagee in any such litigation or claim,
whether or not any such litigation or claim is prosecuted to
judgment. If Mortgagee commences an action against Mortgagor to
enforce any of the terms hereof or to prosecute any breach by
Mortgagor of any of the terms hereof or to recover any sum
secured hereby, Mortgagor shall pay to Mortgagee its reasonable
attorneys' fees (together with reasonable appellate counsel,
fees, if any) and expenses. The right to such attorneys' fees
(together with reasonable appellate counsel fees, if any) and
expenses shall be deemed to have accrued on the commencement of
such action, and shall be enforceable whether or not such action
is prosecuted to judgment. If Mortgagor breaches any term of this
Mortgage, Mortgagee may engage the services of an attorney or
attorneys to protect its rights hereunder, and in the event of
such engagement following any breach by Mortgagor, Mortgagor
shall pay Mortgagee reasonable attorneys' fees (together with
reasonable appellate counsel fees, if any) and expenses incurred
by Mortgagee, whether or not an action is actually
32
commenced against Mortgagor by reason of such breach. All
references to "attorneys" in this Subsection and elsewhere in
this Mortgage shall include without limitation any attorney or
law firm engaged by Mortgagee and Mortgagee's in-house counsel,
and all references to "fees and expenses" in this Subsection and
elsewhere in this Mortgage shall include without limitation any
fees of such attorney or law firm and any allocation charges and
allocation costs of Mortgagee's in-house counsel.
(c) A waiver of subrogation shall be obtained by Mortgagor
from its insurance carrier and, consequently, Mortgagor waives
any and all right to claim or recover against Mortgagee, its
officers, employees, agents and representatives, for loss of or
damage to Mortgagor, the Property, Mortgagor's property or the
property of others under Mortgagor's control from any cause
insured against or required to be insured against by the
provisions of this Mortgage.
1.33. COVENANTS WITH RESPECT TO INDEBTEDNESS, OPERATIONS,
FUNDAMENTAL CHANGES OF MORTGAGOR. Mortgagor represents, warrants
and covenants as of the date of hereof and until such time as the
secured indebtedness is paid in full, that Mortgagor:
(a) does not own and will not own any encumbered asset
other than (i) the Property, and (ii) incidental personal
property necessary for the operation of the Property;
(b) is not engaged and will not engage in any business
other than the ownership and leasing of the Property;
(c) will not enter into any contract or agreement with any
member, principal or affiliate of the Mortgagor or any affiliate
of the members of the Mortgagor except upon terms and conditions
that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third
parties other than an affiliate, and has not made and will not
make any loans or advances to any third part, (including any
affiliate);
(d) has not incurred and will not incur any debt secured
or unsecured, direct or contingent (including guaranteeing any
obligation), other than the secured indebtedness;
(e) [RESERVED]
(f) is and will be solvent and pay its debts from its
assets as the same shall become due;
(g) has done or caused to be done and will do all things
necessary to preserve its existence, and will not, nor will any
member or shareholders thereof, amend, modify or otherwise change
its organizational documents in a manner which adversely affects
the Mortgagor's existence as a single purpose, bankruptcy remote
entity;
(h) will conduct and operate its business as presently
conducted and operated;
(i) will maintain books and records and bank accounts
separate from those of its affiliates, including its members;
33
(j) will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other
entity (including any affiliate thereof, including any member or
any affiliate of the general partner of the Mortgagor);
(k) will file its own tax returns;
(l) will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(m) will not seek the dissolution or winding up, in whole
or in part, of the Mortgagor;
(n) will not enter into any transaction of merger or
consolidation, or acquire by purchase or otherwise all or
substantially all of the business or assets of, or any stock or
beneficial ownership of, any entity;
(o) will not commingle the funds and other assets of the
Mortgagor with those of any member, any affiliate or any other
person;
(p) has and will maintain its assets in such a manner that
it is not costly or difficult to segregate, ascertain or identify
its individual assets from those of any affiliate or any other
person; and
(q) does not and will not hold itself out to be
responsible for the debts or obligations of any other person.
1.34. HANDICAPPED ACCESS. (a) Mortgagor agrees that the
Property shall at all times comply to the extent applicable with
the requirements of the Americans with Disabilities Act of 1990,
the Fair Housing Amendments Act of 1988, all state and local laws
and ordinances related to handicapped access and all rules,
regulations, and orders issued pursuant thereto including,
without limitation, the American with Disabilities Act
Accessibility Guidelines for Buildings and Facilities
(collectively, "Access Laws").
(b) Mortgagor agrees to give prompt notice to Mortgagee of
the receipt by Mortgagor of any complaints related to violations
of any Access Laws and of the commencement of any proceedings or
investigation which relate to compliance with applicable Access
Laws.
ARTICLE 2.
EVENTS OF DEFAULT
2.1. EVENTS OF DEFAULT. The occurrence of any of the
following events shall be a default hereunder:
(a) Mortgagor fails to timely perform any covenant,
agreement, obligation, term or condition hereof or of any other
Loan Document, including the Note, which requires payment of any
money to Mortgagee.
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(b) Mortgagor fails to provide, or to cause the provision
of, insurance as required by Section 1.4 hereof or fails to
perform any covenant, agreement, obligation, term or condition
set forth in Section 1.16 or 1.31 hereof.
(c) Mortgagor fails to perform any other covenant,
agreement, obligation, term or condition set forth herein other
than those otherwise described in this Section 2.1 and, to the
extent such failure or default is susceptible of being cured, the
continuance of such failure or default for thirty (30) days after
written notice thereof from Mortgagee to Mortgagor; PROVIDED,
HOWEVER, that if such default is susceptible of cure but such
cure cannot be accomplished with reasonable diligence within said
period of time, and if Mortgagor commences to cure such default
promptly after receipt of notice thereof from Mortgagee, and
thereafter prosecutes the curing of such default with reasonable
diligence, such period of time shall be extended for such period
of time as may be necessary to cure such default with reasonable
diligence, but not to exceed an additional sixty (60) days.
(d) Any representation or warranty made herein, in or in
connection with any application or commitment relating to the
loan evidenced by the Note, or in any of the other Loan Documents
to Mortgagee by Mortgagor, by any principal, member or general
partner in Mortgagor or by any indemnitor or guarantor under any
indemnity or guaranty executed in connection with the loan
secured hereby is determined by Mortgagee to have been false or
misleading in any material respect at the time made.
(e) There shall be a sale, conveyance, disposition,
alienation, hypothecation, leasing, assignment, pledge, mortgage,
granting of a security interest in or other transfer or further
encumbrancing of the Property, Mortgagor or its members, or any
portion thereof or any interest therein, in violation of Section
1.13 hereof.
(f) A default occurs under any of the other Loan Documents
which has not been cured within any applicable grace or cure
period therein provided.
(g) Mortgagor, any principal or member of Mortgagor
owning, directly or indirectly, twenty-five percent (25%) or more
of the interests in Mortgagor, or any indemnitor or guarantor
under any indemnity or guaranty executed in connection with the
loan secured hereby becomes insolvent, or shall make a transfer
in fraud of creditors, or shall make an assignment for the
benefit of creditors, shall file a petition in bankruptcy, shall
voluntarily be adjudicated insolvent or bankrupt or shall admit
in writing the inability to pay debts as they mature, shall
petition or apply to any tribunal for or shall consent to or
shall not contest the appointment of a receiver, trustee,
custodian or similar officer for Mortgagor, for any such
principal or member of Mortgagor or for any such indemnitor or
guarantor or for a substantial part of the assets of Mortgagor,
of any such principal or member of Mortgagor or of any such
indemnitor or guarantor, or shall commence any case, proceeding
or other action under any bankruptcy, reorganization,
arrangement, readjustment or debt, dissolution or liquidation law
or statute of any jurisdiction, whether now or hereafter in
effect.
(h) A petition is filed or any case, proceeding or other
action is commenced against Mortgagor, against any principal or
member of Mortgagor owning, directly or indirectly, twenty-five
percent (25%) or more of the interests in Mortgagor, or against
any indemnitor or guarantor under any indemnity, or guaranty
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executed in connection with the loan secured hereby seeking to
have an order for relief entered against it as debtor or seeking
reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts or other relief under any law
relating to bankruptcy, insolvency, arrangement, reorganization,
receivership or other debtor relief under any law or statute of
any jurisdiction, whether now or hereafter in effect, or a court
of competent jurisdiction enters an order for relief against
Mortgagor, against any principal or member of Mortgagor or
against any indemnitor or guarantor under any indemnity or
guaranty executed in connection with the loan secured hereby, as
debtor, or an order, judgment or decree is entered appointing,
with or without the consent of Mortgagor, of any such principal
or member of Mortgagor or of any such indemnitor or guarantor, a
receiver, trustee, custodian or similar officer for Mortgagor,
for any such principal or member of Mortgagor or for any such
indemnitor or guarantor, or for any substantial part of any of
the properties of Mortgagor, of any such principal or member of
Mortgagor or of any such indemnitor or guarantor, and if any such
event shall occur, such petition, case, proceeding, action,
order, judgment or decree shall not be dismissed within sixty
(60) days after being commenced.
(i) The Property or any part thereof shall be taken on
execution or other process of law in any action against
Mortgagor.
(j) Mortgagor abandons all or a portion of the Property.
(k) The holder of any lien or security interest on the
Property (without implying the consent of Mortgagee to the
existence or creation of any such lien or security interest),
whether superior or subordinate to this Mortgage or any of the
other Loan Documents, declares a default and such default is not
cured within any applicable grace or cure period set forth in the
applicable document or such holder institutes foreclosure or
other proceedings for the enforcement of its remedies thereunder.
(l) The Property, or any part thereof, is subjected to
actual or threatened waste or to removal, demolition or material
alteration so that the value of the Property is materially
diminished thereby and Mortgagee determines (in its subjective
determination) that it is not adequately protected from any loss,
damage or risk associated therewith.
(m) Any dissolution, termination, partial or complete
liquidation, merger or consolidation of Mortgagor or any of its
principals or members owning, directly or indirectly, twenty-five
percent (25%) or more of the interests in Mortgagor.
(n) [RESERVED]
(o) A default by Mortgagor occurs under the Ground Lease
which default has not been cured within any applicable grace or
cure period, if any, provided therein.
ARTICLE 3.
REMEDIES
3.l. REMEDIES AVAILABLE. If there shall occur a default
under this Mortgage, and such default has not been cured within
any applicable grace or cure period, then this Mortgage is
subject to foreclosure as provided by law and Mortgagee may, at
its option and by or through a trustee, nominee, assignee or
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otherwise, to the fullest extent permitted by law, exercise any
or all of the following rights, remedies and recourses, either
successively or concurrently:
(a) ACCELERATION. Accelerate the maturity date of the Note
and declare any or all of the indebtedness secured hereby to be
immediately due and payable without any presentment, demand,
protest, notice or action of any kind whatever (each of which is
hereby expressly waived by Mortgagor), whereupon the same shall
become immediately due and payable. Upon any such acceleration,
payment of such accelerated amount shall constitute a prepayment
of the principal balance of the Note and any applicable
prepayment fee provided for in the Note shall then be immediately
due and payable.
(b) ENTRY ON THE PROPERTY. Either in person or by agent,
with or without bringing any action or proceeding, or by a
receiver appointed by a court and without regard to the adequacy
of its security, enter upon and take possession of the Property,
or any part thereof, without force or with such force as is
permitted by law and without notice or process or with such
notice or process as is required by law unless such notice and
process is waivable, in which case Mortgagor hereby waives such
notice and process, and do any and all acts and perform any and
all work which may be desirable or necessary in Mortgagee's
judgment to preserve the value, marketability or rentability of
the Property, to increase the income therefrom, to manage and
operate the Property or to protect the security hereof and all
sums expended by Mortgagee therefor, together with interest
thereon at the Default Interest Rate, shall be immediately due
and payable to Mortgagee by Mortgagor on demand and shall be
secured hereby and by all of the other Loan Documents securing
all or any part of the indebtedness evidenced by the Note.
(c) COLLECT RENTS AND PROFITS. With or without taking
possession of the Property, ▇▇▇ or otherwise collect the Rents
and Profits, including those past due and unpaid.
(d) APPOINTMENT OF RECEIVER. Upon, or at any time prior or
after, initiating the exercise of any power of sale, instituting
any judicial foreclosure or instituting any other foreclosure of
the liens and security interests provided for herein or any other
legal proceedings hereunder, make application to a court of
competent jurisdiction for appointment of a receiver for all or
any part of the Property, as a matter of strict right and without
notice to Mortgagor and without regard to the adequacy of the
Property for the repayment of the indebtedness secured hereby or
the solvency of Mortgagor or any person or persons liable for the
payment of the indebtedness secured hereby, and Mortgagor does
hereby irrevocably consent to such appointment, waives any and
all notices of and defenses to such appointment and agrees not to
oppose any application therefor by Mortgagee, but nothing herein
is to be construed to deprive Mortgagee of any other right,
remedy or privilege Mortgagee may now have under the law to have
a receiver appointed, PROVIDED, HOWEVER, that, the appointment of
such receiver, trustee or other appointee by virtue of any court
order, statute or regulation shall not impair or in any manner
prejudice the rights of Mortgagee to receive payment of the Rents
and Profits pursuant to other terms and provisions hereof. Any
such receiver shall have all of the usual powers and duties of
receivers in similar cases, including, without limitation, the
full power to hold, develop, rent, lease, manage, maintain,
operate and otherwise use or permit the use of the Property upon
such terms and conditions as said receiver may deem to be prudent
and reasonable under the circumstances as more fully set forth in
Section 3.3 below. Such receivership shall, at the option of
Mortgagee, continue until full payment of all of the indebtedness
secured hereby or until title to the Property shall have passed
by foreclosure sale under this Mortgage or deed in lieu of
foreclosure.
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(e) FORECLOSURE. Immediately commence an action to
foreclose this Mortgage or to specifically enforce its provisions
or any of the indebtedness secured hereby pursuant to the
statutes in such case made and provided and sell the Property or
cause the Property to be sold in accordance with the requirements
and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.
(1) In the event foreclosure proceedings are filed by
Mortgagee, all expenses incident to such proceeding, including,
but not limited to, attorneys' fees and costs, shall be paid by
Mortgagor and secured by this Mortgage and by all of the other
Loan Documents securing all or any part of the indebtedness
evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without
limitation, interest at the Default Interest Rate (as defined in
the Note), any prepayment charge, fee or premium required to be
paid under the Note in order to prepay principal (to the extent
permitted by applicable law), attorneys' fees and any other
amounts due and unpaid to Mortgagee under the Loan Documents, may
be bid by Mortgagee in the event of a foreclosure sale hereunder.
In the event of a judicial sale pursuant to a foreclosure decree,
it is understood and agreed that Mortgagee or its assigns may
become the purchaser of the Property or any part thereof.
(2) Mortgagee may, by following the procedures and
satisfying the requirements prescribed by applicable law,
foreclose on only a portion of the Property and, in such event,
said foreclosure shall not affect the lien of this Mortgage on
the remaining portion of the Property foreclosed.
(f) OTHER. Exercise any other right or remedy available
hereunder, under any of the other Loan Documents or at law or in
equity.
3.2. APPLICATION OF PROCEEDS. To the fullest extent
permitted by law, the proceeds of any sale under this Mortgage
shall be applied to the extent funds are so available to the
following items in such order as Mortgagee in its discretion may
determine:
(a) To payment of the costs, expenses and fees of taking
possession of the Property, and of holding, operating,
maintaining, using, leasing, repairing, improving, marketing and
selling the same and of otherwise enforcing Mortgagee's right and
remedies hereunder and under the other Loan Documents, including,
but not limited to, receivers' fees, court costs, attorneys',
accountants', appraisers', managers' and other professional fees,
title charges and transfer taxes or fees.
(b) To payment of all sums expended by Mortgagee under the
terms of any of the Loan Documents and not yet repaid, together
with interest on such sums at the Default Interest Rate.
(c) To payment of the secured indebtedness and all other
obligations secured by this Mortgage, including, without
limitation, interest at the Default Interest Rate and, to the
extent permitted by applicable law, any prepayment fee, charge or
premium required to be paid under the Note in order to prepay
principal, in any order that Mortgagee chooses in its sole
discretion.
The remainder, if any, of such funds shall be
disbursed to Mortgagor or to the person or persons legally
entitled thereto.
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3.3. RIGHT AND AUTHORITY OF RECEIVER OR MORTGAGEE IN THE
EVENT OF DEFAULT; POWER OF ATTORNEY. Upon the occurrence of a
default hereunder, which default is not cured within any
applicable grace or cure period, and entry upon the Property
pursuant to Section 3.1(b) hereof or appointment of a receiver
pursuant to Section 3.1(d) hereof, and under such terms and
conditions as may be prudent and reasonable under the
circumstances in Mortgagee's or the receiver's sole discretion,
all at Mortgagor's expense, Mortgagee or said receiver, or such
other persons or entities as they shall hire, direct or engage,
as the case may be, may do or permit one or more of the
following, successively or concurrently, subject to the Ground
Lease: (a) enter upon and take possession and control of any and
all of the Property; (b) take and maintain possession of all
documents, books, records, papers and accounts relating to the
Property; (c) exclude Mortgagor and its agents, servants and
employees wholly from the Property; (d) manage and operate the
Property; (e) preserve and maintain the Property; (f) make
repairs and alterations to the Property; (g) complete any
construction or repair of the Improvements, with such changes,
additions or modifications of the plans and specifications or
intended disposition and use of the Improvements as Mortgagee may
in its sole discretion deem appropriate or desirable to place the
Property in such condition as will, in Mortgagee's sole
discretion, make it or any part thereof readily marketable or
rentable; (h) conduct a marketing or leasing program with respect
to the Property, or employ a marketing or leasing agent or agents
to do so, directed to the leasing or sale of the Property under
such terms and conditions as Mortgagee may in its sole discretion
deem appropriate or desirable; (i) employ such contractors,
subcontractors, materialmen, architects, engineers, consultants,
managers, brokers, marketing agents, or other employees, agents,
independent contractors or professionals, as Mortgagee may in its
sole discretion deem appropriate or desirable to implement and
effectuate the rights and powers herein granted; (j) execute and
deliver, in the name of Mortgagor as attorney-in-fact and agent
of Mortgagor or in its own name as Mortgagee, such documents and
instruments as are necessary or appropriate to consummate
authorized transactions; (k) enter such leases, whether of real
or personal property, or tenancy agreements, under such terms and
conditions as Mortgagee may in its sole discretion deem
appropriate or desirable; (1) collect and receive the Rents and
Profits from the Property; (m) eject tenants or repossess
personal property, as provided by law, for breaches of the
conditions of their leases or other agreements; (n) ▇▇▇ for
unpaid Rents and Profits, payments, income or proceeds in the
name of Mortgagor or Mortgagee; (o) maintain actions in forcible
entry and detainer, ejectment for possession and actions in
distress for rent; (p) compromise or give acquittance for Rents
and Profits, payments, income or proceeds that may become due;
(q) delegate or assign any and all rights and powers given to
Mortgagee by this Mortgage; and (r) do any acts which Mortgagee
in its sole discretion deems appropriate or desirable to protect
the security hereof and use such measures, legal or equitable, as
Mortgagee may in its sole discretion deem appropriate or
desirable to implement and effectuate the provisions of this
Mortgage. This Mortgage shall constitute a direction to and full
authority to any lessee, or other third party who has heretofore
dealt or contracted or may hereafter deal or contract with
Mortgagor or Mortgagee, at the request of Mortgagee, to pay all
amounts owing under any lease, contract, concession, license or
other agreement to Mortgagee without proof of the default relied
upon. Any such lessee or third party is hereby irrevocably
authorized to rely upon and comply with (and shall be fully
protected by Mortgagor in so doing) any request, notice or demand
by Mortgagee for the payment to Mortgagee of any Rents and
Profits or other sums which may be or thereafter become due under
its lease, contract, concession, license or other agreement, or
for the performance of any undertakings under any such lease,
contract, concession, license or other agreement, and shall have
no right or duty to inquire whether any default under this
Mortgage or under any of the other Loan Documents has actually
occurred or is then existing. Mortgagor hereby constitutes and
appoints Mortgagee, its assignees, successors, transferees and
nominees, as Mortgagor's true
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and lawful attorney-in-fact and agent, with full power of
substitution in the Property, in Mortgagor's name, place and
stead, to do or permit any one or more of the foregoing described
rights, remedies, powers and authorities, successively or
concurrently, and said power of attorney shall be deemed a power
coupled with an interest and irrevocable so long as any
indebtedness secured hereby is outstanding. Any money advanced
by Mortgagee in connection with any action taken under this
Section 3.3, together with interest thereon at the Default
Interest Rate from the date of making such advancement by
Mortgagee until actually paid by Mortgagor, shall be a demand
obligation owing by Mortgagor to Mortgagee and shall be secured
by this Mortgage and by every other instrument securing the
secured indebtedness.
3.4. OCCUPANCY AFTER FORECLOSURE. In the event there is a
foreclosure sale hereunder and at the time of such sale,
Mortgagor or Mortgagor's representatives, successors or assigns,
or any other persons claiming any interest in the Property by,
through or under Mortgagor (except tenants of space in the
Improvements subject to leases entered into prior to the date
hereof), are occupying or using the Property, or any part
thereof, then, to the extent not prohibited by applicable law,
each and all shall, at the option of Mortgagee or the purchaser
at such sale, as the case may be, immediately become the tenant
of the purchaser at such sale, which tenancy shall be a tenancy
from day-to-day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of
the Property occupied or used, such rental to be due daily to the
purchaser. Further, to the extent permitted by applicable law,
in the event the tenant fails to surrender possession of the
Property upon the termination of such tenancy, the purchaser
shall be entitled to institute and maintain an action for
unlawful detainer of the Property in the appropriate court of the
county in which the Real Estate is located.
3.5. NOTICE TO ACCOUNT DEBTORS. Mortgagee may, at any time
after a default hereunder, which default is not cured within any
applicable grace or cure period, notify the account debtors and
obligors of any accounts, chattel paper, negotiable instruments
or other evidences of indebtedness to Mortgagor included in the
Property to pay Mortgagee directly. Mortgagor shall at any time
or from time to time upon the request of Mortgagee provide to
Mortgagee a current list of all such account debtors and obligors
and their addresses.
3.6. CUMULATIVE REMEDIES. All remedies contained in this
Mortgage are cumulative and Mortgagee shall also have all other
remedies provided at law and in equity or in any other Loan
Documents. Such remedies may be pursued separately, successively
or concurrently at the sole subjective direction of Mortgagee and
may be exercised in any order and as often as occasion therefor
shall arise. No act of Mortgagee shall be construed as an
election to proceed under any particular provisions of this
Mortgage to the exclusion of any other provision of this Mortgage
or as an election of remedies to the exclusion of any other
remedy which may then or thereafter be available to Mortgagee.
No delay or failure by Mortgagee to exercise any right or remedy
under this Mortgage shall be construed to be a waiver of that
right or remedy or of any default hereunder. Mortgagee may
exercise any one or more of its rights and remedies at its option
without regard to the adequacy of its security.
3.7. PAYMENT OF EXPENSES. Mortgagor shall pay on demand all
of Mortgagee's expenses incurred in any efforts to enforce any
terms of this Mortgage, whether or not any lawsuit is filed and
whether or not foreclosure is commenced but not completed,
including, but not limited to, legal fees and disbursements,
foreclosure costs and title charges, together with interest
thereon from and after the date
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incurred by Mortgagee until actually paid by Mortgagor at the
Default Interest Rate, and the same shall be secured by this
Mortgage and by all of the other Loan Documents securing all or
any part of the indebtedness evidenced by the Note.
ARTICLE 4.
MISCELLANEOUS TERMS AND CONDITIONS
4.1. TIME OF ESSENCE. Time is of the essence with respect
to all provisions of this Mortgage.
4.2. RELEASE OF MORTGAGE. If all of the secured
indebtedness be paid, then and in that event only, all rights
under this Mortgage shall terminate except for those provisions
hereof which by their terms survive, and the Property shall
become wholly clear of the liens, security interests,
conveyances and assignments evidenced hereby, which shall be
released by Mortgagee in due form upon Mortgagor's request and
at Mortgagor's cost. No release of this Mortgage or the lien
hereof shall be valid unless executed by Mortgagee.
4.3. CERTAIN RIGHTS OF MORTGAGEE. Without affecting
Mortgagor's liability for the payment of any of the
indebtedness secured hereby, Mortgagee may from time to time
and without notice to Mortgagor: (a) release any person liable
for the payment of the indebtedness secured hereby; (b) extend
or modify the terms of payment of the indebtedness secured
hereby; (c) accept additional real or personal property of any
kind as security or alter, substitute or release any property
securing the indebtedness secured hereby; (d) recover any part
of the Property; (e) consent in writing to the making of any
subdivision map or plat thereof; (f) join in granting any
easement therein; or (g) join in any extension agreement of
this Mortgage or any agreement subordinating the lien hereof.
4.4. WAIVER OF CERTAIN DEFENSES. No action for the
enforcement of the lien hereof or of any provision hereof shall
be subject to any defense which would not be good and available
to the party interposing the same in an action at law upon the
Note or any of the other Loan Documents.
4.5. NOTICES. All notices, demands, requests or other
communications to be sent by one party to the other hereunder
or required by law shall be in writing and shall be deemed to
have been validly given or served by delivery of the same in
person to the intended addressee, or by depositing the same
with Federal Express or another reputable private courier
service for next business day delivery, or by depositing the
same in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, in any event
addressed to the intended addressee at its address set forth on
the first page of this Mortgage or at such other address as may
be designated by such party as herein provided. All notices,
demands and requests shall be effective upon such personal
delivery, or one (1) business day after being deposited with
the private courier service, or two (2) business days after
being deposited in the United States mail as required above.
Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given
as herein required shall be deemed to be receipt of the notice,
demand or request sent. By giving to the other party hereto at
least fifteen (15) days' prior written notice thereof in
accordance with the provisions hereof, the parties hereto shall
have the right from time to time to change their respective
addresses and each shall have the right to specify as its
address any other address within the United States of America.
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4.6. SUCCESSORS AND ASSIGNS. The terms, provisions,
indemnities, covenants and conditions hereof shall be binding
upon Mortgagor and the successors and assigns of Mortgagor,
including all successors in interest of Mortgagor in and to all
or any part of the Property, and shall inure to the benefit of
Mortgagee, its directors, officers, shareholders, employees and
agents and their respective successors and assigns and shall
constitute covenants running with the land. All references in
this Mortgage to Mortgagor or Mortgagee shall be deemed to
include all such parties' successors and assigns, and the term
"Mortgagee" as used herein shall also mean and refer to any
lawful holder or owner, including pledgees and participants, of
any of the indebtedness secured hereby. If Mortgagor consists of
more than one person or entity, each will be jointly and
severally liable to perform the obligations of Mortgagor.
4.7. SEVERABILITY. A determination that any provision of
this Mortgage is unenforceable or invalid shall not affect the
enforceability or validity of any other provision, and any
determination that the application of any provision of this
Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of
such provision as it may apply to any other persons or
circumstances.
4.8. GENDER. Within this Mortgage, words of any gender
shall be held and construed to include any other gender, and
words in the singular shall be held and construed to include the
plural, and vice versa, unless the context otherwise requires.
4.9. WAIVER; DISCONTINUANCE OF PROCEEDINGS. Mortgagee may
waive any single default by Mortgagor hereunder without waiving
any other prior or subsequent default. Mortgagee may remedy any
default by Mortgagor hereunder without waiving the default
remedied. Neither the failure by Mortgagee to exercise, nor the
delay by Mortgagee in exercising, any right, power or remedy upon
any default by Mortgagor hereunder shall be construed as a waiver
of such default or as a waiver of the right to exercise any such
right, power or remedy at a later date. No single or partial
exercise by Mortgagee of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy hereunder
may be exercised at any time and from time to time. No
modification or waiver of any provision hereof nor consent to any
departure by Mortgagor therefrom shall in any event be effective
unless the same shall be in writing and signed by Mortgagee, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose given. No notice
to nor demand on Mortgagor in any case shall of itself entitle
Mortgagor to any other or further notice or demand in similar or
other circumstances. Acceptance by Mortgagee of any payment in
an amount less than the amount then due on any of the secured
indebtedness shall be deemed an acceptance on account only and
shall not in any way affect the existence of a default hereunder.
In case Mortgagee shall have proceeded to involve any right,
remedy or recourse permitted hereunder or under the other Loan
Documents and shall thereafter elect to discontinue or abandon
the same for any reason, Mortgagee shall have the unqualified
right to do so and, in such an event, Mortgagor and Mortgagee
shall be restored to their former positions with respect to the
indebtedness secured hereby, the Loan Documents, the Property and
otherwise, and the rights, remedies, recourses and powers of
Mortgagee shall continue as if the same had never been involved.
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4.10. SECTION HEADINGS. The headings of the sections and
paragraphs of this Mortgage are for convenience of reference
only, are not to be considered a part hereof and shall not limit
or otherwise affect any of the terms hereof.
4.11. GOVERNING LAW. This Mortgage will be governed by and
construed in accordance with the laws of the State of New York,
provided that to the extent that any of such laws may now or
hereafter be preempted by Federal law, in which case such
Federal law shall so govern and be controlling; and provided
further that the laws of the state in which the Real Estate is
located shall govern as to the creation, priority and enforcement
of liens and security interests in property located in such
state.
4.12. COUNTING OF DAYS. The term "days" when used herein
shall mean calendar days. If any time period ends on a Saturday,
Sunday or holiday officially recognized by the state within
which the Real Estate is located, the period shall be deemed
to end on the next succeeding business day. The term "business
day" when used herein shall mean a weekday, Monday through
Friday, except a legal holiday or a day on which banking
institutions in New York, New York are authorized by law to be
closed.
4.13. RELATIONSHIP OF THE PARTIES. The relationship
between Mortgagor and Mortgagee is that of a borrower and a
lender only and neither of those parties is, nor shall it hold
itself out to be, the agent, employee, joint venturer or partner
of the other party.
4.14. APPLICATION OF THE PROCEEDS OF THE NOTE. To the
extent that proceeds of the Note are used to pay indebtedness
secured by any outstanding lien, security interest, charge or
prior encumbrance against the Property, such proceeds have been
advanced by Mortgagee at Mortgagor's request and Mortgagee shall
be subrogated to any and all rights, security interests and liens
owned by any owner or holder of such outstanding liens, security
interests, charges or encumbrances, irrespective of whether said
liens, security interests, charges or encumbrances are released.
4.15. UNSECURED PORTION OF INDEBTEDNESS. If any part of
the secured indebtedness cannot be lawfully secured by this
Mortgage or if any part of the Property cannot be lawfully
subject to the lien and security interest hereof to the full
extent of such indebtedness, then all payments made shall be
applied on said indebtedness first in discharge of that portion
there of which is unsecured by this Mortgage.
4.16. CROSS DEFAULT. A default hereunder which has not
been cured within any applicable grace or cure period shall be a
default under each of the other Loan Documents.
4.17. INTEREST AFTER SALE. In the event the Property or
any part thereof shall be sold upon foreclosure as provided
hereunder, to the extent permitted by law, the sum for which the
same shall have been sold shall, for purposes of redemption
(pursuant to the laws of the state in which the Property is
located), bear interest at the Default Interest Rate.
4.18. INCONSISTENCY WITH OTHER LOAN DOCUMENTS. In the
event of any inconsistency between the provisions hereof and the
provisions in any of the other Loan Documents, it is intended
that the provisions selected by Mortgagee in its sole subjective
discretion shall be controlling.
43
4.19. CONSTRUCTION OF THIS DOCUMENT. This document may
be construed as a mortgage, security deed, deed of trust, chattel
mortgage, conveyance, assignment, security agreement, pledge,
financing statement, hypothecation or contract, or any one or
more of the foregoing, in order to fully effectuate the liens and
security interests created hereby and the purposes and agreements
herein set forth.
4.20. NO MERGER. It is the desire and intention of the
parties hereto that this Mortgage and the lien hereof do not
merge in fee simple title to the Property. It is hereby
understood and agreed that should Mortgagee acquire any
additional or other interests in or to the Property or the
ownership thereof, then, unless a contrary intent is manifested
by Mortgagee as evidenced by an appropriate document duly
recorded, this Mortgage and the lien hereof shall not merge in
such other or additional interests in or to the Property, toward
the end that this Mortgage may be foreclosed as if owned by a
stranger to said other or additional interests.
4.21. RIGHTS WITH RESPECT TO JUNIOR ENCUMBRANCES. Any
person or entity purporting to have or to take a junior mortgage
or other lien upon the Property or any interest therein shall be
subject to the rights of Mortgagee to amend, modify, increase,
vary, alter or supplement this Mortgage, the Note or any of the
other Loan Documents and to extend the maturity date of the
indebtedness secured hereby and to increase the amount of the
indebtedness secured hereby and to waive or forebear the exercise
of any of its rights and remedies hereunder or under any of the
other Loan Documents and to release any collateral or security
for the indebtedness secured hereby in each and every case
without obtaining the consent of the holder of such junior lien
and without the lien or security interest of this Mortgage losing
its priority over the rights of any such junior lien.
4.22. MORTGAGEE MAY FILE PROOFS OF CLAIM. In the case
of any receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other proceedings
affecting Mortgagor or the principals or general partners in
Mortgagor, or their respective creditors or property, Mortgagee,
to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or
advisable in order to have the claims of Mortgagee allowed in
such proceedings for the entire secured indebtedness at the date
of the institution of such proceedings and for any additional
amount which may become due and payable by Mortgagor hereunder
after such date.
4.23. FIXTURE FILING. This Mortgage shall be effective
from the date of its recording as a financing statement filed as
a fixture filing with respect to Mortgagor's interest in all
goods constituting part of the Property which are or are to
become fixtures.
4.24. AFTER-ACQUIRED PROPERTY. All property acquired by
Mortgagor after the date of this Mortgage which by the terms of
this Mortgage shall be subject to the lien and the security
interest created hereby, shall immediately upon the acquisition
thereof by Mortgagor and without further mortgage, conveyance or
assignment become subject to the lien and security interest
created by this Mortgage. Nevertheless, Mortgagor shall execute,
acknowledge, deliver and record or file, as appropriate, all and
every such further mortgages, security agreements, financing
statements, assignments and assurances as Mortgagee shall require
for accomplishing the purposes of this Mortgage.
44
4.25. NO REPRESENTATION. By accepting delivery of any
item required to be observed, performed or fulfilled or to be
given to Mortgagee pursuant to the Loan Documents, including, but
not limited to, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement,
survey, appraisal or insurance policy, Mortgagee shall not be
deemed to have warranted, consented to, or affirmed the
sufficiency, legality, effectiveness or legal effect of the same,
or of any term, provision or condition thereof, and such
acceptance of delivery thereof shall not be or constitute any
warranty, consent or affirmation with respect thereto by
Mortgagee.
4.26. COUNTERPARTS. This Mortgage may be executed in
any number of counterparts, each of which shall be effective only
upon delivery and thereafter shall be deemed an original, and all
of which shall be taken to be one and the same instrument, for
the same effect as if all parties hereto had signed the same
signature page. Any signature page of this Mortgage may be
detached from any counterpart of this Mortgage without impairing
the legal effect of any signatures thereon and may be attached to
another counterpart of this Mortgage identical in form hereto but
having attached to it one or more additional signature pages.
4.27. PERSONAL LIABILITY. Notwithstanding anything to
the contrary contained in this Mortgage, the liability of
Mortgagor for the indebtedness secured hereby and for the
performance of the other agreements, covenants and obligations
contained herein and in the Loan Documents shall be limited as
set forth in Section 1.05 of the Note; provided however that
nothing herein shall be deemed to be a waiver of any right which
Mortgagee may have under Sections 506(a), 506(b), 1111(b) or any
other provisions of the U.S. Bankruptcy Code to file a claim for
the full amount of the indebtedness secured hereby or to require
that all collateral shall continue to secure all indebtedness
owing to Mortgagee in accordance with the Note, this Mortgage and
the other Loan Documents.
4.28. RECORDING AND FILING. Mortgagor will cause the
Loan Documents and all amendments and supplements thereto and
substitutions therefor to be recorded, filed, re-recorded and re-
filed in such manner and in such places as Mortgagee shall
reasonably request, and will pay on demand all such recording,
filing, re-recording and re-filing taxes, fees and other charges.
Mortgagor shall reimburse Mortgagee, or its servicing agent, for
the costs incurred in obtaining a tax service company to verify
the status of payment of taxes and assessments on the Property.
4.29. ENTIRE AGREEMENT AND MODIFICATIONS. This Mortgage
and the other Loan Documents contain the entire agreements
between the parties relating to the subject matter hereof and
thereof and all prior agreements relative hereto and thereto
which are not contained herein or therein are terminated. This
Mortgage and the other Loan Documents may not be amended,
revised, waived, discharged, released or terminated orally but
only by a written instrument or instruments executed by the party
against which enforcement of the amendment, revision, waiver,
discharge, release or termination is asserted. Any alleged
amendment, revision, waiver, discharge, release or termination
which is not so documented shall not be effective as to any
party.
4.30. MAXIMUM INTEREST. The provisions of this Mortgage
and of all agreements between Mortgagor and Mortgagee, whether
now existing or hereafter arising and whether written or oral,
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of demand or
45
acceleration of the maturity of the Note or otherwise, shall the
amount paid, or agreed to be paid ("Interest"), to Mortgagee for
the use, forbearance or retention of the money loaned under the
Note exceed the maximum amount permissible under applicable law.
If, from any circumstance whatsoever, performance or fulfillment
of any provision hereof or of any agreement between Mortgagor and
Mortgagee shall, at the time performance or fulfillment of such
provision shall be due, exceed the limit for Interest prescribed
by law or otherwise transcend the limit of validity prescribed by
applicable law, then IPSO FACTO the obligation to be performed or
fulfilled shall be reduced to such limit and if, from any
circumstance whatsoever, Mortgagee shall ever receive anything of
value deemed Interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive Interest shall be
applied to the reduction of the principal balance owing under the
Note in the inverse order of its maturity (whether or not then
due) or at the option of Mortgagee be paid over to Mortgagor, and
not to the payment of Interest. All Interest (including any
amounts or payments deemed to be Interest) paid or agreed to be
paid to Mortgagee shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal balance of the
Note so that the Interest thereon for such full period will not
exceed the maximum amount permitted by applicable law. This
paragraph will control all agreements between Mortgagor and
Mortgagee.
4.31. Intentionally Omitted.
4.32. Intentionally Omitted.
4.33. COOPERATION.
(a) Mortgagor covenants and agrees that in the event
Mortgagee decides to include the Loan as an asset of a secondary
market transaction (a "Securitization"), Mortgagor shall, at
Mortgagee's request, (a) meet with representatives of rating
agencies to discuss the business and operations of the Property,
and (b) cooperate, and cause its affiliates to cooperate, with
the reasonable requests of rating agencies in connection with all
of the foregoing, including, without limitation, delivering
financial statements for Mortgagor and or its affiliates and such
other information as may be requested by such rating agencies.
Without limiting the foregoing, Mortgagor agrees that it will,
and will cause its members and principals to, reasonably
cooperate with Mortgagee in the Securitization, including,
without limitation:
(i) subject to obtaining any approval required to
be obtained from the Commission, amending this Mortgage and
the other Loan Documents, and executing such additional
documents, as may be required by the rating agencies;
(ii) modifying the Note to create multiple pari
passu notes, PROVIDED that the longest final maturity of any
such note shall not exceed ten (10) years, the weighted
average amortization of the principal amount of the pari
passu notes is not less than 30 years, and the weighted
average coupon for the life of the pari passu notes is no
higher than the Note Rate (as defined in the Note);
(iii) providing such information as may be
reasonably requested in connection with the preparation of a
private placement memorandum or registration statement
required to privately place or publicly distribute the
securities under the Securitization in a manner which does
not conflict with federal or state securities laws;
46
(iv) causing to be rendered such customary opinion
letters as may be requested by the rating agencies
(including, but not limited to, a substantive
non-consolidation opinion, an opinion letter from local real
estate counsel to Mortgagor stating that the assignment of
the Loan and the Loan Documents to the trustee under the
Securitization is enforceable, and opinions with respect to
the Property, Mortgagor and its affiliates);
(v) making such customary representations and
warranties with respect to Mortgagor and the Property as may
be requested by the rating agencies, consistent with the
facts covered by such representations and warranties as they
exist on the date thereof (including, but not limited to,
the representations and warranties made herein) which
representations and warranties shall survive the closing of
the Securitization;
(vi) providing such updated third party reports and
financial information regarding the Property and Mortgagor
and its affiliates and expanded ongoing administration and
reporting by the trust under the Securitization as may be
requested by the rating agencies or potential investors in
the securities or otherwise required in connection with the
election by the trust of REMIC status;
(vii) obtaining the insurance policies required
herein or otherwise required by the rating agencies in
connection with the Securitization;
(viii) amending Mortgagor's organizational documents
and/or making such other changes to Mortgagor's structure as
required by the rating agencies to the extent necessary to
conform to customary requirements for single purpose
bankruptcy remote entities in similar transactions;
(ix) obtaining comfort letter (in customary form and
containing customary exceptions) from a nationally
recognized accounting firm in connection with financial
information relating to Mortgagor and/or the Property and
which, in connection with the Securitization, shall be
represented in the private placement memorandum or
prospectus; and
(x) providing any indemnity required in connection
with the Securitization.
Mortgagee shall reimburse Mortgagor for the actual, out-of-
pocket, third-party costs and expenses incurred by Mortgagee in
order to comply with this Section 4.33.
(b) In addition, Mortgagee may elect to sell one or more
participation interests (each, a "Participation") in the Note.
In the event that Mortgagee notifies Mortgagor that the sale of
a participation to another party is a desirable course of action,
then Mortgagor shall cooperate with the Mortgagee in the
preparation of any information reasonably necessary or incidental
to such Participation with respect to the Property which is
reasonably within the possession or control of Mortgagor or is
obtainable by Mortgagor and shall in good faith enter into any
amendments to the Note and/or the Loan Documents necessary to
accomplish the Participation.
4.34. CASINO CONTROL COMMISSION.
47
Mortgagee shall not take any action under this
Mortgage requiring under the New Jersey Casino Control Act (as
from time to time amended) or any successor provision of law, and
the regulations promulgated thereunder, would require the
approval of the Commission, without soliciting the prior approval
of the Commission; provided that if the Commission shall withhold
or deny its approval, Mortgagee shall have the right to contest
the Commission's decision.
4.35. FURTHER STIPULATIONS. The additional covenants,
agreements and provisions set forth in EXHIBIT C attached hereto,
if any, shall be a part of this Mortgage and shall, in the event
of any conflict between such further stipulations and any of the
other provisions of this Mortgage, be deemed to control.
48
IN WITNESS WHEREOF, Mortgagor has executed this
Mortgage as of the day and year first above written.
MORTGAGOR:
SHOWBOAT LAND, LLC
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President
and Chief Financial Officer
By: Showboat Land Holding Limited
Partnership,
a Nevada limited partnership, a
member
By: Showboat Land Company, a Nevada
corporation,
its general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-
President/Finance
Acknowledgments
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK)
I certify that on January 23, 1998, R. ▇▇▇▇▇ ▇▇▇▇ personally
came before me and this person acknowledged under oath, to my
satisfaction, that:
(a) this person, signed, sealed and delivered the attached
document as Vice President/Finance of Showboat Land Company, a
Nevada corporation, which is the general partner of Showboat Land
Holding Limited Partnership, which is the member of Showboat
Land, LLC, the Nevada limited liability company named in this
document; and
(b) this document was signed and delivered by Showboat Land
Company, on behalf of Showboat Land, LLC, as its voluntary act
and deed by virtue of authority from its Board of Directors.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
No. 01VA5072319
Qualified in Kings County
Commission Expires January 27, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK)
I certify that on January 23, 1998, R. ▇▇▇▇▇ ▇▇▇▇ personally
came before me and this person acknowledged under oath, to my
satisfaction, that:
(a) this person, signed, sealed and delivered the attached
document as Executive Vice President and Chief Financial Officer
of Showboat Operating Company, which is the member of Showboat
Land, LLC, the Nevada limited liability company named in this
document; and
(b) this document was signed and delivered by Showboat
Operating Company, on behalf of Showboat Land, LLC, as its
voluntary act and deed by virtue of authority from its Board of
Directors.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
No. 01VA5072319
Qualified in Kings County
Commission Expires January 27, 1999
PROMISSORY NOTE
$100,000,000 Loan No. WLD540070
January 29, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, the undersigned, SHOWBOAT LAND, LLC, a
Nevada limited liability company ("Borrower"), promises to pay to
the order of COLUMN FINANCIAL, INC., a Delaware corporation
("Lender"), at the office of Lender at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place as
Lender may designate to Borrower in writing from time to time,
the principal sum of ONE HUNDRED MILLION and NO/100 DOLLARS
($100,000,000.00), together with interest on so much thereof as
is from time to time outstanding and unpaid, from the date of the
advance of the principal evidenced hereby, at the rate of seven
and 9/100ths percent (7.09%) per annum (the "Note Rate"), in
lawful money of the United States of America, which shall at the
time of payment be legal tender in payment of all debts and dues,
public and private.
ARTICLE I - TERMS AND CONDITIONS
1.01 PAYMENT OF PRINCIPAL AND INTEREST.
(a) Said interest shall be computed hereunder based on a
365- or 366-day (as applicable) year and based on twelve (12) 30-
day months for each full calendar month end on the actual number
of days elapsed for any whole or partial month in which interest
is being calculated. In computing the number of days during
which interest accrues, the day on which funds are initially
advanced shall be included regardless of the time of day such
advance is made, and the day on which funds are repaid shall be
included unless repayment is credited prior to close of business.
Payments in federal funds immediately available in the place
designated for payment received by Lender prior to 3:00 p.m.
local time on a day on which Lender is open for business at said
place of payment shall be credited prior to close of business,
while other payments received by Lender, so long as such are
immediately available to Lender in federal funds in the place
designated for payment, shall be credited on the first (1st) day
thereafter on which Lender is open for business. Such principal
and interest shall be payable in equal consecutive monthly
installments of $671,357.80 each, beginning on (x) the first day
of the second full calendar month following the date of this Note
or (y) the first day of the first full calendar month following
the date hereof in the event the advance of the principal amount
evidenced by this Note is made on the first day of a calendar
month, and continuing on the first day of each and every month
thereafter through and including February 1, 2028 (the "Maturity
Date"), at which time the entire outstanding principal balance
hereof, together with all accrued but unpaid interest thereon,
shall be due and payable in full. Each such monthly installment
shall be applied first to the payment of accrued interest and
then to reduction of principal. If the funding of the principal
amount evidenced by this Note is made on a date other than the
first day of a calendar month, then Borrower shall pay to Lender
contemporaneously with the execution hereof interest at the
foregoing interest rate for a period from the date hereof through
and including the last day of the calendar month in which such
funding occurs.
(b) From and after the first day of February,
2008 (the "Preferred Prepayment Date"), Borrower shall
pay to Lender on the first day of each
calendar month, in addition to all amounts payable under
subsection (a) above, all funds on deposit in the Curtailment
Reserve Sub-Account (as such term is defined in that certain Cash
Management Agreement dated as of the date hereof between Borrower
and Lender), to be applied in reduction of the outstanding
principal balance of this Note.
(c) From and after the Preferred Prepayment Date, the
outstanding principal balance of this Note shall, in addition to
interest at the Note Rate, accrue a second tranche of interest
(the "Additional Interest") at a rate equal to the lesser of
(i) the positive excess (if any) of (A) the 20-Year Treasury Rate
plus two percent (2.0%) per annum over (B) the Note Rate, and
(ii) five percent (5.0%) per annum. The term "20-Year Treasury
Rate" shall mean the linearly interpolated implied yield for a
U.S. Treasury obligation having a maturity corresponding to the
Maturity Date using the yields for the most closely corresponding
U.S. Treasury obligations with maturities longer and shorter than
the Maturity Date; provided that if any U.S. Treasury obligation
has a maturity that exactly corresponds to the Maturity Date,
then the yield for that U.S. Treasury obligation shall be the 20-
Year Treasury Rate. The yields used to calculate the 20-Year
Treasury Rate shall be the yields on page C13 of the Government
Section of Bloomberg News Service, or its successor, as of the
Business Day immediately prior to the Preferred Prepayment Date.
If no such rate or such statistical release is published, Lender
shall select a comparable interest rate index which is readily
available and verifiable to Borrower but is beyond Lender's
control. The Additional Interest shall accrue on the outstanding
principal balance of this Note from and after the Preferred
Prepayment Date and shall be payable only after the outstanding
principal balance of this Note shall have been paid in full.
1.02 PREPAYMENT.
(a) This Note may be prepaid in whole but not in part
(except as otherwise specifically provided herein) at any time
after the earlier of (1) the date of thirty-sixth (36th) monthly
installment of principal and interest due hereunder and (2) if
this Note and the Security Instrument become the subject of a
securitization, the date that is the second anniversary of the
closing of the securitization (in either ease, such date, the
"Lock Out Expiration Date") provided (i) written notice of such
prepayment is received by Lender not more than sixty (60) days
and not less than thirty (30) days prior to the date of such
prepayment, (ii) such prepayment is received on the first day of
a calendar month (or, if such prepayment is not received on the
first day of a calendar month, interest is paid through the last
day of such calendar month) and is accompanied by all interest
accrued hereunder and all other sums due hereunder or under the
other Loan Documents, and (iii) if this Note is being prepaid
prior to the Preferred Prepayment Date, Borrower shall have
delivered to Lender cash, treasury notes or other substitute
collateral acceptable to Lender sufficient, together with the
prepayment, to pay all scheduled payments of principal and
interest from and after the date of prepayment as and when due
hereunder, including, without limitation, the outstanding
principal balance hereof on the Preferred Prepayment Date (the
"Defeasance Payment"). No Defeasance Payment or other prepayment
fee or premium shall be due or payable in connection with any
prepayment of the indebtedness evidenced by the Note resulting
from application of insurance or condemnation proceeds as
provided in the Security Instrument at any time during the loan
term. With regard to any prepayment made hereunder, if the prior
written notice required in (i) above has not been received by
Lender, the prepayment shall be increased by an amount equal to
the lesser of (i) thirty (30) days' unearned interest computed on
the outstanding principal balance of this Note so prepaid and
(ii) unearned interest computed on the outstanding principal
balance of this Note so prepaid for the period from, and
including, the date of prepayment through the Preferred
Prepayment Date.
(b) Partial prepayments of this Note shall not be
permitted, except partial prepayments resulting from Lender
applying insurance or condemnation proceeds to reduce the
outstanding principal balance of this Note as provided in the
Security Instrument, in which event no Defeasance Payment or
other prepayment fee or premium shall be due. No
notice of prepayment shall be required under the
circumstance specified in the preceding sentence. No principal
amount repaid may be reborrowed. Partial payments of
principal shall be applied to the unpaid principal balance
evidenced hereby but such application shall not reduce the amount
of the fixed monthly installments required to be paid pursuant to
Section 1.01 above.
(c) Except as otherwise expressly provided in Section
1.02(b) above, the Defeasance Payment provided above shall be
due, to the extent permitted by applicable law, under any and all
circumstances where all or any portion of this Note is paid prior
to the Maturity Date, whether such prepayment is voluntary or
involuntary, even if such prepayment results from Lender's
exercise of its rights upon Borrower's default and acceleration
of the maturity date of this Note (irrespective of whether
foreclosure proceedings have been commenced), and shall be in
addition to any other sums due hereunder or under any of the
other Loan Documents. No tender of a prepayment of this Note
with respect to which the Defeasance Payment is due shall be
effective unless such prepayment is accompanied by the Defeasance
Payment. If the indebtedness of this Note shall have been
declared due and payable by Lender pursuant to Section 1.04
hereof due to a default by Borrower, then any tender of payment
of such indebtedness made prior to the Lock Out Expiration Date
must include a Defeasance Payment computed as provided in Section
1.02(a) above plus an additional prepayment fee of one percent
(1%) of the principal balance of this Note.
1.03 SECURITY. The indebtedness evidenced by this Note and
the obligations created hereby are secured by that certain
Mortgage and Security Agreement (the "Security Instrument") from
Borrower to Lender, dated as of even date herewith concerning
property located in Atlantic County, New Jersey (the "Property").
The Security Instrument together with this Note and all other
documents to or of which Lender is a party or beneficiary now or
hereafter evidencing, securing, guarantying, modifying or
otherwise relating to the indebtedness evidenced hereby, are
herein referred to collectively as the "Loan Documents." All of
the terms and provisions of the Loan Documents are incorporated
herein by reference. Some of the Loan Documents are to be filed
for record on or about the date hereof in the appropriate public
records.
1.04 DEFAULT. It is hereby expressly agreed that should any
default occur in the payment of principal or interest as
stipulated above and such payment is not made within five (5)
days of the date such payment is due (provided that no grace
period is provided for the payment of principal and interest due
on the Maturity Date), or should any other default occur under
any of the Loan Documents which is not cured within any
applicable grace or cure period, then a default shall exist
hereunder, and in such event the indebtedness evidenced hereby,
including all sums advanced or accrued hereunder or under any
other Loan Document, and all unpaid interest accrued thereon,
shall, at the option of Lender and without notice to Borrower, at
once become due and payable and may be collected forthwith,
whether or not there has been a prior demand for payment and
regardless of the stipulated date of maturity. In the event that
any payment is not received by Lender on the date when due
(subject to the applicable grace period), then in addition to any
default interest payments due hereunder, Borrower shall also pay
to Lender a late charge in an amount equal to five percent (5.0%)
of the amount of such overdue payment. So long as any default
exists hereunder, regardless of whether or not there has been an
acceleration of the indebtedness evidenced hereby, and at all
times after maturity of the indebtedness evidenced hereby
(whether by acceleration or otherwise), interest shall accrue on
the outstanding principal balance of this Note at a rate per
annum equal to four percent (4.0%) plus the interest rate which
would be in effect hereunder absent such default or maturity, or
if such increased rate of interest may not be collected under
applicable law, then at the maximum rate of interest, if any,
which may be collected from Borrower under applicable law (the
"Default Interest Rate"), and such default interest shall be
immediately due and payable. Borrower acknowledges that it would
bc extremely difficult or impracticable to determine Lender's
actual damages resulting from any late payment or default, and
such late charges and default interest are reasonable estimates
of those damages and do not constitute a penalty. The remedies
of Lender in this Note or in the Loan Documents, or at law or in
equity, shall be cumulative and concurrent, and may be
pursued singly, successively or together in Lender's
discretion. Time is of the essence of this Note. In the event
this Note, or any part hereof, is collected by or through an
attorney-at-law, Borrower agrees to pay all costs of collection
including, but not limited to, reasonable attorney's fees.
1.05 EXCULPATION. Notwithstanding anything in the Loan
Documents to the contrary, but subject to the qualifications
hereinbelow set forth, Lender agrees that (i) Borrower shall be
liable upon the indebtedness evidenced hereby and for the other
obligations arising under the Loan Documents to the full extent
(but only to the extent) of the security therefor, the same being
all properties (whether real or personal), rights, estates and
interests now or at any time hereafter securing the payment of
this Note and/or the other obligations of Borrower under the Loan
Documents (collectively, the "Security Property"), (ii) if a
default occurs in the timely and proper payment of all or any
part of such indebtedness evidenced hereby or in the timely and
proper performance of the other obligations of Borrower under the
Loan Documents, any judicial proceedings brought by Lender
against Borrower shall be limited to the preservation,
enforcement and foreclosure, or any thereof, of the liens,
security titles, estates, assignments, rights and security
interests now or at any time hereafter securing the payment of
this Note and/or the other obligations of Borrower under the Loan
Documents, and confirmation of any sale under power of sale, and
no attachment, execution or other writ of process shall be
sought, issued or levied upon any assets, properties or funds of
Borrower other than the Security Property except with respect to
the liability described below in this section, and (iii) in the
event of a foreclosure of such liens, security titles, estates,
assignments, rights or security interests securing the payment of
this Note and/or the other obligations of Borrower under the Loan
Documents, whether by judicial proceedings or exercise of power
of sale, no judgment for any deficiency upon the indebtedness
evidenced hereby shall be sought or obtained by Lender against
Borrower, except with respect to the liability described below in
this section; provided, however, that, notwithstanding the
foregoing provisions of this section, Borrower shall be fully and
personally liable and subject to legal action (a) for proceeds
paid under any insurance policies (or paid as a result of any
other claim or cause of action against any person or entity) by
reason of damage, loss or destruction to all or any portion of
the Security Property, to the full extent of such proceeds not
previously delivered to Lender, but which, under the terms of the
Loan Documents, should have been delivered to Lender, (b) for
proceeds or awards resulting from the condemnation or other
taking in lieu of condemnation of all or any portion of the
Security Property, or any of them, to the full extent of such
proceeds or awards not previously delivered to Lender, but which,
under the terms of the Loan Documents, should have been delivered
to Lender, (c) for all tenant security deposits or other
refundable deposits paid to or held by Borrower or any other
person or entity in connection with leases of all or any portion
of the Security Property which are not applied in accordance with
the terms of the applicable lease or other agreement, (d) for
rent and other payments received from tenants under leases of all
or any portion of the Security Property paid more than one month
in advance, (e) for rents, issues, profits and revenues of all or
any portion of the Security Property which are not paid or
remitted to the Central Account in accordance with the Cash
Management Agreement being executed concurrently herewith between
Lender and Borrower, (f) for damage to the Security Property as a
result of the misconduct or negligence of Borrower or any of its
principals, officers, members or affiliates, or any agent or
employee of any such persons, or any removal of the Security
Property in violation of the terms of thc Loan Documents, to the
full extent of the losses or damages incurred by Lender on
account of such damage or removal, (g) for failure to pay any
valid taxes, assessments, mechanic's liens, materialmen's liens
or other liens which could create liens on any portion of the
Security Property which would be superior to the lien or security
title of the Security Instrument or the other Loan Documents, to
the full extent of the amount claimed by any such lien claimant,
(h) for all obligations and indemnities of Borrower under the
Loan Documents relating to hazardous or toxic substances or
compliance with environmental laws and regulations to thc full
extent of any losses or damages (including those resulting from
diminution in value of any Security Property) incurred by Lender
as a result of the existence of such hazardous or toxic
substances or failure to comply with environmental laws or
regulations, and (i) for fraud or material misrepresentation
by Borrower or any of its principals, officers,
members or affiliates, any guarantor, any indemnitor or
any agent, employee or other person authorized or
apparently authorized to make statements or representations
on behalf of Borrower, any principal, officer, member or
affiliate of Borrower, any guarantor or any indemnitor, to the
full extent of any losses, damages and expenses of Lender on
account thereof. References herein to particular sections of the
Loan Documents shall be deemed references to such sections as
affected by other provisions of the Loan Documents relating
thereto. Nothing contained in this section shall (i) be deemed
to be a release or impairment of the indebtedness evidenced by
this Note or the other obligations of Borrower under the Loan
Documents or the lien of the Loan Documents upon the Security
Property, or (ii) preclude Lender from foreclosing the Loan
Documents in case of any default or from enforcing any of the
other rights of Lender except as stated in this section, or
(iii) limit or impair in any way whatsoever the Environmental
Indemnity Agreement or the Guaranty of Lease, both of even date,
executed and delivered in connection with the indebtedness
evidenced by this Note or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to such
Environmental Indemnity Agreement or Guaranty of Lease.
ARTICLE II - GENERAL CONDITIONS
2.01 NO WAIVER; AMENDMENT. No failure to accelerate the
debt evidenced hereby by reason of default hereunder, acceptance
of a partial or past due payment, or indulgences granted from
time to time shall be construed (i) as a novation of this Note or
as a reinstatement of the indebtedness evidenced hereby or as a
waiver of such right of acceleration or of the right of Lender
thereafter to insist upon strict compliance with the terms of
this Note, or (ii) to prevent the exercise of such right of
acceleration or any other right granted hereunder or by any
applicable laws; and Borrower hereby expressly waives the benefit
of any statute or rule of law or equity now provided, or which
may hereafter be provided, which would produce a result contrary
to or in conflict with the foregoing. No extension of the time
for the payment of this Note or any installment due hereunder,
made by agreement with any person now or hereafter liable for the
payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Borrower under this
Note, either in whole or in part unless Lender agrees otherwise
in writing. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement
of any waiver, change, modification or discharge is sought.
2.02 WAIVERS. Presentment for payment, demand, protest and
notice of demand, protest and nonpayment and all other notices
are hereby waived by Borrower. Borrower hereby further waives
and renounces, to the fullest extent permitted by law, all rights
to the benefits of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, valuation, stay,
extension, redemption, appraisement, exemption and homestead now
or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself
and in and to all of its property, real and personal, against the
enforcement and collection of the obligations evidenced by this
Note or the other Loan Documents.
2.03 LIMIT OF VALIDITY. The provisions of this Note and of
all agreements between Borrower and Lender, whether now existing
or hereafter arising and whether written or oral, are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of demand or acceleration of the maturity of
this Note or otherwise, shall the amount paid, or agreed to be
paid ("Interest"), to Lender for the use, forbearance or
retention of thc money loaned under this Note exceed the maximum
amount permissible under applicable law. If, from any
circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Borrower and Lender
shall, at thc time performance or fulfillment of such provision
shall be due, exceed thc limit for interest prescribed by law or
otherwise transcend the limit of validity prescribed by
applicable law, then IPSO FACTO the obligation to be performed or
fulfilled shall be reduced to such limit and if,
from any circumstance whatsoever, Lender shall ever receive
anything of value deemed Interest by applicable law in
excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the
principal balance owing under this Note in the inverse order of
its maturity (whether or not then due) or at the option of Lender
be paid over to Borrower, and not to the payment of Interest.
All Interest (including any amounts or payments deemed to be
Interest) paid or agreed to be paid to Lender shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in
full of the principal balance of this Note so that the Interest
thereof for such full period will not exceed the maximum amount
permitted by applicable law. This Section 2.03 will control all
agreements between Borrower and Lender.
2.04 USE OF FUNDS. Borrower hereby warrants, represents and
covenants that no funds disbursed hereunder shall be used for
personal, family or household purposes.
2.05 UNCONDITIONAL PAYMENT. Borrower is and shall be
obligated to pay principal, interest and any and all other
amounts which become payable hereunder or under the other Loan
Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any
reduction for counterclaim or setoff. In the event that at any
time any payment received by Lender hereunder shall be deemed by
a court of competent jurisdiction to have been a voidable
preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to
make such payment shall survive any cancellation or satisfaction
of this Note or return thereof to Borrower and shall not be
discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding
obligation enforceable in accordance with the terms and
provisions hereof (subject to the effects of general principles
of equity), and such payment shall be immediately due and payable
upon demand.
2.06 MISCELLANEOUS. This Note shall be interpreted,
construed and enforced according to the laws of the State of New
York. The terms and provisions hereof shall be binding upon and
inure to the benefit of Borrower and Lender and their respective
heirs, executors, legal representatives, successors, successors-
in-title and assigns, whether by voluntary action of the parties
or by operation of law. As used herein, the terms "Borrower" and
"Lender" shall be deemed to include their respective heirs,
executors, legal representatives, successors, successors-in-title
and assigns, whether by voluntary action of the parties or by
operation of law. If Borrower consists of more than one person
or entity, each shall be jointly and severally liable to perform
the obligations of Borrower under this Note. All personal
pronouns used herein, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the singular
shall include the plural and vice versa. Titles of articles and
sections are for convenience only and in no way define, limit,
amplify or describe the scope or intent of any provisions hereof.
Time is of the essence with respect to all provisions of this
Note. This Note and the other Loan Documents contain the entire
agreements between the parties hereto relating to the subject
matter hereof and thereof and all prior agreements relative
hereto and thereto which are not contained herein or therein are
terminated.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower has executed this Note as of
the day and year first above written.
SHOWBOAT LAND, LLC,
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President and Chief Financial
Officer
By: Showboat Land Holding Limited
Partnership, a Nevada limited
partnership, a member
By: Showboat Land Company, a Nevada
corporation, its general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-President/
Finance
CASH MANAGEMENT AGREEMENT
THIS CASH MANAGEMENT AGREEMENT (this "AGREEMENT") is made as
of the 29th day of January, 1998, by SHOWBOAT LAND, LLC
("MORTGAGOR"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ to COLUMN FINANCIAL, INC.
("MORTGAGEE"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
WHEREAS, Mortgagee has authorized a loan (hereinafter
referred to as the "LOAN") to Mortgagor in the original principal
amount of $100,000,000 (hereinafter referred to as the "LOAN
AMOUNT"), which Loan is evidenced by that certain promissory
note, dated the date hereof (hereinafter referred to as the
"NOTE"), given by Mortgagor and secured by, among other things,
that certain mortgage and security agreement dated the date
hereof (hereinafter referred to as the "MORTGAGE"), encumbering
certain real property described on EXHIBIT A attached hereto and
made a part hereof;
WHEREAS, in consideration of the Loan, Mortgagor has agreed
to make payments in amounts sufficient to pay and redeem, and
provide for the payment and redemption of the principal of,
premium (if any) and interest on the Note when due;
WHEREAS, Mortgagor agrees and acknowledges that this
Agreement is a material inducement to Mortgagee's making the Loan
to Mortgagor;
WHEREAS, Mortgagor and Mortgagee intend these recitals to be
a material part of, and are hereby incorporated into, this
Agreement; and
WHEREAS, all things necessary to make this Agreement the
valid and legally binding obligation of Mortgagor in accordance
with its terms, for the uses and purposes herein set forth, have
been done and performed.
NOW THEREFORE, in consideration of Ten Dollars ($10.00), the
foregoing premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Mortgagor covenants and agrees with and warrants to Mortgagee
that the Recitals are true and correct and are incorporated
herein by this reference and the parties further covenant and
agree with and warrant as follows:
SECTION 1: DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly indicates a
contrary intent:
(1) the capitalized terms defined in this Section have the
meanings assigned to them in this Section, and include the plural
as well as the singular;
(2) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP;
(3) capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed to them
in the Mortgage; and
1
(4) the words "herein", "hereof", and "hereunder" and
other words of similar import refer to this Agreement as a whole
and not to any particular Section or other subdivision.
"AFFILIATE" of any specified Person shall mean any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For purposes of this definition, "control" when used
with respect to any specified Person, means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
"BANK" shall mean Banc One, or any successor bank hereafter
selected by Mortgagee.
"BUSINESS DAY" shall mean any day other than (a) a Saturday
or Sunday, or (b) a day on which banking and savings and loan
institutions in the State of New York are authorized or obligated
by law or executive order to be closed, or, at any time during
which the Loan is an asset of a securitization, a day on which
banking and savings and loan institutions in the cities, states
and/or commonwealths in which the trustee and the servicer(s)
under the securitization are located are authorized or obligated
to be closed.
"CENTRAL ACCOUNT" shall mean an Eligible Account, maintained
at the Bank, in the name of Mortgagee or its successors or
assigns (as secured party), as may be designated by Mortgagee,
and established for the benefit of Mortgagee and Mortgagor.
"CLOSING DATE" shall mean the date of the Note.
"COLLECTION ACCOUNT" shall mean an account designated by
Mortgagee, which shall be an Eligible Account, to which payments
of secured indebtedness are transferred.
"COMMITMENT" shall mean a written commitment for the
refinancing of the Loan from an Institutional Mortgagee.
"CONDEMNATION PROCEEDS" shall have the meaning set forth in
SECTION 2.13(B) hereof.
"CURRENT MONTH" shall have the meaning set forth in SECTION
2.05 hereof.
"CURTAILMENT PERIOD" shall mean (i) if Mortgagor fails to
provide Mortgagee with a Commitment on or prior to the Refinance
Notification Date, the period commencing on the Refinance
Notification Date and ending on the date the secured indebtedness
has been paid in full and (ii) if Mortgagor provides Mortgagee
with a Commitment on or prior to the Refinance Notification Date
and the Void Commitment Date occurs, the period commencing on the
Void Commitment Date and ending on the date the secured
indebtedness has been paid in full; provided, however, that if
Mortgagor provides Mortgagee with a Commitment on or before the
Refinance Notification Date and the Void Commitment Date does not
occur, there shall be no Curtailment Period hereunder.
"CURTAILMENT RESERVE SUB-ACCOUNT" shall mean the Sub-Account
of the Central Account established pursuant to SECTION 2.02
hereof and maintained pursuant to SECTION 2.11 hereof for the
purpose of holding certain Excess Property Income.
"DEBT SERVICE" shall mean the amount of interest and
principal payments due and payable in accordance with the Note
during an applicable period.
2
"DEBT SERVICE PAYMENT SUB-ACCOUNT" shall mean the Sub-
Account of the Central Account established pursuant to SECTION
2.02 hereof and maintained pursuant to SECTION 2.07 hereof for
the purposes of making Debt Service payments.
"DEFAULT" shall mean any event that, with notice and/or the
passage of time, would become a default under Section 2.1 of the
Mortgage.
"DEVELOPMENT LAWS" shall mean all applicable subdivision,
zoning, environmental protection, wetlands protection, or land
use laws or ordinances, and any and all applicable rules and
regulations of any federal, state or local governmental authority
or agency promulgated thereunder of related thereto.
"ELIGIBLE ACCOUNT" shall mean a segregated account held by
and at the Bank or an account that is either: (a) maintained with
a depository institution or trust company the long-term unsecured
debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of
a holding company, the long-term unsecured debt obligations of
such holding company) have been rated by the Rating Agencies in
one of their two highest rating categories or the short-term
commercial paper of which is rated by the Rating Agencies in
their highest rating category at the time of any deposit therein;
(b) an account or accounts maintained with a federal or state
chartered depository institution or trust company with trust
powers acting in its fiduciary capacity provided that any such
state chartered institution or trust company shall be subject to
regulations regarding fiduciary funds on deposit substantially
similar to federal regulation 12 CFR Section 910(b); or (c) such
other account maintained at a bank; or institution having
aggregate deposits in an amount not less than $100,000,000 and
otherwise acceptable to Mortgagee. The title of each Eligible
Account shall indicate that funds held therein are held in trust
for the uses and purposes set forth herein.
"ENGINEER" shall mean any independent engineer or
engineering firm reasonably approved by Mortgagee.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in the
Mortgage.
"EVENT OF DEFAULT" shall mean (a) any default under Section
2.1 of the Mortgage, (b) any, failure of Mortgagor to cause
sufficient funds to be deposited in the Central Account on any
Payment Date to fund all of the Sub-Accounts pursuant to SECTION
2.05, which failure shall continue for five (5) days after such
Payment Date and (c) any event specified as an "Event of Default"
hereunder.
"EXCESS PROPERTY INCOME" shall have the meaning set forth in
SECTION 2.05(C) hereof.
"FISCAL YEAR" shall mean the twelve month period commencing
on January 1 and ending on December 31 during each year of the
term of this Agreement and the Mortgage, or such other fiscal
year of Mortgagor as Mortgagor may select from time to time with
the prior written consent of Mortgagee.
"IMPROVEMENTS" shall have the meaning set forth in the
granting clauses of the Mortgage.
"INSTITUTIONAL MORTGAGEE" shall mean any of the following
Persons: (a) any bank, savings and loan association, savings
institution, trust company or national banking association,
acting for its own account or in a fiduciary capacity, (b) any
charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e)
any pension. retirement or profit sharing trust or fund within
the meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser
registered under the Investment Advisers Act of 1940, as amended,
is acting as trustee or agent, (f) any investment company or
business development company, as defined in the Investment
3
Company Act of 1940, as amended, (g) any small business
investment company licensed under the Small Business Investment
Act of 1958, as amended, (h) any broker or dealer registered
under the Securities and Exchange Act of 1934, or any investment
adviser registered under the Investment Adviser Act of 1940, as
amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the
investment of public funds, (j) any mortgage conduit which is in
the business of originating loans for securitization in the
capital markets, or (k) any other entity all of the equity owners
of which are Institutional Mortgagees; provided that each of said
Persons shall have net assets equal to or greater than
$500,000,000, be in the business of making commercial mortgage
loans, secured by properties of like type, size and value as the
Property and have a long term credit rating which is not less
than investment grade.
"INSURANCE PROCEEDS" shall have the meaning set forth in
SECTION 2.13(A) hereof.
"LEASE" shall mean the ground lease of the Property, dated
October 26, 1983, between Resorts International, Inc. and
Atlantic City Showboat, Inc. (as successor by assignment to Ocean
Showboat, Inc.), as heretofore or hereafter amended.
"LEGAL REQUIREMENT" shall mean, as to any Person, the
certificate of incorporation and by-laws or other organization or
governing documents of such Person, and any law, treaty, rule or
regulation (including, without limitation, Environmental Laws,
Development Laws, and Use Requirements) or determination of an
arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is
subject.
"LOAN" shall have the meaning set forth in the Recitals
hereto.
"LOAN AMOUNT" shall have the meaning set forth in the
Recitals hereto.
"LOAN DOCUMENTS" shall mean this Agreement, the Mortgage,
the Note, the Assignment of Leases and Rents, and any and all
other agreements, instruments, certificates or documents executed
and delivered by Mortgagor or any Affiliate of Mortgagor in
connection with the Loan.
"LOSS PROCEEDS" shall have the meaning set forth in SECTION
2.13(C) hereof.
"MATURITY DATE" shall have the meaning set forth in the
Note.
"MORTGAGE" shall mean the Mortgage as originally executed or
as it may hereafter from time to time be supplemented, amended,
modified or extended by one or more indentures supplemental
thereto.
"MORTGAGEE" shall mean the Mortgagee named herein and its
successors or assigns.
"MORTGAGOR" shall mean Mortgagor named herein and any
successor to the obligations of Mortgagor.
"NOTE" shall have the meaning set forth in the recitals
hereof.
"PAYMENT DATE" shall mean, with respect to each month, the
first (1st) calendar day in such month, or if such day is not a
Business Day, the next following Business Day.
4
"PERMITTED INVESTMENTS" shall mean any one or more of the
following obligations or securities acquired at a purchase-price
of not greater than par, including those issued by Mortgagee, its
successors or assigns, or any of their respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to payment of principal and
interest by, (a) the United States or any agency
or instrumentality thereof provided such
obligations are backed by the full faith and
credit of the United States of America, or (b)
FHLMC, FNMA, the Federal Farm Credit System or
the Federal Home Loan Banks provided such
obligations at the time of purchase or
contractual commitment for purchase are
qualified by the Rating Agencies as a Permitted
Investment hereunder as evidenced in writing;
(ii) fully FDIC-insured demand and time deposits in
or certificates of deposit of, or bankers'
acceptances issued by, any bank or trust
company, savings and loan association or savings
bank, provided that the commercial paper and
long-term unsecured debt obligations of such
depository institution o trust company have the
highest rating available for such securities by
the Rating Agencies, or such lower rating as is
consented to in writing by Mortgagee;
(iii) repurchase obligations with respect to any
security described in clause (i) above entered
into with a depository institution or trust
company (acting as principal) described in
clause (ii) above;
(iv) general obligations of or obligations guaranteed
by any State of the United States or the
District of Columbia receiving the highest long-
term unsecured debt rating available for such
securities by the Rating Agencies, or such lower
rating as is consented to in writing by
Mortgagee;
(v) securities bearing interest or sold at a
discount that are issued by any corporation
incorporated under the laws of the United States
of America or any State thereof or the District
of Columbia and is rated by the Rating Agencies
in their highest long-term unsecured rating
categories at the time of such investment or
contractual commitment providing for such
investment; PROVIDED, HOWEVER, that securities
issued by any such corporation will not be
Permitted Investments to the extent that
investment therein will cause the then
outstanding principal amount of securities
issued by such corporation and held as part of
the Central Account to exceed 20% of the
aggregate principal amount of all Permitted
Investments held in the Central Account;
(vi) commercial or finance company paper (including
both non-interest-bearing discount obligations
and interest g obligations payable on demand or
on a specified date not more than one year after
the date of issuance thereof) that is rated by
the Rating Agencies in their highest short-term
unsecured debt rating available at the time of
such investment or contractual commitment
providing for such investment, and is issued by
a corporation the outstanding senior long-term
debt obligations of which are then rated by the
Rating Agencies in their highest short-term and
long-term unsecured debt ratings, or such lower
rating as is consented to in writing by
Mortgagee;
5
(vii) guaranteed reinvestment agreements acceptable
to the Rating Agencies issued by any bank,
insurance company or other corporation rated in
the highest long-term unsecured rating levels
available to such issuers by the Rating Agencies
throughout the duration of such agreements, or
such lower rating as is consented to in writing
by Mortgagee;
(viii) units of taxable money market funds, which
funds are regulated investment companies, seek
to maintain a constant net asset value per share
and invest solely in obligations backed by the
full faith and credit of the United States,
which funds have been designated in writing by
the Rating Agencies as Permitted Investments
with respect to this definition; and
(ix) any other demand, money market or time deposit,
or any other obligation, security or investment,
that may be consented to in writing by
Mortgagee;
PROVIDED, HOWEVER, that no instrument or security shall be a
Permitted Investment if (y) such instrument or security evidences
a right to receive only interest payments or (z) the right to
receive principal and interest payments derived from the
underlying investment provides a yield to maturity in excess of
120% of the yield to maturity at par of such underlying
investment.
"PERSON" shall mean any individual, corporation,
partnership, joint venture, estate, trust, unincorporated
association, any federal, state, county or municipal government
or any bureau, department or agency thereof and any fiduciary
acting in such capacity on behalf of any of the foregoing.
"PREFERRED PREPAYMENT DATE" shall have the meaning set forth
in the Note.
"PRINCIPAL AMOUNT" shall mean the Loan Amount as such
principal amount may be reduced from time to time pursuant to the
terms of the Mortgage, the Note or the other Loan Documents.
"PROPERTY" shall have the meaning set forth in the granting
clauses of the Mortgage.
"PROPERTY INCOME" shall mean, in each Fiscal Year or portion
thereof during the term hereof, all revenue derived by Mortgagor
arising from the Property including, without limitation, Rents
and Profits (whether denominated as basic rent, additional rent,
percentage rent, escalation payments, electrical payments or
otherwise) and other fees and charges payable pursuant to the
Lease or otherwise in connection with the Property, and rent
insurance proceeds.
"RATING AGENCY" shall mean any nationally recognized
statistical agency selected by Mortgagee including, without
limitation, Duff & ▇▇▇▇▇▇ Rating Co., Fitch Investors Service,
Inc., ▇▇▇▇▇'▇ Corporation, and/or Standard and Poor's Ratings
Group, Inc., collectively, and any successor to any of them;
provided, however, that at any time during which the Loan is an
asset of a securitization or is otherwise an asset of any rated
transaction, "Rating Agency" shall mean the rating agency or
rating agencies that from time to time rate the securities,
certificates or other instruments issued in connection with such
securitization or other transaction.
"REFINANCE NOTIFICATION DATE" shall mean the date that is
six (6) months prior to the Preferred Prepayment Date.
"RENTS AND PROFITS" shall have the meaning set forth in the
granting clauses of the Mortgage.
6
"REQUIRED DEBT SERVICE PAYMENT" shall mean, as of any
Payment Date, the amount of interest and principal then due and
payable pursuant to the Note, together with any other sums due
thereunder, including, without limitation, any prepayments
required to be made or for which notice has been given under this
Mortgage, Default Rate Interest and premium, if any, made in
accordance therewith.
"SUB-ACCOUNTS" shall have the meaning set forth in SECTION
2.02 hereof.
"TAKING" shall mean any condemnation or taking pursuant to
the exercise of the power of eminent domain and any deed
delivered in lieu thereof.
"USE REQUIREMENTS" shall mean any all building codes,
permits, certificates of occupancy or compliance, laws,
regulations, or ordinances (including, without limitation,
health, pollution, fire protection, medical and day-care
facilities, waste product and sewage disposal regulations),
declarations or other agreements affecting the use of the
Property or any part thereof.
"VOID COMMITMENT DATE" shall mean the date, if any, upon
which the Commitment lapses, terminates or is otherwise
withdrawn.
SECTION II: CENTRAL CASH MANAGEMENT
Section 2.01. CASH FLOW. (a) Mortgagor hereby acknowledges
and agrees that the Rents and Profits (which for the purposes of
this SECTION 2.01 shall not include security deposits from the
tenant under the Lease unless duly applied towards rental
payments under the Lease) derived from the Property and all Loss
Proceeds shall be allocated to the Sub-Accounts in the manner and
priority set forth in SECTION 2.05 hereof. Mortgagor shall
direct the tenant under the Lease to make all rental payments
under the Lease directly to Mortgagee by wire transfer, cashier's
check or money order made payable to Mortgagee or its successors
and assigns and cause same to be deposited directly into the
Central Account. Any Rents and Profits received by Mortgagor
shall be deposited immediately in the Central Account.
(b) Mortgagee may elect to change the financial institution
in which the Central Account shall be maintained; PROVIDED,
HOWEVER, Mortgagee shall give Mortgagor not fewer than ten (10)
Business Days' prior notice of such change. All fees and charges
of the bank in which the Central Account is located shall be paid
by Mortgagor.
Section 2.02. ESTABLISHMENT OF SUB-ACCOUNTS. Mortgagee has
established, or caused to be established, the Central Account in
the name of Mortgagee. The Central Account shall be under the
sole dominion and control of Mortgagee. Mortgagor hereby
irrevocably directs and authorizes Mortgagee to deposit into and
withdraw funds from the Central Account, all in accordance with
the terms and conditions of this Agreement. Mortgagor shall have
no right of withdrawal from the Central Account. Each transfer
of funds to be made hereunder shall be made only to the extent
that funds are on deposit in the Central Account or the affected
Sub-Account, and Mortgagee shall have no responsibility to make
additional funds available in the event that funds on deposit are
insufficient. The Central Account shall contain the Debt Service
Payment Sub-Account and the Curtailment Reserve Sub-Account (to
the extent applicable) (each a "SUB-ACCOUNT" and collectively,
the "SUB-ACCOUNTS") to which certain funds shall be allocated and
from which disbursements shall be made pursuant to the terms of
this Agreement. Each Sub-Account shall be an Eligible Account.
Section 2.03. PERMITTED INVESTMENTS. Upon the written
request of Mortgagor, Mortgagee shall direct the Bank to invest
and reinvest any balance in the Central Account from time to time
in Permitted
7
Investments as instructed by Mortgagor (which instruction may be
made no more than one time per month), PROVIDED THAT (a) if
Mortgagor fails to so instruct Mortgagee, or upon the occurrence
of a Default or Event of Default, Mortgagee may direct the Bank
to invest and reinvest such balance in Permitted Investments as
Mortgagee shall determine in its sole discretion (and Mortgagee
shall provide written notice to Mortgagor of Mortgagee's
directions regarding Permitted Investments), (b) the maturities
of the Permitted Investments on deposit in the Central Account
shall, to the extent such dates are ascertainable, be selected
and coordinated to become due not later than the day before any
disbursements from the applicable Sub-Accounts must be made, (c)
all such Permitted Investments shall be held in the name and be
under the sole dominion and control of Mortgagee, and (d) no
Permitted Investment shall be made unless Mortgagee shall retain
a perfected first priority lien in such Permitted Investment
securing the secured indebtedness and all filings and other
actions necessary to ensure the validity, perfection, and
priority of such lien have been taken. It is the intention of
the parties hereto that the entire amounts deposited in the
Central Account (or as much thereof as Mortgagee may reasonably
arrange to invest) shall at all times be invested in Permitted
Investments, and that the Central Account shall be a so-called
"zero balance" account. All funds in the Central Account that
are invested in a Permitted Investment are deemed to be held in
the Central Account for all purposes of this Mortgage and the
other Loan Documents. Mortgagee shall not have any liability for
any loss in investments of funds in the Central Account that are
invested in Permitted Investments whether Mortgagor or Mortgagee
selected such Permitted Investment in accordance herewith and no
such loss shall affect Mortgagor's obligation to fund, or
liability for funding, the Central Account and each Sub-Account,
as the case may be. Mortgagor agrees that Mortgagor shall include
all such earnings on the Central Account as income of Mortgagor
(and, if Mortgagor is a partnership or other pass-through entity,
the partners, members or beneficiaries of Mortgagor, as the case
may be) for federal and applicable state and local tax purposes.
Mortgagor shall have no right whatsoever to direct the investment
of the proceeds in the Collection Account.
Section 2.04. INTEREST ON ACCOUNTS. All interest paid or
other earnings on the Permitted Investments of funds deposited
into the Central Account made hereunder shall be deposited into
the Central Account.
Section 2.05. MONTHLY FUNDING OF SUB-ACCOUNTS. (a) On the
Payment Date of each month during the term of the Loan (each, a
"Current Month"), commencing on the Payment Date of the second
month after the month in which the Loan is initially funded, and
Mortgagee shall allocate all funds transferred or deposited into
the Central Account among the Sub-Accounts as follows and in the
following priority:
(i) first, to the Debt Service Payment Sub-Account,
until an amount equal to the Required Debt Service
Payment for the Payment Date occurring in such
Current Month has been allocated to the Debt
Service Payment Sub-Account; and
(ii) second, with respect to any Current Month for
which funds are to be allocated to the Curtailment
Reserve Sub-Account pursuant to SECTION 2.11
hereof, all Excess Property Income shall be
allocated to the Curtailment Reserve Sub-Account.
(b) Provided that (i) no Event of Default has occurred and
is continuing, and (ii) no Curtailment Period is in effect,
Mortgagee agrees that in each Current Month any amounts deposited
into or remaining in the Central Account after sufficient funds
have been transferred to the Sub-Accounts in accordance with, and
such funds have been allocated in the amounts set forth in,
clauses (i) and (ii) above with respect to the Current Month and
any periods prior thereto shall be disbursed by Mortgagee
8
to Mortgagor on the Payment Date in such Current Month pursuant
to the instructions set forth on SCHEDULE 1 attached hereto or
any subsequent written instructions delivered to Mortgagee by
Mortgagor.
(c) As used herein, "EXCESS PROPERTY INCOME" means the
amounts available in the Central Account in any Current Month
after the allocation under clause (i) of subsection (a) above has
been made.
(d) After the occurrence and during the continuance of an
Event of Default hereunder or under any other Loan Document, no
funds held in the Central Account shall be distributed to
Mortgagor, and Mortgagee shall have the right (without limitation
to any other right or remedy of Mortgagee) to apply all or any
portion of the funds held in such account to the secured
indebtedness in Mortgagee's sole discretion.
Section 2.06. [Reserved]
Section 2.07. DEBT SERVICE PAYMENT SUB-ACCOUNT. On each
Payment Date during the term of the Loan, Mortgagee shall
transfer to the Collection Account, from the Debt Service Payment
Sub-Account, an amount equal to the sum of (a) the Required Debt
Service Payment for such Payment Date and (b) any amounts
deposited into the Central Account that are either (i) Loss
Proceeds that Mortgagee has elected to apply to reduce the
secured indebtedness in accordance with the terms of SECTION 2.13
hereof or (ii) excess Loss Proceeds remaining after the
completion of any restoration required hereunder.
Section 2.08. [Reserved]
Section 2.09 [Reserved]
Section 2.10. [Reserved]
Section 2.11. CURTAILMENT RESERVE SUB-ACCOUNT. During any
Curtailment Period, on each and every Payment Date until the date
on which all secured indebtedness has been paid in full,
Mortgagee shall allocate all Excess Property Income to the
Curtailment Reserve Sub-Account in accordance with SECTION
2.05(A)(II). On each Payment Date during any Curtailment Period,
Mortgagee shall transfer to the Collection Account an amount
equal to the lesser of (a) the amount available in the
Curtailment Reserve Sub-Account, and (b) the total secured
indebtedness then outstanding under the Note and the other Loan
Documents. At the end of any Curtailment Period, the balance in
the Curtailment Reserve Sub-Account shall be promptly disbursed
to Mortgagor.
Section 2.12. [Reserved]
Section 2.13. LOSS PROCEEDS. (a) In the event of a
casualty to the Property, unless Mortgagee elects, or is required
pursuant to SECTION 1.9 of the Mortgage, to make all of the
proceeds received by or on behalf of Mortgagor under the
insurance policy required to be maintained by Mortgagor
("INSURANCE PROCEEDS") available to Mortgagor for restoration of
the Property, Mortgagee and Mortgagor shall cause all such
Insurance Proceeds to be paid by the insurer directly to the
Central Account, whereupon Mortgagee shall, after deducting
Mortgagee's costs of recovering and paying out such Insurance
Proceeds, including without limitation, reasonable attorneys'
fees, apply such Insurance Proceeds to reduce the secured
indebtedness in accordance with the terms of the Note; PROVIDED,
HOWEVER, that if Mortgagee elects, or is deemed to have elected,
to make the Insurance Proceeds available for restoration of the
Property, all Insurance Proceeds in respect of business
interruption coverage shall be maintained in the Central Account,
to be applied by Mortgagee in the same manner as Rents and
Profits received from Mortgagor with respect to the operation of
the Property; PROVIDED FURTHER, HOWEVER, that in the event that
the Insurance Proceeds of such business interruption insurance
policy are paid in a lump sum in advance, Mortgagee shall (i)
hold
9
such Insurance Proceeds in a segregated interest-bearing escrow
account, which shall be an Eligible Account, (ii) estimate, in
Mortgagee's reasonable discretion based upon a certification of
an Engineer or independent, licensed architect, the number of
months required for Mortgagor to restore the damage caused by the
casualty, (iii) divide the aggregate business interruption
Insurance Proceeds by such number of months, and (iv) disburse
from such escrow account into the Central Account each month
during the performance of such restoration such monthly
installment of said Insurance Proceeds. In the event that
Insurance Proceeds are to be applied toward restoration,
Mortgagee shall hold such funds in a segregated bank account at
the Bank, which shall be an Eligible Account, and shall disburse
same in accordance with the provisions of SECTION 1.9 of the
Mortgage.
(b) In the event of a Taking of all or any portion of the
Property, unless Mortgagee elects, or is required pursuant to
SECTION 1.9 of the Mortgage, to make all of the proceeds payable
to Mortgagor in respect of such Taking (any such proceeds,
"CONDEMNATION PROCEEDS") available to Mortgagor for restoration
of the Property, Mortgagee and Mortgagor shall cause all such
Condemnation Proceeds to be paid to the Central Account,
whereupon Mortgagee shall, after deducting Mortgagee's costs of
recovering and paying out such Condemnation Proceeds, including
without limitation, reasonable attorneys' fees, apply same, by
transferring such amounts to the Collection Account, to reduce
the secured indebtedness in accordance with the terms of the
Note; PROVIDED, HOWEVER, that any Condemnation Proceeds received
by or on behalf of Mortgagor in connection with a temporary
Taking shall be maintained in the Central Account, to be applied
by Mortgagee in the same manner as Rents and Profits received
from Manager with respect to the operation of the Property;
PROVIDED FURTHER, HOWEVER, that in the event that the
Condemnation Proceeds of any such temporary Taking are paid in a
lump sum in advance, Mortgagee shall (i) hold such Condemnation
Proceeds in a segregated interest-bearing escrow account, which
shall be an Eligible Account, (ii) estimate, in Mortgagee's
reasonable discretion, the number of months that the Property
shall be affected by such temporary Taking, (iii) divide the
aggregate Condemnation Proceeds in connection with such temporary
Taking by such number of months, and (iv) disburse from such
escrow account into the Central Account each month during the
pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation
Proceeds are to be applied toward restoration, Mortgagee shall
hold such funds in a segregated bank account at the Bank, which
shall be an Eligible Account, and shall disburse same in
accordance with the provisions of SECTION 1.9 of the Mortgage.
(c) If any Insurance Proceeds or Condemnation Proceeds
(collectively, "LOSS PROCEEDS") are received by Mortgagor, such
Loss Proceeds shall be received in trust for Mortgagee, shall be
segregated from other funds of Mortgagor, and shall be forthwith
paid into the Central Account, or paid to Mortgagee to hold in a
segregated account, in each case to be applied or disbursed in
accordance with the foregoing. Any Loss Proceeds made available
to Mortgagor for restoration in accordance herewith, to the
extent not used by Mortgagor in connection with, or to the extent
they exceed the cost of, such restoration, shall be deposited
into the Central Account, whereupon Mortgagee shall apply the
same to reduce the secured indebtedness in accordance with the
terms of the Note.
SECTION 3: MISCELLANEOUS
Section 3.1. CUMULATIVE RIGHTS. The rights of Mortgagee
under this Agreement shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others
hereunder or under any other Loan Document. No act of Mortgagee
shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision.
Mortgagee shall not be limited exclusively to the rights and
remedies herein stated but shall be entitled, subject to the
terms of this
10
Agreement and the other Loan Documents, to every right and remedy
now or hereafter afforded by law or in equity.
Section 3.2. EXHIBITS INCORPORATED. The information set
forth in the Exhibits annexed hereto is hereby incorporated
herein as a part of this Agreement with the same effect as if set
forth in the body hereof.
Section 3.3. SEVERABLE PROVISIONS. If any term, covenant
or condition of the Loan Documents including, without limitation,
the Note, the Mortgage or this Agreement, is held to be invalid,
illegal or unenforceable in any respect, such Loan Document shall
be construed without such provision.
Section 3.4. DUPLICATE ORIGINALS. The Agreement 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.
Section 3.5. NO ORAL CHANGE. This Agreement, and any
provisions hereof, may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act
on the part of Mortgagor or Mortgagee, but only by an agreement
in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or
termination is sought.
Section 3.6. WAIVER OF COUNTERCLAIM. Mortgagor hereby
waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought
against it by Mortgagee or its agents, and waives trial by jury
in any action or proceeding brought by either party hereto
against the other or in any counterclaim Mortgagor may be
permitted to assert hereunder or which may be asserted by
Mortgagee or its agents, against Mortgagor, or in any matters
whatsoever arising out of or in any way connected with this
Agreement or the secured indebtedness.
Section 3.7. HEADINGS, ETC. The table of contents,
headings and captions of various paragraphs of this Agreement 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.
Section 3.8. SOLE DISCRETION OF MORTGAGEE. Whenever
Mortgagee exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to
Mortgagee, the decision of Mortgagee to approve or disapprove or
to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Mortgagee and
shall be final and conclusive, except as may be otherwise
specifically provided herein.
Section 3.9. WAIVER OF NOTICE. Mortgagor shall not be
entitled to any notices of any nature whatsoever from Mortgagee
except with respect to matters for which the Mortgage
specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for
which Mortgagor is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice.
Section 3.10. COVENANTS RUN WITH THE LAND. All of the
grants, covenants, terms, provisions and conditions herein shall
run with the Premises, shall be binding upon Mortgagor and shall
inure to the benefit of Mortgagee, subsequent holders of this
Mortgage and their successors and assigns. Without limitation to
any provision hereof, the term "Mortgagor" shall include and
refer to the Mortgagor named herein, any subsequent owner of the
Property, and its respective heirs, executors, legal
representatives, successors and assigns.
11
Section 3.11 APPLICABLE LAW. This Agreement will be
governed by and construed in accordance with the laws for the
State of New York, provided that to the extent that any of such
laws may now or hereafter be preempted by Federal law, such
Federal law shall so govern and be controlling; and provided
further that the laws of the state in which the Property is
located shall govern as to the creation, priority and enforcement
of liens and security interest in property located in such state.
Section 3.12. REMEDIES OF MORTGAGOR. In the event that a
claim or adjudication is made that Mortgagee has acted
unreasonably or unreasonably delayed acting in any case where by
law or under this Agreement, the Note, the Mortgage or the other
Loan Documents, it has an obligation to act reasonably or
promptly, Mortgagee shall not be liable for any monetary damages,
and Mortgagor's remedies shall be limited to injunctive relief or
declaratory judgment.
Section 3.13. Offsets, Counterclaims and Defenses. Any
assignee of the Mortgage, this Agreement, the Note or any other
Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to this Agreement,
the Note, the Mortgage and such other Loan Documents which
Mortgagor may otherwise have against any assignor of the
Mortgage, this Agreement, the Note and such other Loan Documents
and no such unrelated counterclaim or defense shall be interposed
or asserted by Mortgagor in any action or proceeding brought by
any such assignee upon the Mortgage, this Agreement, the Note or
any other Loan Documents and any such right to interpose or
assert any such unrelated offset, counterclaim or defense in any
such action or proceeding is hereby expressly waived by
Mortgagor.
Section 3.14. WAIVER OF STATUTE OF LIMITATIONS. The
pleadings of any statute of limitations as a defense to any and
all obligations secured by this Agreement are hereby waived to
the full extent permitted by law.
Section 3.15. NO JOINT VENTURE OR PARTNERSHIP. Mortgagor
and Mortgagee intend that the relationship created hereunder be
solely that of mortgagor and mortgagee or borrower and lender, as
the case may be. Nothing herein is intended to create a joint
venture, partnership, tenancy-in-common, or joint tenancy
relationship between Mortgagor and Mortgagee nor to grant
Mortgagee any interest in the Property other than that of
mortgagee or lender.
Section 3.16. TIME OF THE ESSENCE. Time shall be of the
essence in the performance of all obligations of Mortgagor
hereunder.
Section 3.17. NO RELEASE. No recovery of any judgment by
Mortgagee and no levy of an execution under any judgment upon the
Property or any part thereof or upon any other property of
Mortgagor shall release any liens, rights, powers or remedies of
Mortgagee hereunder, but such liens, rights, powers and remedies
of Mortgagee shall continue unimpaired until all amounts due
under the Note, the Mortgage and the other Loan Documents are
paid in full.
Section 3.18. MORTGAGOR'S OBLIGATIONS ABSOLUTE. Except as
expressly set forth to the contrary in the Loan Documents, all
sums payable by Mortgagor hereunder shall be paid without notice
or demand, counterclaim, setoff, deduction or defense and without
abatement, suspension, deferment, diminution or reduction, and
the obligations and liabilities of Mortgagor hereunder shall in
no way be released, discharged, or otherwise affected (except as
expressly provided herein) by reason of: (a) any damage to or
destruction of or any taking of the Property or any portion
thereof; (b) any restriction or prevention of or interference
with any use of the Property or any portion thereof; (c) any
title defect or encumbrance or any eviction from the Property or
any portion thereof by title paramount or otherwise; (d) any
bankruptcy
12
proceeding relating to Mortgagor, any general partner, member, or
shareholder, or any guarantor or indemnitor, or any action taken
with respect to this Mortgage or any other Loan Document by any
trustee or receiver of Mortgagor or any such general partner,
member, shareholder, guarantor or indemnitor, or by any court, in
any such proceeding; (e) any claim which Mortgagor has or might
have against Mortgagee; (f) any default or failure on the part of
Mortgagee to perform or comply with any of the terms hereof or of
any other agreement with Mortgagor; or (g) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing,
whether or not Mortgagor shall have notice or knowledge of any of
the foregoing.
Section 3.19 SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVISE OF COMPETENT COUNSEL, (i) SUBMITS TO PERSONAL JURISDICTION
IN THE STATE OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING BY
ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT, THE NOTE,
THE MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT
ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK
COUNTY, NEW YORK, (iii) SUBMITS TO THE JURISDICTION OF SUCH
COURT, AND, (iv) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES
THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY
OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF
MORTGAGEE TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER
FORUM). MORTGAGOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL,
POSTAGE PREPAID, TO THE MORTGAGOR AT THE ADDRESS FOR NOTICE SET
FORTH IN THE MORTGAGE, AND CONSENTS AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).
(b) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVISE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THE
INDEBTEDNESS SECURED HEREBY OR ANY CONDUCT, ACT OR OMISSION OF
MORTGAGEE OR MORTGAGOR OR ANY OF THEIR DIRECTORS, OFFICERS,
PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER
PERSONS AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN EACH OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
Section 3.20 EXCULPATION. Notwithstanding anything to the
contrary contained herein, Mortgagor's liability hereunder shall
be limited as set forth in Paragraph 13 of the Note.
Section 3.21 AMENDMENT. This Agreement may not be
modified, amended, supplemented, replaced or terminated except by
a written agreement signed by Mortgagee and Mortgagor.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, Mortgagor and Mortgagee have duly
executed this Agreement the day and year first above written.
SHOWBOAT LAND, LLC,
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President
and Chief Financial Officer
By: Showboat Land Holding Limited
Partnership,
a Nevada limited partnership, a
member
By: Showboat Land Company, a Nevada
corporation,
its general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-
President/Finance
COLUMN FINANCIAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
GUARANTY OF LEASE
This GUARANTY OF LEASE (the "Guaranty") is made and entered
into by SHOWBOAT, INC., a Nevada corporation, having an office at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("Guarantor"), for
the benefit of COLUMN FINANCIAL, INC., a Delaware corporation
having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender"). This Guaranty is made with
reference to the following facts:
A. Sun International, as successor-in-interest to Resorts
International, Inc. ("Original Landlord"), and Atlantic City
Showboat, Inc. ("TENANT") are parties to the Lease (as
hereinafter defined).
B. Showboat Land LLC ("Landlord") is simultaneously
herewith acquiring the fee interest in the real property that is
the subject of the Lease (the "Premises") and acquiring the
Original Landlord's interest under the Lease.
C. Guarantor owns or controls both Landlord and Tenant.
D. Lender is simultaneously herewith making a loan in the
original principal amount of $100 million to Landlord (the
"Loan") to fund a portion of the purchase price of the Premises,
which Loan will be secured by a mortgage on the Premises and an
assignment of the Lease and the rents thereunder.
E. Guarantor acknowledges that the Loan will benefit
Guarantor as the beneficial owner of all of the outstanding
interests of Landlord.
F. Lender would not make the Loan to Landlord unless
Guarantor executed this Guaranty. This Guaranty is therefore
being delivered to Lender to induce Lender to make the Loan to
Landlord.
NOW, THEREFORE, in exchange for Ten Dollars ($10.00) and
other good, adequate and valuable consideration, the receipt and
sufficiency of which Guarantor acknowledges, and to induce Lender
to make the Loan to Landlord, Guarantor agrees as follows:
1. DEFINITIONS. For purposes of this Guaranty, the
following terms shall be defined as follows. In addition, any
terms defined in the Lease shall have the same meanings in this
Guaranty, except to the extent that this Guaranty provides some
other meaning(s) for such terms.
1.1 "LEASE." The "Lease" means the Lease, dated on or about
October 26, 1983, between Landlord's and Tenant's respective
predecessor-in-interest, as it heretofore has been and hereafter
may be amended from time to time. The term "Lease" shall also
refer to: (a) any renewal, modification, option, extension or
assignment of the Lease; and (b) Tenant's obligations relating to
the Premises during any period when Tenant is occupying the
Premises or any portion thereof either (i) as a "holdover tenant"
or (ii) as a "statutory tenant" or under any other rent
regulation, rent control, rent stabilization, mandatory
arbitration or other statutory scheme regulating the landlord-
tenant relationship (the parties recognizing, however, that none
of the schemes referred to in this clause "ii" would presently
apply to the Lease). If the Lease is terminated, then at
Lender's option, notwithstanding such termination (and in the
event of any subsequent reinstatement of the Lease), all
Obligations under this
Guaranty shall be calculated and determined as if the Lease were
still in effect. Any request by Landlord that Tenant vacate the
Premises and surrender the Lease shall not affect the definition
of "Lease" for all purposes of this Guaranty.
1.2 "LEGAL COSTS." Lender's "Legal Costs" means
Lender's actual reasonable attorneys' fees and expenses and costs
incurred by Lender in any Proceeding with Guarantor or with
Tenant on account of Tenant's breach of the Lease or Guarantor's
breach of this Guaranty, provided that Lender prevails.
1.3 "OBLIGATIONS." The "Obligations" shall mean all
obligations of Tenant under the Lease to pay money, including
without limitation: (a) the obligation to pay fixed rent; and (b)
the obligation to make all payments required under the Lease on
account of taxes and all other matters, and to make all payments
required under the Environmental Indemnity Agreement, dated as of
even date hereof, from Tenant and Landlord for the benefit of
Lender.
1.4 "PROCEEDING." The term "Proceeding" means any
legal action, suit, arbitration hearing or proceeding arising out
of, or relating to the interpretation or enforcement of, this
Guaranty or the Lease, including a bankruptcy or similar
proceeding affecting Tenant or Guarantor.
1.5 "TENANT." The term "Tenant" means: (a) Tenant as
defined above, acting on its own behalf, and its successors and
assigns as tenant under the Lease, by sale, assignment or
otherwise; (b) any estate created by the commencement of a
bankruptcy or similar proceeding affecting Tenant; (c) any
trustee, liquidator, sequestrator or receiver of Tenant or
Tenant's property; and (d) any similar person or officer,
appointed pursuant to any law governing any bankruptcy or
insolvency proceeding or otherwise.
1.6 "Landlord." The term "Landlord" means the
Landlord named herein and its successors and assigns as landlord
under the Lease, by sale, assignment, foreclosure or otherwise.
2. GUARANTY OF OBLIGATIONS. Guarantor unconditionally and
irrevocably guarantees Tenant's payment and performance of the
Obligations when due, strictly in compliance with the Lease. If
Tenant does not pay or perform any of the Obligation(s) when due,
strictly in compliance with the Lease, then Guarantor shall pay
or perform such Obligation(s). At Lender's option (whether or
not Landlord has previously requested payment or performance of
the Obligation(s) from Tenant) Lender may demand that Guarantor
pay or perform any Obligation(s) without demanding that Tenant
pay or perform same. Guarantor's liability under this Guaranty
shall be primary and not secondary. Guarantor's liability under
this Guaranty shall be in the full amount owed by Tenant on
account of the Obligations, including any interest, default
interest, costs and fees (including, without limitation, Legal
Costs) with respect to the Obligations, including any of the
foregoing that would have accrued but for the commencement of a
bankruptcy, insolvency or similar proceeding affecting Tenant.
3. NO OFFSET. Except to the extent, if any, that Lender
agrees otherwise in writing, Guarantor's obligations under this
Guaranty shall not be subject to offset, deduction, reduction,
counterclaim, or defense of any kind, including without
limitation on account of any offset, deduction, reduction,
counterclaim, or defense arising or purportedly arising under the
Lease or from the landlord-tenant relationship thereunder.
4. CHANGES IN LEASE. Without notice to, or consent by,
Guarantor, and in Landlord's sole and absolute discretion and
without prejudice to Lender or in any way limiting or reducing
Guarantor's
2
liability under this Guaranty, Landlord may: (a) grant extensions
of time, renewals or other indulgences or modifications to
Tenant; (b) change, amend or modify the Lease; and (c) accept or
make compositions or other arrangements or file or refrain from
filing a claim in any bankruptcy or similar proceeding, and
otherwise deal with Tenant and any other party related to the
Lease as Landlord may determine in its sole and absolute
discretion. Without limiting the generality of the foregoing,
Guarantor's liability under this Guaranty shall continue even if
Landlord alters any obligations under the Lease in any respect or
if Landlord's remedies or rights against Tenant are in any way
impaired or suspended with or without Guarantor's consent. If
Landlord performs any of the actions described in this paragraph,
then Guarantor's liability shall continue in full force and
effect. Guarantor acknowledges that Guarantor is and will be in
a position to know about and control any of the actions described
in this paragraph.
5. NATURE OF GUARANTY. Guarantor's liability under this
Guaranty is a guaranty of payment of money only. This Guaranty
is a guaranty of payment, not of collection. Guarantor's
liability under this Guaranty is not conditioned or contingent
upon the genuineness, validity, regularity or enforceability of
the Lease. Guarantor acknowledges that Guarantor is fully
obligated under this Guaranty (with respect to the Obligations
only) even if Tenant had no liability at the time of execution of
the Lease or later ceases to be liable under the Lease, whether
pursuant to bankruptcy or otherwise. Guarantor waives any right
to compel Landlord to proceed first against Tenant or under the
Lease, before proceeding against Guarantor. Guarantor agrees
that if any of the Obligations are or become void or
unenforceable, then Guarantor's liability under this Guaranty
shall continue in full force with respect to all Obligations as
if they were and continued to be legally enforceable.
Guarantor's liability under this Guaranty shall continue until
the Loan has been satisfied in full.
6. EXTENSION, RENEWAL, ETC. OF LEASE. This Guaranty
shall remain and continue in full force and effect
notwithstanding any renewal, modification, option, extension or
assignment of the Lease, whether or not separately consented to,
acknowledged or confirmed by Guarantor. The definition of "Lease"
shall include any such renewal, modification, option, extension
or assignment of the Lease.
7. WAIVERS OF RIGHTS AND DEFENSES. Guarantor waives any
right to require Landlord to proceed against Tenant or pursue any
other right or remedy for Guarantor's benefit. Guarantor agrees
that Lender may proceed against Guarantor with respect to the
Obligations without taking any action against Tenant. Guarantor
agrees that Landlord may unqualifiedly exercise in its sole
discretion any or all rights and remedies available to it against
Tenant without impairing Lender's rights and remedies in
enforcing this Guaranty, under which Guarantor's liabilities
shall remain independent and unconditional.
8. ADDITIONAL WAIVERS. Guarantor waives diligence and all
demands, protests, presentments and notices of every kind or
nature, including notices of protest, dishonor, nonpayment,
acceptance of this Guaranty and the creation, renewal, extension,
modification or accrual of any of the Obligations. Guarantor
further waives any right to plead any and all statutes of
limitations as a defense to Guarantor's liability under this
Guaranty or the enforcement of this Guaranty. No failure or
delay on Lender's pan in exercising any power, right or privilege
under this Guaranty shall impair or waive any such power, right
or privilege. Guarantor irrevocably waives any right to trial by
jury in any action, proceeding, counterclaim or other litigation
arising out of or relating to this Guaranty, the enforcement of
this Guaranty, or any actions of Lender in connection with or
relating to the enforcement of this Guaranty.
3
9. LANDLORD'S EXERCISE OF LEASE REMEDIES. The validity
of this Guaranty and the obligations of Guarantor shall in no way
be terminated, limited, affected or impaired by reason of
Landlord's assertion against Tenant of any rights or remedies
reserved to Landlord under the Lease or available with respect to
the Lease under applicable law. Lender may enforce this Guaranty
against Guarantor either before, after, in conjunction with, or
independently of Landlord's assertion against Tenant of any
remedies available under the Lease or with respect to the Lease
under applicable law. Guarantor's primary personal liability for
the Obligations shall not be limited, restricted, diminished, or
reduced in any manner by the occurrence of any of the following:
(a) Tenant's departure from the Premises after such Obligations
accrued; (b) Landlord's obtaining a judgment against Tenant for
rent or use and occupancy payments, except to the extent that
such judgment has actually been paid and such payment(s) are
credited against the Obligations pursuant to this Guaranty; (c)
any actions or inactions by Landlord in any Proceeding affecting
Tenant or the Lease; or (d) Landlord's termination of the Lease
or exercise of any other remedies under the Lease.
10. TENANT'S FINANCIAL CONDITION. Guarantor represents
that Guarantor is fully aware of the financial condition of
Tenant. Guarantor delivers this Guaranty based solely upon
Guarantor's own independent investigation and based in no part
upon any representation or statement by Lender. Guarantor is not
relying upon, nor expecting, Lender to furnish Guarantor with any
information concerning the financial condition of Tenant.
11. MERGER; NO CONDITIONS; AMENDMENTS. This Guaranty
contains the entire agreement among the parties with respect to
the matters set forth in this Guaranty. This Guaranty supersedes
all prior agreements among the parties with respect to the
matters set forth in this Guaranty. No course of prior dealings
among the parties, no usage of trade, and no parole or extrinsic
evidence of any nature shall be used to supplement, modify or
vary any terms of this Guaranty. This Guaranty is unconditional.
There are no unsatisfied conditions to the full effectiveness of
this Guaranty. No terms or provisions of this Guaranty may be
changed, waived, revoked or amended without Lender's prior
written consent. If any court of competent jurisdiction
determines that any provision of this Guaranty is unenforceable,
then all other provisions of this Guaranty shall remain fully
effective.
12. INTERPRETATION. This Guaranty shall be governed under
the law of the State of New York. The words "include" or
"including" are intended to be interpreted as if followed in each
case by the words "without limitation."
13. LEGAL COSTS. In the event of any Proceeding between
Guarantor and Lender including any Proceeding in which Lender
enforces or attempts to enforce this Guaranty, Guarantor shall
reimburse Lender for all Legal Costs of such Proceeding.
14. COMMERCIAL TRANSACTION. Guarantor acknowledges that
the Lease and this Guaranty are a commercial transaction, and
that neither this Guaranty nor the Lease is entered into for
personal, family, household or agricultural purposes.
15. NO THIRD-PARTY BENEFICIARIES. This Guaranty is
executed and delivered for the benefit of Lender and its heirs,
successors and assigns, and is not intended to benefit any third
party.
16. NOTICES. All notices, requests and demands to be made under
this Guaranty shall be given in writing to a party at its address
set forth in the preamble and shall be delivered by hand against
a signed receipt, by nationally recognized overnight courier or
by certified or registered mail, postage prepaid, return receipt
requested, and shall be deemed given on the date received or on
the date that
4
receipt is refused. Either party may change its address for
notice by a notice given in accordance herewith.
17. ACQUISITION. Guarantor is in the process of being
acquired by ▇▇▇▇▇▇'▇ Entertainment, Inc. ("▇▇▇▇▇▇'▇"). In the
event that the acquisition of Guarantor by ▇▇▇▇▇▇'▇ is
consummated, at any time thereafter Guarantor may assign this
Guaranty to ▇▇▇▇▇▇'▇ or any entity that is at least fifty percent
(50%) beneficially owned by ▇▇▇▇▇▇'▇ having a net worth equal to
or greater than Guarantor's net worth at such time and owning,
directly or indirectly, at least fifty percent (50%) of the
outstanding interests of Tenant (such entity, the "Successor
Guarantor") provided that the Successor Guarantor agrees in
writing to assume all of the Guarantor's obligations hereunder
and to be bound by all of the terms, conditions and covenants
contained in this Guaranty pertaining to the Guarantor.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, Guarantor has duly executed this
Guaranty as of the date indicated below.
GUARANTOR
SHOWBOAT, INC.
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
Its: Executive Vice President
and Chief Financial
Officer
Date: January 29, 1998
9
ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT (the "Agreement")
made as of the 29th day of January, 1998 by SHOWBOAT LAND, LLC, a
Nevada limited liability company, having an office at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("Owner-
Indemnitor"), and ATLANTIC CITY SHOWBOAT, INC., a New Jersey
corporation, having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Tenant-Indemnitor"), in favor of COLUMN
FINANCIAL, INC., a Delaware corporation, having an office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Indemnitee") and other Indemnified Parties (as hereinafter
defined).
RECITALS
A. Owner-Indemnitor and Tenant-Indemnitor (together,
"Indemnitors"), are, or will be, respectively, the fee owner of
and the ground tenant (pursuant to that certain Lease Agreement,
dated October 26, 1983, originally entered into between Resorts
International, Inc. and Ocean Showboat, Inc., as amended) with
respect to that certain real property located in the City of
Atlantic City, County of Atlantic, and State of New Jersey, known
as Atlantic City Showboat Hotel and Casino and more particularly
described in Exhibit A attached hereto (said real property,
together with any real property hereafter encumbered by the lien
of the Security Instrument (defined below), being herein
collectively referred to as the "Land"; the Land, together with
Owner-Indemnitor's, title and interest in and to all structures,
buildings and improvements now or hereafter located on the Land,
being collectively referred to as the "Property").
B. Indemnitee is prepared to make a loan (the "Loan")
to Owner-Indemnitor in the principal amount of $100,000,000.00,
to be evidenced by a certain promissory note of even date
herewith in the principal amount of $100,000,000.00 made by Owner-
Indemnitor to Indemnitee (the "Note") and secured by, among other
things, a certain mortgage and security agreement given by Owner-
Indemnitor to Indemnitee (the "Security Instrument") which will
encumber the Property.
C. Indemnitee is unwilling to make the Loan unless
Owner-Indemnitor and Tenant-Indemnitor, jointly and severally,
agree to provide the indemnification, representations,
warranties, and covenants and other matters described in this
Agreement for the benefit of Indemnified Parties.
AGREEMENT
NOW THEREFORE, in consideration of the loan and the
right to use the premises and Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Owner-Indemnitor and Tenant-Indemnitor
hereby represent, warrant, covenant and agree for the benefit of
Indemnified Parties as follows:
1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. The
Indemnitors represent and warrant that, to the best knowledge of
Indemnitors: (a) there are no Hazardous Substances (defined
below) or underground storage tanks in, on, above, or under the
Property, except those that are both (i) in compliance with all
Environmental Laws (defined below) and with permits issued
pursuant thereto, if applicable, and (ii) fully disclosed to
Indemnitee in writing pursuant to the written report(s) resulting
from the environmental assessment(s) of the Property delivered to
Indemnitee (such report(s) are
identified in Exhibit B attached hereto and are hereinafter
referred to collectively as the "Environmental Report"); (b)
there are no past, present or threatened Releases (defined below)
of Hazardous Substances in, on, above, under or from the Property
except as described in the Environmental Report; (c) there is no
threat of any Release of Hazardous Substances migrating to the
Property except as described in the Environmental Report; (d)
there is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with
the Property, except as described in the Environmental Report;
(e) Indemnitors do not know of, and neither of the Indemnitors
has received, nor has knowledge of the receipt by any prior
tenant of, any written or oral notice or other communication from
any person or entity (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined
below) thereof, of possible liability of any person or entity
pursuant to any Environmental Law, other environmental conditions
in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with any of
the foregoing; and (f) Indemnitors have truthfully and fully
provided to Indemnitee, in writing, any and all information
relating to conditions in, on, above, under or from the Property
that is known to Indemnitors or that is contained in files and
records of the Indemnitors, including but not limited to any
reports relating to Hazardous Substances in, on, above, under or
from the Property and/or to the environmental condition of the
Property.
2. ENVIRONMENTAL COVENANTS. Indemnitors covenant and
agree that: (a) all uses and operations on or of the Property,
whether by Indemnitors or by any other person or entity, shall be
in compliance with all Environmental Laws and permits issued
pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, above, under or from the Property other than
in compliance with all Environmental Laws; (c) there shall be no
Hazardous Substances in, on, above or under the Property, except
those that are in compliance with all Environmental Laws and with
permits issued pursuant thereto; (d) Indemnitors shall keep the
Property free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act
or omission of Indemnitors or any other person or entity (the
"Environmental Liens"); (e) Indemnitors shall, at their sole cost
and expense, fully and expeditiously cooperate in all activities
of Indemnified Parties pursuant to Section 3 hereof, including
but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (f) Indemnitors
shall, at their sole cost and expense, perform any environmental
site assessment or other investigation of environmental
conditions in connection with the Property, pursuant to any
reasonable written requests of Indemnitee (including but not
limited to sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether
solid, liquid or gas), and share with Indemnitee the reports and
other results thereof, and Indemnitee and other Indemnified
Parties shall be entitled to rely on such reports and other
results thereof, provided that, so long as no Event of Default
has occurred and is continuing, such requests by Indemnitee shall
not be made more than once in any twelve (12) month period; (g)
Indemnitors shall, at their sole cost and expense, comply with
all reasonable written requests of Indemnitee to (i) reasonably
effectuate Remediation of any condition (including but not
limited to a Release of a Hazardous Substance) in, on, above,
under or from the Property; (ii) comply with any Environmental
Law; (iii) comply with any directive from any governmental
authority; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment;
(h) Indemnitors shall not do or allow any tenant or other user of
the Property to do any act or thing that materially increases the
dangers to human health or the environment, poses an unreasonable
risk of harm to any person or entity (whether on or off the
Property), or constitutes a public or private nuisance; and (i)
Indemnitors shall immediately notify Indemnitee in writing of (A)
any presence or Releases or threatened Releases of Hazardous
Substances in, on, above, under, from or migrating towards the
Property, (B) any non-compliance with any
-2-
Environmental Laws related in any way to the Property, (C) any
actual or potential Environmental Lien, (D) any required or
proposed Remediation of environmental conditions relating to the
Property, and (E) any written or oral notice or other
communication of which Indemnitors become aware from any source
whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation
thereof, possible liability of any person or entity pursuant to
any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with
anything referred to in this Agreement, in each case of which
either Indemnitor has knowledge or notice. Any failure of
Indemnitors to perform their obligations pursuant to this
Agreement shall constitute bad faith waste with respect to the
Property.
3. INDEMNIFIED PARTIES' RIGHTS/COOPERATION AND
ACCESS. Indemnified Parties and any other person or entity
designated by Indemnified Parties (including but not limited to
any receiver, any representative of a governmental entity, and
any environmental consultant) shall have the right but not the
obligation, to enter upon the Property at all reasonable times to
assess any and all aspects of the environmental condition of the
Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be
determined in Indemnified Parties' sole and absolute discretion)
and taking samples of soil, groundwater or other water, air, or
building materials, and conducting other invasive testing.
Indemnitors shall cooperate with and provide access to
Indemnified Parties and any such person or entity designated by
Indemnified Parties. Indemnified Parties shall reasonably
endeavor to minimize any interference to Indemnitors caused by
Indemnified Parties' exercise of their rights under this Section
3.
4. INDEMNIFICATION. Indemnitors covenant and agree,
jointly and severally, at their sole cost and expense, to
protect, defend, indemnify, release and hold harmless Indemnified
Parties from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified
Parties (other than those Losses arising solely (i) from a state
of facts that first came into existence after Indemnitee acquired
title to the Property through foreclosure or a deed in lieu
thereof or (ii) from the gross negligence of any Indemnified
Parties) and directly or indirectly arising out of or in any way
relating to any one or more of the following: (a) any presence of
any Hazardous Substances in, on, above, or under the Property;
(b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any
activity by one or both of the Indemnitors, any person or entity
affiliated with one or both Indemnitors, and any other user of
the Property in connection with any actual, proposed or
threatened use, treatment, storage, holding, existence,
disposition or other Release, generation, production,
manufacturing, processing, refining, control, management,
abatement, removal, handling, transfer or transportation to or
from the Property of any Hazardous Substances at any time located
in, under, on or above the Property; (d) any activity by one or
both of the Indemnitors, any person or entity affiliated with one
or both of the Indemnitors, and any other user of the Property in
connection with any actual or proposed Remediation of any
Hazardous Substances at any time located in, under, on or above
the Property, whether or not such Remediation is voluntary or
pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any
past, present or threatened non-compliance or violations of any
Environmental Laws (or permits issued pursuant to any
Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by one or both
of the Indemnitors, any person or entity affiliated with one or
both of the Indemnitors, and any other user of the Property to
comply with any order of any governmental authority in connection
with any Environmental Laws; (f) the imposition, recording or
filing or the threatened imposition, recording or filing of any
Environmental Lien encumbering the Property; (g) any
administrative processes or proceedings or judicial proceedings
in any way connected with any matter
-3-
addressed in this Agreement; (h) any past, present or threatened
injury to, destruction of or loss of natural resources in any way
connected with the Property, including but not limited to costs
to investigate and assess such injury, destruction or loss; (i)
any acts of one or both of the Indemnitors, any person or entity
affiliated with one or both of the Indemnitors, and any other
user of the Property in arranging for disposal or treatment, or
arranging with a transporter for transport for disposal or
treatment, of Hazardous Substances at any facility or
incineration vessel containing such or similar Hazardous
Substances; (j) any acts of one or both of the Indemnitors, any
person or entity affiliated with one or both of the Indemnitors,
and any other user of the Property in accepting any Hazardous
Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a
threatened Release of any Hazardous Substance which causes the
incurrence of costs for Remediation; (k) any personal injury,
wrongful death, or property or other damage arising under any
statutory or common law or tort law theory, including but not
limited to damages assessed for private or public nuisance or for
the conducting of an abnormally dangerous activity on or near the
Property; (1) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to
perform any covenants or other obligations pursuant to this
Agreement or Section 1.31 of the Security Instrument; and (m) any
diminution in value of the Property in any way connected with any
occurrence or other matter referred to in this Agreement.
5. DUTY TO DEFEND AND ATTORNEYS' AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party,
Indemnitors shall defend same (if requested by any Indemnified
Party, in the name of the Indemnified Party) by attorneys and
other professionals approved by the Indemnified Parties.
Notwithstanding the foregoing, any Indemnified Parties may, in
their sole and absolute discretion, engage their own attorneys
and other professionals to defend or assist them, and, at the
option of Indemnified Parties, their attorneys shall control the
resolution of claim or proceeding; provided, however, that,
unless any conflict of interest shall arise among the Indemnified
Parties, the Indemnified Parties shall have the right to retain
no more than one firm of attorneys to defend or assist them.
Upon demand, Indemnitors shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and
other professionals in connection therewith.
6. DEFINITIONS. Capitalized terms used herein and
not specifically defined herein shall have the respective
meanings ascribed to such terms in the Security Instrument. As
used in this Agreement, the following terms shall have the
following meanings:
The term "Hazardous Substances" includes but is not
limited to any and all substances (whether solid, liquid or gas)
defined, listed, or otherwise classified as pollutants, hazardous
wastes, hazardous substances, hazardous materials, extremely
hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment,
including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials ("ACM"),
polychlorinated biphenyls ("PCBs"), lead, radon, radioactive
materials, flammables and explosives.
The term "Environmental Law" means any present and
future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law,
applicable to the Property and relating to protection of human
health or the environment, relating to Hazardous Substances,
relating to liability for or costs of Remediation or prevention
of Releases of Hazardous Substances or relating to liability for
or costs of other actual or threatened danger to human health or
the environment.
-4-
The term "Environmental Law" includes, but is not limited to, the
following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any state or local
statutes, ordinances, rules, regulations and the like applicable
to the Property and addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous
Substances Transportation Act; the Resource Conservation and
Recovery Act (including but not limited to Subtitle I relating to
underground storage tanks); the Solid Waste Disposal Act; the
Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the
Federal Water Pollution Control Act (the "Clean Water Act"); the
Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act;
the Spill Compensation and Control Act; the Industrial Site
Recovery Act; the Leaking Underground Storage Tank Act; and the
River and Harbors Appropriation Act. The term "Environmental
Law" also includes, but is not limited to, any present and future
federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law, conditioning
transfer of property upon a negative declaration or other
approval of a governmental authority of the environmental
condition of the Property; requiring notification or disclosure
of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other
person or entity, whether or not in connection with transfer of
title to or interest in the Property; imposing conditions or
requirements in connection with permits or other authorization
for lawful activity at or with respect to the Property; relating
to nuisance, trespass or other causes of action related to the
Property; and relating to wrongful death, personal injury, or
property or other damage in connection with any physical
condition or use of the Property.
The term "Release" with respect to any Hazardous
Substance includes but is not limited to any release, deposit,
discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.
The term "Remediation" includes but is not limited to
any response, remedial, removal, or corrective action; any
activity to clean up, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Substance; any actions to
prevent, cure or mitigate any Release of any Hazardous Substance;
any action to comply with any Environmental Laws or with any
permits issued pursuant thereto; any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any
Hazardous Substances or to anything referred to herein and in
Section 1.31 of the Security Instrument.
The term "Legal Action" means any claim, suit or
proceeding, whether administrative or judicial in nature.
The term "Indemnified Parties" includes Indemnitee, any
person or entity who is or will have been involved in originating
the Loan, any person or entity who is or will have been involved
in servicing the Loan, any person or entity in whose name the
encumbrance created by the Security Instrument is or will have
been recorded, persons and entities who may hold or acquire or
will have held a full or partial interest in the Loan (including
but not limited to those who may acquire any interest in mortgage
pass-through certificates or other securities evidencing a
beneficial interest in the Loan offered in a rated or unrated
public offering or private investment ("Securities"), as well as
custodians, trustees and other fiduciaries who hold or have held
a full or partial interest in the Loan for the benefit of third
parties), as well as the respective directors, officers,
shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of
-5-
any and all of the foregoing (including but not limited to any
other person or entity who holds or acquires or will have held a
participation or other full or partial interest in the Loan or
the Property, whether during the term of the Loan or as part of
or following foreclosure pursuant to the Loan) and including but
not limited to any successors by merger, consolidation or
acquisition of all or a substantial part of Indemnitee's assets
and business.
The term "Losses" includes any and all claims, suits,
liabilities (including but not limited to strict liabilities),
administrative or judicial actions or proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, costs of Remediation
(whether or not performed voluntarily), judgments, awards,
amounts paid in settlement, foreseeable and unforeseeable
consequential damages, litigation costs, attorneys' fees and
costs of diligence, engineers' fees, environmental consultants'
fees, and investigation costs (including but not limited to costs
for sampling, testing and analysis of soil, water, air, building
materials, and other materials and substances whether solid,
liquid or gas), of whatever kind or nature, and whether or not
incurred in connection with any judicial or administrative
proceedings.
7. UNIMPAIRED LIABILITY. The liability of
Indemnitors under this Agreement shall in no way be limited or
impaired by, and Indemnitors hereby consent to and agree to be
bound by, any amendment or modification of the provisions of the
Note, the Security Instrument or any other document which
evidences, secures or guarantees all or any portion of the Loan
or executed and delivered in connection with the Loan (the "Other
Security Documents") to or with Indemnitee by Indemnitor or any
person who succeeds Indemnitor under any of such documents or as
owner of the Property. In addition, the liability of Indemnitors
under this Agreement shall in no way be limited or impaired by
(i) any extensions of time for performance required by the Note,
the Security Instrument or any of the Other Security Documents,
(ii) any sale or transfer of all or part of the Property, (iii)
except as provided herein, any exculpatory provision in the Note,
the Security Instrument, or any of the Other Security Documents
limiting Indemnitee's recourse to the Property or to any other
security for the Note, or limiting Indemnitee's rights to a
deficiency judgment against any Indemnitor, (iv) the accuracy or
inaccuracy of the representations and warranties made by any
Indemnitor under the Note, the Security Instrument or any of the
Other Security Documents or herein, (v) the release of one or
both Indemnitors or any other person from performance or
observance of any of the agreements, covenants, terms or
conditions contained in any of the Other Security Documents by
operation of law, Indemnitee's voluntary act, or otherwise, (vi)
the release or substitution in whole or in part of any security
for the Note, or (vii) Indemnitee's failure to record the
Security Instrument or file any UCC financing statements (or
Indemnitee's improper recording or filing of any thereof) or to
otherwise perfect, protect, secure or insure any security
interest or lien given as security for the Note; and, in any such
case, whether with or without notice to Indemnitor and with or
without consideration.
8. ENFORCEMENT. (a) Indemnified Parties may enforce
the obligations of the Indemnitors without first resorting to or
exhausting any security or collateral or without first having
recourse to the Note, the Security Instrument, or any Other
Security Documents or any of the Property, through foreclosure
proceedings or otherwise, provided, however, that nothing herein
shall inhibit or prevent Indemnitee from suing on the Note,
foreclosing, or exercising any power of sale under, the Security
Instrument, or exercising any other rights and remedies
thereunder. This Agreement is not collateral or security for the
debt of Owner-Indemnitor pursuant to the Loan, unless Indemnitee
expressly elects in writing to make this Agreement additional
collateral or security for the debt of Owner-Indemnitor pursuant
to the Loan, which Indemnitee is entitled to do in its sole and
absolute discretion. It is not
-6-
necessary for an event of default to have occurred pursuant to
the Security Instrument for Indemnified Parties to exercise their
rights pursuant to this Agreement. Notwithstanding any provision
of the Security Instrument, the obligations pursuant to this
Agreement are exceptions to any non-recourse or exculpation
provision of the Security Instrument; Indemnitors are fully and
personally, jointly and severally, liable for such obligations,
and their liability is not limited to the original or amortized
principal balance of the Loan or the value of the Property.
(b) Notwithstanding anything to the contrary in this
Agreement, it shall not be a default hereunder if an Indemnitor
shall breach any of its covenants, or fail to perform its
obligations, set forth in Section 2 hereof unless and until (i)
an Indemnified Party shall have notified the Indemnitors that
such breach or failure has occurred, and (ii) such breach or
failure is not cured within thirty (30) days after the effective
date of such notice, or, if such breach or default is not
reasonably capable of being cured within such thirty (30) day
period, Indemnitors do not commence to cure within such thirty
(30) day period and thereafter diligently pursue such cure to
completion.
9. SURVIVAL. The obligations and liabilities of
Indemnitors under this Agreement shall fully survive indefinitely
notwithstanding any termination, satisfaction, assignment, entry
of a judgment of foreclosure, exercise of any power of sale, or
delivery of a deed in lieu of foreclosure of the Security
Instrument.
10. INTEREST. Any amounts payable to Indemnified
Parties under this Agreement shall become immediately due and
payable and, if not paid within thirty (30) days of written
demand therefor, shall bear interest at a per annum rate equal to
the lesser of (a) eleven and 9/100ths percent (11.09%) per annum
or (b) the maximum interest rate which Indemnitors may by law pay
or Indemnified Parties may charge and collect, from the date
payment was due.
11. WAIVERS. (a) Indemnitors hereby waive and
relinquish (i) any right or claim of right to cause a marshalling
of Indemnitors' assets or to cause Indemnitee or other
Indemnified Parties to proceed against any of the security for
the Loan before proceeding under this Agreement against
Indemnitors; (ii) all rights and remedies accorded by applicable
law to indemnitors or guarantors, except any rights of
subrogation which Indemnitors may have, provided that the
indemnity provided for hereunder shall neither be contingent upon
the existence of any such rights of subrogation nor subject to
any claims or defenses whatsoever which may be asserted in
connection with the enforcement or attempted enforcement of such
subrogation rights including, without limitation, any claim that
such subrogation rights were abrogated by any acts of Indemnitee
or other Indemnified Parties; (iii) the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim,
in any action or proceeding brought against or by Indemnitee or
other Indemnified Parties; (iv) notice of acceptance hereof and
of any action taken or omitted in reliance hereon; (v)
presentment for payment, demand of payment, protest or notice of
nonpayment or failure to perform or observe, or other proof, or
notice or demand; and (vi) all homestead exemption rights against
the obligations hereunder and the benefits of any statutes of
limitations or repose. Notwithstanding anything to the contrary
contained herein, Indemnitors hereby agree to postpone the
exercise of any rights of subrogation with respect to any
collateral securing the Loan until the Loan shall have been paid
in full.
(b) INDEMNITORS HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING
-7-
OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE
SECURITY INSTRUMENT, THIS AGREEMENT OR THE OTHER SECURITY
DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES BY
CONNECTION THEREWITH.
12. SUBROGATION. Indemnitors shall take any and all
reasonable actions, including institution of legal action against
third-parties, necessary or appropriate to obtain reimbursement,
payment or compensation from such persons responsible for the
presence of any Hazardous Substances at, in, on, under or near
the Property or otherwise obligated by law to bear the cost
Indemnified Parties shall be and hereby are subrogated to all of
Indemnitors' rights now or hereafter in such claims.
13. INDEMNITOR'S REPRESENTATIONS AND WARRANTIES.
Indemnitors represent and warrant that:
(a) each has the full corporate power and
authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery
and performance of this Agreement by each Indemnitor has
been duly and validly authorized; and all requisite
corporate action has been taken by each Indemnitor to make
this Agreement valid and binding upon such Indemnitor,
enforceable in accordance with its terms;
(b) each Indemnitor's execution of, and
compliance with, this Agreement will not result in the
breach of any term or provision of the charter or by-laws
of that Indemnitor or result in the breach of any term or
provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation
under, any agreement, indenture or loan or credit
agreement or other instrument to which the Indemnitor or
the Property is subject, or result in the violation of any
law, rule, regulation, order, judgment or decree to which
the Indemnitor or the Property is subject;
(c) there is no action, suit, proceeding or
investigation pending or threatened against either
Indemnitor which, either in any one instance or in the
aggregate, that may result in any material adverse change
in the business, operations, financial condition,
properties or assets of either Indemnitor, or in any
material impairment of the right or ability of either
Indemnitor to carry on its business substantially as now
conducted, or in any material liability on the part of
either Indemnitor, or which would draw into question the
validity of this Agreement or of any action taken or to be
taken in connection with the obligations of each
Indemnitor contemplated herein, or which would be likely
to impair materially the ability of either Indemnitor to
perform under the terms of this Agreement;
(d) Indemnitors do not believe, nor does either
Indemnitor have any reason or cause to believe, that it
cannot perform each and every covenant contained in this
Agreement;
(e) no approval, authorization, order, license
or consent of, or registration or filing with, any
governmental authority or other person, and no approval,
authorization or consent of any other party is required in
connection with this Agreement; and
-8-
(f) this Agreement constitutes a valid, legal
and binding obligation of each Indemnitor, enforceable
against it in accordance with the terms hereof, subject to
general principles of equity and laws affecting the rights
and remedies of debtors and creditors generally.
14. NO WAIVER. No delay on any Indemnified Party's
part in exercising any right, power or privilege under this
Agreement shall operate as a waiver of any such privilege, power
or right.
15. NOTICE OF LEGAL ACTIONS. Each party hereto shall,
within five (5) business days of receipt thereof, give written
notice to the other party hereto of (i) any notice, advice or
other communication from any governmental entity or any source
whatsoever with respect to Hazardous Substances on, from or
affecting the Property, and (ii) any Legal Action brought against
such party or related to the Property, with respect to which
Indemnitor may have liability under this Agreement. Such notice
shall comply with the provisions of Section 19 hereof.
16. BOOKS AND RECORDS. (a) Each Indemnitor shall
keep adequate books and records of account in accordance with
generally accepted accounting principles ("GAAP"), or in
accordance with other methods acceptable to Indemnitee in its
sole discretion, consistently applied, and each Indemnitor shall
furnish to Indemnitee:
(i) an annual balance sheet and profit and loss
statement of such Indemnitor in the form required by
Indemnitee, prepared and certified by such Indemnitor,
or if required by Indemnitee, audited financial
statements prepared by an independent certified public
accountant acceptable to Indemnitee, within ninety (90)
days after the close of each fiscal year of Indemnitor;
and
(ii) such other financial statements as may,
from time to time, be required by Indemnitee.
(b) Indemnitors shall furnish to Indemnitee and its
agents convenient facilities for the examination and audit of any
such books and records. Within a reasonable time after request
by Indemnitee, each Indemnitor shall provide any other
information with respect to the Property and the financial
condition of such Indemnitor as Indemnitee may from time to time
request.
(c) To the extent that any of the above financial
statements and/or records are prepared for an Indemnitor by an
independent certified public accountant, such Indemnitor shall
deliver copies of such certified financial statements and/or
records to Indemnitee.
17. EXAMINATION OF BOOKS AND RECORDS. Indemnitee and
its accountants shall have the right to examine the records,
books, management and other papers of each Indemnitor which
reflect upon such Indemnitor's financial condition, at the
Property or at any office regularly maintained by such Indemnitor
where the books and records are located. Indemnified Parties and
their accountants shall have the right to make copies and
extracts from the foregoing records and other papers. In
addition, Indemnified Parties and their accountants shall have
the right to examine and audit the books and records of each
Indemnitor pertaining to the income, expenses and operation of
the Property during reasonable business hours at any office of
such Indemnitor where the books and records are located.
-9-
18. TRANSFER OF LOAN. (a) Indemnitee may, at any time,
sell, transfer or assign the Note, the Security Instrument, this
Agreement and the Other Security Documents, any or all servicing
rights with respect thereto, or grant participations therein or
issue mortgage pass-through certificates or other securities
evidencing a beneficial interest in a rated or unrated public
offering or private placement. Indemnitee may forward to each
purchaser, transferee, assignee, servicer, participant, investor
in such securities or any credit rating agency rating such
securities (collectively, the "Investor") and each prospective
Investor, all documents and information which Indemnitee now has
or may hereafter acquire relating to Indemnitors and the
Property, as Indemnitee determines necessary or desirable.
Indemnitors shall furnish, and Indemnitors consent to Indemnitee
furnishing, to such Investors or such prospective Investors any
and all information concerning the financial condition of the
Indemnitors and of the Property as may be requested by
Indemnitee, any Investor or any prospective Investor in
connection with any sale, transfer or participation interest.
(b) Upon any transfer or proposed transfer
contemplated above and by Section 4.33 of the Security
Instrument, at Indemnitee's request, each or both Indemnitors
shall provide an estoppel certificate to the Investor or any
prospective Investor in such form, substance and detail as
Indemnitee, such Investor or prospective Investor reasonably may
require.
19. NOTICES. (a) Any notice or communication in
respect thereof will be sufficiently given to a party if in
writing and delivered in person, sent by certified or registered
mail (airmail if overseas) or the equivalent (with return receipt
requested) or by overnight courier or given by facsimile
transmission addressed to the party at its address or facsimile
number provided for that purpose.
(b) A notice or communication will be effective, if
delivered by hand, sent by overnight courier or by facsimile
transmission, on the day it is delivered (or if that day is not a
day on which commercial banks are open for business in the city
specified in the address for notice provided by the recipient (a
"Local Banking Day"). or if delivered after 5:00 p.m.
(recipient's local time) on a Local Banking Day, on the first
following day that is a Local Banking Day), or, if sent by
certified or registered mail (airmail if overseas) or the
equivalent (return receipt requested), three Local Banking Days
after dispatch if the recipient's address for notice is in the
same country as the place of dispatch and otherwise seven Local
Banking Days after dispatch (or, in either case, if delivered
after 5:00 p.m. (recipient's local time) on a Local Banking Day,
on the first following day that is a Local Banking Day).
(c) Either party by notice to the other may designate
additional or different addresses for subsequent notices or
communications.
20. JURISDICTION. Indemnitors covenant and agree (i)
that in any action or proceeding brought by any Indemnified Party
against an Indemnitor under this Agreement, the Supreme Court of
the State of New York for the County of New York, or, in a case
involving diversity of citizenship, the United States District
Court for the Southern District of New York, shall have non
exclusive jurisdiction over any such action or proceeding; (ii)
that service of any summons and complaint or other process in any
such action or proceeding may be made by registered or certified
mail directed to Indemnitor to its address set forth on the first
page of this Agreement; Indemnitors hereby waive personal service
thereof; and (iii) that within thirty days after such mailing
Indemnitor so served shall appear or answer to any summons and
complaint or other process, and should Indemnitor so served fail
to appear or answer within said thirty-day period, Indemnitor
shall be deemed in default and judgment may be entered
-10-
against the Indemnitor for the amount as demanded in any summons
and complaint or other process so served.
21. NO THIRD-PARTY BENEFICIARY. The terms of this
Agreement are for the sole and exclusive protection and use of
Indemnified Parties. No party shall be a third-party beneficiary
hereunder, and no provision hereof shall operate or inure to the
use and benefit of any such third party. It is agreed that those
persons and entities included in the definition of Indemnified
Parties are not such excluded third party beneficiaries.
22. DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement
may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This
Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of
which together shall constitute a single Agreement. The failure
of any party hereto to execute this Agreement, or any counterpart
hereof, shall not relieve the other signatories from their
obligations hereunder.
23. NO ORAL CHANGE. This Agreement, and any
provisions hereof, may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act
or failure to act on the part of any Indemnitor or any
Indemnified Party, but only by an agreement in writing signed by
the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is
sought.
24. HEADINGS, ETC. The headings and captions of
various paragraphs of this Agreement 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.
25. NUMBER AND GENDER/SUCCESSORS AND ASSIGNS. All
pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.
Without limiting the effect of specific references in any
provision of this Agreement, the term "Indemnitor" shall be
deemed to refer to each and every person or entity comprising an
Indemnitor from time to time, as the sense of a particular
provision may require, and to include the heirs, executors,
administrators, legal representatives, successors and assigns of
an Indemnitor, all of whom shall be bound by the provisions of
this Agreement, provided that no obligation of an Indemnitor may
be assigned except with the written consent of Indemnitee, but
provided further that if the interest of the Owner-Indemnitor or
the Tenant-Indemnitor in the Property shall be transferred to
another entity in accordance with the provisions of Section
1.13(c) or Section 1.12(d), respectively, of the Security
Instrument, then the transferee of such interest shall be deemed
and be an assign of the transferor and an Indemnitor hereunder
and shall be bound by the provisions of this Agreement without
obtaining the written consent of the Indemnitee. Each reference
herein to Indemnitee shall be deemed to include its successors
and assigns. This Agreement shall inure to the benefit of
Indemnified Parties and their respective successors and assigns
forever.
26. JOINT AND SEVERAL LIABILITY. If any Indemnitor
consists of more than one person or entity, the obligations and
liabilities of each such person hereunder are joint and several.
The obligations and liabilities of this Agreement are joint and
several to Owner-Indemnitor and Tenant-Indemnitor.
-11-
27. RELEASE OF LIABILITY. Any one or more parties
liable upon or in respect of this Agreement may be released, or
partially released, without affecting the liability of any party
not so released.
28. RIGHTS CUMULATIVE. The rights and remedies herein
provided are cumulative and not exclusive of any rights or
remedies which Indemnitee has under the Note, the Security
Instrument, or the Other Security Documents or would otherwise
have at law or in equity.
29. INAPPLICABLE PROVISIONS. If any term, condition
or covenant of this Agreement shall be held to be invalid,
illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
30. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the law of the State of New
York, without reference or giving effect to any choice of law
doctrine, provided that to the extent that any of such laws may
now or hereafter be preempted by Federal law, such Federal law
shall so govern and be controlling.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
-12-
IN WITNESS WHEREOF, this Agreement has been executed by
Owner-Indemnitor and Tenant-Indemnitor and is effective as of the
day and year first above written.
SHOWBOAT LAND, LLC,
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President
and Chief Financial Officer
By: Showboat Land Holding Limited
Partnership,
a Nevada limited partnership, a
member
By: Showboat Land Company, a Nevada
corporation,
its general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-
President/Finance
ATLANTIC CITY SHOWBOAT, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary
RECORD AND RETURN TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, L.A.
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (this
"Assignment"), made as of the 29th day of January, 1998, is by
SHOWBOAT LAND, LLC, a Nevada limited liability company
("Assignor"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, in favor of Column Financial, Inc.,
a Delaware corporation ("Assignee"), whose address is ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H :
THAT, WHEREAS, Assignor has executed a certain note
dated of even date herewith (the "Note"), payable to the order of
Assignee in the stated principal amount of One Hundred Million
and 00/100 Dollars ($100,000,000.00); and
WHEREAS, the Note is secured by that certain Mortgage
and Security Agreement dated of even date herewith (the
"Mortgage"), between Assignor, as mortgagor, and Assignee, as
mortgagee, encumbering that certain real property, situated at
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of Atlantic, State of New
Jersey, as more particularly described on EXHIBIT A attached
hereto and incorporated herein by this reference, and all of
Assignor's right, title and interest in and to all buildings and
other improvements now or hereafter located thereon
(collectively, the "Improvements") (said real property and the
Improvements are hereinafter sometimes collectively referred to
as the "Property"); and
WHEREAS, Assignor is desirous of further securing to
Assignee the performance of the terms, covenants and agreements
hereof and of the Note, the Mortgage and each other document
evidencing, securing, guaranteeing or otherwise relating to the
indebtedness evidenced by the Note (the Note, the Mortgage and
such other documents, as each of the foregoing may from time to
time be amended, consolidated, renewed or replaced, being
collectively referred to herein as the "Loan Documents").
NOW, THEREFORE, in consideration of the mailing of the
loan evidenced by the Note be Assignee to Assignor and for other
good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor does
hereby irrevocably, absolutely and unconditionally transfer,
sell, assign, pledge, deliver and convey to Assignee, its
successors and assigns, all of the right, title and interest of
Assignor in and to:
(a) any and all leases, licenses, rental agreements
and occupancy agreements of whatever form now or hereafter
affecting all or any part of the Property, including, without
limitation, the Ground Lease (as hereinafter defined), and any
and all guarantees, extensions, renewals, replacements and
modifications thereof (collectively, the "Leases"); and
(b) all deposits (whether for security or otherwise),
rents, issues, profits, revenues, royalties, accounts, rights,
benefits and income of every nature of and from the Property,
including, without limitation, minimum rents, additional rents,
termination payments, forfeited security deposits, liquidated
damages following default and all proceeds payable to Assignor
(pursuant to the Ground Lease (as hereinafter defined) or
otherwise) under any policy of insurance covering loss of rents
resulting from untenantability due to destruction or damage to
the Property, and all proceeds of and awards in condemnation
payable to Assignor arising from the Property, together with the
immediate and continuing right to collect and receive the same,
whether now due or hereafter becoming due, and together with all
rights and claims of any kind that Assignor may have against any
tenant, lessee or licensee under the Leases or under law or
equity as a result of their relationship as landlord and tenant,
or against any other occupant of the Property (collectively, the
"Rents").
TO HAVE AND TO HOLD the same unto Assignee, its
successors and assigns.
This Assignment is an absolute assignment to Assignee,
and not an assignment as security for the performance of the
obligations under the Loan Documents or any other indebtedness.
This is an outright, immediate, continuing, and absolute
assignment, and not a pledge or the passing of a security
interest. Notwithstanding the foregoing, upon termination of
this Assignment in accordance with Section 16 hereof, this
Assignment shall become and be void and of no effect; but the
affidavit of any officer of Assignee stating that any portion of
the amount due under the Note or any other Loan Document is
unpaid or any term of any of the Loan Documents is unperformed
shall be and constitute PRIMA FACIE evidence of the validity,
effectiveness and continuing force of this Assignment and any
party may and is hereby authorized to rely thereon.
IT IS AGREED that, notwithstanding that this instrument
is a present, outright, immediate, continuing, absolute and
executed assignment of the Rents and of the Leases and a present,
outright, immediate, continuing, absolute and executed grant of
the powers herein granted to Assignee, and not merely the
collateral assignment of, or a grant of a lien or security,
interest in, the Rents and Leases, Assignor is hereby permitted,
at the sufferance of Assignee and at its discretion, and is
hereby granted (not as a limitation or condition hereof, but as a
personal covenant only to Assignor and its successors and not to
any lessee or any other person) a revocable license by Assignee,
to retain possession of the Leases and to collect and retain the
Rents unless and until there shall be a default
under the terms of any of the Loan Documents,
2
which default has not been cured within any applicable grace or
cure period (including any applicable notice). In the event of
such uncured default (any such uncured default, an "Event of
Default"), the aforementioned license granted to Assignor shall
automatically terminate without notice to Assignor, and Assignee
may thereafter, without taking possession of the Property, take
possession of the Leases and collect the Rents. Further, from
and after such termination, Assignor shall be the agent of
Assignee in collection of the Rents, and any Rents so collected
by Assignor shall be held in trust by Assignor for the sole and
exclusive benefit of Assignee and Assignor shall, within one (1)
business day after receipt of any Rents, pay the same to Assignee
to be applied by Assignee as hereinafter set forth. Furthermore,
from and after such uncured default and termination of the
aforementioned license, Assignee shall have the immediate and
continuing power, right and authority, without any notice
whatsoever to Assignor and without regard to the adequacy of the
security therefor (but subject to (i) the terms and conditions of
that certain Lease Agreement, dated October 26, 1983, between
Resorts International, Inc. and Ocean Showboat, Inc., as such
lease agreement has been amended to date (as so amended, the
"Ground Lease") and (ii) the requirements of the New Jersey
Casino Control Commission (the "Commission")), to: (a) enter
upon, take possession of, and manage and operate the Property,
with full power to employ agents to manage the same, whether
foreclosure of the Mortgage has been instituted or not and
without applying for a receiver; (b) demand, collect, receive and
▇▇▇ for the Rents, including those past due and unpaid; and (c)
do all acts relating to such management of the Property,
including, but not limited to, negotiation of new Leases, making
adjustments of existing Leases, contracting and paying for
repairs and replacements to the Improvements and to the fixtures,
equipment and personal property located in the Improvements or
used in any way in the operation, use and occupancy of the
Property as in the sole subjective judgment and discretion of
Assignee may be necessary to maintain the same in a tenantable
condition, purchasing and paying for such additional furniture
and equipment as in the sole subjective judgment of Assignee may
be necessary to maintain a proper rental income from the
Property, employing necessary managers and other employees,
purchasing fuel, providing utilities and paying for all other
expenses incurred in the operation of the Property, maintaining
adequate insurance coverage over hazards customarily insured
against and paying the premiums therefor. Assignee may apply the
Rents received by Assignee from the Property, after deducting the
costs of collection thereof, including, without limitation,
attorneys' fees and a management fee for any management agent so
employed, against amounts expended for repairs, upkeep,
maintenance, service, fuel, utilities, taxes, assessments,
insurance premiums and such other expenses as Assignee incurs in
connection with the operation of the Property and against
interest, principal, required escrow deposits and other sums
which have or which may become due, from time to time, under the
terms of the Loan Documents, in such order or priority as to any
of the items so mentioned as Assignee, in its sole subjective
discretion, may determine. The exercise by Assignee of the
rights granted Assignee in this paragraph, and the collection of
the Rents and the application thereof as herein provided, shall
not be considered a waiver by Assignee of any default under the
Loan Documents or prevent foreclosure of any liens on the
Property nor shall such exercise make Assignee liable under any
of the Leases, Assignee hereby expressly reserving
3
all of its rights and privileges under the Mortgage and the other
Loan Documents as fully as though this Assignment had not been
entered into.
Without limiting the rights granted hereinabove, in the
event Assignor shall fail to make any payment or to perform any
act required under the terms hereof and such failure shall not be
cured within any applicable grace or cure period (including any
applicable notice), then Assignee may, but shall not be obligated
to, without prior notice to or demand on Assignor, and without
releasing Assignor from any obligation hereof, make or perform
the same in such manner and to such extent as Assignee reasonably
may deem necessary to protect the security hereof, including
specifically, without limitation, appearing in and defending any
action or proceeding purporting to affect the security hereof or
the rights or powers of Assignee, performing or discharging any
obligation, covenant or agreement of Assignor under any of the
Leases, and, in exercising any of such powers, paying all
necessary costs and expenses, employing counsel and incurring and
paying attorneys' fees. Any sum advanced or paid by Assignee for
any such purpose, including, without limitation, reasonable
attorneys' fees, together with interest thereon at the Default
Interest Rate (as defined in the Note) from the date paid or
advanced by Assignee until repaid by Assignor, shall immediately
be due and payable to Assignee by Assignor on demand and shall be
secured by the Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the
Note.
IT IS FURTHER AGREED that this Assignment is made upon
the following terms, covenants and conditions:
1. This Assignment shall not operate to place responsibility
for the control, care, management or repair of the Property upon
Assignee, nor for the performance of any of the terms and
conditions of any of the Leases, nor shall it operate to make
Assignee responsible or liable for any waste committed on the
Property by the tenants or any other party or for any dangerous
or defective condition of the Property or for any negligence in
the management, upkeep, repair or control of the Property.
Assignee shall not be liable for any loss sustained by Assignor
resulting from Assignee's failure to let the Property or from any
other act or omission of Assignee in managing the Property except
for such acts or omissions constituting gross negligence on the
part of Assignee. Assignor shall and does hereby indemnify and
hold Assignee harmless from and against any and all liability,
loss, claim, demand or damage which may or might be incurred by
reason of this Assignment, including, without limitation, claims
or demands for security deposits from tenants of space in the
Improvements deposited with Assignor, and from and against any
and all claims and demands whatsoever which may be asserted
against Assignee by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained in any of the Leases.
Should Assignee incur any liability by reason of this Assignment
or in defense of any claim or demand for loss or damage as
provided above, the amount thereof, including, without
limitation, costs, expenses and attorneys' fees, together with
interest thereof at the Default Interest Rate from the date paid
or incurred by Assignee until repaid by Assignor, shall be
immediately due and payable to Assignee by Assignor upon demand
and
4
shall be secured by the Mortgage and by all of the other Loan
Documents securing all or any part of the indebtedness evidenced
by the Note.
2. This Assignment shall not be construed as making
Assignee a mortgagee in possession.
3. Assignee is obligated to account to Assignor only for
such Rents as are actually collected or received by Assignee.
4. Assignor hereby further presently and absolutely
assigns to Assignee subject to the terms and provisions of this
Assignment: (a) any award or other payment which Assignor may
hereafter become entitled to receive with respect to any of the
Leases as a result of or pursuant to any bankruptcy, insolvency
or reorganization or similar proceedings involving the tenants
under such Leases; and (b) any and all payments made by or on
behalf of any tenant of any part of the Property in lieu of Rent.
Assignor hereby irrevocably appoints Assignee as its attorney-in-
fact to, from and after the occurrence of a default by Assignor
hereunder or under any of the other Loan Documents which has not
been cured within any applicable grace or cure period, appear in
any such proceeding and to collect any such award or payment,
which power of attorney is coupled with an interest by virtue of
this Assignment and is irrevocable so long as any sums are
outstanding under the loan evidenced by the Note.
5. Assignor represents, warrants and covenants to and for
the benefit of Assignee: (a) that Assignor now is (or with
respect to any Leases not yet in existence, will be immediately
upon the execution thereof) the absolute owner of the landlord's
interest in the Leases, with full right and title to assign the
same and the Rents due or to become due thereunder; (b) that,
other than this Assignment and those assignments, if any,
specifically permitted in the Mortgage, there are no outstanding
assignments of the Leases or Rents; (c) that no Rents have been
anticipated, discounted, released, waived, compromised or
otherwise discharged except for prepayment of rent of not more
than one (1) month prior to the accrual thereof; (d) that there
are no material defaults now existing under any of the Leases by
the landlord or tenant, and there exists no state of facts which,
with the giving of notice or lapse of time or both, would
constitute a default under any of the Leases by the landlord or
tenant, except as disclosed in writing to Assignee; (e) that
Assignor has and shall duly and punctually observe and perform
all covenants, conditions and agreements in the Leases on the
part of the landlord to be observed and performed thereunder and
(f) the Leases are in full force and effect and are the valid and
binding obligations of Assignor, and, to the knowledge of
Assignor, are the valid and binding obligations of the tenants
thereto.
6. Assignor covenants and agrees that Assignor shall not,
without the prior written consent of Assignee, except as
expressly required by the Commission: (a) exclusive of security
deposits, accept any payment of Rent or installments of Rent for
more than one month in advance; (b) enter into any Lease having a
term of less than six (6) months or in excess of two (2) years;
(c) cancel or terminate any Lease (other than for non-payment of
Rent or any other material default thereunder) or amend or modify
any Lease; (d) take or omit to take any action or exercise any
right or option which would permit the tenant under any Lease to
cancel or terminate said Lease; (e)
5
anticipate, discount, release, waive, compromise or otherwise
discharge any Rents payable or other obligations under the
Leases; (f) further pledge, transfer, mortgage or otherwise
encumber or assign the Leases or future payments of Rents except
as otherwise expressly permitted by the terms of the Mortgage or
incur any material indebtedness, liability or other obligation to
any tenant, lessee or licensee under the Leases; or (g) permit
any Lease to become subordinate to any lien, except to the extent
that such may occur without Assignor's consent under the terms of
such Lease; provided, however, that Assignor may take any of the
actions described in subsection (c) or (e) above so long as such
actions are taken by Assignor in the ordinary course of business
and are consistent with sound customary leasing and management
practices for similar properties.
7. Assignor covenants and agrees that Assignor shall, at
its sole cost and expense, appear in and defend any action or
proceeding arising under, growing out of, or in any manner
connected with the Leases or the obligations, duties or
liabilities of the landlord or tenant thereunder, and shall pay
on demand all costs and expenses, including, without limitation,
attorneys' fees, which Assignee may incur in connection with
Assignee's appearance, voluntary or otherwise, in any such action
or proceeding, together with interest thereon at the Default
Interest Rate from the date incurred by Assignee until repaid by
Assignor.
8. At any time after the occurrence of an Event of
Default, Assignee may, at its option, notify any tenants or other
parties of the existence of this Assignment, Assignor does hereby
specifically authorize, instruct and direct each and every
present and future tenant, lessee and licensee of the whole or
any part of the Property to pay all unpaid and future Rents to
Assignee upon receipt of demand from Assignee to so pay the same
and Assignor hereby agrees that each such present and future
tenant, lessee and licensee may rely upon such written demand
from Assignee to so pay said Rents without any inquiry into
whether there exists a default hereunder or under the other Loan
Documents or whether Assignee is otherwise entitled to said
Rents. Assignor hereby waives any right, claim or demand which
Assignor may now or hereafter have against any present or future
tenant, lessee or licensee by reason of such payment of Rents to
Assignee, and any such payment shall discharge such tenant's,
lessee's or licensee's obligation to make such payment to
Assignor.
9. Assignee may take or release any security for the
indebtedness evidenced by the Note, may release any party
primarily or secondarily liable for the indebtedness evidenced by
the Note, may grant extensions, renewals or indulgences with
respect to the indebtedness evidenced by the Note and may apply
any other security therefor held by it to the satisfaction of any
indebtedness evidenced by the Note without prejudice to any of
its rights hereunder.
10. The acceptance of this Assignment and the collection of the
Rents in the event Assignor's license terminates, as referred to
above, shall be without prejudice to Assignee. The rights of
Assignee hereunder are cumulative and concurrent, may be pursued
separately, successively or together and may be exercised as
often as occasion therefor shall arise, it being agreed by
Assignor that the exercise of any one or more of the rights
provided for herein shall not
6
be construed as a waiver of any of the other rights or remedies
of Assignee, at law or in equity or otherwise, so long as any
obligation under the Loan Documents remains unsatisfied.
11. All rights of Assignee hereunder shall inure to the
benefit of its successors and assigns; and all obligations of
Assignor shall bind its successors and assigns and any subsequent
owner of the Property. All rights of Assignee in, to and under
this Assignment shall pass to and may be exercised by any
assignee of such rights of Assignee. Assignor hereby agrees that
if Assignee gives notice to Assignor of an assignment of said
rights, upon such notice the liability of Assignor to the
assignee of the Assignee shall be immediate and absolute.
Assignor will not set up any claim against Assignee or any
intervening assignee as a defense, counterclaim or set-off to any
action brought by Assignee or any intervening assignee for any
amounts due hereunder or for possession of or the exercise of
rights with respect to the Leases or the Rents.
12. It shall be a default hereunder (a) if any
representation or warranty made herein by Assignor is determined
by Assignee to have been false or misleading in any material
respect at the time made; or (b) upon any failure by Assignor to
comply with the provisions of Paragraph 6 above; or (c) upon any
failure by Assignor in the performance or observance of any other
covenant or condition hereof and, to the extent such failure
described in this subsection (c) is susceptible of being cured,
the continuance of such failure for thirty (30) days after
written notice thereof from Assignee to Assignor, PROVIDED,
HOWEVER, that if such default is susceptible of cure but such
cure cannot be accomplished with reasonable diligence within said
period of time, and if Assignor commences to cure such default
promptly after receipt of notice thereof from Assignee, and
thereafter prosecutes the curing of such default with reasonable
diligence, such period of time shall be extended for such period
of time as may be necessary to cure such default with reasonable
diligence, but not to exceed an additional sixty (60) days. Any
such default not so cured shall be a default under each of the
other Loan Documents, entitling Assignee to exercise any or all
rights and remedies available to Assignee under the terms hereof
or of any or all of the other Loan Documents, and any default
under any other Loan Document which is not cured within any
applicable grace or cure period shall be deemed a default
hereunder subject to no grace or cure period, entitling Assignee
to exercise any or all rights provided for herein.
13. Failure by Assignee to exercise any right which it may
have hereunder shall not be deemed a waiver thereof unless so
agreed in writing by Assignee, and the waiver by Assignee of any
default hereunder shall not constitute a continuing waiver or a
waiver of any other default or of the same default on any future
occasion. No collection by Assignee of any Rents pursuant to
this Assignment shall constitute or result in a waiver of any
default then existing hereunder or under any of the other Loan
Documents.
14. If any provision under this Assignment or the application
thereof to any entity, person or circumstance shall be invalid,
illegal or unenforceable to any extent, the remainder of this
Assignment and the application of the provisions hereof to other
entities, persons or circumstances shall not be affected thereby
and shall be enforced to the fullest extent permitted by law.
7
15. This Assignment may not be amended, modified or
otherwise changed except by a written instrument duly executed by
Assignor and Assignee.
16. This Assignment shall be in full force and effect
continuously from the date hereof to and until the Mortgage shall
be released of record, and the release of the Mortgage shall, for
all purposes, automatically terminate this Assignment and render
this Assignment null and void and of no effect whatsoever.
17. In case of a conflict between any provision of this
Assignment and any provision of the other Loan Documents, the
provision selected by Assignee in its sole subjective discretion
shall prevail and be controlling.
18. All notices, demands, requests or other communications
to be sent by one party to the other hereunder or required by law
shall be given and become effective as provided in the Mortgage.
19. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York, except to the
extent that any of such laws may now or hereafter be preempted by
Federal law, in which case such Federal law shall so govern and
be controlling; and provided further that the laws of the state
in which the real property on EXHIBIT "A" attached hereto is
located shall govern as to the creation, priority and enforcement
of liens and security interests on and in property located in
such state.
20. This Assignment may be executed in any number of
counterparts, each of which shall be effective only upon delivery
and thereafter shall be deemed an original, and all of which
shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature
page. Any signature page of this Assignment may be detached from
any counterpart of this Assignment without impairing the legal
effect of any signatures thereon and may be attached to another
counterpart of this Assignment identical in form hereto but
having attached to it one or more additional signature pages.
21. In addition to, but not in lieu of, any other rights
hereunder, Assignee shall have the right to institute suit and
obtain a protective or mandatory injunction against Assignor to
prevent a breach or default, or to enforce the observance, of the
agreements, covenants, terms and conditions contained herein, as
well as the right to damages occasioned by any breach or default
by Assignor.
22. This Assignment shall continue and remain in full force
and effect during any period of foreclosure with respect to the
Property.
23. Assignor hereby covenants and agrees that Assignee shall be
entitled to all of the rights, remedies and benefits available by
statute, at law, in equity or as a matter of practice for the
enforcement and perfection of the intents and purposes hereof.
Assignee shall, as a matter of absolute right, be entitled, upon
application to a court of applicable jurisdiction, to the
appointment
8
of a receiver to obtain and secure the rights of Assignee
hereunder and the benefits intended to be provided to Assignee
hereunder.
24. Notwithstanding anything to the contrary contained in
this Assignment, the liability of Assignor and its members for
the indebtedness secured hereby and for the performance of the
other agreements, covenants and obligations contained herein and
in the Loan Documents shall be limited as set forth in Section
1.05 of the Note.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
9
IN WITNESS WHEREOF, Assignor has executed this
Assignment as of the day and year first above written.
SHOWBOAT LAND, LLC
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President and Chief
Financial Officer
By: Showboat Land Holding Limited
Partnership,
a Nevada limited partnership,
a member
By: Showboat Land Company, a
Nevada corporation, its
general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-
President/Finance
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
I certify that on January 23, 1998, R. ▇▇▇▇▇ ▇▇▇▇ personally
came before me and this person acknowledged under oath, to my
satisfaction, that:
(a) this person signed, sealed and delivered the attached
document as Executive Vice President and Chief Financial Officer
of Showboat Operating Company, which is the member of Showboat
Land, LLC, the Nevada limited liability company named in this
document; and
(b) this document was signed and delivered by Showboat
Operating Company, on behalf of Showboat Land, LLC, as its
voluntary act and deed by virtue of authority from its Board of
Directors.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
No. 01VA5072319
Qualified in Kings County
Commission Expires January 27, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
I certify that on January 23, 1998, R. ▇▇▇▇▇ ▇▇▇▇ personally
came before me and this person acknowledged under oath, to my
satisfaction, that:
(a) this person signed, sealed and delivered the attached
document as Vice President/Finance of Showboat Land Company, a
Nevada corporation, which is the general partner of Showboat Land
Holding Limited Partnership, which is the member of Showboat
Land, LLC, the Nevada limited liability company named in this
document; and
(b) this document was signed and delivered by Showboat Land
Company, on behalf of Showboat Land, LLC, as its voluntary act
and deed by virtue of authority from its Board of Directors.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
No. 01VA5072319
Qualified in Kings County
Commission Expires January 27, 1999
TENANT ESTOPPEL CERTIFICATE
January 29, 1998
Column Financial, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 801 BOARDWALK. ATLANTIC CITY, NEW JERSEV (THE
"PROPERTY")
Gentlemen:
It is our understanding that Column Financial, Inc.
("Lender") is about to make a loan to Showboat Land, LLC
("Landlord"), the landlord, or successor-in-interest to the
landlord under our lease, secured by a mortgage on the Property
(the "Loan"), and, as a condition precedent thereof, you have
required this certification by the undersigned.
The undersigned, as successor by assignment to Ocean
Showboat, Inc., the named tenant under that certain lease made
with Resorts International, Inc., as landlord, dated October 26,
1983, which lease has been modified or amended by amendments
dated January 15, 1985, July 5, 1985, October 28, 1985, August
28, 1986 (restating amendment of October 28, 1985), December 6,
1987, March 2, 1987, March 13, 1987, October 18, 1988, and May
18, 1993 (as so amended and modified, the "LEASE", a true and
complete copy of which, including all such amendments and
modifications, is attached hereto), hereby ratifies the Lease and
certifies and agrees that:
(a) the undersigned entered into possession of the
premises described in the Lease (the "DEMISED PREMISES") on
December 15, 1983 (the commencement date of the term of the
Lease). The Demised Premises consist of the entirety of the
Property;
(b) the fixed rental in the annual amount of
$6,340,000 (payable in equal monthly installments) was payable
beginning on April 1, 1987;
(c) the current annual fixed rental under the Lease is
$9,046,626.97;
(d) the Lease is in full force and effect in
accordance with its terms and, except as indicated above, has not
been assigned, modified, supplemented or amended in any way and
the undersigned has no notice of any assignment, pledge or
hypothecation by the Landlord of the Lease or of the rentals
thereunder;
(e) the Lease represents the entire agreement between
the parties with respect
to the Demised Premises and the Property, and the undersigned has
no options, rights of first refusal or other rights with respect
to the Property and the Demised Premises except as set forth
therein;
(f) other than leasehold mortgages currently
encumbering the Property, the Lease has not been assigned or
pledged. No portion of the Demised Premises has been sublet,
except as listed on Exhibit A to this Certificate;
(g) the term of the Lease commenced on December 15,
1983 and, unless otherwise terminated or extended in accordance
with the terms of the Lease, will expire on December 14, 2082.
There are no options to renew, extend or cancel the Lease except
to the extent contained in the Lease;
(h) all construction and other obligations of a
material nature required to be performed by the landlord under
the Lease (including, without limitation, the landlord covenants
in Articles 9, 10, 11 and 15 of the Lease) have been fully
satisfied or are inapplicable to Landlord, and there are no
existing obligations on the part of Landlord under the Lease;
(i) any required payments, if any, by the landlord to
the undersigned for tenant improvements have been made;
(j) on this date there are no existing defenses,
offsets or counterclaims which the undersigned has against the
enforcement of the Lease by the Landlord and the undersigned has
no knowledge of any existing default under the Lease or any event
which, with the giving of notice, the passage of time or both,
would constitute a default under said Lease;
(k) the undersigned is not entitled to any free rent
periods, offsets, concessions, abatements, deductions or
otherwise against the rent payable under the Lease from and after
the date hereof, except as follows: none (list all offsets,
abatements and deductions to the rent or, if none, so indicate);
(1) no rental, other than for the current month, has
been paid in advance;
(m) there is no security deposit held by the Landlord;
(n) the rentals under the Lease have been paid through
the month of January 1998;
(o) there are no actions, whether voluntary or
involuntary, pending against the undersigned under the bankruptcy
or insolvency laws of the United States or any state or territory
of the United States;
(p) to the best of the undersigned's knowledge, no
hazardous wastes or hazardous substances have been treated,
stored, placed, used or disposed of in, on, at, above or under
the Demised Premises except such cleaning or other fluids used in
the ordinary course of
2
business;
(q) the undersigned currently has no right to
terminate the Lease pursuant to Section 29.1 thereof (granting
the unilateral right to terminate the Lease upon a determination
that modifications or additions required by The New Jersey Casino
Control Commission are unreasonably burdensome);
(r) the undersigned will maintain, throughout the 10-
year term of the Loan, the casualty and liability insurance that
the undersigned is required to maintain under the terms of the
leasehold mortgages currently encumbering the Demised Premises;
(s) in the event that all or substantially or
effectively all of the Property is taken by condemnation, the
undersigned will not contest or submit to arbitration any
valuation of Landlord's fee estate at an amount equal to the
amount then outstanding under the Loan;
(t) in the event that a default on the part of
Landlord occurs under the Lease, the undersigned will give
written notice to Lender of said default, including sufficient
detail to enable Lender, to cure said default, and the
undersigned will forbear from exercising any and all rights and
remedies exercisable under the Lease as a result of such default
to afford Lender a reasonable period of time (but in no event
less the thirty (30) days after the expiration of the applicable
cure period with respect to Landlord) to cure such default,
including, as necessary, sufficient time for Lender to obtain
possession of the Property through foreclosure or otherwise;
The undersigned understands and acknowledges that (i)
this certificate shall be binding upon the undersigned and its
successors and assigns, (ii) Lender is relying on this
certificate in extending financial accommodations to Landlord,
(iii) Lender will be secured by, among other things, a mortgage
on the Property and a collateral assignment of Landlord's
interest in the Lease, (iv) certain modifications of the Lease
and other actions relating to the Lease may require your prior
written consent, and (v) this certificate also may be relied upon
by Lender's successors and assigns and, if the Loan becomes the
subject of a securitization, may also be relied upon by the
credit rating agency, if any, rating the securities
collateralized by the Loan as well as by any issuer of such
securities and any servicer and/or trustee acting in respect of
such securitization.
Very truly yours,
ATLANTIC CITY SHOWBOAT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary
3
EXHIBIT A
SUBLEASES
4
RETAIL LEASES AND LIMITED LICENSE AGREEMENT
APPENDIX ITEM
A Somerset Ice Company, Inc. lease (Jewelry
Shop)
B Ocean 11 Enterprises lease (Gift Shop)
C Mr. Larry's Hair Salon Lease
D L.A.Y. Enterprises, Inc. lease (Peanut Shop)
E Megabucks Host Casino Limited License and
Personnel Agreement
PROMISSORY NOTE CLARIFICATION AGREEMENT
Dated as of January 29, 1998
between
COLUMN FINANCIAL, INC.,
a Delaware corporation having an office at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and
SHOWBOAT LAND, LLC,
A Nevada limited liability company having an office at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
PROMISSORY NOTE CLARIFICATION AGREEMENT
THIS PROMISSORY NOTE CLARIFICATION AGREEMENT (this
"AGREEMENT"), made as of the 29th day of January, 1998, between
SHOWBOAT LAND, LLC, a Nevada limited liability company having an
office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ ("BORROWER"), and COLUMN FINANCIAL, INC., a Delaware
corporation having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("LENDER").
W I T N E S S E T H :
WHEREAS, Borrower is the owner of certain real property
situated at ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of Atlantic,
State of New Jersey (the "PROPERTY"); and
WHEREAS, in connection with a certain mortgage loan
made with regard to the Property by Lender to Borrower, in the
original principal amount of One Hundred Million and 00/100
Dollars ($100,000,000.00) (the "Loan"), Borrower executed and
delivered to Lender a Promissory Note, dated January 29, 1998, in
the maximum principal amount of One Hundred Million and 00/100
Dollars ($100,000,000.00) (the "NOTE") to evidence the Loan; and
WHEREAS, Borrower and Lender have agreed to clarify
their understanding with respect to Section 1.01 (a) of the Note.
NOW, THEREFORE, in consideration of the sum of Ten
Dollars ($10.00), and
for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, and the mutual
covenants contained herein, the parties hereto do hereby agree as
follows:
1. CLARIFICATION OF THE NOTE.
If there is any confusion or question about the meaning
of the first sentence of Section 1.01 (a) of the Note, then said
sentence shall be interpreted as if written as follows:
"Said interest shall be computed hereunder based on a
360-day year, but paid based upon the actual number of days in
each calendar month."
2. MISCELLANEOUS.
This Agreement shall be interpreted, construed and
enforced according to the laws of the State of New York. The
terms and provisions hereof shall be binding upon and inure to
the benefit of Borrower and Lender and their respective heirs,
executors, legal representatives, successors, successors-in-title
and assigns, whether by voluntary action of the parties or by
operation of law. As used herein, the terms "Borrower" and
"Lender" shall be deemed to include their respective heirs,
executors, legal representatives, successors, successors-in-title
and assigns, whether by voluntary action of the parties or by
operation of law. If Borrower consists of more than one person
or entity, each shall be jointly and severally liable to perform
the obligations of Borrower under the Note and under this
Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the day and year first above written.
Attest: (Seal) SHOWBOAT LAND, LLC
a Nevada limited liability company
By: Showboat Operating Company,
a Nevada corporation, a member
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive Vice-
President and Chief Financial Officer
By: Showboat Land Holding Limited Partnership,
a Nevada limited partnership, a member
By: Showboat Land Company,
a Nevada corporation, its general partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Vice-President/Finance
COLUMN FINANCIAL, INC.,
a Delaware corporation
By: /s/ ▇. ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
LEASE CLARIFICATION AGREEMENT
THIS LEASE CLARIFICATION AGREEMENT (this "AGREEMENT")
is made and entered into as of the 13th day of February, 1998, by
and between SHOWBOAT LAND, LLC, a Nevada limited liability
company, as lessor ("LESSOR"), and ATLANTIC CITY SHOWBOAT, INC.,
a New Jersey corporation, as lessee ("LESSEE").
W I T N E S S E T H:
A. Resorts International, Inc. ("RESORTS") together
with Resorts' subsidiary, Resorts International, Inc. of New
Jersey ("RESORTS NEW JERSEY"), to the extent of its interest, and
Lessee's parent corporation, Ocean Showboat, Inc., a New Jersey
corporation ("OSI") entered into a lease agreement dated October
26, 1983 (which lease agreement, as amended, is hereinafter
called the "LEASE") for certain property located in the City of
Atlantic City (the "DEMISED PREMISES"), as such property and such
Lease are more particularly described on EXHIBIT A and EXHIBIT B,
respectively, annexed hereto and made a part hereof.
B. On December 3, 1984, OSI assigned to Lessee the
lessee's interest under the Lease pursuant to the provisions of
Paragraph 13.1 of the Lease.
C. On January 15, 1985, Resorts and Lessee executed a
First Amendment to Lease Agreement.
D. On July 5, 1985, Resorts and Lessee executed a
Second Amendment to Lease Agreement.
E. On October 28, 1985, Resorts and Lessee executed a
Third Amendment to Lease Agreement.
F. On August 28, 1986, Resorts and Lessee executed a
Restated Third Amendment to Lease Agreement.
G. On December 16, 1986, Resorts and Lessee executed
a Fourth Amendment to Lease Agreement.
H. Resorts acquired from Resorts New Jersey the fee
simple interest in the Demised Premises by deed dated December
23, 1986 and recorded in the Clerk's Office on December 24, 1986
in Deed Book 4366, page 214.
I. On March 2, 1987, Resorts and Lessee executed a
Fifth Amendment to Lease Agreement.
J. On March 13, 1987, Resorts and Lessee executed a
Sixth Amendment to Lease Agreement.
K. On October 18, 1988, Resorts and Lessee executed a
Seventh Amendment to Lease Agreement.
L. On May 18, 1983, Resorts and Lessee executed an
Eighth Amendment to Lease Agreement.
M. By Deed dated January 26, ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. ("SUN"), Resorts' successor in interest with
respect to the Demised Premises, conveyed to Lessor the fee
simple interest in the Demised Premises, and Lessor succeeded to
Sun's interest as lessor under the Ground Lease.
N. Lessee, as the current lessee under the Lease, the
lessee thereunder which has executed all amendments thereto to
date, and an affiliate of the original lessee under the Lease,
and Lessor, as the current lessor under the Lease, desire to
clarify the meaning of Section 24.4 of the Lease.
NOW, THEREFORE, in consideration of the mutual
covenants and conditions contained herein.
1. DEFINITIONS. All words and terms used herein
shall have the same meanings as those set forth in the Lease,
unless otherwise provided herein.
2. CLARIFICATION OF SECTION 24.4 OF THE LEASE.
Lessee acknowledges and agrees, and Lessor confirms that it was
Lessor's understanding when it acquired fee title to the Demised
Premises, that it was the intent of the parties to the Lease
that, and Lessor and Lessee agree that, Section 24.4 provide
that:
(a) if the purchase price to be paid by Lessee is
less than the amount (collectively, the "Fee Mortgage
Release Amount") that Lessor would be obligated to pay
to the holder of the fee mortgage to obtain a release
and satisfaction (or, if applicable, to effect a
defeasance) thereof in accordance with the related loan
documents, including, without limitation, any
prepayment premiums, late charges, or any other amounts
that may be due and payable under such fee mortgage in
connection therewith then, Lessee shall not be entitled
to acquire fee title to the Demised Premises free of
the lien of such fee mortgage unless Lessor or, at its
election, Lessee, pays to the holder of the fee
mortgage an amount equal to the difference between the
Fee Mortgage Release Amount and such purchase price;
and
2
(b) no closing of such transfer of fee title to
the Demised Premises shall occur until the lien of such
fee mortgage has been cleared.
3. INCONSISTENCY BETWEEN THIS AGREEMENT AND THE
LEASE. If there shall be an inconsistency between the terms and
provisions of this Agreement and those of the Lease, then the
terms and provisions of this Agreement shall control.
4. CHOICE OF LAW. This Agreement shall be deemed to
be a contract entered into pursuant to the laws of the State of
New Jersey and shall in all respects be governed, construed,
applied and enforced in accordance with the laws of the State of
New Jersey.
5. ENTIRE AGREEMENT. This writing constitutes the
entire agreement of the parties relative to the subject matter
hereof. Any modification or amendment hereto shall be
ineffective unless in writing and signed by the parties hereto.
6. NO WAIVER. Nothing in this Agreement is intended
to waive or release any rights of Lessor to any payments to which
Lessor is or may be entitled under the Lease.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns.
8. RATIFICATION OF THE LEASE. The provisions of the
Lease as clarified hereby are ratified and affirmed by Lessor and
Lessee and shall remain in full force and effect according to
their terms.
9. COUNTERPARTS. This Agreement may be executed in
one or more counterparts which, when taken together, shall
constitute one and the same Agreement, with the same effect as if
all parties hereto signed the same Agreement.
[NO FURTHER TEXT ON THIS PAGE]
3
IN WITNESS WHEREOF, Lessor and Lessee have executed
this instrument as of the day and year first written.
LESSOR:
SHOWBOAT LAND, LLC, A Delaware
limited liability company
ATTEST: By: SHOWBOAT OPERATING COMPANY,
a Nevada corporation, a member
____________________________
Name:
Title: (Assistant) Secretary By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇, Executive
Vice President and Chief
Financial Officer
By: SHOWBOAT LAND HOLDING
LIMITED PARTNERSHIP,
a Nevada limited partnership,
a member
ATTEST: By: SHOWBOAT LAND COMPANY,
a Nevada corporation,
its general partner
____________________________
Name:
Title: (Assistant) Secretary By: /s/ R. ▇▇▇▇▇ ▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇,
Vice President/Finance
LESSEE:
ATTEST: ATLANTIC CITY SHOWBOAT, INC., a New
Jersey corporation
____________________________ By: /s/
Name: Name:
Title: (Assistant) Secretary Title:
STATE OF NEW JERSEY )
) ss.:
COUNTY OF ATLANTIC )
BE IT REMEMBERED, that on this 13th day of
February, 1998, before me, this subscriber, an _________________
of New Jersey, personally appeared R. ▇▇▇▇▇ ▇▇▇▇, who, I am
satisfied is the person who signed the within instrument as
Executive Vice President of Showboat Operating Company, a Nevada
corporation, a member of SHOWBOAT LAND, LLC, a Nevada limited
liability company, the entity named therein, and he acknowledged
that he signed and delivered the same as such officer aforesaid,
and that the within instrument is the voluntary act and deed of
such entity, in its capacity as a member of SHOWBOAT LAND, LLC,
made by virtue of the authority of its Board of Directors.
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
NOTARY PUBLIC
[Seal]
STATE OF NEW JERSEY )
) ss.:
COUNTY OF ATLANTIC )
BE IT REMEMBERED, that on this 13th day of
February, 1998, before me, this subscriber, an
_______________________ of New Jersey, personally appeared R.
▇▇▇▇▇ ▇▇▇▇, who, I am satisfied is the person who signed the
within instrument as Vice President/Finance of Showboat Land
Company, a Nevada corporation, a general partner of Showboat Land
Holding Limited Partnership, a Nevada limited partnership, a
member of SHOWBOAT LAND, LLC, a Nevada limited liability company,
the entity named therein, and he acknowledged that he signed and
delivered the same as such officer aforesaid, and that the within
instrument is the voluntary act and deed of such entity, in its
capacity as a general partner of Showboat Land Holding Limited
Partnership, a member of SHOWBOAT LAND, LLC, made by virtue of
the authority of its Board of Directors.
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
NOTARY PUBLIC
[Seal]
IN WITNESS WHEREOF, Lessor and Lessee have executed
this instrument as of the day and year first written.
LESSOR:
SHOWBOAT LAND, LLC, A Delaware
limited liability company
ATTEST: By: SHOWBOAT OPERATING COMPANY,
a Nevada corporation, a member
____________________________
Name: By: /s/
Title: (Assistant) Secretary R. ▇▇▇▇▇ ▇▇▇▇, Executive
Vice President and Chief
Financial Officer
By: SHOWBOAT LAND HOLDING
LIMITED PARTNERSHIP,
a Nevada limited partnership,
a member
ATTEST: By: SHOWBOAT LAND COMPANY,
a Nevada corporation,
its general partner
____________________________
Name:
Title: (Assistant) Secretary By: /s/
R. ▇▇▇▇▇ ▇▇▇▇,
Vice President/Finance
LESSEE:
ATTEST: ATLANTIC CITY SHOWBOAT, INC., a New
Jersey corpoation
/s/ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: Name:
Title: (Assistant) Title:
Secretary
STATE OF NEVADA )
) ss
COUNTY OF ▇▇▇▇▇ )
BE IT REMEMBERED, that on this 13th day of February,
1998, before me, this subscriber, a Notary Public of Nevada,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, who, I am satisfied is the
person who signed the within instrument as Assistant Secretary of
ATLANTIC CITY SHOWBOAT, INC., a New Jersey corporation, the
entity named therein, and he acknowledged that he signed and
delivered the same as such officer aforesaid, and that the within
instrument is the voluntary act and deed of such entity, made by
virtue of the authority of its Board of Directors.
/s/ Pier Washington
OFFICIAL SEAL
PIER WASHINGTON
Notary Public - State of Nevada
My Comm. Expires Nov. 20, 1999
No. ▇▇-▇▇▇▇-▇
EXHIBIT "A"
DESCRIPTION OF THE LAND
ALL THAT CERTAIN lot, tract or parcel of land and premises
situate, lying and being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as
follows:
BEGINNING at a point in the southerly line of Pacific Avenue (60
feet wide), distant 577.00 feet eastwardly from the easterly line
of Virginia Avenue (80 feet wide), said point also being located
62.00 feet eastwardly from the westerly line of the former States
Avenue (90 feet wide) (now vacated), and extending thence
1. North 62 degrees 32 minutes 00 seconds East, in and along
the southerly line of Pacific Avenue, 292.00 feet; thence
2. South 27 degrees 28 minutes 00 seconds East; parallel with
Virginia Avenue, 1432.20 feet to the Interior or Inland Line
of Public Park; thence
3. South, curving to the right in the arc of a circle, having a
radius of 1102.57 feet, the arc distance of 8.94 feet to a
point of tangent; thence
4. South 59 degrees 24 minutes 40 seconds West, in and along
the Interior or INLAND LINE of Public Park, 308.53 feet to a
point distant 552.00 feet east of the easterly line of
Virginia Avenue, when measured at right angles thereto;
thence
5. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, 1369.53 feet; thence
6. North 62 degrees 32 minutes 00 seconds East, parallel with
Pacific Avenue, 25.00 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, 80.00 feet to the point and place of
BEGINNING.
TOGETHER WITH the following non-exclusive easements:
1. A non-exclusive easement for the construction, repair,
maintenance and use of the Common Facilities (as defined in
the Ground Lease).
2. A non-exclusive easement over, upon and across the
Pedestrian Passageway (as defined in the Ground Lease),
together with the 17-Foot Egressway, the Service Road and
the Service Road Extension (as such terms are defined in the
Ground Lease), as shown on a survey made by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Co. and Associates, Inc. dated December 30, 1986 and being
more particularly described as Parcels A, B and C,
respectively, attached hereto.
SUBJECT to a portion of the fifty-foot wide service easement
lying within the Land and more particularly described as Parcel D
attached hereto.
BEING Block 13, Lot 1401, Tax Map o the City of Atlantic City,
New Jersey.
PARCEL A
DESCRIPTION OF THE SEVENTEEN-FOOT WIDE EGRESSWAY AT GRADE BETWEEN
THE SERVICE ROAD AND THE BOARDWALK.
ALL that certain lot, tract or parcel of land and premises
situate, lying and being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as
follows:
BEGINNING at a point distant 535.00 feet east of the easterly
line of Virginia Avenue (80 feet wide) and 868.00 feet south of
the southerly line of Pacific Avenue (60 feet wide), when
measured at right angles to said avenues respectively, and
extending from said beginning point the following courses and
distances:
1. South 27 degrees 28 minutes 00 seconds East, parallel with
Virginia Avenue, a distance of 582.45 feet to the Inland or
Interior Line of Public Park; thence
2. South 59 degree 24 minutes 40 seconds West, in and along the
Inland or Interior Line of Public Park, a distance of 17.03
feet; thence
3. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, a distance of 583.38 feet: thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with
Pacific Avenue, a distance of 17.00 feet to the point and
place of BEGINNING.
PARCEL B
DESCRIPTION OF THE FIFTY-FOOT WIDE SERVICE ROAD
All that certain lot, tract or parcel of land and premises
situate, lying and being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as
follows:
BEGINNING at a point in the southerly side of Pacific Avenue (60
feet wide), said point being distant 577.00 feet east of the
easterly line of Virginia Avenue (80 feet wide) and extending
from said beginning point the following courses and distances:
1. South 27 degrees 28 minutes 00 seconds East, parallel with
Virginia Avenue, a distance of 86.00 feet; thence
2. South 07 degrees 48 minutes 46 seconds East, a distance of
74.33 feet; thence
3. South 27 degrees 28 minutes 00 seconds East, parallel with
Virginia Avenue, a distance of 712.00 feet, to a point
distant 868.00 feet south of the southerly line of Pacific
Avenue when measured at right angles thereto; thence
4. South 62 degrees 32 minutes 00 seconds West, parallel with
Pacific Avenue, a distance of 50.00 feet; thence
5. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, a distance of 720.66 feet; thence
6. North 07 degrees 48 minutes 46 seconds West, a distance of
74.33 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, a distance of 77.34 feet to the southerly
line of Pacific Avenue; thence
8. North 62 degrees 32 minutes 00 seconds East, in and along
the southerly line of Pacific Avenue, a distance of 50.00
feet to the point and place of BEGINNING.
PARCEL C
DESCRIPTION OF THE SEVENTEEN-FOOT WIDE FIRE LANE BETWEEN THE
SERVICE ROAD AND THE BOARDWALK.
All that certain lot, tract or parcel of land and premises
situate, lying and being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as
follows:
BEGINNING at a point distant 552.00 feet east of the easterly
line of Virginia Avenue (80 feet wide) and 868.00 feet south of
the southerly line of Pacific Avenue (60 feet wide), when
measured at right angles to said avenues respectively, and
extending from said beginning point the following courses and
distances:
1. South 27 degrees 28 minutes 00 seconds East, parallel with
Virginia Avenue, a distance of 581.53 feet to the Inland or
Interior Line of Public Park; thence
2. South 59 degrees 24 minutes 40 seconds West, in and along
the Inland or Interior Line of Public Park, a distance of
17.03 feet; thence
3. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, a distance of 582.45 feet; thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with
Pacific Avenue, a distance of 17.00 feet to the point and
place of BEGINNING.
PARCEL D
DESCRIPTION FOR THE EASEMENT FOR THAT PORTION OF THE FIFTY-FOOT
WIDE SERVICE ROAD LYING WITHIN THE SHOWBOAT LANDS.
ALL that certain lot, tract or parcel of land and premises
situate, lying and being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as
follows:
BEGINNING at a point distant 577.00 feet east of the easterly
line of Virginia Avenue (80 feet wide) and 80.00 feet south of
the southerly line of Pacific Avenue (60 feet wide), and
extending from said beginning point the following courses and
distances:
1. South 27 degrees 28 minutes 00 seconds East, parallel with
Virginia Avenue, a distance of 6.00 feet; thence
2. South 07 degrees 48 minutes 46 seconds East, a distance of
74.23 feet; thence
3. North 27 degrees 28 minutes 00 seconds West, parallel with
Virginia Avenue, a distance of 76.00 feet; thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with
Pacific Avenue, a distance of 25.00 feet to the point and
place of BEGINNING.
RECITAL:
BEING the same premises that were leased by Resorts International
Inc., a Delaware Corporation to Ocean Showboat Inc., a New Jersey
Corporation dated October 26, 1983 recorded January 18, 1984 in
Deed Book 3878 page 1.
ASSIGMENT AND ASSUMPTION OF LEASE: by Ocean Showboat Inc., a New
Jersey Corporation to Atlantic City Showboat Inc., a New Jersey
Corporation to Atlantic City Showboat Inc., a New Jersey
Corporation dated December 3, 1984 recorded December 24, 1984 in
Deed Book 4004 page 310.
FIRST AMENDMENT TO LEASE: dated January 15, 1985 recorded August
16, 1985 in Deed Book 4107 page 141.
SECOND AMENDMENT TO LEASE: dated July 5, 1985 recorded November
25, 1985 in Deed Book 4158 page 221.
THIRD AMENDMENT TO LEASE: dated October 28, 1985 recorded
November 25, 1985 in Deed Book 4158 page 227.
RESTATED THIRD AMENDMENT TO LEASE: dated October 28, 1985
recorded February 20, 1987 in Deed Book 4406 page 17.
FOURTH AMENDMENT TO LEASE: dated December 16, 1986 recorded
February 20, 1987 in Deed Book 4406 page 37.
FIFTH AMENDMENT TO LEASE: dated March 2, 1987 recorded March 23,
1987 in Deed Book 4421 page 10.
SIXTH AMENDMENT TO LEASE: dated March 13, 1987 recorded March
23, 1987 in Deed Book 4421 page 17.
SEVENTH AMENDMENT TO LEASE: dated October 18, 1988 recorded
December 19, 1988 in Deed Book 4814 page 231.
EXHIBIT "B"
"RESORTS LEASE" means that certain Lease Agreement
dated as of October 26, 1983 between Resorts and OSI, recorded
May 1, 1984 in Deed Book 3878, page 1, as assigned to Mortgagor
pursuant to that certain Assignment and Assumption of Lease made
December 3, 1984 between OSI and Mortgagor recorded, December 24,
1984 in Deed Book 4004, page 310, as amended by (i) that certain
First Amendment to Lease Agreement dated as of January 15, 1985
between Resorts and Mortgagor recorded, August 16, 1985 in Deed
Book 4107, page 141; (ii) that certain Second Amendment to Lease
Agreement dated as of July 5, 1985 between Resorts and Mortgagor
recorded, November 25, 1985 in Deed Book 4158, page 221; (iii)
that certain Third Amendment to Lease Agreement dated as of
October 28, 1985 between Resorts and Mortgagor, recorded November
25, 1985 in Deed Book 4158, page 227; (iv) that certain Restated
Third Amendment to Lease Agreement dated as of August 28, 1986
between Resorts and Mortgagor, recorded February 20, 1987 in Deed
Book 4406 page 17; (v) the certain Fourth Amendment to Lease
Agreement dated as of December 16, 1986 between Resorts and
Mortgagor, recorded February 20, 1987 in Deed Book 4406, page 37;
(vi) that certain Fifth Amendment to Lease Agreement dated as of
March 2, 1987 between Resorts and Mortgagor, recorded March 23,
1987 in Deed Book 4421, page 10; (vii) that certain Sixth
Amendment to Lease Agreement dated as of March 13, 1987 between
Resorts and Mortgagor, recorded March 23, 1987 in Deed Book 4421,
page 17; (viii) that certain Seventh Amendment to Lease Agreement
dated as of October 18, 1988 between Resorts and Mortgagor,
recorded December 19, 1988 in Deed Book 4814, page 231; and (ix)
that certain Eighth Amendment to Lease Agreement dated as of May
18, 1993 between Resorts and Mortgagor, recorded May ____, 1993
in Deed Book ____, page _____.