EXHIBIT 10.38
LOAN AND GUARANTY AGREEMENT
DATED AS OF JULY 14, 1995
AMONG
SHOWBOAT, INC.
AS BORROWER
AND
SHOWBOAT OPERATING COMPANY,
OCEAN SHOWBOAT, INC.
AND
ATLANTIC CITY SHOWBOAT, INC.
AS GUARANTORS
AND
NATWEST BANK, N.A.
AS LENDER
1. DEFINITIONS 1
2. THE LOANS 12
SECTION 2.01. REVOLVING CREDIT FACILITY LOANS. 12
SECTION 2.02. TERM LOAN FACILITY. 12
SECTION 2.03. MAKING OF LOANS. 12
SECTION 2.04. NOTES. 13
SECTION 2.05. INTEREST ON NOTES 13
SECTION 2.06. FEES 14
SECTION 2.07. PREPAYMENT OF LOANS 14
3. REPRESENTATIONS AND WARRANTIES 14
SECTION 3.01. CORPORATE EXISTENCE AND POWER 15
SECTION 3.02. CORPORATE AUTHORITY AND NO 15
VIOLATION
SECTION 3.03. GOVERNMENTAL APPROVAL 15
SECTION 3.04. FINANCIAL CONDITION 16
SECTION 3.05. NO MATERIAL ADVERSE CHANGE 16
SECTION 3.06. SUBSIDIARIES 16
SECTION 3.07. TRADEMARKS, PATENTS AND OTHER 16
RIGHTS
SECTION 3.08. FICTITIOUS NAME 17
SECTION 3.09. TITLE TO PROPERTIES 17
SECTION 3.10. UCC FILING INFORMATION 17
SECTION 3.11. LITIGATION 17
SECTION 3.12. FEDERAL RESERVE REGULATIONS 18
SECTION 3.13. INVESTMENT COMPANY ACT 18
SECTION 3.14. ENFORCEABILITY 18
SECTION 3.15. TAXES 18
SECTION 3.16. COMPLIANCE WITH ERISA 18
SECTION 3.17. AGREEMENTS 19
SECTION 3.18. DISCLOSURE 19
SECTION 3.19. ENVIRONMENTAL LIABILITIES 19
SECTION 3.20. LABOR MATTERS 20
4. CONDITION OF LENDING 20
SECTION 4.01. CONDITIONS PRECEDENT TO THE LOANS 20
SECTION 4.02. CONDITIONS PRECEDENT TO EACH 24
BORROWING
SECTION 4.03. CONDITIONS TO CONVERSION 25
5. AFFIRMATIVE COVENANTS 25
SECTION 5.01. FINANCIAL STATEMENTS, REPORTS, 25
ETC.
i
SECTION 5.02. CORPORATE EXISTENCE; COMPLIANCE 27
WITH STATUTES
SECTION 5.03. INSURANCE 27
SECTION 5.04. TAXES AND CHARGES; INDEBTEDNESS
IN ORDINARY COURSE OF BUSINESS. 28
SECTION 5.05. CORPORATE NAME; CHIEF EXECUTIVE 29
OFFICE
SECTION 5.06. ERISA COMPLIANCE AND REPORTS 29
SECTION 5.07. USE OF PROCEEDS 30
SECTION 5.08. ACCESS TO BOOKS AND RECORDS; 30
EXAMINATIONS
SECTION 5.09. MAINTENANCE OF PROPERTIES 30
SECTION 5.10. MATERIAL CHANGES 30
SECTION 5.11. ENVIRONMENTAL LAWS 31
SECTION 5.12. FURTHER ASSURANCES; SECURITY 31
INTERESTS
SECTION 5.13. PROJECT EXPANSIONS 32
SECTION 5.14. ANNUAL CLEANUP PERIOD 32
6. NEGATIVE COVENANTS 33
SECTION 6.01. LIMITATION OF INDEBTEDNESS 33
SECTION 6.02. LIMITATION OF GUARANTIES 33
SECTION 6.03. CHANGE IN BUSINESS 33
SECTION 6.04. CONSOLIDATION, MERGER, SALE 34
OR PURCHASE OF ASSETS,ETC.
SECTION 6.05. LIMITATION ON LIENS 34
SECTION 6.06. EXECUTIVE OFFICES 35
SECTION 6.07. SALE AND LEASEBACK 35
SECTION 6.08. ERISA COMPLIANCE 35
SECTION 6.09. TRANSACTIONS WITH AFFILIATES 36
SECTION 6.10. AMENDMENTS TO EXISTING DOCUMENTS 36
SECTION 6.11. HAZARDOUS MATERIALS 36
SECTION 6.12. NO FURTHER NEGATIVE PLEDGES 36
SECTION 6.13. CAPITAL FUNDS 37
SECTION 6.14. LEVERAGE RATIO 37
SECTION 6.15. DEBT SERVICE COVERAGE RATIO 37
SECTION 6.16. ACCOUNTING PRACTICES 37
SECTION 6.17. LIMITATION ON RESTRICTIONS ON 37
SUBSIDIARY DIVIDENDS AND OTHER
DISTRIBUTIONS, ETC.
7. EVENTS OF DEFAULT 38
8. GUARANTY 40
SECTION 8.01. AGREEMENT OF GUARANTY 40
SECTION 8.02. NO IMPAIRMENT OF GUARANTY 41
SECTION 8.03. CONTINUATION AND REINSTATEMENT, 42
ETC.
ii
SECTION 8.04. LIMITATION ON GUARANTEED AMOUNT 42
9. MISCELLANEOUS 42
SECTION 9.01. NOTICES 42
SECTION 9.02. SURVIVAL OF AGREEMENT, 43
REPRESENTATIONS AND WARRANTIES,
ETC.
SECTION 9.03. SUCCESSORS AND ASSIGNS; 43
SYNDICATIONS; LOAN SALES;
PARTICIPATIONS.
SECTION 9.04. EXPENSES; DOCUMENTARY TAXES 44
SECTION 9.05. INDEMNITY 44
SECTION 9.06. CHOICE OF LAW 45
SECTION 9.07. NO WAIVER 45
SECTION 9.08. EXTENSION OF MATURITY 45
SECTION 9.09. AMENDMENTS, ETC 46
SECTION 9.10. SEVERABILITY 46
SECTION 9.11. SERVICE OF PROCESS 46
SECTION 9.12. HEADINGS 47
SECTION 9.13. EXECUTION IN COUNTERPARTS 47
SECTION 9.14. ENTIRE AGREEMENT 47
EXHIBITS:
Exhibit 2.04(a) Revolving Note
Exhibit 2.04(b)-1 Note Amendment Agreement
(Floating Rate)
Exhibit 2.04(b)-2 Note Amendment Agreement
(Fixed Rate)
Exhibit 4.01(p) Officers' Certificate
SCHEDULES:
Schedule 3.06 List of Showboat, Inc. Subsidiaries
Schedule 3.07 Proprietary Rights Needed to Conduct
Business Which Showboat, Inc. and/or
its Subsidiaries Neither Possess Nor
Have License to Use
Schedule 3.08 Fictitious or Trade Names
Schedule 3.09 List of Real Property Owned or
Leased by Showboat, Inc. and/or its
Subsidiaries
Schedule 3.10 Principal Executive Office and
Location of Records
Schedule 3.11 List of Pending Lawsuits/Proceedings
Schedule 3.17 List of Agreements
of Showboat, Inc. and its Subsidiaries
For Which Loss or Termination May Have
Material Adverse Effect
Schedule 3.19 Environmental Liabilities
Schedule 6.05 Existing Liens
iii
LOAN AND GUARANTY AGREEMENT
THIS LOAN AND GUARANTY AGREEMENT (the "Agreement") is
entered into on July 14, 1995, between and among NATWEST BANK,
N.A. a national banking association (hereinafter called
"Lender"), with a business office at 00 Xxxxxxxx Xxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx 00000, and SHOWBOAT, INC., a Nevada corporation
with a business address at 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx
00000 (hereinafter called "Borrower"), and Showboat Operating
Company, a Nevada corporation, Ocean Showboat, Inc., a New Jersey
corporation and Atlantic City Showboat, Inc., a New Jersey
corporation (the "Guarantors") having the addresses set forth on
the signature pages hereof.
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lender make
available a committed revolving credit facility in the amount of
$25,000,000 for a term of 2 years, after which time the facility
may, at the discretion of the Borrower, be converted to a term
loan having a remaining term of 3 years; and
WHEREAS, subject to the terms and conditions set forth
herein, the Lender is willing to make the credit facilities
available to the Borrower; and
WHEREAS, the Loan is to be secured by a first lien and
security interest in the Atlantic City Showboat and the Las Vegas
Showboat, which mortgages and liens are to be in pari passu with
the liens and security interests held by the Trustee, and by the
guaranty of the Guarantors.
NOW THEREFORE, in consideration of the mutual promises and
covenants set forth below, the parties hereto hereby agree as
follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise
requires, the following terms shall have the meanings indicated,
all accounting terms not otherwise defined herein will have the
respective meanings accorded to them under GAAP and all terms
defined in the New Jersey Uniform Commercial Code and not
otherwise defined herein shall have the respective meanings
accorded to them therein. Unless the context otherwise requires,
any of the following terms may be used in the singular or plural,
depending on the reference:
"ACSI" means Atlantic City Showboat, Inc.
"AFFILIATE" means any Person which, directly or indirectly,
is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person
shall be deemed to be "controlled by" another Person if such
Person possesses, directly or indirectly, power either to (i)
vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or
cause the direction of the management and policies of such Person
whether by contract or otherwise.
"AGREEMENT" means this Loan Agreement, together with all
modifications and amendments thereto.
"APPLICABLE LAW" means all provisions of statutes, rules,
regulations and orders of governmental bodies or regulatory
agencies applicable to a Person, and all orders and decrees of
all courts and arbitrators in proceedings or actions in which the
Person in question is a party.
"ATLANTIC CITY SHOWBOAT" means (i) all of ACSI's interest in
its hotel casino and related properties located at 000 Xxxxxxxxx,
Xxxxxxxx Xxxx, Xxx Xxxxxx and any Project Expansion relating
thereto and (ii) any contiguous property acquired by the Borrower
or any of its Subsidiaries and any Project Expansion relating
thereto.
"AUSTRALIAN JOINT VENTURE" means Sydney Harbour Casino
Holdings, Ltd., the holding company for the Sydney Harbour
Casino, Sydney, New South Wales, Australia, or Sydney Harbour
Casino Pty, Ltd. or any other Affiliate of the Borrower holding
an interest in the proposed casino in New South Wales, Australia.
"BOND INDENTURE" means that certain Indenture executed by
the Borrower dated as of May 18, 1993 in connection with the
issuance by the Borrower of its 9 1/4% First Mortgage Bonds due
2008.
"BONDS" means the 9 1/4% First Mortgage Bonds due 2008
issued by the Borrower under the Bond Indenture.
"BORROWER" means Showboat, Inc.
"BORROWING" means a borrowing of funds by the Borrower being
either a Floating Rate or a LIBOR Based Rate Borrowing advanced
by the Lender hereunder on any given day under the Revolving Loan
Facility.
"BUSINESS DAY" means any day other than a Saturday, Sunday
or other day on which banks in the State of New York or the State
of New Jersey are permitted to close; provided, however, that
when used in connection with a LIBOR Borrowing, the term Business
Day shall also exclude any day on which banks are not open for
dealings in dollar deposits on the London Interbank Market.
2
"CAPITAL FUNDS" means the Consolidated Tangible Net Worth of
the Borrower less on a consolidated basis the value on the
Borrower's books of (i) unamortized debt issuance costs and (ii)
loans by the Borrower directly or indirectly to or its
investments, directly or indirectly, in Non-Recourse Subsidiaries
and Unconsolidated Subsidiaries, plus (iii) Subordinated Debt.
"CAPITAL LEASE" as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted
for as a capital lease on the balance sheet of that Person.
"CHANGE OF CONTROL" means any of the following events: (i)
the sale, lease, transfer, conveyance or other disposition of all
or substantially all of the assets of the Borrower and its
Subsidiaries; (ii) the liquidation or dissolution of the
Borrower, (iii) the Borrower becomes aware of (by way of a report
or any other filing pursuant to Section 13(d) of the Securities
and Exchange Act (the "Exchange Act"), proxy vote, written notice
or otherwise) the acquisition by any "Person" or related group
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act, or any successor provision to either of the
foregoing, including any "group" acting for the purpose of
acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act), other than the
Existing Management, in a single transaction or in a related
series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act, or any
successor provision) of 30% or more of the total voting power
entitled to vote in the election of the Board of Directors of the
Borrower or such other Person surviving the transaction; (iv)
during any period of two consecutive years, individuals who at
the beginning of such period constituted the Borrower's Board of
Directors (together with any new directors whose election or
appointment by such board or whose nomination for election by the
shareholders of the Borrower was approved by a vote of a majority
of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Borrower's Board of Directors then
in office; or (v) the Borrower fails to own, directly or
indirectly, 100% of the Las Vegas Showboat or the Atlantic City
Showboat or 100% of any Person holding a gaming license to
operate either the Las Vegas Showboat or the Atlantic City
Showboat.
"CLOSING DATE" means the date on which the conditions
precedent to the making of the Loans as set forth in Section 4.01
have been satisfied or waived, which shall in no event be later
than July 15, 1995.
"CODE" means the Internal Revenue Code of 1986 and the rules
and regulations issued thereunder, as now and hereafter in
effect, or any successor provision thereto.
"COLLATERAL" means any assets of the Borrower or of the
Guarantors defined as Collateral in any of the Loan Documents.
3
"CONSOLIDATED EBITDA" means, without duplication, for any
period for which such amount is being determined, the sum of the
amounts for such period of (i) net income, (exclusive of (a)
interest income, (b) extraordinary items, and (c) the Borrower's
equity in income of any Non-Recourse Subsidiaries or
Unconsolidated Subsidiaries but including cash distributions of
Consolidated EBITDA of Non-Recourse Subsidiaries or
Unconsolidated Subsidiaries received from Non-Recourse
Subsidiaries or Unconsolidated Subsidiaries), (ii) provision for
income taxes, (iii) depreciation expense, (iv) Consolidated
Interest Expense, (v) amortization expense, and (vi) any other
non-cash items reducing net income, but each of the above (ii)
through (v) only to the extent reducing net income less (vii) any
non-cash items increasing net income. All of the foregoing items
(i) through (vii) are otherwise to be determined on a
consolidated basis for Borrower and its consolidated subsidiaries
in accordance with GAAP. However, notwithstanding the foregoing,
the financial information as to items (ii) through (vii) of any
Non-Recourse Subsidiaries shall be excluded from the calculation
of Consolidated EBITDA hereunder.
"CONSOLIDATED INTEREST EXPENSE" means for any period for
which such amount is being determined, gross interest expense
(including that properly attributable to Capital Leases in
accordance with GAAP) of the Borrower and its Subsidiaries on a
consolidated basis; including, without limitation, all
capitalized interest, all commissions, discounts and other fees
and charges under interest rate protection agreements (including
amortization of discount), but excluding interest expense of any
Non-Recourse Subsidiary.
"CONSOLIDATED TANGIBLE NET WORTH" means as at any date of
determination, the sum of the capital stock and additional paid-
in capital plus retained earnings (or minus accumulated deficit)
of the Borrower and its Subsidiaries on a consolidated after-tax
basis determined in accordance with GAAP less the value on the
Borrower's books of all intangible assets, on a consolidated
basis. However, the equity of the Borrower or its Subsidiaries
in any Non-Recourse Subsidiaries and the debt held by the
Borrower or its Subsidiaries of any Non-Recourse Subsidiaries
shall be excluded in the calculation of Consolidated Tangible Net
Worth.
"CONSOLIDATED TOTAL LIABILITIES" means the amount of
liabilities (excluding liabilities of Non-Recourse Subsidiaries)
which would appear on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
Consolidated Total Liabilities shall also include without
duplication the amount of all Guaranties, except that
Consolidated Total Liabilities shall include guaranties insuring
the completion of any construction or development projects only
if performance thereon has been demanded, and if performance has
been demanded such guaranties shall be included to the extent of
the maximum reasonably anticipated liability of the Borrower and
its Subsidiaries under such guaranties.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement
substantially in the form of Exhibit 4.01(q) hereto to be entered
into by the Borrower and the Guarantors.
4
"CONVERSION DATE" means July 14, 1997.
"CPLTD" means current portion of long term debt (excluding
CPLTD of Non-Recourse Subsidiaries) as determined in accordance
with GAAP.
"DEBT SERVICE COVERAGE RATIO" means, for any period, the
ratio of the Consolidated EBITDA for such period to the sum of
the following: (a) the CPLTD for such period, plus (b)
Consolidated Interest Expense for such period plus (c) the
current portion of amounts payable under Capital Leases for such
period and (d) dividends paid or declared for such period. Non-
Recourse Subsidiaries are to be excluded in such calculation.
"DEBT" means any liability on a Claim. For purposes of this
definition, "Claim" means any (i) right to payment whether or not
such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (ii) right to an
equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, legal, equitable, secured or unsecured.
"DEFAULT" means any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"ENVIRONMENTAL ACTIONS" refers to any complaint, summons,
citation, notice, directive, order, claim, litigation,
investigation, proceeding, judgment, letter or other
communication from any federal, state, local, or municipal
agency, department, bureau, office or other authority, or any
third party involving a violation of any Environmental Laws or a
Hazardous Discharge (i) from or onto any of the real properties
or assets owned or leased by the Borrower or any of its
Subsidiaries or any tenant, subtenant, prior tenant or prior
subtenant of such real properties or (ii) from or onto any
facilities which received solid wastes or Hazardous Materials
from the Borrower, or any of its Subsidiaries or any tenant,
subtenant, prior tenant or prior subtenant of the real
properties.
"ENVIRONMENTAL LAW" means any and all applicable federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees or requirements of any
Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning any Hazardous
Material or environmental protection or health and safety, as now
or may at any time hereafter be in effect, including without
limitation, the Clean Water Act also known as the Federal Water
Pollution Control Act ("FWPCA"), 33 U.S.C. Sec. 1251 et seq.,
the Clean Air Act ("CAA"), 42 U.S.C. Sec. 7401 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"),
7 U.S.C. Sec. 300f et seq., the Surface Mining Control and
Reclamation Act Sec. 1201 et seq., ("SMCRA"), 30 U.S.C. Sec.
1201 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Sec. 9601
et seq., as amended by the Superfunded Amendment and
Reauthorization Act of 1986 ("XXXX"), the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. Sec.
5
6901 et seq., the Occupational Safety and Health Act as amended
("OSHA), 29 U.S.C. Sec. 655 and Sec. 657, relevant state laws,
together, in each case, with any amendment thereto, and the
regulations adopted thereunder and all substitutions thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as such Act may be amended, and the regulations promulgated
thereunder.
"EVENT OF DEFAULT" shall have the meaning given such term in
Article 7 hereof.
"EXISTING MANAGEMENT" means X. X. Xxxxxxxx, members of his
family and his estate.
"FIXED RATE OPTION" means the option of the Borrower to
elect to pay a fixed rate on the Term Loan Facility pursuant to
Section 2.05(c) below.
"FLOATING RATE BORROWING" means a Borrowing under the
Revolving Loan Facility as to which Borrower has elected the
Floating Rate Option.
"FLOATING RATE OPTION" means Borrower's option, as
applicable, to pay interest on Borrowings under the Revolving
Loan Facility at the Revolving Loan Floating Rate pursuant to
Section 2.03(a) or at the Term Loan Floating Rate on the Term
Loan pursuant to Section 2.05(c) below.
"GAAP" means generally accepted accounting principles
applied in a manner consistent with the most recent accountant-
prepared financial statements of the Borrower furnished and
acceptable to the Lender pursuant to Section 3.04 of this
Agreement, subject, however to such changes in accounting
policies and procedures as shall be in accordance with generally
accepted accounting principles.
"GAMING AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any
nature whatsoever of the United States federal or foreign
government, any state, province or any city or other political
subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, including, without
limitation, the Nevada Gaming Commission, the Nevada State Gaming
Control Board, the City Council of the City of Las Vegas, and the
New Jersey Casino Control Commission with authority to regulate
any gaming operation (or proposed gaming operation) owned,
managed or operated by the Borrower or any of its Subsidiaries.
"GAMING CONTROL ACTS" means the Nevada Gaming Control Act
and the New Jersey Casino Control Act, as from time to time
amended, or any successor provision of law, and the regulations
promulgated thereunder.
"GAMING PERMITS" means every license, franchise, permit or
other authorization on the Closing Date or thereafter required to
own, lease, operate or otherwise conduct casino gaming at the Las
Vegas Showboat and the Atlantic City Showboat, including, without
limitation, all such licenses granted under the Gaming Control
Acts, the regulations of the Gaming Authorities and other
applicable laws.
6
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case whether of
the United States or foreign.
"GUARANTORS" means each of SBOC, OSI and ACSI.
"GUARANTY" means as to any Person, any direct or indirect
obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, Capital Lease, dividend or other monetary
obligation ("primary obligation") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, or (c) to purchase property, securities or services, in
each case, primarily for the purpose of assuring the owner of any
such primary obligation. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guaranty is
made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"HAZARDOUS DISCHARGE" means any releasing, spilling,
leaking, pumping, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping of Hazardous Materials
from or at any of the properties owned or leased by the Borrower,
its Subsidiaries or any tenant, subtenant, prior tenant or prior
subtenant of the real properties as well as any at or from any
facility which received solid waste or Hazardous Materials
generated by the Borrower, its Subsidiaries or any tenant,
subtenant, prior tenant or prior subtenant of the real
properties.
"HAZARDOUS MATERIALS" means any compound, element, chemical
or compound exhibiting a flammable, explosive, radioactive,
corrosive, reactive or toxic characteristic or which is defined
as a hazardous material, hazardous waste, hazardous or toxic
substance, or similar material under any Environmental Law. This
term shall also include raw materials used or stored by Borrower
building components, including but not limited to asbestos-
containing materials and manufactured products to the extent any
of these contain hazardous materials.
"INDEBTEDNESS" of any Person means, without duplication, (i)
the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable; (ii) all Capitalized Lease obligations of
such Person; (iii) all obligations of such Person issued or
assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations
of such Person under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of
business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations
with respect to letters of credit securing obligations
7
(other than obligations described in clauses (i), (ii) and (iii)
above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon
or, if and to the extent drawn upon, such drawing is reimbursed
no later than the third business day following receipt by such
Person of a demand for reimbursement following payment on the
letter of credit); (v) all obligations existing at the time under
hedging obligations, foreign currency xxxxxx and similar
agreements; (vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons and all dividends and
distributions of other Persons for the payment of which, in
either case, such Person is responsible or liable as obligor,
guarantor or otherwise; and (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons secured
by any Lien on any property as asset of such Person (whether or
not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so
secured.
"INTEREST PERIOD" means as to any LIBOR Rate Borrowing, the
period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or if there is no corresponding
day, the last day) in the calendar month that is 1,2,3, or 6
months thereafter as Borrower may elect; provided, however, that
(i) if any Interest Period would end on a day which shall not be
a Business Day, such interest period shall be extended to the
next succeeding Business Day, and (ii) no interest period with
respect to a LIBOR Rate Borrowing may be selected which would end
later than the Conversion Date.
"INVESTMENTS" means, with respect to any Person, all
investments by such Person in other Persons, including Affiliates
(in the form of loans, Guaranties, advances or capital
contributions (excluding commission, travel and similar advances
to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of
Indebtedness, equity interests or other securities and all other
items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP).
"LAS VEGAS SHOWBOAT" means (i) the Borrower's hotel casino
and related properties at 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx
and any Project Expansion relating thereto and (ii) any
contiguous property acquired by the Borrower or any of its
Subsidiaries and any Project Expansion relating thereto.
"LENDER" means Natwest Bank, N.A., its successors and
assigns.
"LEVERAGE RATIO" means the ratio of (a) the sum of (i) Total
Liabilities less (ii) Subordinated Debt over (b) the sum of (i)
Consolidated Tangible Net Worth and (ii) total Subordinated Debt.
"LIBOR BASED RATE" means the interest rate payable on LIBOR
Rate Borrowings pursuant to the Revolving Note, being the sum of
the Adjusted LIBOR Rate as defined in the Note plus 250 basis
points (2.50%).
8
"LIBOR RATE BORROWING" means a Borrowing under the Revolving
Loan Facility as to which Borrower has elected the LIBOR Based
Rate.
"LIEN" means any interest in property securing an obligation
owed to, or a claim, right or interest of, any Person, whether
created by agreement, statute or common law, including without
limitation security interest, lien, encumbrance, mortgage,
assignment, pledge, conditional sale, lease, consignment or
bailment.
"LOAN" means the Revolving Loan Facility and/or the Term
Loan.
"LOAN DOCUMENTS" means this Agreement and all other
agreements, documents or instruments, now or hereafter executed
and delivered to evidence or secure the Loan or any of the
Obligations.
"MATERIAL ADVERSE EFFECT" means any circumstances or
condition which either individually or when aggregated with other
circumstances or conditions has a material adverse effect upon
the business, assets or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole.
"MORTGAGES" means that certain Leasehold Mortgage,
Assignment of Rents and Security Agreement issued by ACSI in
favor of the Lender (the "Leasehold Mortgage") and that certain
Deed of Trust, Assignment of Rents and Security Agreement issued
by the Borrower in favor of Lender (the "Deed of Trust"), as
amended, supplemented or modified from time to time.
"MULTI-EMPLOYER PLAN" means a plan described in Section
3(37) of ERISA.
"NON-RECOURSE SUBSIDIARY" means (i) a Subsidiary (other than
any Guarantor) or (ii) any entity in which the Borrower or any of
its Subsidiaries has an equity investment and pursuant to a
contract or otherwise has the right to direct the day-to-day
operation of such entity that, in each case, meets all of the
requirements of the definition of a "Non-Recourse Subsidiary"
contained in Section 1.01 of the Bond Indenture as such
definition is set forth in the Bond Indenture dated May 18, 1993.
The amendment, modification or termination of the Bond Indenture
shall not affect this definition of Non-Recourse Subsidiary
herein.
"NOTE INDENTURE" means that certain indenture executed by
the Borrower in connection with its 13% Senior Subordinated Notes
due 2009 dated August 10, 1994.
"NOTES" OR "NOTES" means the Revolving Note and/or the
Revolving Note as amended by the Term Note executed and delivered
by the Borrower to the Lender to secure the Loan.
"OBLIGATIONS" means and includes all loans, advances,
debts, liabilities, obligations, guaranties, covenants and
duties owing by the Borrower to the lender of any kind and
9
description (whether or not evidenced by this Agreement, any note
or other instrument or any other agreement between the Lender and
the Borrower and whether or not for the payment of money), direct
or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, whether similar or dissimilar to
advances made under this Agreement, including without limitation
any debt, liability or obligation owing from the Borrower to
others which the Lender may obtain or has obtained as security by
assignment or otherwise.
"OBLIGOR" refers to the Borrower and the Guarantors or any
of them.
"OSI" means Ocean Showboat, Inc., a New Jersey corporation.
"PBGC" means the Pension Benefits Guaranty Corporation.
"PERMITTED LIENS" means (a) Liens in favor of the Borrower;
(b) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower; PROVIDED, that such Liens were in
existence prior to the contemplation of such merger or
consolidation and less than one year prior to such Person
becoming merged into or consolidated with the Borrower or any of
its Subsidiaries; (c) Liens on property existing at the time of
acquisition thereof by the Borrower or any Subsidiary of the
Borrower; PROVIDED, that such Liens were in existence prior to
the contemplation of such acquisition and less than one year
prior to such acquisition; (d) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary
course of business; (e) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; PROVIDED, that any
reserve or other appropriate provisions as shall be required in
conformity with GAAP shall have been made therefor; (f) ground
leases in respect of the real property on which facilities owned
or leased by the Borrower or any of its Subsidiaries are located;
(g) Liens arising from UCC financing statements regarding
property leased by the Borrower or any of its Subsidiaries; (h)
easements, rights-of-way, navigational servitudes, restrictions,
minor defects or irregularities in title and other similar
charges or encumbrances which do not interfere in any material
respect with the ordinary conduct of business of the Borrower and
its Subsidiaries; and (i) Liens in favor of the Trustee under the
Bond Indenture.
"PERSON" means individual, corporation, partnership, trust,
unincorporated association or organization, joint venture,
governmental authority, or any other entity.
"PLAN" means an employee pension benefit plan described in
Section 3(2) of ERISA, other than a Multiemployer Plan.
"PRIME RATE" as used in this Agreement shall mean that rate
of interest defined as the Prime Rate in the Note.
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"PROJECT EXPANSION" means any addition, improvement,
extension or capital repair to the Las Vegas Showboat or the
Atlantic City Showboat or any contiguous or adjacent property,
including the purchase of real estate or improvements thereon,
but excluding separable furniture.
"REPORTABLE EVENT" means any reportable event as defined in
Section 4043(b) of ERISA, other than a reportable event as to
which provision for 30-day notice to the PBGC would be waived
under applicable regulations had the regulations in effect on the
Closing Date been in effect on the date of occurrence of such
reportable event.
"REVOLVING LOAN FACILITY" means the Revolving Loan Facility
provided pursuant to Section 2.01 below.
"REVOLVING LOAN FLOATING RATE" means a floating rate equal
to the Lender's Prime Rate plus one-half of one percent (.50%).
"REVOLVING NOTE" means the Note referred to in Section
2.04(a)
"SBOC" means Showboat Operating Company.
"SENIOR SUBORDINATED NOTES" means 13% Senior Subordinated
Notes to 2009 issued by Borrower under Indenture dated August 10,
1994.
"SUBORDINATED DEBT" means indebtedness of the Borrower on a
consolidated basis (but excluding Subordinated Debt of Non-
Recourse Subsidiaries) which is subordinated in payment to all
other Indebtedness and to trade obligations of the Borrower.
"SUBSIDIARY" means (i) any corporation, association or other
business entity of which more than 50% of the total voting power
of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
of the other Subsidiaries of that Person or a combination thereof
and (ii) any Non-Recourse Subsidiaries.
"TERM LOAN" means the term loan to be extended under Section
2.02 hereof.
"TERM LOAN FLOATING RATE" means a floating rate equal to the
Lender's Prime Rate plus one percent (1%).
"TERM NOTE" means the Note Amendment Agreement referred to
in Section 2.04(b).
"TRUSTEE" means IBJ Xxxxxxxx Bank & Trust Company or its
successor as Indenture Trustee under the Bond Indenture.
11
"UCC" refers to the New Jersey Uniform Commercial Code,
N.J.S.A. 12A:1-101 et seq., as it may be amended from time to
time.
"UNCONSOLIDATED SUBSIDIARIES" means Subsidiaries of a Person
or other entities in which such Person holds an equity interest
which are not consolidated for financial reporting purposes with
the financial statements of such Person under GAAP.
2. THE LOANS
SECTION 2.01. REVOLVING LOAN FACILITY.
Lender agrees, upon the terms and subject to the conditions
hereof, to make advances to the Borrower from time to time from
the Closing Date up to and including the Business Day prior to
the Conversion Date, in an aggregate amount at any one time
outstanding of no more than $25,000,000.
SECTION 2.02. TERM LOAN FACILITY.
On the Conversion Date, upon the terms and subject to the
conditions hereof, the principal amount outstanding under the
Revolving Loan Facility shall be converted to a term loan payable
under the terms described below. Once repaid, amounts
outstanding under the Term Loan may not be reborrowed.
SECTION 2.03. MAKING OF LOANS.
(a) Each Borrowing under the Revolving Loan Facility shall
be a Floating Rate Borrowing or a LIBOR Rate Borrowing as the
Borrower may request subject to and in accordance with this
Section and the Revolving Note. Subject to the other provisions
of this Section, Borrowings of more than one type may be
outstanding at the same time.
(b) The Borrower shall give the Lender at least three
Business Days' prior written, telecopier, facsimile or telephonic
(promptly confirmed in writing) notice of each LIBOR Rate
Borrowing and at least one Business Day's prior written,
telecopier, facsimile or telephonic (promptly confirmed in
writing) notice of each Floating Rate Borrowing. Each such
notice in order to be effective must be received by the Lender
not later than 2:00 p.m. Each such notice shall be irrevocable
and shall specify whether the Borrowing then being requested is a
LIBOR Rate or a Floating Rate Borrowing and in the case of LIBOR
Rate Borrowings, the Interest Period or Interest Periods with
respect thereto. If no election of Interest Period is specified
in such notice in the case of LIBOR Rate Borrowings, such notice
shall be deemed to be a request for an Interest Period of one
month. If no election is made as to the type of Borrowing, such
notice shall be deemed a request for a Floating Rate Borrowing.
12
(c) The aggregate amount of any Borrowing of new funds
shall be in an aggregate principal amount of (x) with respect to
LIBOR Rate Borrowings, $500,000 (or such lesser amount as shall
equal the available but unused portion of the Revolving Credit
Facility) or such greater amount which is an integral multiple of
$100,000, and (y) with respect to Floating Rate Borrowings,
$500,000 (or such lesser amount as shall equal the available but
unused portion of the Revolving Credit Facility) or such greater
amount which is an integral multiple of $100,000.
SECTION 2.04. NOTES.
(a) The Revolving Credit Borrowings shall be evidenced by a
promissory note substantially in the form of Exhibit 2.04(a) in
the face of amount of $25,000,000 (the "Revolving Note"), payable
to the order of the Lender, duly executed on behalf of the
Borrower and dated the Closing Date. The outstanding principal
balance of the Revolving Note shall be payable on the Conversion
Date, subject to the provisions hereof regarding conversion to
the Term Loan.
(b) The Term Loan made hereunder shall be evidenced by the
Revolving Note as amended by the Note Amendment Agreement (the
"Term Note") substantially in the form of Exhibit 2.04(b)-1 if
the Borrower chooses the Floating Rate Option under Section 2.05
below, or 2.04(b)-2 if the Borrower chooses the Fixed Rate
Option, in the face amount of the Term Loan, payable to the order
of the Lender, duly executed on behalf of the Borrower and dated
the Conversion Date. If the Borrower chooses the Fixed Rate
Option, the Borrower shall make equal payments of principal and
interest in an amount sufficient to amortize the Term Loan over a
remaining term of three (3) years. If the Floating Rate Option
is elected, interest shall be paid monthly as accrued, along with
equal monthly payments of principal over the following three (3)
year period in amounts sufficient to fully repay the Term Loan.
The Term Note shall mature on July 14, 2000.
SECTION 2.05. INTEREST ON NOTES
(a) In the case of a LIBOR Rate Borrowing under the
Revolving Loan Facility, interest shall be payable at a rate per
annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the LIBOR Based Rate. Interest
shall be payable as set forth in the Revolving Note.
(b) In the case of a Floating Rate Borrowing under the
Revolving Loan Facility, interest shall be payable at a rate per
annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Revolving Loan Floating
Rate. Interest shall be payable on each Floating Rate Borrowing
as set forth in the Revolving Note.
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(c) Interest on the Term Loan shall accrue at the
Borrower's option either (i) at the Term Loan Floating Rate or
(ii) at a fixed rate determined by the Lender three (3) Business
Days prior to the Conversion Date. The Lender shall notify the
Borrower four (4) Business Days prior to the Conversion Date of
the Fixed Rate which would be applicable if the Borrower chose
the Fixed Rate Option. The Borrower will notify the Lender three
(3) Business Days prior to the Conversion Date as to which rate
option it elects as to the Term Loan. If no rate option is
selected, the Borrower will be presumed to have chosen the
Floating Rate Option.
(d) Anything in this Agreement or the Notes to the contrary
notwithstanding, the interest rate on the Loans shall in no event
be in excess of the maximum permitted by Applicable Law.
SECTION 2.06. FEES
(a) The Borrower agrees to pay to the Lender an origination
fee of $250,000.00, $25,000.00 of which has been paid, and the
balance of which shall be paid at Closing.
(b) The Borrower agrees to pay to the Lender on the last
Business Day of each March, June, September and December in each
year (commencing on the last Business Day of September, 1995) and
(pro-rated for the period from June 30 through the Conversion
Date) on the Conversion Date, a commitment fee of 3/8 of one
percent per annum, computed on the basis of the actual number of
days elapsed over a year of 360 days, on the average daily unused
amount of the Lender's commitment under the Revolving Loan
Facility. Such commitment fee shall accrue from the Closing
Date.
(c) The Borrower agrees to pay additional loan fees for
certain Revolving Loan Facility Borrowings as set forth in
Section 5.07.
SECTION 2.07. PREPAYMENT OF LOANS
The Borrower's right to prepay principal under the Loans
and the right of the Lender to reimbursement for costs resulting
from such prepayment are governed by the terms of the Notes.
3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement
and to make the Loans provided for herein, Borrower makes the
following representations and warranties to, and agreements with,
the Lender, all of which shall survive the execution and delivery
of this Agreement, the issuance of the Notes and the making of
the Loans:
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SECTION 3.01. CORPORATE EXISTENCE AND POWER.
Each Obligor has been duly organized and is validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation and is in good standing as a
foreign corporation in all jurisdictions where the nature of its
properties or business so requires it and where a failure to be
in good standing as a foreign corporation would have a Material
Adverse Effect. Each of the Obligors has the corporate power to
own its properties and carry on its businesses as now being
conducted, to execute, deliver and perform, as applicable, its
obligations under this Agreement, the Notes and the other Loan
Documents and other documents contemplated hereby to which it is
a party.
SECTION 3.02. CORPORATE AUTHORITY AND NO VIOLATION.
The execution, delivery and performance of this Agreement
and the other Loan Documents, the borrowings hereunder and the
execution and delivery of the Notes and the grant to the Lender
of a security interest in the Collateral as contemplated by this
Agreement and the mortgage lien contemplated by the Mortgages (a)
have been duly authorized by all necessary corporate action on
the part of each Obligor, (b) will not violate any provision of
any Applicable Law applicable to any party or any of their
respective properties or assets, (c) will not violate any
provision of the Certificate of Incorporation or By-Laws of any
Obligor, or any indenture, any agreement for borrowed money, any
bond, note or other similar instrument or any other material
agreement to which any Obligors are a party or by which any
Obligor or any of their respective properties or assets are
bound, (d) will not violate, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
such indenture, agreement, bond, note, instrument or other
agreements of any Obligor and (e) will not result in the creation
or imposition of any Lien upon any property or assets of any
Obligor other than pursuant to this Agreement or any other Loan
Document.
SECTION 3.03. GOVERNMENTAL APPROVAL.
Except for approval from the New Jersey Casino Control
Commission and the requirement of providing a 30-day post-closing
notice to the Nevada Gaming Commission, no action, consent or
approval of, or registration or filing with, or any other action
by any Governmental Authority, is required in connection with the
execution, delivery and performance by the Obligors of this
Agreement or the other Loan Documents except for (i) filings of
UCC-1 financing statements in the appropriate offices and (ii)
the filing of the Mortgages with the real estate recording
offices in the counties in which the real property interest
described in such Mortgages are located. The New Jersey Casino
Control Commission has granted approval of the transaction
contemplated by this Agreement.
15
SECTION 3.04. FINANCIAL CONDITION.
(a) The audited consolidated financial statements of
Borrower at December 31, 1994, in the form previously delivered
to the Lender, are complete and correct in all material respects
and have been prepared in accordance with GAAP. Such financial
statements fairly present the financial condition of the Borrower
at the date and for the period indicated and reflect all known
liabilities, contingent or otherwise, that GAAP requires, as of
such dates, to be shown, reserved against or disclosed in notes
to financial statements.
(b) The unaudited consolidated financial statements for the
period ending March 31, 1995, in the form previously delivered to
Lender are complete and correct in all material respects. Such
financial statements fairly present in all material respects the
financial condition of Borrower at the date and for the period
indicated and reflect all known liabilities, contingent or
otherwise, that GAAP requires as of such dates, to be shown,
reserved against or disclosed in notes to financial statements.
(c) The audited balance sheet and related statements of
income and cash flows of ACSI at December 31, 1994, and the
unaudited balance sheet and related financial statements for the
period ending March 31, 1995 in the form previously delivered to
the Lender are prepared in accordance with GAAP. Such financial
statements fairly present in all material respects the respective
financial condition of ACSI at the respective dates and for the
respective periods indicated and reflect all known liabilities,
contingent or otherwise that GAAP requires as of such dates, to
be shown, reserved against or disclosed in notes to financial
statements.
SECTION 3.05. NO MATERIAL ADVERSE CHANGE.
Except for the sale of the Showboat Star Partnership, there
has been no material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of
Borrower since December 31, 1994.
SECTION 3.06. SUBSIDIARIES.
Annexed hereto as Schedule 3.06 is a correct and complete
list as of the date hereof of all Subsidiaries of the Borrower
showing, as to each Subsidiary, its name, the jurisdiction of its
incorporation and the ownership of the capital stock of such
Subsidiary.
SECTION 3.07. TRADEMARKS, PATENTS AND OTHER RIGHTS.
(a) Except as specifically noted on Schedule 3.07, the
Obligors possess or have a license to use all patents,
trademarks, tradenames, and any other material proprietary rights
(collectively the "Proprietary Rights") which are required to
conduct their respective businesses as conducted by Borrower and
its Subsidiaries.
16
(b) Except as set forth on Schedule 3.07, (i) there is no
claim, suit, action or proceeding pending or to the Borrower's
knowledge threatened against Borrower that involves a claim of
infringement of any material Proprietary Right and (ii) neither
the Borrower nor any of its Subsidiaries has any knowledge of any
existing infringement by any other person of any of the material
Proprietary Rights.
SECTION 3.08. FICTITIOUS NAME.
None of the Obligors are doing business or intends to do
business other than under its full corporate name, including,
without limitation, under any trade name or other doing business
name, except as set forth on Schedule 3.08 hereto.
SECTION 3.09. TITLE TO PROPERTIES.
The Borrower and Subsidiaries will have at the Closing Date
good title or valid leasehold interests to each of the properties
and assets reflected on the balance sheets referred to in Section
3.04 other than properties or assets disposed of in the ordinary
course of business since the date of such balance sheets and all
such properties and assets are free and clear of Liens, except
Permitted Liens and existing Liens listed on Schedule 6.05.
Schedule 3.09 is a list of all real properties owned or leased by
the Borrower or a Subsidiary.
SECTION 3.10. UCC FILING INFORMATION.
The principal executive office of each Obligor is on the
date hereof as set forth on Schedule 3.10 hereto, which office is
the place where each Obligor is "located" for the purpose of
Section 9-103(3)(d) of the Uniform Commercial Code in effect in
the State of New Jersey and the State of Nevada, and the place
where each Obligor keeps the records concerning the Collateral on
the date hereof or regularly keep any goods included in the
Collateral on the date hereof are also listed on Schedule 3.10
hereto.
SECTION 3.11. LITIGATION.
Schedule 3.11 is a list of all lawsuits or other
proceedings pending or, to the knowledge of Borrower, threatened
against or affecting the Borrower, or any Subsidiary, or any
of the respective properties with potential liability in excess
of $500,000 or this Agreement or any of the transactions
contemplated thereby by or before any Governmental Authority or
arbitrator. None of the lawsuits set forth on Schedule 3.11
should reasonably be expected to have a Material Adverse Effect
on this Agreement or any of the transactions contemplated hereby.
Neither the Borrower nor any of the Subsidiaries is in default
with respect to any order, writ, injunction, decree, rule or
regulation of any Governmental Authority, which default would
have a Material Adverse Effect.
17
SECTION 3.12. FEDERAL RESERVE REGULATIONS.
None of the Obligors are engaged principally, or as one of
its important activities, in the business of extending credit for
the purpose of purchasing or carrying any margin stock as defined
in Regulation U of the Board of Governors of the Federal Reserve
System. No part of the proceeds of the Loan will be used,
whether immediately, incidentally or ultimately, to purchase or
carry any such stock, to extend credit to others for the purpose
of purchasing or carrying any such stock or for any other purpose
violative of or inconsistent with any of the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
SECTION 3.13. INVESTMENT COMPANY ACT.
The Borrower is not, or will not during the term of this
Agreement be, (x) an "investment company", within the meaning of
the Investment Company Act of 1940, as amended or (y) subject to
regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or any foreign, federal or local statute or
regulation limiting its ability to incur indebtedness for money
borrowed or guarantee such indebtedness as contemplated hereby or
by any other Loan Documents.
SECTION 3.14. ENFORCEABILITY.
Subject to applicable Gaming Control Acts, this Agreement,
the Notes and the other Loan Documents when executed will
constitute legal, valid and enforceable obligations of the
Borrower and the other Obligors, as applicable (subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and to general
principles of equity.)
SECTION 3.15. TAXES.
The Borrower and each of its Subsidiaries have filed or
caused to be filed all federal, state and local tax returns which
are required to be filed, and have paid or have caused to be paid
all taxes as shown on said returns or on any assessment received
by them in writing, to the extent that such taxes have become
due, except as permitted by Section 5.04 hereof.
SECTION 3.16. COMPLIANCE WITH ERISA.
Each of the Borrower and its Subsidiaries, as applicable,
is in compliance in all material respects with the provisions of
ERISA and the Code applicable to Plans, and the regulations and
published interpretations thereunder, if any, which are
applicable to it. None of the Borrower or any of its
Subsidiaries have, with respect to any Plan established or
maintained by it, engaged in a prohibited transaction which
would subject it to a material tax or penalty on
prohibited transactions imposed by ERISA or Section 4975 of
the Code. No liability to the PBGC that is material to the
Borrower and its Subsidiaries taken as a
18
whole has been or is expected to be incurred with respect to
any Plan and there has been no Reportable Event and no other
event or condition that presents a material risk of termination
of a Plan by the PBGC. None of the Borrower and its Subsidiaries
has engaged in a transaction which would result in the incurrence
of a material liability under Section 4069 of ERISA. As of the
Closing Date, none of the Borrower and Subsidiaries has incurred
any liability that would be material to the Borrower and its
Subsidiaries taken as a whole on account of a partial or complete
withdrawal (as defined in Sections 4203 and 4205 of ERISA,
respectively) with respect to any Multiemployer Plan.
SECTION 3.17. AGREEMENTS.
None of the Borrower and its Subsidiaries, is in default in
the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement
or instrument to which it is a party which could reasonably be
expected to have a Material Adverse Effect. Schedule 3.17 is a
list of all agreements of the Borrower and its Subsidiaries, the
loss or termination of which could reasonably be expected to have
a Material Adverse Effect.
SECTION 3.18. DISCLOSURE.
Neither this Agreement nor any other Loan Document nor any
other agreement, document, certificate or statement furnished to
the Lender by or on behalf of any Obligor in connection with the
transactions contemplated hereby, at the time it was furnished
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein, under the circumstances under
which they were made not misleading.
SECTION 3.19. ENVIRONMENTAL LIABILITIES.
(a) To the knowledge of the Borrower and except as set
forth in Schedule 3.19, none of the Borrower or any of its
Subsidiaries has used, stored, treated, transported,
manufactured, refined, generated, handled, produced or disposed
of any Hazardous Materials on, under, at, from, or in any way
affecting any of their properties or assets, or otherwise, in any
manner in violation of any Environmental Law, except in each
instance such violations as in the aggregate would not have a
material adverse effect upon the Borrower and its Subsidiaries
taken as a whole.
(b) To the knowledge of the Borrower and except as set
forth in Schedule 3.19, none of the Borrower or its
Subsidiaries has any obligations or liabilities, known or
unknown, matured or not matured, absolute or contingent,
assessed or unassessed, where such would reasonably be expected
to have a Materially Adverse Effect and no Environmental
Actions have been filed against the Borrower or its Subsidiaries
or any of their respective employees, agents, representatives or
predecessors in interest in connection with or in any way
arising from or relating to the Borrower or its Subsidiaries
or any of their
19
respective properties, or relating to or arising from or
attributable, in whole or in part, to the manufacturing,
processing, distributing, using, treating, storing, disposing,
transporting or handling of any Hazardous Materials, by any other
Person at or on or under any of the real properties owned or used
by the Borrower or its Subsidiaries or any other location where
any of the foregoing could reasonably be expected to have a
Materially Adverse Effect.
SECTION 3.20. LABOR MATTERS.
Neither Borrower nor any Subsidiary thereof has, in the
last five years, experienced any strike, lockout, slowdown or
work stoppage due to labor disagreements which has had or may
have a Materially Adverse Effect and, to the knowledge of the
Borrower or any of its Subsidiaries, there is no such strike,
lockout, slowdown or work stoppage threatened against the
Borrower or any of its Subsidiaries.
4. CONDITION OF LENDING
SECTION 4.01. CONDITIONS PRECEDENT TO THE LOANS.
The obligation of the Lender to complete closing hereunder
and make the Revolving Credit Facility available is subject to
the following conditions precedent:
(a) Corporate Documents of the Borrower. At the time of
the closing of the Revolving Loan Facility the Lender shall have
received:
(i) a copy of the Borrower's Certificate of
Incorporation, certified as of a recent date by the
Secretary of State of its state of incorporation;
(ii) certificates of such Secretary of State,
dated as of a recent date as to the good standing of
and payment of taxes by the Borrower which lists the
charter documents on file in the office of such
Secretary of State;
(iii) a certificate dated as of a recent date
as to the good standing of the Borrower issued by the
Secretary of State of each jurisdiction in which the
Borrower is qualified as a foreign corporation; and
(iv) a certificate of the Secretary of the
Borrower dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-
laws of the Borrower as in effect on the date of such
certification, (B) that attached thereto is a true and
complete copy of resolutions adopted by the Board of
Directors of the Borrower authorizing the borrowings
hereunder, the execution, delivery and performance in
accordance with their respective terms of this
Agreement, the Notes, and any other documents required
or
20
contemplated hereunder or thereunder, (C) that the
certificate of incorporation of the Borrower has not
been amended since the date of the last amendment
thereto indicated on the certificate of the Secretary
of State furnished pursuant to clause (i) above and (D)
as to the incumbency and specimen signature of each
officer of the Borrower executing this Agreement, the
Notes or any other document delivered by it in
connection herewith or therewith (such certificate to
contain a certification by another officer of the
Borrower as to the incumbency and signature of the
officer signing the certificate referred to in this
clause (iv)).
(b) Corporate Documents of Obligors (other than the
Borrower). At the time of the making of the Revolving Loan, the
Lender shall have received for each Obligor (other than the
Borrower):
(i) a copy of such entity's certificate of
incorporation, certified as of a recent date by the
Secretary of State of the state of incorporation;
(ii) a certificate of each such Secretary of
State, dated as of a recent date as to the good
standing of and payment of taxes by such entity which
lists the charter documents on file in the office of
such Secretary of State;
(iii) a certificate dated as of a recent date
as to the good standing of such entity issued by the
Secretary of State of each jurisdiction in which such
entity is qualified as a foreign corporation; and
(iv) a certificate of the Secretary of such entity
dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of
such entity as in effect on the date of such
certification, (B) that attached thereto is a true and
complete copy of resolutions adopted by the Board of
Directors of such entity authorizing the execution,
delivery and performance in accordance with their
respective terms of this Agreement, and any other
documents required or contemplated hereunder or
thereunder, (C) that the certificate of incorporation
of such entity has not been amended since the date of
the last amendment thereto indicated on the certificate
of the Secretary of State furnished pursuant to clause
(i) above and (D) as to the incumbency and specimen
signature of each officer of such entity executing this
Agreement or any other document delivered by it in
connection herewith or therewith (such certificate to
contain a certification by another officer of such
entity as to the incumbency and signature of the
officer signing the certificate referred to in this
clause (iv)).
(c) Revolving Note. On or before the Closing Date,
the Lender shall have received the Revolving Note,
executed on behalf of the Borrower, dated the date thereof,
21
and payable to the order of the Lender in the principal amount
equal to the Revolving Loan Facility.
(d) Opinions of Counsel. The Lender shall have received
the favorable written opinion, dated the Closing Date and
addressed to the Lender of (i) Kummer, Kaempfer, Xxxxxx &
Xxxxxxx, counsel to the Obligors substantially in the form of
Exhibit 4.01(d) hereto, and (ii) such local counsel as the
Lender may request regarding perfection of the security
interests, validity of the Mortgages and other similar matters.
(e) Financial Information. The Lender shall have received
and be reasonably satisfied with an unaudited statement for
Borrower for each month subsequent to December 31, 1994 through
April 30, 1995.
(f) ERISA. The Lender shall have received copies of all
Plans of the Borrower and its Subsidiaries that are in existence
on the Closing Date, and confirmation satisfactory to the Lender
that (i) none of the Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412
of the Code), (ii) no Reportable Event has occurred as to any
Plan, and (iii) no termination of, or withdrawal from, any of the
Plans has occurred or is contemplated that would result in any
liability on the part of the Borrower or any of its Subsidiaries,
if the occurrence of any of the foregoing events could reasonably
be expected to have a Material Adverse Effect.
(g) Mortgages. The Loans will be secured by the Deed of
Trust executed by the Borrower in favor of the Lender creating a
first priority pari passu Lien on the Las Vegas Showboat
(including, without limitation, the fee and leasehold interests
as well as interests in all furniture, furnishings, fixtures,
equipment and other personal property, which are not subject to
any Lien permitted to be granted under Section 6.05 hereof in
favor of any third party lender providing financing for the
acquisition or the lease thereof). The obligations of ACSI
hereunder will be secured by its Mortgage and the Assignment of
Leases and Rents executed by ACSI in favor of the Lender creating
a first priority pari passu Lien on the Atlantic City Showboat
(including, without limitation, its fee and leasehold interests
as well as interests in all furniture, furnishings, fixtures,
equipment and other personal property, which are not subject to
any Lien permitted to be granted under Section 6.05 hereof in
favor of any third party lender providing financing for the
acquisition or the lease thereof). The Lender shall receive
evidence reasonably satisfactory to it that the Borrower and ACSI
have sufficient right, title and interest to mortgage the real
property interests covered under the Mortgages and that all
security and mortgage documents necessary to provide the Lender
with valid first mortgage liens on the real property interest
described in the Mortgages (in pari passu with the Trustee for
the benefit of the holders of the Bonds subject to Permitted
Liens) have been filed and/or recorded or delivered to the Lender
(or to the duly authorized agent of the title insurance company
issuing the mortgage title insurance policies in favor of the
Lender) in form satisfactory for filing. Lender shall have
further received an assignment of rents and leases as to each of
the mortgaged properties in the form agreed to by Lender and
Borrower.
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(h) Australian Joint Venture. The Lender shall have
received a statement prepared and signed by Borrower's counsel
summarizing the constituent documents for the Australian Joint
Venture and stating the opinion of Borrower's counsel to the
effect that (i) neither the Borrower nor any of the Guarantors
are, directly or indirectly, through a Subsidiary or otherwise,
by way of Guaranty or otherwise, contingent or not contingent,
liable for any obligations incurred by or arising out of the
Australian Joint Venture and (ii) neither the Borrower nor any
of the Guarantors have incurred, directly or indirectly, through
a Subsidiary or otherwise any liability under any agreements
or commitments to contribute capital to, maintain the net worth
of or extend loans or Guarantees for the benefit of the
Australian Joint Venture other than as to funds already
contributed and reported in writing to the Lender.
(i) Intercreditor Agreement. An Intercreditor Agreement
shall have been executed and delivered by each of Lender,
Borrower and the Trustee as to the Atlantic City Showboat and by
the Trustee and Lender as to the Las Vegas Showboat in form
acceptable to the Lender and in accordance with the Indenture.
(j) Title Insurance, etc. The Lender shall have received
as to the Atlantic City Showboat and the Las Vegas Showboat
legal, valid and binding commitments from a title insurance
company reasonably acceptable to the Lender, to issue a mortgage
title insurance policy in form and substance reasonably
satisfactory to the Lender in respect of the Mortgages showing
that such Mortgages are valid first liens subject only to
Permitted Liens and that such fee or leasehold interest in real
property subject to the Mortgages is owned by the Borrower or
ACSI, respectively, free of encumbrances other than Permitted
Liens.
(k) Surveys, etc. Lender shall have received a survey
(certified in form and by surveyors reasonably acceptable to
Lender) relating to the Las Vegas Showboat and the Atlantic City
Showboat prepared in accordance with ALTA standards indicating
the absence of any encroachments or other title defects and
sufficient to induce the Borrower's title insurance company to
remove the survey exception.
(l) Federal Reserve Regulations. The Lender shall be
reasonably satisfied that the provisions of Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System
will not be violated by the transactions contemplated hereby.
(m) No Material Adverse Change. No change shall have
occurred with respect to the Borrower or any of its Subsidiaries
since the date of the most recent audited financial statement
delivered to the Lender of each such Person having or as could
reasonably be expected to have a Material Adverse Effect.
(n) Insurance. The Borrower shall have furnished the
Lender with a summary of all existing insurance coverage and
evidence reasonably acceptable to the Lender that the
23
insurance policies required by Section 5.03 (a) and (b) hereof
have been obtained and are in full force and effect.
(o) UCC Financing Statements and UCC Searches, etc. The
Obligor shall have received, in each case in form satisfactory to
it, (i) UCC financing statements executed on behalf of the
Obligor for filing in all jurisdictions in which it shall be
necessary or desirable to make a filing in order to provide the
Lender with a perfected security interest in the Collateral and
(ii) UCC searches satisfactory to the Lender indicating that no
other filings with regard to the Collateral are of record in any
of such jurisdictions except in connection with Permitted Liens
and existing Liens listed on Schedule 6.05.
(p) Officers' Certificate. The Lender shall have received
a certificate executed by the Chief Executive Officer and Senior
Financial Officer of the Borrower substantially in the form of
Exhibit 4.01(p) hereto.
(q) Contribution Agreement. The Obligors shall have
executed and delivered the Contribution Agreement.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING.
The obligation of the Lender to advance each Borrowing,
including its initial advance (but excluding continuations and
conversions), is subject to the following conditions precedent:
(a) Notice. The Lender shall have received a notice with
respect to such borrowing as required by Article 2 hereof.
(b) Representations and Warranties. The representations
and warranties set forth in Article 3 hereof and in the other
Loan Documents shall be true and correct in all material respects
on and as of the date of each Borrowing hereunder (except to the
extent that such representations and warranties related solely to
an earlier date) with the same effect as if made on and as of
such date except as affected by subsequent transactions
contemplated by or permitted by the terms of this Agreement.
(c) No Event of Default. On the date of each Borrowing
hereunder, the Borrower shall be in material compliance with all
of the terms and provisions set forth herein to be observed or
performed and no Event of Default or Default shall have occurred
and be continuing.
(d) Additional Documents. The Lender shall have received
from the Borrower on the date of each Borrowing such documents
and information as it may reasonably request prior to such date
relating to the satisfaction of the conditions in this Section
4.02.
24
Each Borrowing shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the
matters specified in paragraphs (b) and (c) of this Section.
SECTION 4.03. CONDITIONS TO CONVERSION.
The Conversion of the Revolving Loan Facility to the Term
Loan shall be subject to the following conditions:
(a) Representations and Warranties. The representations
and warranties set forth in Article 3 hereof and in the other
Loan Documents shall be true and correct in all material respects
on and as of the Conversion Date (except to the extent that such
representations and warranties related solely to an earlier date)
with the same effect as if made on and as of such date except as
affected by subsequent transactions contemplated by or permitted
by the terms of this Agreement.
(b) No Event of Default. On the Conversion Date, the
Borrower shall be in material compliance with all of the terms
and provisions set forth herein to be observed or performed and
no Event of Default or Default shall have occurred and be
continuing.
(c) No Violations. The Term Loan shall not violate or
constitute a breach under the Bond Indenture, the Note Indenture
or any other agreement binding upon the Borrower or its
Subsidiaries.
(d) Delivery of Term Note. The Borrower shall have
executed and delivered the Term Note.
(e) Additional Documents. The Lender shall have received
from the Borrower on or prior to the Conversion Date such
documents and information as it may reasonably request prior to
such date relating to the satisfaction of the conditions in this
Section 4.03.
5. AFFIRMATIVE COVENANTS
From the Closing Date and for so long as the Revolving Loan
Facility shall be in effect or any amount shall remain
outstanding under any Note or unpaid under this Agreement, the
Borrower agrees that, unless the Lender shall otherwise consent
in writing, it will, and will cause each of its Subsidiaries to:
SECTION 5.01. FINANCIAL STATEMENTS, REPORTS, ETC.
Deliver to Lender:
25
(a) (i) As soon as is practicable, but in any event within
120 days after the end of each fiscal year of the Borrower, the
audited consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of, and the related consolidated
statements of income, shareholders' equity and cash flows for
such year, accompanied by an opinion of KPMG Peat Marwick or such
other independent certified public accountants of recognized
standing as shall be retained by the Borrower and as shall be
reasonably satisfactory to the Lender, which report and opinion
shall be prepared in accordance with generally accepted auditing
standards relating to reporting and which report and opinion must
(A) be unqualified as to going concern and scope of audit and
shall state that such financial statements fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries as at the dates indicated and the results of the
operations and cash flow for the periods indicated and (B)
contain no material exceptions or qualifications except for
qualifications relating to accounting changes (with which such
independent public accountants concur) in response to FASB
releases or other authoritative pronouncements and (ii) as soon
as practicable, but in any event within 150 days after the end of
each fiscal year of Borrower, the audited consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of the
related fiscal year and the audited consolidating statements of
income, shareholders' equity and cash flow for such fiscal year,
along with a report and opinion of independent certified public
accountants as in (i) above;
(b) Annually, within 120 days of fiscal year end, a copy of
the Borrower's report on Form 10-K as filed with the Securities
and Exchange Commission, along with a copy of the Borrower's
annual report to shareholders;
(c) As soon as is practicable, but in any event sixty (60)
days after the end of each fiscal quarter of ACSI, a copy of the
quarterly statement of ACSI as filed with the New Jersey Casino
Control Commission.
(d) Promptly upon receipt thereof, copies of all reports,
if any, submitted by independent certified public accountants to
the Borrower or any Subsidiary in connection with each annual,
interim or special audit of the financial statements of the
Borrower or any Subsidiary, including, without limitation, the
comment letter submitted by such accountants to management in
connection with their annual audit;
(e) Promptly upon their becoming available, copies of all
regular and periodic reports and all registration statements and
prospectuses, if any, filed by any of them with any securities
exchange or with the Securities and Exchange Commission, or any
comparable foreign bodies, and of all press releases and other
statements made available generally by any of them to the public
concerning material developments in the business of the Borrower
or its Subsidiaries;
(f) Promptly upon any executive officer of an Obligor
obtaining actual knowledge (a) of any Default or
(b) that any Person has given any notice to any Obligor
or taken any other action with respect to a
claimed default or event or condition of the type referred to
26
in paragraph (e) of Article 7 or any condition or event which
would be required to be disclosed in a current report required to
be filed by the Borrower with the Securities and Exchange
Commission on Form 8-K if the Borrower were required to file such
reports under the Securities Exchange Act of 1934, as amended, or
the rules and regulations thereunder (or any successor thereof),
a certificate of the president or Senior Financial Officer of the
Borrower specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action
taken by such holder or Person and the nature of such claimed
Event of Default or condition and what action the applicable
Obligor has taken, is taking and proposes to take with respect
thereto;
(g) Promptly upon any executive officer of an Obligor
obtaining actual knowledge of (a) the institution of, or threat
of, any action, suit, proceeding, investigation or arbitration by
any Governmental Authority or other Person against the Borrower,
any of its Subsidiaries or any of their assets, which involves a
claim or amount in dispute in excess of $500,000 or (b) any
material development in such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed
to the Lender), which, in each case might reasonably be expected
to have a Material Adverse Effect, the Obligor shall promptly
give notice thereof to the Lender and provide such other
information as may be reasonably available to it (without waiver
of any applicable evidentiary privilege) to enable the Lender to
evaluate such matters; and, in addition to the requirements set
forth in clauses (a) and (b) of this Section 5.01, the Borrower
upon request shall promptly give notice of the status of any
action, suit, proceeding, investigation or arbitration covered by
a report delivered to the Lender pursuant to clause (a) or (b)
above to the Lender and provide such other information as may be
reasonably available to it to enable the Lender to evaluate such
matters; and
(h) With reasonable promptness, such other information and
data with respect to the Borrower and its Subsidiaries as from
time to time may be reasonably requested by Lender.
SECTION 5.02. CORPORATE EXISTENCE; COMPLIANCE WITH
STATUTES.
Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its corporate existence,
other than with respect to actions permitted by this Agreement,
and use best efforts to preserve, renew and keep in full force
and effect all material rights, licenses, permits and franchises
and comply in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions
imposed by, any Governmental Authority.
SECTION 5.03. INSURANCE.
(a) Keep its assets which are of an insurable character
insured (to the extent and for time periods consistent with
normal industry practices) by financially sound and reputable
insurers against loss or damage by fire, explosion, theft,
business interruption or
27
other hazards with coverages which are currently referred to as
"basic", "special", "differences in conditions", "earthquake" and
"building maintenance" and with such coverages written on a
replacement cost basis and with such self-insured retention or
deductible levels, as are consistent with normal industry
practices and the Borrower's past practices.
(b) Maintain with financially sound and reputable insurers,
commercial general liability insurance and such other insurance
against all other hazards and risks and liability to persons and
property to the extent and in the manner customary for companies
in similar businesses; provided however, that workmen's
compensation insurance or similar coverage may be effected with
respect to its operations in any particular state or other
jurisdiction through an insurance fund operated by such state or
jurisdiction.
(c) Cause all such above-described insurance (excluding
worker's compensation insurance) to (1) provide for the benefit
of the Lender that 30 days' (10 days in the case of cancellation
for non-payment of premium) prior written notice of suspension,
cancellation, termination, modification, non-renewal or lapse or
material change of coverage shall be given to the Lender; (2)
name Lender as the loss payee (except for third-party liability
insurance), provided, however, that absent a Default or Event of
Default, the Lender shall, except to the extent otherwise
provided herein, instruct the insurer to direct that any
insurance proceeds be paid to the Borrower; and (3) to the extent
the Lender shall not be liable for premiums or calls, name the
Lender as additional assureds.
(d) The proceeds of any insurance resulting from any damage
to or loss or destruction of any Collateral shall be disposed of
in accordance with the Mortgages and shall be subject to the
Indenture and the Intercreditor Agreements.
SECTION 5.04. TAXES AND CHARGES; INDEBTEDNESS IN ORDINARY
COURSE OF BUSINESS.
Duly pay and discharge, or cause to be paid and discharged,
before the same shall become delinquent, all federal, state or
local taxes, assessments, levies and other governmental charges,
imposed upon the Borrower or its Subsidiaries or their respective
properties, sales and activities, or any part thereof, or upon
the income or profits therefrom, as well as all claims for labor,
materials, or supplies which if unpaid might by law become a Lien
upon any of the property of either the Borrower or its
Subsidiaries; provided, however, that any such tax, assessment,
charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower shall have set aside on its books
reserves (the presentation of which is segregated to the extent
required by GAAP) adequate with respect thereto if reserves shall
be deemed necessary by the Borrower in accordance with GAAP; and
provided, further, that the Borrower will pay all such taxes,
assessments, levies or other governmental charges forthwith upon
the commencement of proceedings to foreclose any Lien which may
have attached as security therefor (unless the same is fully
bonded or otherwise effectively stayed). The Borrower and its
Subsidiaries will promptly pay when due, or in conformance
28
with customary trade terms, all other material Indebtedness
incident to its operations; provided, however, that any such
Indebtedness need not be paid if the validity or amount thereof
shall currently be contested in good faith by appropriate
proceedings and if the Borrower shall have set aside on its books
reserves (the presentation of which is segregated to the extent
required by GAAP) adequate with respect thereto if reserves shall
be deemed necessary, and provided, further that the Borrower will
pay all such Indebtedness which, if unpaid, would result in a
Lien on its properties.
SECTION 5.05. CORPORATE NAME; CHIEF EXECUTIVE OFFICE.
None of the Obligors will change its corporate name or the
location of their respective chief executive offices or any of
the offices where any such entity keeps the books and records
with respect to the Collateral owned by it without (i) giving the
Lender 15 days' written notice of such change and (ii) filing any
additional UCC financing statements, mortgages, and such other
documents reasonably requested by the Lender or which are
otherwise necessary or desirable to continue the first perfected
security interest of the Lender.
SECTION 5.06. ERISA COMPLIANCE AND REPORTS.
Furnish to the Lender (a) as soon as practicable, and in
any event within 30 days after any executive officer (as defined
in Regulation C under the Securities Act of 1933) of the Borrower
or any Subsidiary knows that (A) any Reportable Event with
respect to any Plan has occurred, a statement of the Senior
Financial Officer of the Borrower, setting forth details as
to such Reportable Event and the action which it proposes to take
with respect thereto, together with a copy of the notice, if any,
required to be filed by the Borrower or any of its Subsidiaries
of such Reportable Event given to the PBGC or (B) an accumulated
funding deficiency has been incurred or an application has been
made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard or an extension of
any amortization period under Section 412 of the Code with
respect to a Plan, a Plan has been or is proposed to be
terminated in a "distress termination" (as defined in Section
4041(c) of ERISA) proceedings have been instituted to terminate a
Plan or a Multiemployer Plan, a proceeding has been instituted to
collect a delinquent contribution to a Plan or a Multiemployer
Plan, or either Borrower or any of its Subsidiaries will incur
any liability (including any contingent or secondary liability)
to or on account of the termination of or withdrawal from a Plan
under Sections 4062, 4063, 4064 of ERISA or the withdrawal or
partial withdrawal from a Multiemployer Plan under Sections 4201
or 4204 of ERISA, a statement of the Senior Financial Officer of
the Borrower, setting forth details as to such event and the
action it proposes of the Lender, copies of each annual and other
report with respect to each Plan and (c) promptly after receipt
thereof a copy of any notice the Borrower or any of its
Subsidiaries may receive from the PBGC relating to the PBGC's
intention to terminate any Plan or to appoint a trustee to
administer any Plan.
29
SECTION 5.07. USE OF PROCEEDS.
Use the proceeds of the Revolving Credit Facility solely
for general corporate purposes, except that the Borrower may
utilize the proceeds of a Borrowing under the Revolving Loan
for Investments in or loans to Subsidiaries constituting new
projects or for the acquisition cost of new projects only if (i)
prior to the Lender's making of the advance for such purpose, the
Borrower shall provide to the Lender a written statement signed
and certified by its Chief Financial Officer describing the
utilization of the funds, and (ii) upon the making of such
advance, the Borrower shall pay to the Lender a fee equal to
three fourths of one percent (.75%) of the advance.
SECTION 5.08. ACCESS TO BOOKS AND RECORDS; EXAMINATIONS.
Maintain or cause to be maintained at all times books and
records of its financial operations (in accordance with GAAP)
which shall be true and complete in all material respects and
provide the Lender and its representatives access, upon not less
than 24 hours advance notice, to all such books and records and
to any of their properties or assets during regular business
hours, in order that the Lender and its representatives may make
such audits and examinations and make abstracts from such books,
accounts, records and other papers and may discuss the affairs,
finances and accounts with, and be advised as to the same by,
officers and independent accountants, all as the Lender and its
representatives may deem appropriate. Provided that no Event of
Default or Default exists, the Lender shall limit to one the
number of field examinations to be performed in each year by the
Lender or its representatives, and the cost of such field
examination shall be limited to $15,000 each.
SECTION 5.09. MAINTENANCE OF PROPERTIES.
Keep its properties which are material to its business in
good repair, working order and condition consistent with industry
practice and, from time to time (i) make all necessary and proper
repairs, renewals, replacements, additions and improvements
thereof and (ii) comply in all material respects at all times
with the provisions of all material leases and other material
agreements to which it is a party so as to prevent any material
loss or forfeiture thereof or thereunder.
SECTION 5.10. MATERIAL CHANGES.
Report to the Lender promptly after any executive officer
of the Borrower obtains actual knowledge of any Material Adverse
Change in the financial condition or business of the Borrower or
any Subsidiary thereof.
30
SECTION 5.11. ENVIRONMENTAL LAWS.
(a) Promptly notify the Lender following receipt by an
officer of the Borrower or any Subsidiary thereof of any actual
or threatened Environmental Action or any violation or potential
violation of or non-compliance with, or liability or potential
liability under any Environmental Laws which, when taken together
with all other pending violations could reasonably be expected to
have a Material Adverse Effect on the Borrower and its
Subsidiaries taken as a whole, and promptly furnish to the Lender
all material notices of any nature which the Borrower or any
Subsidiary thereof may receive from the Governmental Authority or
other Person with respect to any Environmental Action, violation,
or potential violation of or non-compliance with, or liability or
potential liability under any Environmental Laws which, in any
case or when taken together with all such other notices, could
reasonably be expected to have a Material Adverse Effect.
(b) Comply in all material respects with and use reasonable
efforts to ensure compliance by all tenants and subtenants with
all Environmental Laws, and obtain and comply in all material
respects with and maintain and use reasonable best efforts to
ensure that all tenants and subtenants obtain and comply with all
licenses, approvals, registrations or permits required by
Environmental Laws.
(c) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal, reporting and
other actions required under all Environmental Laws and promptly
comply in all material respects with all lawful orders and
directives of all Governmental Authorities subject to the
Borrower's or any Subsidiary's right to contest or negotiate any
such order or directive in good faith and in compliance with
Environmental Laws provided such contest or negotiation is
promptly commenced.
(d) Defend, indemnify and hold harmless the Lender and its
respective employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities
(including strict liability), settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent
or otherwise, arising out of, or in any way related to the
violation of or non-compliance with any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities
by the Borrower or any Subsidiary thereof, including, without
limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs and litigation
expenses, but excluding therefrom all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses arising out of or resulting from (i) the gross
negligence or willful misconduct of any indemnified party or (ii)
any acts or omissions of any indemnified party occurring after
any indemnified party is in possession of, or controls the
operation of, any property or asset.
SECTION 5.12. FURTHER ASSURANCES; SECURITY INTERESTS.
(a) Upon the reasonable request of the Lender duly execute
and deliver, or cause to be duly executed and delivered, at the
cost and expense of the Borrower, such further
31
instruments as may be necessary or proper, in the reasonable
judgment of the Lender, to provide the Lender with a perfected
Lien in the Collateral, and to carry out the provisions and
purposes of the Loan Documents.
(b) Upon the reasonable request of the Lender, promptly
perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without
limitation, the execution, amendment or supplementation of any
financing statement and continuation statement or other
statement) for filing under the provisions of the UCC and the
rules and regulations thereunder, or any other statute, rule or
regulation of any applicable foreign, federal, state or local
jurisdiction, which are necessary or advisable, from time to
time, in order to grant and maintain in favor of the Lender the
security interest in the Collateral contemplated by the Loan
Documents, and Liens on real property owned by the Borrower or
its Subsidiaries, subject to no other Liens except as may be
expressly permitted hereunder.
(c) Promptly undertake to deliver or cause to be delivered
to the Lenders from time to time such other documentation,
consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Lender, as the Lender
shall deem reasonably necessary or advisable to perfect or
maintain the Liens of the Lender for the benefit of the Lender.
SECTION 5.13. PROJECT EXPANSIONS.
Without affecting the obligations of the Borrower or any
Subsidiary under the Mortgage, in the event that the Borrower or
any Subsidiary thereof at any time after the date hereof acquires
any interest in any Project Expansion, including, without
limitation, any leasehold interest (each such interest an "After
Acquired Property"), the Borrower shall promptly provide written
notice thereof to the Lender, setting forth in reasonable detail
a description of the interest acquired, the location of the After
Acquired Property, any structures or improvements thereon and an
appraisal or its good-faith estimate of the current value of such
real property. The Borrower or its Subsidiary will grant and
record a mortgage to the Lender on such Project Expansion to the
extent not already encumbered in favor of the Lender. In such
event, the Borrower or its Subsidiary, as the case may be, shall
execute and deliver to the Lender a Mortgage substantially in the
form of the applicable Mortgage, together with such of the
documents or instruments described in Section 4.01 (j) as the
Lender shall reasonably require. The Borrower shall pay all fees
and expenses, including, without limitation, reasonable
attorneys' fees and expenses and all title insurance charges and
premiums, in connection with their obligations under this Section
5.13.
SECTION 5.14. ANNUAL CLEANUP PERIOD.
The Borrower shall ensure that during any 365 day period
during the term of the Revolving Loan Facility, there shall be a
period of at least thirty (30) consecutive days
32
during which time there is no outstanding balance under the
Revolving Loan Facility hereunder.
6. NEGATIVE COVENANTS
From the date of the initial Loan and for so long as the
Revolving Loan Facility shall be in effect or any amount shall
remain outstanding under any Note or unpaid under this Agreement,
unless the Lender shall otherwise consent in writing, the
Borrower agrees that it will not, nor will it permit any
Subsidiary thereof (other than a Non-Recourse Subsidiary, it
being understood that the term "Subsidiaries" as used in this
Article refers to Subsidiaries other than Non-Recourse
Subsidiaries) to, directly or indirectly:
SECTION 6.01. LIMITATION OF INDEBTEDNESS.
Without the prior written consent of the Lender, incur,
assume or suffer to exist any Indebtedness:
(a) which is secured by a Lien on the Collateral
(except for Indebtedness secured by purchase money security
interests expressly permitted by Section 6.05 below and the
Mortgages and for refinancings of the Bond Indenture pursuant to
which (i) no additional funds are borrowed in excess of the
refinanced amount of principal, plus transaction costs, (ii) all
other terms, including interest rate, are not disadvantageous to
the Borrower, and (iii) the maturity of the debt is not thereby
shortened); or
(b) which would violate the terms of the Bond
Indenture or the Note Indenture as such terms currently provide
without regard to any waiver of the application of such terms or
modification of such terms.
SECTION 6.02. LIMITATION OF GUARANTIES.
Assume or incur any Guaranties:
(a) which are secured by a Lien on the Collateral; or
(b) which would violate the terms of the Bond
Indenture or the Note Indenture as such terms currently provide
without regard to any waiver of the application of such terms or
modification of such terms.
SECTION 6.03. CHANGE IN BUSINESS.
Engage in any business other than a gaming related
business, including without limitation, the gaming business and
other business necessary for, incident to, connected with or
arising out of the gaming business (including developing and
operating lodging facilities, sports or entertainment facilities,
transportation services or other related activities or
enterprises and any additions or improvements thereto).
33
SECTION 6.04. CONSOLIDATION, MERGER, SALE OR PURCHASE OF
ASSETS, ETC.
Neither the Borrower nor any of its Subsidiaries (in one
transaction or series of transactions) will wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or
consolidation, or sell or otherwise dispose of all or
substantially all or any of the shares of a Guarantor or more
than 30% in value of its assets or agree to do or suffer any of
the foregoing, except:
(a) any Subsidiary of the Borrower may be wound up,
liquidated or dissolved, or all or any part of its property or
assets may be sold to any wholly-owned domestic Subsidiary of the
Borrower or to the Borrower, or merged or consolidated with or
into any wholly-owned domestic Subsidiary of the Borrower or into
the Borrower; or
(b) a merger in which the Borrower or one of its
Subsidiaries is the surviving corporation, provided there has
been no Change of Control and after giving effect to the
transaction there shall have been no Default or Event of Default.
The ability of the Borrower or ACSI to dispose of any of
the Collateral is further restricted by the Mortgages (Section
1.10 of the Deed of Trust and Section 1.16 of the Leasehold
Mortgage respectively).
SECTION 6.05. LIMITATION ON LIENS.
Suffer any Lien on its property, except:
(a) deposits under Worker's Compensation, unemployment
insurance and Social Security laws or to secure statutory
obligations or surety or appeal bonds or performance or other
similar bonds in the ordinary course of business, or statutory
Liens of landlords, carriers, warehousemen, mechanics and
material men and other similar Liens, in respect to liabilities
which are not yet due and payable or which are being contested in
good faith, Liens for taxes not yet due and payable, and Liens
for taxes due and payable, the validity or amount of which is
currently being contested in good faith by appropriate
proceedings (but provided in each case the foreclosure of such
Lien shall not have been commenced unless fully bonded or
otherwise effectively stayed);
(b) easements, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the
ordinary conduct of the business of such Person;
(c) Liens upon real and/or tangible personal property,
which property was acquired after the date of this Agreement (by
purchase, construction or otherwise) by the Borrower or any
Subsidiary, each of which Liens existed on such property before
the time of its acquisition and was not created in anticipation
thereof; provided, however, that no such Lien shall extend to or
cover any property so acquired and improvements thereon;
34
(d) Liens arising out of attachments, judgments or
awards as to which an appeal or other appropriate proceedings for
contest or review are promptly commenced (provided that
foreclosure or other enforcement proceedings shall not have been
commenced unless fully bonded or otherwise effectively stayed);
(e) Liens created under any Loan Document;
(f) Existing Liens listed on Schedule 6.05;
(g) Permitted Liens;
(h) Liens on the assets acquired or leased with the
proceeds of Indebtedness permitted to be incurred pursuant to
Section 6.01 to acquire or to lease tangible assets, provided
that such Lien does not extend to any property or assets other
than the property or assets so acquired; and
(i) Liens securing a refinance of the Bond Indenture
meeting the requirements of Section 6.01(a) above.
SECTION 6.06. EXECUTIVE OFFICES.
Transfer executive offices, change the corporate name or
location of records for Receivables, or keep Inventory or
equipment at locations not presently kept or maintained without
compliance with Section 5.05.
SECTION 6.07. SALE AND LEASEBACK.
Enter into any arrangement with any Person or Persons,
whereby in contemporaneous transactions the Borrower sells
essentially all of its right, title and interest in a material
asset and the Borrower acquires or leases back the right to use
such property.
SECTION 6.08. ERISA COMPLIANCE.
Engage in a "prohibited transaction", as defined in Section
406 of ERISA or Section 4975 of the Code, with respect to any
Plan or Multiemployer Plan or knowingly consent to any other
"party in interest" or any "disqualified person", as such terms
are defined in Section 3(14) of ERISA and Section 4975(e)(2) of
the Code, respectively, engaging in any "prohibited transaction",
with respect to any Plan or Multiemployer Plan maintained by the
Borrower; or permit any Plan maintained by the Borrower to incur
any "accumulated funding deficiency", as defined in Section 302
of ERISA or Section 412 of the Code, unless such incurrence shall
have been waived in advance by the Internal Revenue Service; or
terminate any Plan in a manner which could result in the
imposition of a Lien on any property of the Borrower pursuant to
Section 4068 of ERISA; or breach or knowingly permit any employee
or officer or any trustee or administrator of any Plan maintained
by
35
Borrower to breach any fiduciary responsibility imposed under
Title I of ERISA with respect to any Plan; engage in any
transaction which would result in the incurrence of a liability
under Section 5069 of ERISA; or fail to make contributions to a
Plan or Multiemployer Plan which results in the imposition of a
Lien on any property of the Borrower or any Subsidiary pursuant
to Section 302(f) of ERISA or Section 412(n) of the Code, if the
occurrence of any of the foregoing events would result in a
liability which is materially adverse to the financial condition
of the Borrower and its Subsidiaries taken as a whole or would
materially and adversely affect the ability of the Borrower to
perform its obligations under this Agreement or the Notes.
SECTION 6.09. TRANSACTIONS WITH AFFILIATES.
Directly or indirectly enter into any transaction with an
Affiliate on terms less favorable (including, but not limited to,
price and credit terms) to the Borrower and the Subsidiaries than
would be the case if such transaction had been effected by arms
length with a Person other than an Affiliate:
SECTION 6.10. AMENDMENTS TO EXISTING DOCUMENTS.
Amend, waive or in any manner alter the terms of the Bond
Indenture or the Note Indenture after the Closing Dates, if such
amendment, waiver or alteration would materially adversely affect
the Lender.
SECTION 6.11. HAZARDOUS MATERIALS.
Cause or permit any of its properties or assets to be used
to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce or process Hazardous
Materials, except in compliance in all material respects with all
applicable Environmental Laws, nor release, discharge, dispose of
or permit or suffer any release or disposal as a result of any
intentional act or omission on its part of Hazardous Materials
onto any such property or asset in material violation of any
Environmental Law.
SECTION 6.12. NO FURTHER NEGATIVE PLEDGES.
Except with respect to prohibitions against other
encumbrances on specific property encumbered to secure payment of
particular Indebtedness (which Indebtedness related solely to
such specific property, and improvements and accretions thereto,
and is otherwise permitted hereby), enter into any agreement
(other than this Agreement and the other Loan Documents)
prohibiting the creation or assumption of any Lien upon the
properties or assets of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired or requiring an
obligation to be secured if some other obligation is secured.
36
SECTION 6.13. CAPITAL FUNDS.
Permit Capital Funds at any time during the periods
referenced below to fall below the amounts indicated below for
such period:
closing - 12/30/95 $50,000,000
12/31/95 - 12/30/96 55,000,000
12/31/96 - 12/30/97 60,000,000
12/31/97 - 12/30/98 65,000,000
12/31/98 - 12/30/99 70,000,000
12/31/99 and thereafter 75,000,000
SECTION 6.14. LEVERAGE RATIO.
Permit the Leverage Ratio at the end of any fiscal quarter of the
Borrower to exceed 1.70:1.
SECTION 6.15. DEBT SERVICE COVERAGE RATIO.
Permit the Debt Service Coverage Ratio as of the last day of any
fiscal quarter of the Borrower measured as to the period
consisting of such fiscal quarter combined with the three
previous fiscal quarters to be less than the amount indicated
below for the applicable fiscal quarters indicated below:
4th Qtr. 1994 - 3d Qtr. 0000 0.00x
4th Qtr. 1995 - 3d Qtr. 0000 0.00x
4th Qtr. 1996 - 3d Qtr. 0000 0.00x
4th Qtr. 1998 and thereafter 1.50x.
SECTION 6.16. ACCOUNTING PRACTICES.
Modify or change financial accounting treatments or
financial reporting practices except as otherwise required by
changes in GAAP or alter its fiscal year end.
SECTION 6.17. LIMITATION ON RESTRICTIONS ON SUBSIDIARY
DIVIDENDS AND OTHER DISTRIBUTIONS, ETC.
Except to the extent otherwise provided in this Agreement,
and except as required by a Gaming Control Act or directives of
Gaming Authorities as a condition to the renewal of a Gaming
Permit concerning the Atlantic City Showboat or the Las Vegas
Showboat, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the
ability of any of the Subsidiaries of the Borrower to (i) pay
dividends or make any other distributions on its capital stock or
any other interest or participation in its profits owned by the
Borrower or any of its Subsidiaries, or pay any Indebtedness owed
to the Borrower or any of its Subsidiaries, (ii) make loans or
advances to the Borrower or
37
any of its Subsidiaries or (iii) subject to customary provisions
in contracts or other agreements entered into in the ordinary
course of business, transfer any of its properties or assets to
the Borrower or any of its Subsidiaries.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of
any of the following events (herein called "Events of Default"):
(a) any material representation or warranty made by
any Obligor in this Agreement or any other Loan Document or any
statement or representation made in any report, financial
statement, certificate or other document furnished by or on
behalf of the Borrower or any Subsidiary to the Lender under this
Agreement, shall prove to have been false or misleading in any
material respect when made or delivered;
(b) default shall be made in the payment of any
principal of or interest on the Note or of any fees or other
amounts payable by the Borrower hereunder, when and as the same
shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof
or otherwise, and, in the case of payments of interest, such
default shall continue unremedied for five Business Days, and in
the case of payments other than of any principal amount of, or
interest on, the Note, such default shall continue remedied for
five Business Days after receipt by the Borrower of an invoice
therefor;
(c) default shall be made by the Borrower or its
Subsidiaries in the due observance or performance of any
covenant, condition or agreement contained in Section 5.01 (with
respect to notice of Default or Events of Default) or Article 6
of this Agreement;
(d) default shall be made by the Borrower or any
Subsidiary in the due observance or performance of any other
covenant, condition or agreement to be observed or performed
pursuant to the terms of this Agreement, the Mortgages or any
other Loan Document and such default shall continue unremedied
for 30 days, in each case after the Borrower receives written
notice from the Lender;
(e) default in payment shall be made with respect to
any Indebtedness of the Borrower or any Subsidiary in an amount
or amounts over $250,000.00 in the aggregate, or in any amount if
an Obligation to the Lender, or default with respect to the
performance of any other obligation incurred in connection with
any such Indebtedness, if the effect of such default is, or with
the giving of notice or passage of time or both would be, to
accelerate the maturity of such Indebtedness or to permit the
holder thereof (after giving effect to any applicable grace
periods) to cause such Indebtedness to become due prior to its
stated maturity or any such Indebtedness shall not be paid when
due, whether at the due date thereof or at acceleration thereof
or otherwise;
38
(f) the Borrower or any Subsidiary shall generally not
pay its debts as they become due or shall admit in writing its
inability to pay its debts, or shall make a general assignment
for the benefit of creditors; or any Obligor shall commence any
case, proceeding or other action seeking to have an order for
relief entered on its behalf as debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a
receiver, trustee, custodian or other similar official for it or
for all or any substantial part of its property or shall file an
answer or other pleading in any such case, proceeding or other
action admitting the material allegations of any petition,
complaint or similar pleading filed against it or consenting to
the relief sought therein; any Obligor shall take any action to
authorize any of the foregoing;
(g) any involuntary case, proceeding or other action
against the Borrower or any Subsidiary shall be commenced seeking
to have an order for relief entered against it as debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under the law relating to banking, appointment
of a receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its property, and such
case, proceeding or other action (i) results in the entry of any
order for relief against it or (ii) shall remain undismissed for
a period of sixty (60) days;
(h) final judgment(s) for the payment of money in
excess of $250,000 shall be rendered against an Obligor which
within thirty (30) days from the entry of such judgment shall not
have been discharged or stayed pending appeal or which shall not
have been discharged within thirty (30) days from the entry of a
final order of affirmance on appeal;
(i) a Reportable Event relating to a failure to meet
minimum funding standards or an inability to pay benefits when
due shall have occurred with respect to any Plan under the
control of an Obligor and shall not have been remedied within 45
days after the occurrence of such Reportable Event, and (i) the
Lender shall have notified the Borrower that the Lender made a
good faith determination that, on the basis of such "Reportable
Event", there are reasonable grounds to believe that such
Reportable Event will result in a liability which is materially
adverse to the Borrower and its Subsidiaries taken as a whole,
(ii) a trustee shall be appointed by a United States District
Court to administer such Plan or (iii) the PBGC shall institute
proceedings to terminate such Plan;
(j) any Person shall have (or an Obligor shall assert
that any Person has) a right in the Collateral prior or equal to
that of the Lender or the Mortgages shall cease to be in full
force and effect or shall no longer grant to the Lender a first
mortgage Lien in the property interests subject thereto, in each
case, only to Permitted Liens in effect on the date hereof;
39
(k) There has occurred any revocation, suspension or
loss of any Gaming Permit required to operate the Las Vegas
Showboat or the Atlantic City Showboat (other than any
revocation, suspension or loss resulting from an Event of Loss)
which results in the cessation of business at either the Las
Vegas Showboat or the Atlantic City Showboat for a period of more
than 90 consecutive days; then, in every such event and at any
time thereafter during the continuance of such event, the Lender
may take either or both of the following actions, at the same or
different times: terminate forthwith the Revolving Loan Facility
and/or declare the principal of and the interest on the Loan and
the Note and all other amounts payable hereunder or thereunder to
be forthwith due and payable, whereupon the same shall become and
be forthwith due and payable, without presentment, demand,
protest, notice of acceleration, notice of intent to accelerate
or other notice of any kind, all of which are hereby expressly
waived, anything in this Agreement or in the Note to the contrary
notwithstanding. If an Event of Default specified in paragraphs
(f) or (g) above shall have occurred, the principal of and
interest on the Loan and the Note and all other amounts payable
hereunder or thereunder shall thereupon and concurrently become
due and payable without presentment, demand, protest, notice of
acceleration, notice of intent to accelerate or other notice of
any kind, all of which are hereby expressly waived, anything in
this Agreement or the Note to the contrary notwithstanding and
the Revolving Loan Facility of the Lender shall thereupon
forthwith terminate;
(l) Entry of a final order or judgment of a court of
competent jurisdiction, which judgment has not been stayed on
appeal, directing the Borrower to convey to the Atlantic City
Housing Authority its title to real property owned by it and
constituting part of the Atlantic City Showboat known as Block
13, Lot 144.03, on the tax map of the City of Atlantic City.
8. GUARANTY
SECTION 8.01. AGREEMENT OF GUARANTY.
(a) Each Guarantor unconditionally and irrevocably
guarantees the due and punctual payment by, and performance of,
the Obligations (including interest accruing on and after the
filing of any petition in bankruptcy or of reorganization of the
obligor whether or not post filing interest is allowed in such
proceeding). Each Guarantor further agrees that the Obligations
may be extended or renewed, in whole or in part, without notice
or further assent from it (except as may be otherwise required
herein), and it will remain bound upon this guaranty
notwithstanding any extension or renewal of any Obligation.
(b) To the extent permitted by Applicable Law, each
Guarantor waives presentation to, demand for payment from and
protest to, as the case may be, the Borrower or any other
guarantor, and also waives notice of protest for nonpayment. The
obligations of each Guarantor hereunder shall not be affected by
(i) the failure of the Lender to assert any claim or demand or to
enforce any right or remedy against the Borrower or any other
guarantor under the provisions of this Agreement or any other
agreement or otherwise; (ii) any extension or renewal of any
provision hereof or thereof; (iii) the failure of the Lender to
obtain the consent of the Guarantors with respect to any
rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of this Agreement,
the Note or of any other agreement; (iv) the release, exchange,
waiver or
40
foreclosure of any security held by the Lender for the
Obligations or any of them; (v) the failure of the Lender to
exercise any right or remedy against any other guarantor of the
Obligations; or (vi) the release or substitution of any
guarantor.
(c) Each Guarantor further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and
not just of collection, and, to the extent permitted by
Applicable Law, waives any right to require that any resort be
had by the Lender to any security held for payment of the
Obligations or to any balance of any deposit, account or credit
or the books of the Lender in favor of the Borrower, any other
guarantor or to any other Person.
(d) Each Guarantor hereby expressly assumes all
responsibilities to remain informed of the financial condition of
the Borrower and any circumstances affecting the ability of the
Borrower to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by
the genuineness, validity, regularity or enforceability of the
Obligations, the Note or any other instrument evidencing any
Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor or by any other
circumstance relating to the Obligations which might otherwise
constitute a defense to this Guaranty. The Lender makes no
representation or warranty in respect to any such circumstances
and has no duty or responsibility whatsoever to the Guarantors in
respect to the management and maintenance of the Obligations or
any collateral security for the Obligations.
(f) The Guarantors consent to the provisions of the
paragraph of the Note entitled "Security Interest."
SECTION 8.02. NO IMPAIRMENT OF GUARANTY.
The obligations of the Guarantors hereunder shall not be
subject to any reduction, limitation, impairment or termination
for any reason including, without limitation, any claim of
waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations
of the Guarantors hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Lender to assert any
claim or demand or to enforce any remedy under this Agreement or
any other agreement, by any waiver or modification of any
provision thereof, by any default, failure or modification of any
provision thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other
act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk
of the Guarantors or would otherwise operate as a discharge of
the Guarantors as a matter of law, unless and until the
Obligations are paid in full.
41
SECTION 8.03. CONTINUATION AND REINSTATEMENT, ETC.
(a) Each Guarantor further agrees that its guaranty
hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must
otherwise be restored by the Lender upon the bankruptcy or
reorganization of the Borrower or the Guarantors, or otherwise.
In furtherance of the provisions of this Article 8 and not in
limitation of any other right which the Lender may have at law or
in equity against the Borrower or any Guarantor by virtue hereof,
upon failure of the Borrower to pay any Obligation when and as
the same shall become due, whether at maturity, by acceleration,
after notice or otherwise, each Guarantor hereby promises to and
will, upon receipt of written demand by the Lender, forthwith pay
or cause to be paid to the Lender in cash an amount equal to the
unpaid amount of all the Obligations with interest thereon at a
rate of interest equal to the rate specified in the Notes, and
thereupon the Lender shall assign such Obligation, together with
all security interests, if any, then held by the Lender in
respect of such Obligation, to the Guarantors making such
payments.
(b) Upon the payment in full of all principal of and
interest on the Notes and any other amounts payable by the
Borrower under the Loan Documents, the Guarantors shall be
subrogated to the rights of the holders of the Notes in respect
of any payment or other obligation with respect to which an
amount has been payable by the Guarantors hereunder. The
Guarantors shall not seek to exercise any rights of subrogation,
reimbursement or indemnity arising from payments made by the
Guarantors pursuant to the provisions of this Agreement until the
full and complete payment or performance and discharge of the
Obligations.
SECTION 8.04. LIMITATION ON GUARANTEED AMOUNT.
Notwithstanding any other provision of this Article 8, the
amount guaranteed by the Guarantors hereunder shall be limited to
the extent, if any, required so that its obligations under this
Article 8 shall not be subject to avoidance under Section 548 of
the Bankruptcy Code or to being set aside or annulled under any
applicable state law relating to fraud on creditors. In
determining the limitations, if any, on the amount of any
Guarantor's obligations hereunder pursuant to the preceding
sentence, any rights of subrogation or contribution which such
Guarantor may have under this Article 8 or applicable law shall
be taken into account.
9. MISCELLANEOUS
SECTION 9.01. NOTICES.
Notices and other communications provided for herein shall
be in writing and shall be delivered or mailed (or in the case of
telegraphic communication, if by telex, facsimile telecopy or
other telegraphic communications equipment of the sending party
hereto,
42
delivered by such equipment) addressed, if to the Lender to it at
0000 Xxxxxxxx Xxxxxx, Mezzanine Level, Atlantic City, New Jersey
08401, Attn: Xxxx X. Xxxxxxxx, Vice President, or Showboat, Inc.
Account Officer, or if to the Borrower or a Guarantor, to it at
its address set forth on the signature page or such other address
as such party may from time to time designate by giving written
notice to the other parties hereunder. All notices and other
communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given
on the fifth Business Day after the date when sent by registered
or certified mail, postage prepaid, return receipt requested, if
by mail, or when delivered to the telegraph company, charges
prepaid, if by telegram, or when receipt is acknowledged, if by
any telecopy communications equipment of the sender, in each case
addressed to such party as provided in this Section 9.01 or in
accordance with the latest unrevoked written direction from such
party.
SECTION 9.02. SURVIVAL OF AGREEMENT, REPRESENTATIONS AND
WARRANTIES, ETC.
All warranties, representations and covenants made by the
Borrower herein or in any certificate or other instrument
delivered by it or on its behalf in connection with this
Agreement shall be considered to have been relied upon by the
Lender and issuance and delivery to the Lender of the Notes
regardless of any investigation made by the Lender or on its
behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid
and so long as the Revolving Loan Facility has not been
terminated. All statements in any such certificate or other
instrument shall constitute representations and warranties by the
Borrower hereunder.
SECTION 9.03. SUCCESSORS AND ASSIGNS; SYNDICATIONS; LOAN
SALES; PARTICIPATIONS.
(a) Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party (provided, however, that
the Borrower may not assign its rights hereunder without the
prior written consent of the Lender), and all covenants, promises
and agreements by or on behalf of the Borrower which are
contained in this Agreement shall inure to the benefit of the
successors and assigns of the Lender.
(b) The Lender may without the consent of the Borrower
sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
commitment, to advance funds hereunder and the Loans owing to it
and the Note or Notes held by it); provided, however, that any
such Lender's obligations under this Agreement shall remain
unchanged.
(c) The Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 9.03, disclose to the assignee or participant any
other financial information concerning Obligors furnished to the
Lender.
43
(d) The Borrower consents that the Lender may at any
time and from time to time pledge or otherwise grant a security
interest in any Loan or any Note evidencing such Loan (or any
part thereof) to any Federal Reserve Bank.
SECTION 9.04. EXPENSES; DOCUMENTARY TAXES.
The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Lender in connection with the
preparation, execution, delivery and administration of this
Agreement (including the cost of field examination fees), the
Note and the making of the Loan, as well as all reasonable out-of-
pocket expenses incurred by the Lender in the enforcement or
protection of the rights of the Lender in connection with this
Agreement or the Note, and with respect to any action which may
be instituted by any Person against the Lender in respect of the
foregoing, or as a result of any transaction, action or nonaction
arising from the foregoing, including but not limited to the fees
and disbursements of any counsel for the Lenders. Such payments
shall be made on demand. The Borrower agrees that it shall
indemnify the Lender and hold it harmless against any documentary
taxes, assessments or charges made by an Governmental Authority
by reason of the execution and delivery of this Agreement or the
Note. The obligations of the Borrower under this Section shall
survive the termination of this Agreement and/or the payment of
the Loan.
SECTION 9.05. INDEMNITY.
Further, by the execution hereof, the Borrower agrees to
indemnify and hold harmless the Lender and its directors,
officers, employees and agents (each an "Indemnified Party") from
and against any and all expenses, losses, claims, damages and
liabilities arising out of any claim, litigation, investigation
or proceeding in any way relating to the transactions
contemplated hereby, but excluding therefrom all expenses,
losses, claims, damages, and liabilities arising out of or
resulting from the gross negligence or willful misconduct of any
Indemnified Party. If any proceeding, including any governmental
investigation, shall be instituted involving any Indemnified
Party, in respect of which indemnity may be sought against the
Borrower, such Indemnified Party shall promptly notify the
Borrower in writing, and the Borrower shall assume the defense
thereof on behalf of such Indemnified Party including the
employment of counsel (reasonably satisfactory to such
Indemnified Party) and payment of all reasonable expenses. Any
Indemnified Party shall have the right to employ separate counsel
in any such proceeding and participate in the defense thereof,
but the fees and expenses of such separate counsel shall be at
the expense of such Indemnified Party unless (i) the employment
of such separate counsel has been specifically authorized by the
Borrower or (ii) the named parties to any such action (including
any impleaded parties) include such Indemnified Party and the
Borrower and such Indemnified Party shall have been advised by
its counsel that there may be one or more legal defenses
available to such Indemnified Party which are different from or
additional to those available to the Borrower (in which case the
Borrower shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, it being understood,
however, that the Borrower shall not, in connection with any one
such action
44
or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees
or expenses of more than one separate firm of attorneys for all
such Indemnified Parties). The Borrower shall not be liable for
any settlement of any such proceeding effected without the
written consent of the Borrower, but if settled with the written
consent of the Borrower or if there is a final judgment for the
plaintiff in any such action, the Borrower agrees to indemnify
and hold harmless any Indemnified Party from and against any loss
or liability by reason of such settlement or judgment. At any
time after the Borrower has assumed the defense of any proceeding
involving any Indemnified Party in respect of which indemnity has
been sought against the Borrower, such Indemnified Party may
elect, by written notice to the Borrower, to withdraw its request
for indemnity and thereafter the defense of such proceeding shall
be maintained by counsel of the Indemnified Party's choosing and
at the Indemnified Party's expense. The obligations of the
Borrower under this Section 9.05 shall survive the termination of
this Agreement and/or payment of the Loans.
SECTION 9.06. CHOICE OF LAW.
THIS AGREEMENT AND THE NOTES HAVE BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW JERSEY AND SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH
STATE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS RELATING TO
INTEREST RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
SECTION 9.07. NO WAIVER.
No failure on the part of the Lender to exercise, and not
delay in exercising, any right, power or remedy hereunder or
under the Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided
by law.
SECTION 9.08. EXTENSION OF MATURITY.
Should any payment of principal of or interest on the Note
or any other amount due hereunder become due and payable on a day
other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day and, in the case of
principal, interest shall be payable thereon at the rate herein
specified in the Notes during such extension.
45
SECTION 9.09. AMENDMENTS, ETC.
No modification, amendment or waiver of any provision of
this Agreement, and no consent to any departure by the Borrower
herefrom, shall in any event be effective unless the same shall
be in writing and signed by the Lender, and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given.
SECTION 9.10. SEVERABILITY.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.11. SERVICE OF PROCESS.
EACH OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE STATE COURTS OF THE STATE OF NEW JERSEY AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
OF NEW JERSEY, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF BROUGHT BY THE LENDER. EACH OBLIGOR TO THE
EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES
NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY
CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE
FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,
AND (B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION,
SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT
COUNTERCLAIMS THAT ARE COMPULSORY. EACH OBLIGOR HEREBY CONSENTS
TO SERVICE OF PROCESS BY MAIL AT ITS ADDRESS AS SET FORTH ON THE
SIGNATURE PAGE HEREOF. EACH OBLIGOR AGREES THAT THIS SUBMISSION
TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE
FOR THE EXPRESS BENEFIT OF THE LENDER. FINAL JUDGMENT AGAINST A
BORROWER IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (A) BY
SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE
COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE
AMOUNT OF
46
INDEBTEDNESS OR LIABILITY OF THE OBLIGOR THEREIN DESCRIBED
OR (B) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO
THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT THE
LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL
PROCEEDINGS AGAINST AN OBLIGOR OR ANY OF ITS ASSETS IN ANY XXXXX
XX XXXXXXX XXXXX XX XXX XXXXXX XXXXXX OR OF ANY COUNTRY OR PLACE
WHERE AN OBLIGOR OR SUCH ASSETS MAY BE FOUND.
SECTION 9.12. HEADINGS.
Section headings used herein are for convenience only and
are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 9.13. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all
of which taken together shall constitute one and the same
instrument.
SECTION 9.14. ENTIRE AGREEMENT.
This Agreement, together with the Loan Documents hereof,
constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first
written.
BORROWER:
SHOWBOAT, INC.
By: /s/ R. Xxxxx Xxxx
Name: R. Xxxxx Xxxx
Title: Executive Vice President of
Finance and Administration
Address: 0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
GUARANTORS:
SHOWBOAT OPERATING COMPANY
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Treasurer
Address: 0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
OCEAN SHOWBOAT, INC.
By: /s/ R. Xxxxx Xxxx
Name: R. Xxxxx Xxxx
Title: Vice President of Finance
and Administration
Address: 000 Xxxxxxxxx
Xxxxxxxx City, N.J. 08401
ATLANTIC CITY SHOWBOAT, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President/CEO
Address: 801 Boardwalk
Atlantic City, N.J. 08401
LENDER:
NATWEST BANK, N.A.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxxx Xxxxxx
Mezzanine Level
Atlantic City, N.J. 08401
REVOLVING NOTE
$25,000,000.00 July 14, 1995
FOR VALUE RECEIVED, the undersigned (hereinafter referred to
as "BORROWER") promises to pay to the order of NATWEST BANK, N.A.
(hereinafter "LENDER"), at any of its banking offices the
principal sum of Twenty-five Million Dollars ($25,000,000.00), or
so much thereof as may be advanced pursuant to the terms of the
Revolving Loan Facility established under that certain Loan and
Guaranty Agreement between the Borrower, the Lender and the
Guarantors named therein (the "Loan Agreement"), together with
interest thereon, to be payable commencing on the first day of
August, 1995, and continuing on the first day of each month
thereafter. As to each Borrowing under the Revolving Loan
Facility, interest from the date thereof shall accrue on the
unpaid principal balance thereof as follows at the Borrower's
option at either (i) the Prime Rate (as hereinafter defined) plus
one-half of one percent (.5%) (the "Floating Rate" or "Floating
Rate Option"); or (ii) the LIBOR Based Rate (the "LIBOR Rate
Option"). Lender's PRIME RATE of interest shall mean that rate
of interest so designated and established by the Lender from time
to time as its reference rate in making loans but which is not
necessarily the lowest rate of interest charged by the Lender.
The LIBOR Based Rate shall mean a rate per annum equal to Two
Hundred Fifty Basis Points (2.5%) plus the Adjusted LIBOR Rate
with respect to the applicable LIBOR Interest Period. Each
determination of a LIBOR Based Rate shall be made by the Lender
and shall be conclusive and binding upon the Borrower absent
manifest error. The term "Adjusted LIBOR Rate" shall mean a rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the product arrived at by multiplying the Base LIBOR
Rate with respect to the applicable LIBOR Interest Period by a
fraction (expressed as a decimal), the numerator of which shall
be the number one and the denominator of which shall be the
number one minus the aggregate reserve percentages (expressed as
a decimal) from time to time established by the Board of
Governors of the Federal Reserve System of the United States and
other banking authority to which the Lender is now or hereafter
subject, including, but not limited to, at the ratios provided in
such Regulation, from time to time, it being agreed that any
portion of the Principal bearing interest at a LIBOR Based Rate
shall be deemed to constitute Eurocurrency Liabilities, as
defined by such Regulation, and it being further agreed that such
Eurocurrency Liabilities shall be deemed subject to such reserve
requirements without benefit of or credit for prorations,
exceptions or offsets that may be available to the Lender from
time to time under such Regulation and irrespective of whether
the Lender actually maintains all or any portion of such reserve.
The "Base LIBOR Rate" applicable to a particular LIBOR Interest
Period shall mean a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the rate at which
dollars approximately equal in amount to the Principal of the
applicable Borrowing and for a maturity equal to the applicable
LIBOR Interest Period are offered in immediately available funds
by the National Westminster Bank to leading banks in the London
Interbank Market for Eurodollars at approximately 11:00 a.m.,
London time, three (3) Business Days prior to the commencement of
such LIBOR Interest Period. The term "LIBOR Interest Period"
shall mean the period of time defined in the Loan Agreement
during which a particular LIBOR Rate will be applicable to any
Principal balance in accordance with the provisions of this Note.
No LIBOR Interest Period shall extend beyond the Conversion Date.
The Principal balance with respect to which a particular LIBOR
Interest Period is applicable will bear interest at the LIBOR
Based Rate pertaining to such LIBOR Interest Period from and
including the first day of such LIBOR Interest Period to, but not
including, the last day of such LIBOR Interest Period. Subject
to the paragraph immediately below, the Borrower may elect the
LIBOR Based Rate only upon written notice to Lender no later than
three (3) Business Days prior to the day upon which such
Borrowing is requested. If such notice is not received by the
Lender by or on such date, the Floating Rate Option shall be
deemed to have been elected.
Principal of any LIBOR Rate Borrowing shall be due on the last
day of the applicable Interest Period. If not repaid, such
principal shall be deemed to have been converted to a Floating
Rate Borrowing as of such date, unless three (3) Business Days
prior to the last day of such Interest Period the Borrower shall
have given notice of a LIBOR Rate Borrowing with respect to such
principal amounts intended to be reborrowed as a LIBOR Rate
Borrowing. The entire sum of principal, interest, costs and
other sums due hereunder shall be due and payable in full on July
14, 1997 (the "Conversion Date") unless the principal sum hereof
is converted to a term loan pursuant to the provisions of Section
2.02 of the Loan Agreement.
Capitalization terms used herein which are not otherwise defined
shall have the meaning set forth in the Loan Agreement.
LIMITATION ON RATE OPTIONS - Anything herein to the contrary
notwithstanding, if, on or prior to the determination of a LIBOR
Rate for any Interest Period, the Lender determines in good faith
(which determination shall be conclusive) that: (1) By reason
of any event affecting the money markets in the United States or
the applicable interbank Eurodollar market, quotations of
interest rates for the relevant deposits are not being provided
in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for this Loan; or
(2) The rates of interest referred to in this Agreement do not
accurately reflect the cost to the Lender of making or
maintaining such Loans for such period, then the Lender shall
give the Borrower notice thereof (and shall thereafter give the
Borrower prompt notice of the cessation, if any, of such
condition), and so long as such condition remains in effect, the
Lender
shall be under no obligation to make the LIBOR Rate Option
available and the Borrower shall, on the last day of the then
current Interest Period, either prepay, without premium or
penalty, this Note or select the Floating Rate Option.
PREPAYMENTS (i) The Borrower shall have the right at any time
and from time to time to prepay any Floating Rate Borrowing, in
whole or in part, without premium or penalty. All prepayments
shall be accompanied by accrued interest to the date of
prepayment, and shall be applied in inverse order of maturity.
(ii) In the case of a LIBOR Rate loan, full or
partial prepayments in multiples of $100,000.00 shall be
permitted during a LIBOR Interest Period provided the Borrower
gives Lender not less than five (5) business days prior written
notice and such prepayment shall be applied in inverse order of
maturity and shall be accompanied by payment of accrued interest
to and including the date of prepayment together with Lender's
standard LIBOR Rate indemnification fee, which indemnifies the
Lender against any and all loss and reasonable expenses which the
Lender may sustain or incur as a consequence of the receipt or
recovery by the Lender of any Libor Rate borrowing pursuant to
this Note and the Loan and Guaranty Agreement, whether by
prepayment, acceleration or otherwise. Without limiting the
effect of the foregoing, the amount to be paid by the Borrower to
the Lender in order to so indemnify the Lender for any loss
occasioned by any of the events described above, and as
liquidated damages therefor, shall be equal to the excess,
discounted to its present value as of the date so received or
recovered, of (i) the amount of interest which otherwise would
have accrued on the principal balance so received or recovered at
the Libor Based Rate during the period (the "Indemnity Period")
commencing with the date of such receipt or recovery (the
"Commencement Date") to the Rollover Date over (ii) the amount of
interest which would be earned by the Lender during the Indemnity
Period if it invested, on the Commencement Date, the principal
amount so received or recovered at the rate per annum determined
by the Lender as the rate it would bid in the London Interbank
Market for a deposit of Eurodollars in an amount approximately
equal to such principal amount (or part thereof) for a period of
time comparable to the Indemnity Period. The term "Rollover
Date" applicable to a particular LIBOR Interest Period shall mean
the last day of such LIBOR Interest Period. In the event a
prepayment is made by virtue of a sale or further encumbering of
any security for this Note, or application of insurance proceeds
or condemnation award, or is voluntarily made after an Event of
Default has occurred, the applicable prepayment premium as set
forth under this paragraph will be due and payable on demand.
SECURITY INTEREST - As security for the prompt payment as and
when due of all amounts due under this Note, and the Loan
Documents including any renewals, extensions and/or modifications
hereof (hereinafter collectively referred to as the
"LIABILITIES"), in addition to any other security agreement or
document granting Lender any rights in any of Obligor's
("OBLIGOR", as used herein, shall include Borrower and all
endorsers, sureties and guarantors) property for the purpose of
securing the Liabilities, Obligor hereby grants to Lender,
subject to the terms of Intercreditor agreements between Lender,
Borrower, Guarantor and IBJ Xxxxxxxx Bank & Trust Company of even
date herewith (collectively the "Intercreditor Agreement"), a
lien and security interest in and to all property of Obligor, or
any of them, which at any time Lender shall have in its
possession, or which is in transit to it, including without
limitation any balance or share belonging to Obligor or Lender,
and any other amounts which may be owing from time to time by
Lender to Obligor, or any of them. Said lien and security
interest shall be independent of any right of set-off which
Lender may have. Such right of set-off shall be deemed to occur
at the time Lender first restricts access of Obligor to property
in Lender's possession, although such set-off may be entered upon
Lender's books and records at a later time.
EVENTS OF DEFAULT - An "Event of Default" hereunder shall have
the meaning set forth in the Loan Agreement.
LENDER'S RIGHTS UPON DEFAULT - Upon the occurrence of any Event
of Default (subject to any applicable grace and cure period
therefor), Lender may:
(1) accelerate the maturity of this Note and demand immediate
payment of all outstanding principal and accrued interest.
(2) exercise its right of set-off and all of the rights,
privileges and remedies of a secured party under the Uniform
Commercial Code and all of its rights and remedies under any
security agreement, pledge agreement, mortgage, power, this Note
or any other note, or other agreement, instrument or document
issued in connection with or arising out of any of the
Liabilities, all of which remedies shall be cumulative and not
alternative. The net proceeds of any collateral held by Lender
as security for any of the Liabilities shall be applied first to
the expenses of Lender in preparing the collateral for sale,
selling and the like, including, without limitation, reasonable
attorneys' fees and expenses incurred by Lender (including fees
and expenses of any litigation incident to any of the foregoing),
and second, in such order as Lender may elect, in its sole
discretion, to the complete satisfaction of all of the
Liabilities together with all interest thereon. To the extent
permitted by applicable law, Obligor waives and releases any
right to require Lender to collect any of the Liabilities to
Lender from any other collateral under any theory of marshalling
of assets or otherwise, and specifically authorizes Lender to
apply any collateral proceeds in which Obligor has any right,
title or interest against any of Obligor's Liabilities to Lender
in any manner that Lender may determine.
(3) make a late charge of five percent (5%) of any amount due
and unpaid for a period of fifteen (15) days or more.
(4) Upon five (5) Business Day's written notice to Borrower,
begin accruing interest, in addition to any interest provided for
above, at a rate not to exceed five percent (5%) per annum on the
unpaid principal balance; provided, however, that no interest
shall accrue hereunder in excess of the maximum amount of
interest then allowed by law. Borrower agrees to pay such
accrued interest upon demand. The default rate set forth herein
is strictly a measure of liquidated damages to Lender based upon
Lender's excess costs involved in the redeployment of funds and
is not meant to be construed as a penalty.
MISCELLANEOUS - Borrower hereby waives protest, notice of
protest, presentment, dishonor, notice of dishonor, demand, and
notice of demand. If this Note is placed in the hands of an
attorney for collection, Borrower shall reimburse Lender for any
and all of its reasonable attorneys' fees whether or not suit be
brought, together with all actual costs and expenses of any legal
proceedings. Interest shall be calculated hereunder for the
actual number of days that the principal is outstanding, based on
a year of three hundred sixty (360) days, unless otherwise
specified. As to Floating Rate Borrowings changes in the rate of
interest hereon shall become effective on the days on which
Lender announces changes in its Prime Rate. THIS NOTE HAS BEEN
DELIVERED TO AND ACCEPTED BY LENDER IN AND SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW JERSEY. THE PARTIES AGREE TO THE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN NEW
JERSEY IN CONNECTION WITH ANY MATTER ARISING HEREUNDER, INCLUDING
THE COLLECTION AND ENFORCEMENT HEREOF. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, AND LENDER, BY ITS ACCEPTANCE OF THIS
NOTE AND THE MORTGAGE SECURING THE LOAN, IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF
OR OTHERWISE RELATING TO THIS NOTE, THE MORTGAGE, THE LOAN
AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT NOW OR HEREAFTER
EXECUTED AND DELIVERED IN CONNECTION THEREWITH OR THE LOAN.
REGULATORY CHANGES; ADDITIONAL FEES - If any regulatory change or
existing law or regulation shall either (i) impose, modify or
deem applicable, or result in the application of, any reserve,
special deposit, capital maintenance, capital ratio or similar
requirement against fixed rate loans or loan commitments made by
the Lender or against any other extensions of credit or
commitments to extend credit or other assets of or any deposits
or other liabilities taken or entered into by Lender or (ii)
impose on Lender any other condition regarding the Loan or the
Prime Rate, and the result of any event referred to in clause (i)
or (ii) above shall be to increase the cost to Lender of making
or maintaining, or to impose upon Lender or increase any capital
requirement applicable as a result of the making or maintenance
of this Loan or the obligation of the Borrower hereunder or to
reduce the amounts receivable by the Lender hereunder (which
increase in cost or increase in (or imposition of) capital
requirements or reduction in amounts receivable may be determined
by Lender's reasonable allocation of the aggregate of such cost
increases, capital increases or impositions or reductions in
amounts receivable resulting from such events) then, upon written
demand by the Lender, the Borrower shall pay to the Lender not
later than five (5) business days following the date of such
written demand from time to time as specified by the Lender, such
amounts or additional fees which shall be sufficient to
compensate Lender for such increased cost or increase in (or
imposition of) capital requirements or reduction in amounts
receivable by the Lender, together with interest on each such
amount from the date demanded until payment in full thereof at
the Prime Rate provided in this Note. Upon the occurrence of any
event referred to in clause (i) or (ii) above, a certificate
setting forth in reasonable detail the increased cost, reduction
in amounts receivable or amounts necessary to compensate the
Lender as a result of an increase in (or imposition of) capital
requirements submitted by the Lender to the Borrower, shall be
conclusive, absent manifest error or bad faith, as to the amount
thereof. For purposes of this Section, in calculating the amount
necessary to compensate the Lender for any increase in or
imposition of capital requirements, the Lender shall be deemed to
be entitled to a rate of return on capital (after federal, state
and local taxes) of fifteen percent (15%) per annum.
Borrower has duly executed this Note the day and year first above
written, and has hereunto set Borrower's hand and seal.
ATTEST: SHOWBOAT, INC.
/s/ H. Xxxxxxx Xxxxx By: /s/ R. Xxxxx Xxxx
[Corporate Seal]
Recording Requested By and
Return Recorded Counterparts to:
Xxxxx X. Xxxxxxxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Young
Woodland Falls Corporate Park
000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
DEED OF TRUST, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
MADE BY
SHOWBOAT, INC. and SHOWBOAT OPERATING COMPANY
Nevada Corporations,
as Trustor,
to
NEVADA TITLE COMPANY
a Nevada corporation
as Trustee,
for the benefit of
NATWEST BANK, N.A.,
a National Banking Association
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL
ESTATE RECORDS AND IS ALSO TO BE INDEXED IN THE INDEX OF
FINANCING STATEMENTS OF XXXXX COUNTY, NEVADA, UNDER THE NAMES OF
SHOWBOAT, INC. AS "DEBTOR" AND NATWEST BANK, N.A. AS SECURED
PARTY.
TABLE OF CONTENTS
ARTICLE ONE
COVENANTS OF TRUSTOR
1.1 Performance of Loan Documents 10
1.2 General Representations, Covenants and Warranties 10
1.3 Compliance with Legal Requirements 10
1.4 Taxes 10
1.5 Insurance 11
1.6 Condemnation 13
1.7 Care of Trust Estate 14
1.8 Environmental Laws 14
1.9 Leases 15
1.10 Further Encumbrance, Sale or Other Disposition of 15
Collateral
1.11 Partial Releases of Trust Estate 16
1.12 Future Advances 17
1.13 Further Assurances 17
1.14 Security Agreement and Financing Statements 17
1.15 Assignment of Rents 19
1.16 Expenses 19
1.17 Beneficiary's Cure of Trustor's Default 19
1.18 Use of Land 20
1.19 Material Space Leases 20
1.20 Compliance with Permitted Lien Agreements 20
1.21 Defense of Actions 20
1.22 Affiliates 20
1.23 Title Insurance 20
ARTICLE TWO
CORPORATE LOAN PROVISIONS
2.1 Interaction with Indenture and Loan Agreement 20
2.2 Other Collateral 21
ARTICLE THREE
DEFAULTS
3.1 Event of Default 21
ARTICLE FOUR
REMEDIES
4.1 Acceleration of Maturity 22
4.2 Protective Advances 22
4.3 Institution of Equity Proceedings 22
4.4 Beneficiary's Power of Enforcement 22
4.5 Beneficiary's Right to Enter and Take Possession,
Operate and Apply Income 23
4.6 Leases 24
4.7 Purchase by Beneficiary 24
4.8 Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws 24
4.9 Receiver 25
4.10 Suits to Protect the Trust Estate 25
4.11 Proofs of Claim 25
i
4.12 Trustor to Pay the First Mortgage Bonds and Promissory 25
Note on Any Default in Payment: Application of Monies
by Beneficiary
4.13 Delay or Omission: No Waiver 25
4.14 No Waiver of One Default to Affect Another 25
4.15 Discontinuance of Proceedings: Position of Parties 26
Restored
4.16 Remedies Cumulative 26
4.17 Interest After Event of Default 26
4.18 Foreclosure: Expenses of Litigation 26
4.19 Deficiency Judgments 27
4.20 Waiver of Jury Trial 27
4.21 Exculpation of Beneficiary 27
ARTICLE FIVE
RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE
5.1 Exercise of Remedies by Trustee 27
5.2 Rights and Privileges of Trustee 27
5.3 Resignation or Replacement of Trustee 28
5.4 Authority of Beneficiary 28
5.5 Effect of Appointment of Successor Trustee 28
5.6 Confirmation of Transfer and Succession 28
5.7 Ratification 28
5.8 Exculpation 28
5.9 Endorsement and Execution of Documents 28
5.10 Multiple Trustees 29
5.11 Terms of Trustee's Acceptance 29
ARTICLE SIX
MISCELLANEOUS PROVISIONS
6.1 Heirs, Successors and Assigns Included in Parties 29
6.2 Notices 29
6.3 Addresses for Notices, Etc. 29
6.3.1Change of Address 30
6.4 Headings 30
6.5 Invalid Provisions to Affect No Others 30
6.6 Changes and Priority Over Intervening Liens 30
6.7 Estoppel Certificates 30
6.8 Governing Law 30
6.9 Required Notices 31
6.10 Reconveyance 31
6.11 Attorneys Fees 31
6.12 Late Charges 31
6.13 Cost of Accounting 31
6.14 Right of Entry 31
6.15 Corrections 31
6.16 Statute of Limitations 31
6.17 Subrogation 32
6.18 Joint and Several Liability 32
6.19 Context 32
6.20 Time 32
6.21 Interpretation 32
6.22 Effect of NRS 57.030 32
6.23 Application of certain Deed of Trust Provisions to 32
Showboat Operating Company
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ARTICLE SEVEN
POWER OF ATTORNEY
7.1 Grant of Power 32
7.2 Possession and Completion 32
7.3 Plans 32
7.4 Employment of Others 32
7.5 Security Guards 32
7.6 Compromise Claims 33
7.7 Legal Proceedings 33
7.8 Other Acts 33
SCHEDULE A LAND DESCRIPTION
SCHEDULE B LIST OF EXISTING ENCUMBRANCES
iii
DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT
Pursuant to Section 1.10 of that certain Deed of Trust,
Assignment of Rents and Security Agreement, dated as of May 18,
1993 made by Showboat, Inc. as Trustor, to Nevada Title Company,
as Trustee for the benefit of IBJ Xxxxxxxx Bank & Trust Company
as Beneficiary, recorded on May 18, 1993 in Book 930513, Document
No. 00390 the lien created by this instrument ranks pari passu
with the lien created by said Deed of Trust.
THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT (hereinafter called Deed of Trust") is made as of July
14, 1995, made by SHOWBOAT, INC., a Nevada corporation, and
SHOWBOAT OPERATING COMPANY, a Nevada Corporation, collectively as
Trustor, whose address is 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx
00000 to NEVADA TITLE COMPANY, a Nevada corporation, whose
address is 0000 Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000-
60677, as Trustee ("Trustee") for the benefit of NATWEST BANK,
N.A., a national banking association ("Beneficiary"), as trustee
under that certain Loan Agreement dated as of even date herewith
among Beneficiary, as trustee, Trustor as borrower and Ocean
Showboat, Inc., a New Jersey corporation, Atlantic City Showboat,
Inc., a New Jersey corporation, and Showboat Operating Company, a
Nevada corporation, as Guarantors.
DEFINITIONS - As used in this Deed of Trust, the
following terms have the meanings hereinafter set forth:
"ACCOUNTS RECEIVABLE", shall have the meaning set forth
in Section 9-106 (NRS 104.9106) of the UCC for the term
"account."
"ACSI" means Atlantic City Showboat, Inc., a New Jersey
corporation.
"ACSI GUARANTY" means that certain Guaranty as set
forth in the Loan Agreement as of the date hereof made by ACSI in
favor of Beneficiary.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person, and,
with respect to any specified natural Person, any other Person
having a relationship by blood, marriage or adoption not more
remote than first cousins with such natural Person. For purposes
of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control
with") as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person,
whether through the ownership of voting securities or by
agreement or otherwise; provided, however, that beneficial
ownership of 10% or more of the voting securities of a Person
shall be deemed control.
"APPURTENANT RIGHTS" means all and single tenements,
hereditaments, rights, reversions, remainders, development
rights, privileges, benefits, easements (in gross or
appurtenant), rights-of-way, gores or strips of land, streets,
ways, alleys, passages, sewer rights, water courses, water rights
and powers, and all appurtenances whatsoever and claims or
demands of Trustor at law or in equity in any way belonging,
benefitting, relating or appertaining to the Land, the airspace
over the Land, the Improvements or any of the Trust Estate
encumbered by this Deed of Trust, or which hereinafter shall in
any way belong, relate or be appurtenant thereto, whether now
owned or hereafter acquired by Trustor.
"ATLANTIC CITY SHOWBOAT" means the Showboat Casino
Hotel in Atlantic City, New Jersey.
"BANKRUPTCY" means, with respect to any Person, that
such Person is or becomes bankrupt or insolvent or: (a) is the
subject of any order for relief under any Bankruptcy Law; (b)
commences a voluntary proceeding under any Bankruptcy Law; (c)
consents to the entry of an order for relief in an involuntary
proceeding under any Bankruptcy Law; (d) consents to the
appointment of, or taking possession by any Receiver; (e) makes
any assignment for the benefit of creditors; (f) is unable or
fails, or admits in writing its inability, to pay its debts as
such debts become due; (g) is the subject of any involuntary
proceeding under any Bankruptcy Law or involuntary appointment of
a Receiver, and such involuntary proceeding or appointment is not
dismissed and terminated within 90 days; (h) is the subject of
any other proceeding or relief similar to any of the foregoing
under any law; (i) is the subject of a warrant of attachment,
execution, or similar process with respect to such Person or any
substantial part of such Person's property, which warrant or
similar process remains in effect for sixty days without having
been bonded or discharged; or (j) otherwise ceases to do business
as a going concern.
1
"BANKRUPTCY CODE" means the United States Bankruptcy
Code, 11 U.S.C. 101 et seq.
"BANKRUPTCY LAW" means the Bankruptcy Code, and any
other state or federal insolvency, reorganization, moratorium or
similar law for the relief of debtors.
"BENEFICIARY" means NATWEST BANK, N.A., a national
banking association, as lender under the Loan Agreement.
"BONDHOLDERS" means the holders of the First Mortgage
Bonds.
"BUSINESS DAY" means any day that is not a Saturday, a
Sunday or a day on which banking institutions in the State of
Nevada or New York are not required to be open.
"COLLATERAL" means the property described in granting
clauses (A) through (O).
"DEEDS OF TRUST" means collectively (1) that certain
Leasehold Mortgage, Assignment of Rents and Security Agreement
made by ACSI (as mortgagor) in favor of Beneficiary (as
mortgagee), and this Deed of Trust, both dated the date hereof,
securing, among other things, the Promissory Note, the ACSI
Guaranty.
"DISBURSEMENT REQUEST" means a certificate in the form
of Exhibit "A" attached hereto and completed as to all
information required therein, with all required attachments
attached and executed by the president and a vice-president or at
least two vice-presidents of Trustor on behalf of Trustor.
"ENVIRONMENTAL LAWS" means any and all laws and Legal
Requirements relating to environmental matters, pollution, or
hazardous substances, including: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C.
9601-9657; the Resource Conservation and Recovery Act of 1976,42
U.S.C. 6901 ET SEQ.; the Hazardous Materials Transportation
Act (49 U.S.C. 1801 ET SEQ.); the Nevada Hazardous Materials
Act (NRS Chapters 459 et seq.); any other Laws that may form the
basis of any claim, action, demand, suit, proceeding, hearing, or
notice of violation that is based on or related to the
generation, manufacture, processing, distribution, use,
existence, treatment, storage, disposal, transport, or handling,
or the emission, discharge, release, or threatened release into
the environment, of any hazardous substance, or other threat to
the environment.
"EVENT OF DEFAULT" has the meaning set forth in Section
3.1 hereof.
"EXISTING ENCUMBRANCES" means those matters set forth
on Schedule B attached hereto and incorporated herein by
reference and constituting a prior lien, claim or encumbrance
upon the Trust Estate or any other prior lien, claim or
encumbrance upon the Trust Estate specifically consented to in
writing by Beneficiary.
"FF&E" means all furniture, fixtures, equipment,
appurtenances and personal property now or in the future
contained in, used in connection with, attached to, or otherwise
useful or convenient to the use, operation, or occupancy of, or
placed on, but unattached to, any part of the Land or
Improvements whether or not the same constitutes real property or
fixtures in the State of Nevada, including all removable window
and floor coverings, all furniture and furnishings, heating,
lighting, plumbing, ventilating, air conditioning, refrigerating,
incinerating and elevator and escalator plants, cooking
facilities, vacuum cleaning systems, public address and
communications systems, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, motors,
machinery, pipes, appliances, equipment, fittings, fixtures, and
building materials, together with all venetian blinds, shades,
draperies, drapery and curtain rods, brackets, bulbs, cleaning
apparatus, mirrors, lamps, ornaments, cooling apparatus and
equipment, ranges and ovens, garbage disposals, dishwashers,
mantels, and any and all such property which is at any time
installed in, affixed to or placed upon the Land or Improvements.
"FF&E FINANCING AGREEMENT" shall have the meaning
ascribed to that term in Section 1.10(d) hereof.
"FIRST MORTGAGE BONDS" means Trustor's 9 1/4 % First
Mortgage Bonds due May 1, 2008, issued pursuant to the Indenture,
or any notes exchanged therefor as contemplated in the Indenture.
"GAMING AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any
nature whatsoever of the United States federal or foreign
government, any state, province or any city
2
or other political subdivision or otherwise and whether now
or hereafter in existence, or any officer or official thereof
with authority to regulate any gaming operation (or proposed
gaming operation) owned, managed or operated by the Trustor
or any of its Subsidiaries, including, without limitation, the
Nevada Gaming Commission, The Nevada State Gaming Control Board,
the City Council of the City of Las Vegas, and the New Jersey
Casino Control Commission.
"GAMING CONTROL ACTS" means the laws, regulations and
supervision procedures of the Nevada Gaming Control Act and the
New Jersey Casino Control Act, as from time to time amended, or
any successor provision of law, and the regulations promulgated
thereunder and such other laws, regulations and supervision
procedures of the United States federal or foreign government,
any state, province or any city or other political subdivision or
otherwise and whether now or hereafter in existence, or any
officer or official thereof with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed, or
operated by the Trustor or any of its subsidiaries including,
without limitation, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the City Council of the City of Las
Vegas, and the New Jersey Casino Control Commission.
"GAMING PERMITS" means every license, franchise, permit
or other authorization on the date of the Indenture or thereafter
required to own, lease, operate or otherwise conduct casino
gaming at the Las Vegas Showboat and the Atlantic City Showboat,
including, without limitation, all such licenses granted under
the Gaming Control Acts, the regulations of the Gaming
Authorities and other applicable laws.
"GOVERNMENTAL AUTHORITY" means any agency, authority,
board, bureau. commission, department, office, public entity, or
instrumentality of any nature whatsoever of the United States
federal or foreign government, any state, province or any city or
other political subdivision or otherwise, whether now or
hereafter in existence, or any officer or official thereof,
including, without limitation, any Gaming Authority.
"GUARANTORS" means each of (i) SBOC, OSI and ACSI and
(ii) any other Subsidiary that executes a Subsidiary Guaranty in
accordance with the provisions of the Loan Agreement, and their
respective successors and assigns.
"HAZARDOUS MATERIAL" shall mean any material or
substance that, whether by its nature or use, is now or hereafter
defined as hazardous waste, hazardous substance, pollutant or
contaminant under any Environmental Law, or which is toxic,
explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now
or hereafter regulated under any Environmental Law, or which is
or contains petroleum, gasoline, diesel fuel or another petroleum
hydrocarbon product.
"IBJ" means IBJ Xxxxxxxx Bank & Trust Company, Trustee
under the Indenture.
"IMPOSITION" means any taxes, assessments, water rates,
sewer rates, maintenance charges, other governmental impositions
and other charges now or hereafter levied or assessed or imposed
against the Trust Estate or any part thereof.
"IMPROVEMENTS" means (1) all the buildings, structures,
facilities and improvements of every nature whatsoever now or
hereafter situated on the Land or any real property encumbered
hereby, and (2) all fixtures, machinery, appliances, goods,
building or other materials, equipment, including without
limitation all gaming equipment and devices, all bowling balls,
bowling shoes, bowling pins, pin-setting and ball-return
machines, ball drilling and polishing machines, racks, cases,
cabinets, trophies, towels, furniture, furnishings, machinery,
equipment and supplies relating to the operation of the bowling
center located on the Land, and all machinery, equipment,
engines, appliances and fixtures for generating or distributing
air, water, heat, electricity, light, fuel or refrigeration, or
for ventilating or sanitary purposes, or for the exclusion of
vermin or insects, or for the removal of dust, refuse or garbage;
all wall-beds, wall-safes, built-in furniture and installations,
shelving, lockers, partitions, doorstops, vaults, motors,
elevators, dumb-waiters, awnings, window shades, venetian blinds,
light fixtures, fire hoses and brackets and boxes for the same,
fire sprinklers, alarm, surveillance and security systems,
computers, drapes, drapery rods and brackets, mirrors, mantels,
screens, linoleum, carpets and carpeting, plumbing, bathtubs,
sinks, basins, pipes, faucets, water closets, laundry equipment,
washers, dryers, ice-boxes and heating units; all kitchen and
restaurant equipment, including but not limited to silverware,
dishes, menus, cooking utensils, stoves, refrigerators, ovens,
ranges, dishwashers, disposals, water heaters, incinerators,
furniture, fixtures and furnishings, communication systems, and
equipment; all cocktail lounge supplies, including but not
limited to bars, glassware, bottles and tables used in connection
with the Land; all chaise lounges, hot tubs, swimming pool
heaters and equipment and all other recreational equipment
(computerized and otherwise), beauty and xxxxxx equipment, and
maintenance supplies used in connection with the Land; all
specifically designed
3
installations and furnishings, and all furniture, furnishings
and tangible personal property of every nature whatsoever now or
hereafter owned or leased by Trustor or in which Trustor has any
rights or interest and located in or on, or attached to, or used
or intended to be used or which are now or may hereafter be
appropriated for use on or in connection with the operation of
the Land or any real or personal property encumbered hereby
or any other Improvements, or in connection with any
construction being conducted or which may be conducted thereon,
and all extensions, additions, accessions, improvements,
betterments, renewals, substitutions, and replacements to any of
the foregoing, and all of the right, title and interest of
Trustor in and to any such property (subject to any Permitted
Liens), which, to the fullest extent permitted by law, shall be
conclusively deemed fixtures and improvements and a part of the
real property hereby encumbered.
"INDEBTEDNESS" means all indebtedness whatsoever of
Trustor to Beneficiary.
"INDENTURE" means that certain indenture, dated as of
May 18, 1993, by and among IBJ, as Trustee, Trustor, as issuer,
and ACSI, OSI, and SBOC, as guarantors, as such Indenture is
amended or supplemented from time to time in accordance with the
terms thereof.
"INSOLVENT" means with respect to any person or entity,
that such person or entity shall be deemed to be insolvent if he
or it is unable to pay his or its debts as they become due and/or
if the fair market value of his or its assets does not exceed his
or its aggregate liabilities.
"INTANGIBLE COLLATERAL" means, subject to the terms and
conditions of the Indenture, (a) the rights to use all names and
all derivations thereof now or hereafter used by Trustor in
connection with the Land or Improvements, including, without
limitation, the names "Showboat" and "Showboat Casino" in the
State of Nevada, including any variations thereon, together with
the goodwill associated therewith, and all names, logos, and
designs used by Trustor, or in connection with the Land or in
which Trustor has rights, with the exclusive right to use such
names, logos and designs wherever they are now or hereafter used
in connection with the Las Vegas Showboat, and any and all other
trade names, trademarks or service marks, whether or not
registered, now or hereafter used in the operation of the Las
Vegas Showboat, including, without limitation, any interest as a
lessee, licensee or franchisee, and, in each case, together with
the goodwill associated therewith; (b) subject to the absolute
assignment contained herein, the Rents; (c) any and all books,
records, customer lists, concession agreements, supply or service
contracts, licenses, permits, governmental approvals (to the
extent such licenses, permits and approvals may be pledged under
applicable law), signs, goodwill, casino and hotel credit and
charge records, supplier lists, checking accounts, safe deposit
boxes (excluding the contents of such deposit boxes owned by
persons other than Trustor and its subsidiaries), cash,
instruments, chattel papers, documents, unearned premiums,
deposits, refunds, including but not limited to income tax
refunds, prepaid expenses, rebates, tax and insurance escrow and
impound accounts, if any, actions and rights in action, and all
other claims, including without limitation condemnation awards
and insurance proceeds, and all other contract rights and general
intangibles resulting from or used in connection with the
operation of the Trust Estate and in which Trustor now or
hereafter has rights; (d) all of Trustor's documents,
instruments, contract rights, and general intangibles including,
without limitation, all permits, licenses, franchises and
agreements required for the use, occupancy or operation of any
Improvements (to the extent such licenses, permits and approvals
are not prohibited from being pledged under applicable law); and
(e) general intangibles, vacation license resort agreements or
other time share license or right to use agreements, including
without limitation all rents, issues, profits, income and
maintenance fees resulting therefrom, whether any of the
foregoing is now owned or hereafter acquired.
"INTERCREDITOR AGREEMENT" means, collectively, the
Intercreditor Agreements, of even date herewith, entered into
between Beneficiary, IBJ, Trustor, and ACSI.
"INVENTORY" shall have the meaning set forth in section
9-109(4) of the UCC.
"LAND" means the real property situated in the City of
Las Vegas, County of Xxxxx, State of Nevada, more specifically
described in Schedule A attached hereto and incorporated herein
by reference, including any after acquired title thereto.
"LAS VEGAS SHOWBOAT" means the Showboat Casino Hotel in
Las Vegas, Nevada, as more particularly described in the
Prospectus and any other facilities, businesses or enterprises
owned or operated by Trustor on the Land.
4
"LAS VEGAS SHOWBOAT EXPANSION" means any addition,
improvement, extension or capital repair to the Las Vegas
Showboat or related or ancillary facilities.
"LEGAL REQUIREMENTS" means all applicable restrictive
covenants, applicable zoning and subdivision ordinances and
building codes, all applicable health and Environmental Laws and
regulations, all applicable gaming laws and regulations, and all
other applicable laws, ordinances, rules, regulations, judicial
decisions, administrative orders, and other requirements of any
Governmental Authority having jurisdiction over Trustor, the
Trust Estate and/or any Affiliate of Trustor, in effect either at
the time of execution of this Deed of Trust or at any time during
the term hereof, including, without limitation, all Environmental
Laws and Gaming Control Acts.
"LIEN" means with respect to any portion of the Trust
Estate, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such portion of the Trust
Estate, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other
title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"LOAN AGREEMENT" means that certain Loan and Guaranty
Agreement between Trustor, Beneficiary, ACSI, SBOC and OSI.
"LOAN" means the definition as set forth in the Loan
Agreement.
"LOAN DOCUMENTS" means the Promissory Note, the ACSI
Guaranty, the Loan and Guaranty Agreement and any other Related
Document or any other documents evidencing, guaranteeing or
securing the Obligations of Trustor to Beneficiary under such
document.
"MATERIAL SPACE LEASE" means a Space Lease that
provides for an annual rent in excess of $100,000 or covers at
least ten percent (10%) of the Trust Estate.
"NRS" means the Nevada Revised Statutes as in effect
from time to time.
"OBLIGATIONS" means the payment and performance of each
covenant and agreement of Trustor contained in this Deed of Trust
and the Loan Documents.
"OSI" means Ocean Showboat, Inc., a New Jersey
corporation.
"OSI GUARANTY" means the Guaranty, contained in the
Loan Agreement dated as of the date hereof and made by OSI in
favor of Beneficiary.
"PERMITTED DISPOSITIONS" means the sale, transfer or
other disposition of Collateral not to exceed an aggregate value
of $3,000,000.00 per annum.
"PERMITTED LIENS" means Liens that are permitted in the
Loan Agreement and the Indenture.
"PERSON" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or any governmental agency or
political subdivision thereof.
"PROCEEDS" has the meaning assigned to it under the UCC
and, in any event, shall include but not be limited to (i) any
and all proceeds of any insurance (including, without limitation,
property, casualty and title insurance), indemnity, warranty or
guaranty payable from time to time with respect to any of the
Trust Estate; (ii) any and all proceeds in the form of accounts,
security deposits, tax escrows (if any), down payments (to the
extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel
paper, liens and security instruments, guaranties or general
intangibles relating in whole or in part to the Las Vegas
Showboat and all rights and remedies of whatever kind or nature
Trustor may hold or acquire for the purpose of securing or
enforcing any obligation due Trustor thereunder; (iii) any and
all payments in any form whatsoever made or due and payable from
time to time in connection with any requisition,
5
confiscation, condemnation, seizure or forfeiture of all or any
part of the Trust Estate by any Governmental Authority; (iv)
subject to the absolute assignment contained herein, the Rents or
other benefits arising out of, in connection with or pursuant to
any Space Lease of the Trust Estate; and (v) any and all other
amounts from time to time paid or payable in connection with any
of the Trust Estate; provided, however, that the Trustor is not
authorized to dispose of any of the Trust Estate unless such
disposition is a Permitted Disposition.
"PROMISSORY NOTE" means that certain Revolving Note as
same may be amended pursuant to the Loan Agreement, between
Borrower and Mortgagee as Lender, both of even date herewith, in
the maximum aggregate amount of $25,000,000.00..
"PROSPECTUS" means that certain prospectus, dated as of
May 18, 1993, relating to the offering of the First Mortgage
Bonds, and all supplements, schedules or other attachments
thereto.
"PROTECTIVE ADVANCES" shall have the meaning set forth
in Section 4.2 herein.
"RECEIVER" means, with respect to any Person (including
Trustor), any receiver, trustee, custodian, debtor in possession,
liquidator, sequestrator, administrator, conservator, or other
successor appointed (whether by a court or otherwise) pursuant to
any creditor's exercise of remedies against such Person, or
pursuant to a Bankruptcy of such Person, or for purposes of
reorganization or liquidation, or otherwise for the benefit of
such Person's creditors, or under any similar circumstances, or
otherwise having similar powers over such Person or its property,
whether such Receiver acts on an interim, temporary, or final
basis and whether such appointment applies to all or any
significant portion of such Person's assets or property,
including or not including any of the Trust Estate.
"RELATED DOCUMENTS" means, collectively, the OSI
Guaranty, the ACSI Guaranty, the SBOC Guaranty, the Deeds of
Trust, and any and all pledges, security agreements, guaranties,
financing statements, filings, instruments or other agreements or
assignments executed by the Trustor or the Guarantors in order to
evidence, secure, perfect, notice or guaranty the Loan Documents
and the Promissory Note or any guaranty of the foregoing
obligations.
"RENTS" means all rents, room revenues, income,
receipts, issues, profits, revenues and maintenance fees, room,
food and beverage revenues, license and concession fees, income,
proceeds and other benefits to which Trustor may now or hereafter
be entitled from the Land, the Improvements, the Facility Leases
or Space Leases or any property encumbered hereby or any business
or other activity conducted by Trustor at the Land or the
Improvements.
"SBOC" means Showboat Operating Company, a Nevada
corporation.
"SBOC GUARANTY" means the Subsidiary Guaranty issued by
SBOC and dated as of the date hereof and made by SBOC in favor of
Beneficiary.
"SPACE LEASES" means any and all leases, subleases,
lettings, licenses, concessions, operating agreements, management
agreements, and all other agreements affecting the Trust Estate
that Trustor has entered into, taken by assignment, taken subject
to, or assumed; or has otherwise become bound by, now or in the
future, that give any person or any entity other than Trustee the
right to conduct its business on, or otherwise use, operate or
occupy, all or any portion of the Land or Improvements and any
leases, agreements or arrangements permitting anyone or any
entity other than Trustee to enter upon or use any of the Trust
Estate to extract or remove natural resources of any kind,
together with all amendments, extensions, and renewals of the
foregoing entered into in compliance with this Deed of Trust,
together with all rental, occupancy, service, maintenance or any
other similar agreements pertaining to use or occupation of, or
the rendering of services at the Land, the Improvements or any
part thereof.
"SPACE LESSEE(S)" means any and all tenants, licensees,
or other grantees of the Space Leases and any and all guarantors,
sureties, endorsers or others having primary or secondary
liability with respect to such Space Lease.
"SUBSIDIARY GUARANTIES" means, collectively, the OSI
Guaranty, the ACSI Guaranty, the SBOC Guaranty and any other
guaranties issued pursuant to the Loan Agreement.
6
"TANGIBLE COLLATERAL" means all personal property,
goods (other than intangible personal property), equipment,
supplies, building and other materials of every nature whatsoever
and all other tangible personal property constituting a part or
portion of the Las Vegas Showboat and/or used in the operation of
the hotel, casino, restaurants, stores, parking facilities,
bowling alley and all other commercial operations on the Land or
Improvements, including but not limited to communication systems,
visual and electronic surveillance systems and transportation
systems and not constituting a part of the real property subject
to the real property lien of this Deed of Trust and including all
property and materials stored therein in which Trustor has an
interest and all tools, utensils, food and beverage, liquor,
uniforms, linens, housekeeping and maintenance supplies,
vehicles, fuel, advertising and promotional material, blueprints,
surveys, plans and other documents relating to the Land or
Improvements, and all construction materials and all furnishings,
fixtures and equipment, including, but not limited to, all
bowling balls, bowling shoes, bowling pins, pin-setting and ball
return machines, ball drilling and polishing machines, racks,
cases, cabinets, trophies, towels, furniture, furnishings,
machinery, equipment and supplies relating to the operation of
the bowling center located on the Land, to the extent permitted
by all applicable Gaming Control Acts, all gaming equipment and
devices which are or are to be installed and used in connection
with the operation of the Las Vegas Showboat, those items of
furniture, fixtures and equipment which are to be purchased or
leased by Trustor, machinery and any other item of personal
property in which Trustor now or hereafter own or acquire an
interest or right, and which are used or useful in the
construction, operation, use and occupancy of the Las Vegas
Showboat; to the extent permitted by the applicable contract or
applicable law, all gaming and financial equipment, computer
equipment, calculators, adding machines, gaming tables, video
game and slot machines, and any other electronic equipment of
every nature used or located on any part of the Land or
Improvements, and all present and future right, title and
interest of Trustor in and to any casino operator's agreement,
license agreement or sublease agreement used in connection with
the Land or Improvements; excluding therefrom, however, all
Inventory.
"365(H) ELECTION" means Trustor's election to treat a
Facility Lease as terminated under Sec. 365(h) of the Bankruptcy
Code or any similar Bankruptcy Law, or any comparable right
provided under any other Bankruptcy Law, together with all
rights, remedies and privileges related thereto.
"TITLE INSURER" means Nevada Title Company, a Nevada
corporation.
"TRUST ESTATE" means all of the property described in
Granting Clauses (A) through (O) below, inclusive, and each item
of property therein described, provided, however, that such term
shall not include the property described in Granting Clause (P)
below.
"TRUSTEE" means Nevada Title Company, a Nevada
corporation.
"TRUSTOR" means collectively Showboat, Inc., a Nevada
corporation and Showboat Operating Company, a Nevada corporation,
and includes not only the original Trustor hereunder, but also
any successors or assigns of the Trust Estate, or any part
thereof, at any time and from time to time, as the case requires.
"UCC" means the Uniform Commercial Code in effect in
the State of Nevada from time to time, NRS chapters 104 and 104A.
Capitalized terms used in this Deed of Trust which are not
otherwise defined herein shall have the meaning ascribed to such
terms in the Indenture.
W I T N E S S E T H:
IN CONSIDERATION OF TEN DOLLARS AND OTHER GOOD AND VALUABLE
CONSIDERATION; THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, AND FOR THE PURPOSE OF SECURING an in pari passu
first priority Lien in an aggregate amount of $25,000,000.00 plus
advances, if any, made by the Trustee or Beneficiary to preserve
the Collateral, subject to the terms and conditions set forth in
the Intercreditor Agreement, in favor of Beneficiary (1) the due
and punctual payment of the indebtedness evidenced by the
Promissory Note and Loan Agreement; (2) the performance of each
covenant and agreement of Trustor contained in the Loan Agreement
herein or in the other Loan Documents; (3) the payment of such
additional loans or advances as hereafter may be made to Trustor
or its successors or assigns, when evidenced by a promissory note
or notes reciting that they are secured by this Deed of Trust;
provided, however, that any and all future advances to Trustor
made for the improvement, protection or
7
preservation of the Trust Estate, together with interest at the
interest rate on the Promissory Notes, shall be automatically
secured hereby unless such a note or instrument evidencing such
advances specifically recites that it is not intended to be
secured hereby and (4) the payment of all sums expended or
advanced by Beneficiary under or pursuant to the terms hereof or
to protect the security hereof, together with interest thereon
as herein provided, Trustor, in consideration of the premises,
and for the purposes aforesaid, does hereby GRANT, ASSIGN,
BARGAIN, CONVEY, PLEDGE, RELEASE, HYPOTHECATE, WARRANT, AND
TRANSFER UNTO TRUSTEE IN TRUST FOR THE BENEFIT OF BENEFICIARY:
(A) The Land.
(B) TOGETHER WITH the Improvements.
(C) TOGETHER WITH all Appurtenant Rights.
(D) TOGETHER WITH the Tangible Collateral.
(E) TOGETHER WITH the Intangible Collateral.
(F) TOGETHER WITH (i) all the estate, right, title and
interest of Trustor of, in and to all judgments and decrees,
insurance proceeds, awards of damages and settlements hereafter
made resulting from condemnation proceedings or the taking of any
of the property described in Granting Clauses (A), (B), (C), (D)
and (E) hereof or any part thereof under the power of eminent
domain, or for any damage (whether caused by such taking or
otherwise) to the property described in Granting Clauses (A),
(B), (C), (D) and (E) hereof or any part thereof, or to any
Appurtenant Rights thereto, and Beneficiary is hereby authorized
to collect and receive said awards and proceeds and to give
proper receipts and acquittance therefor, and (subject to the
terms hereof) to apply the same toward the payment of the
Indebtedness and other sums secured hereby, notwithstanding the
fact that the amount owing thereon may not then be due and
payable; (ii) all proceeds of any sales or other dispositions of
the property or rights described in Granting Clauses (A), (B),
(C), (D) and (E) hereof or any part thereof whether voluntary or
involuntary, provided, however, that the foregoing shall not be
deemed to permit such sales, transfers, or other disposition
except as specifically permitted herein; and (iii) whether
arising from any voluntary or involuntary disposition of the
property described in Granting Clauses (A), (B), (C), (D) and
(E), all Proceeds, products, replacements, additions,
substitutions, renewals and accessions, remainders, reversions
and after-acquired interest in, of and to such property.
(G) TOGETHER WITH the absolute assignment of any Space
Leases or any part thereof that Trustor has entered into, taken
by assignment, taken subject to, or assumed, or has otherwise
become bound by, now or in the future, together with all of the
following (including all "Cash Collateral" within the meaning of
the Bankruptcy Code) arising from the Space Leases: (a) Rents
(subject, however, to the aforesaid absolute assignment to
Beneficiary and the conditional permission hereinafter given to
Trustor to collect the Rents), (b) all guaranties, letters of
credit, security deposits, collateral, cash deposits, and other
credit enhancement documents, arrangements and other measures
with respect to the Space Leases, (c) all of Trustor's right,
title, and interest under the Space Leases, including the
following: (i) the right to receive and collect the Rents from
the lessee, sublessee or licensee, or their Successor(s), under
any Space Lease(s) and (ii) the right to enforce against any
tenants thereunder and otherwise any and all remedies under the
Space Leases, including Trustor's right to evict from possession
any tenant thereunder or to retain, apply, use, draw upon,
pursue, enforce or realize upon any guaranty of any Space Lease;
to terminate, modify, or amend the Space Leases; to obtain
possession of, use, or occupy, any of the real or personal
property subject to the Space Leases; and to enforce or exercise,
whether at law or in equity or by any other means, all provisions
of the Space Leases and all obligations of the tenants thereunder
based upon (A) any breach by such tenant under the applicable
Space Lease (including any claim that Trustor may have by reason
of a termination, rejection, or disaffirmance of such Space Lease
pursuant to any Bankruptcy Law) and (B) the use and occupancy of
the premises demised, whether or not pursuant to the applicable
Space Lease (including any claim for use and occupancy arising
under landlord-tenant law of the State of Nevada or any
Bankruptcy Law). Permission is hereby given to Trustor, so long
as no Event of Default has occurred and is continuing hereunder,
to collect and use the Rents, as they become due and payable, but
not in advance thereof. Upon the occurrence of an Event of
Default and the expiration of any applicable cure or grace
period, the permission hereby given to Trustor to collect the
Rents shall automatically terminate, but such permission shall be
reinstated upon a cure of such Event of Default. Beneficiary
shall have the right, at any time and from time to time, to
notify any Space Lessee of the rights of Beneficiary as provided
by this section.
8
Notwithstanding anything to the contrary contained
herein, the foregoing provisions of this Paragraph (G) shall not
constitute an assignment for purposes of security but shall
constitute an absolute and present assignment of the Rents to
Beneficiary, subject, however, to the conditional license given
to Trustor to collect and use the Rents as hereinabove provided;
and the existence or exercise of such right of Trustor shall not
operate to subordinate this assignment to any subsequent
assignment, in whole or in part, by Trustor.
(H) TOGETHER WITH all of Trustor's right, title and
interest in and to any and all maps, plans, specifications,
surveys, studies, tests, reports, data and drawings relating to
the development of the Land or the Las Vegas Showboat and the
construction of the Improvements, including, without limitation,
all marketing plans, feasibility studies, soils tests, design
contracts and all contracts and agreements of Trustor relating
thereto including, without limitation, architectural, structural,
mechanical and engineering plans and specifications, studies,
data and drawings prepared for or relating to the development of
the Land or the Las Vegas Showboat or the construction,
renovation or restoration of any of the Improvements or the
extraction of minerals, sand, gravel or other valuable substances
from the Land.
(I) TOGETHER WITH, to the extent permitted by
applicable law, all of Trustor's right, title, and interest in
and to any and all licenses, permits, variances, special permits,
franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents,
approvals, waivers, orders, rights and agreements (including
options, option rights and contract rights) now or hereafter
obtained by Trustor from any Governmental Authority having or
claiming jurisdiction over the Land, the FF&E, the Las Vegas
Showboat, or any other element of the Trust Estate or providing
access thereto, or the operation of any business on, at, or from
the Land including, without limitation, any Gaming Permits;
provided, that upon an Event of Default hereunder or under the
Indenture and the expiration of any applicable cure or grace
period, if Beneficiary is not qualified under the Gaming Control
Acts to hold such Gaming Permits, then Beneficiary shall
designate an appropriately qualified third party to which an
assignment of such Gaming Permits can be made in compliance with
the Gaming Control Acts.
(J) TOGETHER WITH all water stock, water permits and
other water rights relating to the Land.
(K) TOGETHER WITH all oil and gas and other mineral
rights, if any, in or pertaining to the Land and all royalty,
leasehold and other rights of Trustor pertaining thereto.
(L) TOGETHER WITH any and all monies and other
property, real or personal, which may from time to time be
subjected to the lien hereof by Trustor or by anyone on its
behalf or with its consent, or which may come into the possession
or be subject to the control of Trustee or Beneficiary pursuant
to this Deed of Trust or any Loan Document, including, without
limitation, any Protective Advances under this Deed of Trust; and
all of Trustor's right, title, and interest in and to all
extensions, improvements, betterments, renewals, substitutes for
and replacements of, and all additions, accessions, and
appurtenances to, any of the foregoing that Trustor may
subsequently acquire or obtain by any means, or construct,
assemble, or otherwise place on any of the Trust Estate, and all
conversions of any of the foregoing; it being the intention of
Trustor that all property hereafter acquired by Trustor and
required by any Loan Document or this Deed of Trust to be subject
to the lien of this Deed of Trust or intended so to be shall
forthwith upon the acquisition thereof by Trustor be subject to
the lien of this Deed of Trust as if such property were now owned
by Trustor and were specifically described in this Deed of Trust
and granted hereby or pursuant hereto, and Trustee and
Beneficiary are hereby authorized, subject to Gaming Control
Acts, to receive any and all such property as and for additional
security for the obligations secured or intended to be secured
hereby. Trustor agrees to take any action as may reasonably be
necessary to evidence and perfect such liens or security
interests, including, without limitation, the execution of any
documents reasonably necessary to evidence and perfect such liens
or security interests.
(M) TOGETHER WITH, to the extent permitted by the Act,
any and all Accounts Receivable, royalties, earnings, income,
proceeds, products, rents, revenues, reversions, remainders,
issues, profits, avails, production payments, and other benefits
directly or indirectly derived or otherwise arising from any of
the foregoing, all of which are hereby assigned to Beneficiary,
who, except as otherwise expressly provided in this Deed of
Trust, is authorized to collect and receive the same, to give
receipts and acquittances therefor and to apply the same to the
Obligations secured hereunder, whether or not then due and
payable.
(N) TOGETHER WITH Proceeds of the foregoing property
described in Granting Clauses (A) through (M).
9
(O) TOGETHER WITH (i) Trustor's rights further to
assign, sell, encumber or otherwise transfer or dispose of the
property described in Granting Clauses (A) through (N) inclusive,
above, for debt or otherwise.
(P) EXPRESSLY EXCLUDING, HOWEVER, (i) Inventory; and
(ii) FF&E (to the extent that (a) Trustor is permitted to enter
into a FF&E Financing Agreement for such FF&E under the Indenture
and Loan Agreement and (b) such FF&E Financing Agreement
prohibits Beneficiary from maintaining a security interest in the
FF&E covered thereby); together with the proceeds of the property
described in this Granting Clause (P).
Trustor, for itself and its successors and assigns,
covenants and agrees to and with Trustee that, at the time or
times of the execution of and delivery of these presents or any
instrument of further assurance with respect thereto, Trustor has
good right, full power and lawful authority to assign, grant,
convey, warrant, transfer, bargain or sell its interests in the
Trust Estate in the manner and form as aforesaid, and that the
Trust Estate is free and clear of all liens and encumbrances
whatsoever, except the Existing Encumbrances and Permitted Liens,
and Trustor shall warrant and forever defend the above-bargained
property in the quiet and peaceable possession of Trustee and its
successors and assigns against all and every person or persons
lawfully or otherwise claiming or to claim the whole or any part
thereof, except for Permitted Liens. Trustor agrees that any
greater title to the Trust Estate hereafter acquired by Trustor
during the term hereof shall be automatically subject hereto.
ARTICLE ONE
COVENANTS OF TRUSTOR
The Beneficiary has been induced to make the Loan on the
basis of the following material covenants, all agreed to by
Trustor:
1.1 Performance of Loan Documents. Trustor shall perform,
observe and comply with each and every provision hereof, and with
each and every provision contained in the Loan Documents and
shall promptly pay to Beneficiary, when payment shall become due,
the principal with interest thereon and all other sums required
to be paid by Trustor under this Deed of Trust and the Loan
Documents.
1.2 General Representations, Covenants and Warranties.
Trustor or its counsel represents, covenants and warrants that:
(a) Showboat, Inc. has good and marketable title to an
indefeasible fee estate in the Land, free and clear of all
encumbrances except Permitted Liens, and that it has the right to
hold, occupy and enjoy its interest in the Trust Estate, and has
good right, full power and lawful authority to subject the Trust
Estate to the Lien of this Deed of Trust and pledge the same as
provided herein and, subject to the Gaming Control Acts,
Beneficiary may at all times peaceably and quietly enter upon,
hold, occupy and enjoy the entire Trust Estate in accordance with
the terms hereof; (b) neither Trustor nor any Affiliate of
Trustor is Insolvent and no bankruptcy or insolvency proceedings
are pending or contemplated by or, to the best of Trustor's
knowledge, against Trustor or any Affiliate of Trustor; (c) all
costs arising from construction of any Improvements, the
performance of any labor and the purchase of all Tangible
Collateral and Improvements have been or shall be paid when due
unless same are being contested in good faith and adequately
bonded; (d) the Land has frontage on, and direct access for
ingress and egress to dedicated street(s); (e) Trustor shall at
all times conduct and operate the Trust Estate in a manner so as
not to lose the right to conduct gaming activities at the Las
Vegas Showboat; (f) no material part of the Trust Estate has been
damaged, destroyed, condemned or abandoned; and (g) no part of
the Trust Estate is the subject of condemnation proceedings and
Trustor has no knowledge of any contemplated or pending
condemnation proceeding with respect to any portion of the Trust
Estate.
1.3 Compliance with Legal Requirements. Trustor shall
promptly, fully, and faithfully comply with all Legal
Requirements and shall cause all portions of the Trust Estate and
its use and occupancy to fully comply with Legal Requirements at
all times, whether or not such compliance requires work or
remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, structural or nonstructural, or that interfere with
the use or enjoyment of the Trust Estate.
1.4 Taxes. Trustor shall pay all Impositions as they become
due and payable and shall deliver to Beneficiary promptly upon
Beneficiary's request, evidence satisfactory to Beneficiary that
the Impositions have been paid or are not delinquent. Trustor
shall not suffer to exist, permit or initiate the joint
assessment of the real and personal property, or any
10
other procedure whereby the lien of the real property taxes and
the lien of the personal property taxes shall be assessed, levied
or charged to the Land as a single lien, except as may be
required by law. In the event of the passage of any law deducting
from the value of real property for the purposes of taxation any
lien thereon, or changing in any way the taxation of deeds of
trust or obligations secured thereby for state or local purposes,
or the manner of collecting such taxes and imposing a tax,
either directly or indirectly, on this Deed of Trust or the
First Mortgage Bonds, Trustor shall pay all such taxes.
1.5 Insurance.
(a) HAZARD INSURANCE REQUIREMENTS AND PROCEEDS.
(1) Hazard Insurance. Trustor shall at its sole
expense obtain for, deliver to, assign and maintain for the
benefit of Beneficiary, during the term of this Deed of Trust,
insurance policies insuring the Trust Estate and liability
insurance policies, all in accordance with the requirements of
Section 4.17 of the Indenture and Par. 5.03 of the Loan
Agreement. Trustor shall pay promptly when due any premiums
on such insurance policies and on any renewals thereof. The form
of such policies and the companies issuing them shall be
reasonably acceptable to Beneficiary. All such policies and
renewals thereof shall be held by Beneficiary and shall contain a
noncontributory standard mortgagee or beneficiary endorsement
(Form 438 BFU or its equivalent) making losses payable to
Beneficiary as its interest may appear and shall name the
Beneficiary as an additional insured. At least thirty (30) days
prior to the expiration date of all such policies, renewals
thereof satisfactory to Beneficiary shall be delivered to
Beneficiary together with receipts evidencing the payment of all
premiums on such insurance policies and renewals. In the event
of loss, Trustor shall give immediate written notice to
Beneficiary and Beneficiary may make proof of loss if not made
promptly by Trustor. In the event of the foreclosure of this Deed
of Trust or any other transfer of title to the Trust Estate in
extinguishment of the indebtedness and other sums secured hereby,
all right, title and interest of Beneficiary in and to all
insurance policies and renewals thereof then in force shall pass
to the purchaser or grantee, upon delivery of written notice to
Beneficiary within thirty (30) days following the occurrence of
such loss.
(2) Payment of Proceeds to Beneficiary. Pursuant
to its rights granted hereunder in all proceeds from any
insurance policies, Beneficiary is hereby authorized and
empowered at its option to adjust or compromise any loss under
any insurance policies on the Trust Estate and to collect and
receive the proceeds from any such policy or policies. Each
insurance company is hereby authorized and directed to make
payment for all such losses directly to Beneficiary alone and not
to the Trustor and Beneficiary jointly. After deducting from such
insurance proceeds any reasonable expenses incurred by
Beneficiary in the collection or handling such funds, including
reasonable attorneys' fees, Beneficiary shall apply such
insurance proceeds as follows:
(A) Trustor shall notify Beneficiary, within
one (1) year following the event giving rise to a payment
under an insurance policy ("Loss"), to inform Beneficiary
whether or not Trustor intends to restore the Improvements
or any portion thereof and provide an Officers' Certificate
(as defined in the Indenture) certifying that such
restoration is allowed under Section 4.10(d) of the
Indenture. If Trustor notifies Beneficiary that it intends
to restore the Improvements or any portion thereof, and such
restoration is allowed under the Indenture, then Trustor
shall have the right to use the balance of such award or
settlement in accordance with the provisions of Section 1
.5(a)(3) hereof to reimburse Trustor or pay for the costs of
such rebuilding, reconstruction or repair by Trustor
pursuant to this Section 1.5(a)(2)(A). Any proceeds
allocable to Improvements which Trustor has elected not to
restore shall be applied in accordance with Section 4.5 of
the Indenture. Trustor shall not invest or use any
insurance proceeds from the Loss of the Improvements to
purchase or invest in real estate, real property, or
accessions or improvements to real estate or real property,
except for the restoration of the Improvements in accordance
with this Section 1.5(a).
(B) If Trustor fails to notify Beneficiary
that it intends to restore the Improvements within said one
(1) year period as provided in Section 1.5(a)(2)(A) hereof,
or Trustor has elected not to restore the Improvements or
any portion thereof, or a Purchase Offer is required under
Section 4.10 of the Indenture, or in the event there remain
any insurance proceeds following such reconstruction or
repair, then in any such event, subject to the Intercreditor
Agreement, such award or settlement or amounts then
remaining shall be applied in accordance with Section 4.10
of the Indenture.
11
(3) Restoration. Provided that (A) the Indenture
does not require a repurchase of the First Deed of Trust Notes
and the maturity of the First Deed of Trust Notes has not been
accelerated under the Indenture at the time of a Loss, or at the
time Trustor seeks the benefit of this paragraph, and (B)
Beneficiary reasonably determines that Trustor has the ability
(including financial ability) to restore the Improvements or any
portion thereof to a condition substantially the same as prior to
the Loss, and pay for the complete costs of such restoration
(taking into account available insurance proceeds), Beneficiary
agrees that Trustor shall have the right to require Beneficiary
to apply the insurance proceeds received by Beneficiary under the
provisions of Section 1.5(a)(2) on account of such Loss for the
purpose of the restoration of the Trust Estate in the following
manner and upon satisfaction of the following conditions:
If the insurance proceeds resulting from the
Loss of the Improvements or any portion thereof are made
available to Trustor under the provisions of this Section
l.5(a)(3), then upon the occurrence of a Loss, Trustor
shall, following its election to restore the Improvements
under Section 1.5(a)(2)(A) hereof, commence the restoration
of the Improvements to as good and substantially the same
condition as such property was prior to such Loss and upon
commencement thereof shall diligently prosecute the same to
completion.
(A) Subject to the terms and conditions of
the Intercreditor Agreement, such insurance proceeds shall
be paid over to Beneficiary or its designee, as depository
for the disbursement thereof as provided herein. In the
event such proceeds are to be used to restore the
Improvements, such proceeds shall be invested in Investment
Grade Securities, as defined in the Indenture, the interest
from which shall inure to the benefit of Trustor. Pending
disbursement of such proceeds, Trustor hereby grants to
Beneficiary a security interest in such Investment Grade
Securities and pledges such Investment Grade Securities to
Beneficiary as further security for the indebtedness secured
hereby. If an Event of Default occurs (and any applicable
cure or grace period has expired) prior to the completion of
the restoration, Beneficiary at its option shall, during the
continuance of such Event of Default, have the right to
either apply all or any portion of such Investment Grade
Securities toward restoration of the Trust Estate or toward
any amounts secured hereby.
(B) The manner of disbursement by the
depository of such insurance proceeds shall be by written
request of Trustor, not more than once per week, and only if
(l) said depository has not received any notice from
Beneficiary or Trustee that an Event of Default has occurred
hereunder or under the Indenture or Loan Agreement and (2)
the depository shall have received a commitment from Title
Insurer, attached to the Disbursement Request, evidencing
the Title Insurer's unconditional commitment to issue an
endorsement in the form of a 122 CLTA Endorsement insuring
the continuing priority of the lien of this Deed of Trust as
security for each advance of funds from the insurance
proceeds. Trustor covenants and agrees (a) to comply with
all material covenants and conditions set forth in the
Indenture and which are incorporated herein by reference to
the extent such provisions are applicable to the restoration
of the Improvements, or any portion thereof and (b) to cause
each Disbursement Request to be true, correct and complete.
(C) If IBJ and Beneficiary reasonably
determine that the amount of the insurance proceeds
available for the restoration work to be completed under
Section 1.5(a)(2)(A) hereunder shall be insufficient for the
performance and completion of such work, Trustor covenants
and agrees, as a condition precedent to any disbursement of
insurance proceeds to deliver to Beneficiary an amount,
which, together with the insurance proceeds, shall be
sufficient to pay the total amount necessary or reasonably
required to restore the Trust Estate as herein provided, and
which amounts shall be disbursed in accordance with
subsection (iii) of this section.
(D) Without limiting the generality of the
foregoing provisions, the restoration work and the
performance thereof shall be subject to and performed in
accordance with each of the following provisions: (1) such
work and the performance thereof shall be conducted in a
first-class, workmanlike manner, shall not permanently
weaken nor impair the structural strength of any existing
Improvements, nor change the character thereof or the
purpose for which the same may be used, nor lessen the value
of the Trust Estate; (2) before the commencement of any such
work, the plans and specifications (the "Plans") therefor
shall be filed with and approved by all Governmental
Authorities having jurisdiction and all necessary licenses,
permits and/or authorizations from all Governmental
Authorities shall have been obtained, and all such work
shall be done subject to and in accordance with all
applicable Legal Requirements; (3) before commencing any
such work, Trustor shall have delivered to Beneficiary the
Plans and a line item budget setting forth with reasonable
particularity the cost of completing such work together with
a certificate in a form, and from a licensed architect,
reasonably satisfactory to Beneficiary certifying (a) that
the execution of the work described in the Plans will
substantially restore the Trust Estate and
12
(b) that the budget constitutes a reasonable appreciation of
the cost of restoring the Trust Estate in accordance with
the Plans; and (4) before commencing any such work, should
Beneficiary so request, Trustor shall, at Trustor's expense,
give to Beneficiary surety company labor and material,
payment and performance bonds in a company or companies
and in form reasonably satisfactory to Beneficiary (or
other security guaranteeing performance satisfactory to
Beneficiary) in an aggregate amount equal to one hundred
twenty percent (120%) of the estimated cost of such work,
guaranteeing the completion of such work, free and clear
of all liens, encumbrances, claims, chattel mortgages,
conditional bills of sale and security agreements;
provided, however, that such bonds or other security
shall not be required from contractors which, in
Beneficiary's reasonable judgment do not need to post such
bonds or provide such security. Notwithstanding the
foregoing, to the extent that the restoration work is
contracted for under fixed-price contracts, such surety
company labor and material payment and performance bonds
(or other security guaranteeing performance satisfactory
to Beneficiary) may be equal to one hundred ten percent
(110%) of the amount of such fixed price contracts.
(b) Insurance Escrow. In order to secure the
performance and discharge of the Trustor's obligations under this
Section 1.5, but not in lieu of such obligations, Trustor shall,
upon a failure to pay or provide such insurance at the times and
in the manner required herein, pay over to Beneficiary an amount
equal to one-twelfth (1/12th) of the next maturing annual
insurance premiums for each month that has elapsed since the last
date to which such premiums were paid; and Trustor shall, in
addition, pay over to Beneficiary, on the first day of each
month, sufficient funds (as estimated from time to time by
Beneficiary in its sole discretion) to permit Beneficiary to pay
said premiums when due. Such deposits shall not be, nor be deemed
to be, trust funds but may be commingled with the general funds
of Beneficiary, and no interest shall be payable in respect
thereof except as required by law. Upon demand by Beneficiary,
Trustor shall deliver to Beneficiary such additional monies as
are necessary to make up any deficiencies in the amounts
necessary to enable Beneficiary to pay such premiums when due.
(c) Compliance with Insurance Policies. Trustor
shall not violate or permit to be violated any of the conditions
or provisions of any policy of insurance required by the Loan
Agreement, Indenture, or this Deed of Trust and Trustor shall so
perform and satisfy the requirements of the companies writing
such policies that, at all times, companies of good standing
reasonably satisfactory to Beneficiary shall be willing to write
and/or continue such insurance. Trustor further covenants to
promptly send to Beneficiary all notices relating to any
violation of such policies or otherwise affecting Trustor's
insurance coverage or ability to obtain and maintain such
insurance coverage.
1.6 Condemnation. Pursuant to its rights in condemnation
awards and proceeds, IBJ and Beneficiary shall be entitled to the
receipt of all compensation awards, damages, claims, rights of
action and proceeds of, or on account of, any damage or taking
through condemnation and is hereby authorized, at its option, to
commence, appear in and prosecute in its own or Trustor's names
any action or proceeding relating to any condemnation and to
settle or compromise any claim in connection therewith, and
Trustor hereby appoints Beneficiary as their attorney-in-fact to
take any action in Trustor's names pursuant to Beneficiary's
rights hereunder. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Trust
Estate or any portion thereof, Trustor shall notify Trustee and
Beneficiary of the pendency of such proceedings. Trustor from
time to time shall execute and deliver to Beneficiary all
instruments requested by it to permit such participation
provided, however, that such instruments shall be deemed as
supplemental to the foregoing grant of permission to Trustee and
Beneficiary, and unless otherwise required, the foregoing
permission shall, without more, be deemed sufficient to permit
Trustee and/or Beneficiary to participate in such proceedings on
behalf of Trustor. All such compensation awards, damages, claims,
rights of action and proceeds, and any other payments or relief,
and the right thereto, are included in the Trust Estate, and
Beneficiary, after deducting therefrom all its expenses,
including reasonable attorneys fees, shall apply such proceeds as
follows:
(a) In the event that any Land or Improvements are
condemned (whether by one or successive condemnation
proceedings), proceeds of such condemnation shall be applied in
accordance with the provisions of Section 4.10 of the Indenture.
(b) If such condemnation affects Improvements or any
Land upon which Improvements are located (other than a
condemnation of all of the Trust Estate (discussed in Section
1.6(c) hereinbelow), Trustor shall notify Beneficiary within one
(1) year following the conclusion of such condemnation proceeding
whether or not Trustor intends to (i) restore the Improvements or
replace the Improvements with substantially similar improvements,
(ii) replace the Improvements with other improvements which are
not substantially similar to the Improvements lost or damaged
through condemnation, or (iii) not restore the Improvements. In
the event that Trustor makes an election pursuant to 1.6(b)(i) or
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(ii) hereinabove, Trustor shall cause such restoration to be
completed substantially in accordance with the provisions of
Section 1.5(a)(3) hereof. In the event Trustor makes an election
pursuant to l.6(b)(ii) above, then, in addition to any other
obligations of Trustor hereunder, Trustor shall deliver to
Beneficiary an MAI appraisal performed by an MAI appraiser
selected by Trustor and reasonably satisfactory to IBJ and
Beneficiary showing that the value of the Trust Estate upon
completion of such restoration shall be in an amount not less
than 100% of the indebtedness secured by this Deed of Trust
(calculated as if Trustor had been entitled to, and had drawn
down the entire undrawn amount of any further advances Trustor
may be entitled to receive from Beneficiary) and any indebtedness
secured by a Permitted Lien which is secured on a pari passu
basis with the lien hereof. In the event that there shall remain
any balance of such award after the payment of settlement costs
and the payment of costs of demolition, repair, restoration and
replacement under 1.6(b)(i) or (ii) above, any balance shall be
retained by Trustor.
(c) In the event that (i) the Improvements are not so
rebuilt, reconstructed or substituted with other improvements, or
repaired in accordance with Section 1.6(b) hereof, (ii) Trustor
fails to notify Beneficiary within said one (1) year period as
provided in Section 1.6(b) hereof or elects under 1 .6(b)(iii)
hereof not to restore, repair, replace or substitute such
Improvements or (iii) all or substantially all of the Trust
Estate is condemned, then such award or settlement shall be
applied in accordance with the provisions of Section 4.10 of the
Indenture.
1.7 Care of Trust Estate.
(a) Trustor shall preserve and maintain the Trust
Estate in good condition and repair. Trustor shall not permit,
commit or suffer to exist any waste, impairment or deterioration
of the Trust Estate or of any part thereof that in any manner
materially impairs Beneficiary's security hereunder and shall not
take any action which will increase the risk of fire or other
hazard to the Trust Estate or to any part thereof.
(b) Except for Permitted Dispositions, no part of the
Improvements shall be removed, demolished or materially altered,
without the prior written consent of Beneficiary, which consent
shall not be unreasonably withheld. Trustor shall have the right,
without such consent, to remove and dispose of free from the lien
of this Deed of Trust any part of the Improvements as from time
to time may become worn out or obsolete, provided that either (i)
such removal or disposition does not materially adversely affect
the value of the Trust Estate or (ii) prior to or promptly
following such removal, any such property shall be replaced with
other property of substantially equal utility and of a value at
least substantially equal to that of the replaced property when
first acquired and free from any security interest of any other
person (subject to Permitted Liens), and by such removal and
replacement Trustor shall be deemed to have subjected such
replacement property to the lien of this Deed of Trust.
1.8 Environmental Laws.
(a) Trustor shall comply with all Environmental Laws.
If Trustor fails to do so, then Beneficiary may cause the Trust
Estate to so comply and Trustor shall indemnify Beneficiary with
respect to any expenditures that Beneficiary reasonably incurs in
doing so. This shall not limit any other rights or remedies
available to Beneficiary.
(b) Trustor shall have 90 days to cure any lien
imposed on any portion of the Trust Estate pursuant to any
Environmental Laws or such greater period of time as permitted by
the Governmental Authority which has imposed the lien.
(c) Trustor shall notify Beneficiary immediately of
Trustor's discovery of (i) any contamination of any portion of
the Trust Estate which may require remediation; or (ii) any past
or present violation of any Environmental Law on any portion of
the Trust Estate.
(d) Turstor will defend, indemnify, and hold harmless
Beneficiary, its employees, agents, officers, and directors, from
and against any and all claims, demands, penalties, causes of
action, fines, liabilities, settlements, damages, costs, or
expenses of whatever kind or nature, known or unknown, foreseen
or unforeseen, contingent or otherwise (including, without
limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, court costs, and
litigation expenses) arising out of, or in any way related to,
(i) any breach by the Trustor of any of the provisions set forth
above, (ii) the presence, disposal, spillage, discharge,
emission, leakage, release, or threatened release of any
Hazardous Material which is at, in, on, under, about, from or
affecting the Trust Estate, including, without limitation, any
damage or injury resulting from any such Hazardous Material to or
affecting the Trust Estate or the soil, water, air, vegetation,
buildings,
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personal property, persons or animals located on the
Trust Estate or on any other property or otherwise, (iii) any
personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to any such
Hazardous Material, (iv) any lawsuit brought or threatened,
settlement reached, or order or directive of or by any
governmental authority relating to such Hazardous Material, or
(v) any violation of any Environmental Law.
1.9 Leases.
(a) Trustor represents and warrants that:
(i) Trustor has delivered to Beneficiary true,
correct and complete copies of all Material Space Leases,
including all amendments and modifications, written or oral
existing as of the Issue date;
(ii) Trustor has not executed or entered into any
modifications or amendments of the Material Space Leases, either
orally or in writing, other than written amendments that have
been disclosed to Beneficiary in writing;
(iii) no default now exists under any Space
Lease;
(iv) no event has occurred that, with the giving
of notice or the passage of time or both, would constitute such a
default or would entitle Trustor or any other party under such
Space Lease to cancel the same or otherwise avoid its
obligations;
(v) Trustor has not accepted prepayments of
installments of Rent under any Space Leases, except for that
certain Lease Agreement among SBOC and Xxxxxxxxx Yerushalamin
dated July 8, 1992, more than one month in advance of the date
when the same are due, except for security deposits not in excess
of one month's Rent;
(vi) except for the Existing Encumbrances and
this assignment Trustor has not executed any assignment or pledge
of any of the Existing Encumbrances, Space Leases, the Rents, or
of Trustor's right, title and interest in the same; and
(vii) this Deed of Trust conforms and
complies with all Space Leases, does not constitute a violation
or default under any Space Lease, and is and shall at all times
constitute a valid lien (subject only to Permitted Liens) on
Trustor's interests in the Space Leases.
(b) Trustor shall not enter into any new Space Leases
or any modifications or amendments of existing Space Leases in
the future other than written, bona fide amendments or
modifications entered into in arms-length transactions.
1.10 Further Encumbrance, Sale or Other Disposition of
Collateral.
(a) Trustor covenants that at all times prior to the
discharge of the Promissory Note or Loan Documents, except for
Permitted Liens and Permitted Dispositions, Trustor shall not,
without the consent of Beneficiary, make nor suffer to exist, nor
enter into any agreement for, any sale, assignment, exchange,
mortgage, transfer, Lien, hypothecation or encumbrance of all or
any part of the Trust Estate, including, without limitation, the
Rents. As used herein, "transfer" includes the actual transfer or
other disposition, whether voluntary or involuntary, by law, or
otherwise, except those transfers specifically permitted herein,
provided, however, that "transfer" shall not include the granting
of utility or other beneficial easements with respect to the
Trust Estate which have been granted by Trustor and are
reasonably necessary to the construction, maintenance or
operation of the Las Vegas Showboat.
(b) Any Permitted Lien described in the definition of
"Permitted Liens" set forth in Section 1.01 of the Indenture and
1 of the Loan Agreement which is junior to the lien of the Loan
Documents (a "Subordinate Deed of Trust") shall be permitted
hereunder so long as there shall have been delivered to
Beneficiary, not less than thirty (30) days prior to the date
thereof, a copy thereof which shall contain express covenants in
form and substance reasonably satisfactory to Beneficiary to the
effect that: (i) the Subordinate Deed of Trust is in all respects
subject and subordinate to this Deed of Trust; (ii) if any action
or proceeding shall be brought to foreclose the Subordinate Deed
of Trust (regardless of whether
15
the same is a judicial proceeding or pursuant to a power of sale
contained therein), no tenant of any portion of the Trust Estate
shall be named as a party defendant nor shall any action be taken
with respect to the Trust Estate which would terminate any
occupancy or tenancy of the Trust Estate, or any portion thereof,
without the consent of Beneficiary; (iii) any Rents, if collected
through a receiver or by the holder of the Subordinate Deed
of Trust, shall be applied first to the obligations secured by
this Deed of Trust, including principal and interest due and
owing on or to become due and owing on the First Mortgage Bonds,
and then to the payment of maintenance expenses, operating
charges, taxes, assessments, and disbursements incurred in
connection with the ownership, operation, and maintenance of
the Trust Estate; and (iv) if any action or proceeding shall
be brought to foreclose the Subordinate Deed of Trust, prompt
notice of the commencement thereof shall be given to Beneficiary.
(c) Trustor agrees that in the event the ownership of
the Trust Estate or any part thereof becomes vested in a person
other than Trustor, Beneficiary may, without notice to Trustor,
deal in any way with such successor or successors in interest
with reference to this Deed of Trust, the First Mortgage Bonds,
the Promissory Note, and other Obligations hereby secured without
in any way vitiating or discharging Trustor's or any Guarantor's,
surety's or endorser's liability hereunder or upon the
obligations hereby secured. No sale of the Trust Estate and no
forbearance to any person with respect to this Deed of Trust and
no extension to any person of the time for payment of the First
Mortgage Bonds, and other sums hereby secured given by
Beneficiary shall operate to release, discharge, modify, change
or affect the original liability of Trustor, or such Guarantor,
surety or endorser either in whole or in part.
(d) This Deed of Trust may be subordinated to the
liens of any FF&E Financing Agreements (as hereinafter defined in
this Section 1.10(d)) and any future or further advances made
thereunder and to any modifications, renewals or extensions
thereof to which the lien of this Deed of Trust attaches. Trustor
covenants and agrees to comply with all of the terms and
conditions set forth in any FF&E Financing Agreement. If Trustor
shall fail to make any payment of principal of or pursuant to any
FF&E Financing Agreement on its part to be performed or observed,
except where Trustor is contesting such payment in good faith,
then Beneficiary may make such payment of the principal of or
interest on the sums secured by such security interest or may
make any payment in order to perform or observe any other term,
covenant, condition or agreement of any FF&E Financing Agreement
on Trustor's part to be performed or observed and any and all
sums so expended by Beneficiary or Trustee shall be secured by
this Deed of Trust and shall be repaid by Trustor upon demand,
together with interest thereon at the interest rate on the First
Mortgage Bonds from the date of advance. In furtherance of such
subordination, Beneficiary shall execute, acknowledge and deliver
to Trustor, at Trustor's expense, any and all such evidence and
document the subordination of this Deed of Trust in accordance
with the foregoing provisions of this Section 1.10(d). As used
herein, "FF&E Financing Agreement" shall mean any financing (i)
as to which the lender holds a security interest in only the
assets purchased by such financing for the payment of principal
and interest, (ii) which is permitted by the Indenture to be
incurred and (iii) the proceeds of which are used to acquire or
lease the FF&E subject to such security interest.
1.11 Partial Releases of Trust Estate. Trustor may from
time to time (i) transfer a portion of the Trust Estate
(including any temporary taking) to any person legally empowered
to exercise the power of eminent domain, (ii) make a Permitted
Disposition or (iii) grant utility and other easements reasonably
necessary for the construction and operation of the Las Vegas
Showboat, which grant or transfer is for the benefit of the Trust
Estate. In each such case, Beneficiary shall execute and deliver
any instruments necessary or appropriate to effectuate or confirm
any such transfer or grant, free from the lien of this Deed of
Trust, provided. however, that Beneficiary shall execute a lien
release or subordination agreement, as appropriate, for matters
described in clauses (i) and (iii) above only if Beneficiary and
Trustee shall have received the following:
(a) A written request of Trustor, dated as of the date
of such transfer, grant or release and signed by an authorized
officer of Trustor, requesting Beneficiary and Trustee to execute
one or more described instruments, and certifying that (i) no
Event of Default hereunder, and no event which with notice or
lapse of time or both would constitute such Event of Default, has
occurred and is continuing and that the conditions of this
Section 1.11 have been fulfilled, (ii) the transfer, grant or
release is not materially adverse to the proper conduct of the
business of Trustor on the Land, (iii) in the case of a transfer
of property whose value is greater than $1,000,000 to a person
legally empowered to exercise the power of eminent domain, the
consideration being paid for the portion of the Trust Estate
being transferred, and that such consideration is not less than
the fair market value of such portion, and in the case of a grant
or release of easements or other rights, the consideration, if
any, being paid for such grant or release, (iv) in the case of a
transfer to a person legally empowered to exercise the power of
eminent domain, that such transfer is being made in anticipation
that such portion would
16
otherwise be taken under the power of eminent domain, and (v)
that such transfer, grant or release does not materially impair
the use of the Trust Estate for the purposes for which it is
then held by Trustor;
(b) A counterpart of the instrument pursuant to which
such transfer, grant or release is to be made, and each
instrument which Beneficiary or Trustee is requested to execute
in order to effectuate or confirm such transfer, grant or
release;
(c) In the case of a transfer to a person legally
empowered to exercise the power of eminent domain, which transfer
involves property whose value is greater than $6,000,000, an
opinion of counsel to Trustor to the effect that the assignee or
grantee of the portion of the Trust Estate being transferred is
legally empowered to take such portion under the power of eminent
domain; and
(d) Such other instruments, certificates (including
evidence of authority) and legal opinions as Beneficiary or
Trustee may reasonably request.
Any consideration received for a transfer to any person
empowered to exercise the right of eminent domain shall be
subject to Section 1.6 hereof.
1.12 Future Advances. All funds advanced in the reasonable
exercise of Beneficiary's judgment that the same are needed to
protect its security hereunder are deemed to be obligatory
advances and are to be added to the total indebtedness secured by
this Deed of Trust and such indebtedness shall be increased
accordingly. All sums so advanced shall be secured by this Deed
of Trust with the same priority of Lien as the security for the
Obligations secured hereunder.
1.13 Further Assurances.
(a) At its sole cost and without expense to Trustee or
Beneficiary, Trustor shall do, execute, acknowledge and deliver
any and all such further acts, deeds, conveyances, notices,
requests for notices, financing statements, continuation
statements, certificates, assignments, notices of assignments,
agreements, instruments and further assurances, and shall xxxx
any chattel paper, deliver any chattel paper or instruments to
Beneficiary and take any other actions that are reasonably
necessary, prudent, or requested by Beneficiary or Trustee to
perfect or continue the perfection and first priority in pari
passu of Beneficiary's security interest in the Trust Estate, to
protect the Collateral against the rights, claims, or interests
of third persons other than holders of Permitted Liens or to
effect the purposes of this Deed of Trust, including the security
agreement and the absolute assignment of Rents contained herein,
or for the filing. registering or recording thereof.
(b) Trustor shall forthwith upon the execution and
delivery of this Deed of Trust, and thereafter from time to time,
cause this Deed of Trust and each instrument of further assurance
to be filed, indexed, registered, recorded, given or delivered in
such manner and in such places as may be required by any present
or future law in order to publish notice of and fully to protect
the lien hereof upon, and the title of Trustee and/or Beneficiary
to, the Trust Estate.
1.14 Security Agreement and Financing Statements. Trustor
(as debtor) hereby grants to Beneficiary (as creditor and secured
party) a present and future security interest in all Tangible
Collateral, Intangible Collateral, FF&E (to the extent
Beneficiary is permitted, in each applicable FF&E Financing
Agreement, to maintain a security interest therein).
Improvements, all other personal property now or hereafter owned
or leased by Trustor or in which Trustor has or will have any
interest, to the extent that such property constitutes a part of
the Trust Estate (whether or not such items are stored on the
premises or elsewhere). Proceeds of the foregoing comprising a
portion of the Trust Estate and all proceeds of insurance
policies and consideration awards arising therefrom and all
proceeds, products, substitutions, and accessions therefor and
thereto, subject to Beneficiary's rights to treat such property
as real property as herein provided (collectively, the "Personal
Property"). Trustor shall execute any and all documents and
writings. including without limitation financing statements
pursuant to the UCC. as may be reasonably necessary or prudent to
preserve and maintain the priority of the security interest
granted hereby on property which may be deemed subject to the
foregoing security agreement or as Beneficiary may reasonably
request, and shall pay to Beneficiary on demand any reasonable
expenses incurred by Beneficiary in connection with the
preparation, execution and filing of any such documents. Trustor
hereby authorizes and empowers Beneficiary to execute and file,
on Trustor's behalf, all financing statements and refiling and
continuations thereof as Beneficiary deems reasonably necessary
or advisable to create, preserve and protect said security
interest. This Deed of Trust constitutes both a real property
deed of trust and a "security agreement," within the meaning of
the UCC, and the Trust Estate includes both
17
real and personal property and all other rights and
interests, whether tangible or intangible in nature, of Trustor
in the Trust Estate. Trustor by executing and delivering this
Deed of Trust has granted to Beneficiary, as security of the
Obligations, a security interest in the Trust Estate.
(a) FIXTURE FILING. Without in any way limiting the
generality of the immediately preceding paragraph or of the
definition of the Trust Estate, this Deed of Trust constitutes a
fixture filing under Section 9-402 of the UCC (NRS 104.9402). For
such purposes, (i) the "debtor" is Trustor and its address is the
address given for it in the initial paragraph of this Deed of
Trust; (ii) the "secured party" is the Beneficiary and its
address for the purpose of obtaining information is the address
given for it in the initial paragraph of this Deed of Trust;
(iii) the real estate to which the fixtures are or are to become
attached is Trustor's interest in the land; and (iv) the record
owner of such real estate is Showboat, Inc.
(b) REMEDIES. This Deed of Trust shall be deemed a
security agreement as defined in the UCC and the remedies for any
violation of the covenants, terms and conditions of the
agreements herein contained shall include any or all of (i) those
prescribed herein, and (ii) those available under applicable law,
and (iii) those available under the UCC, all at Beneficiary's
sole election. In addition, a photographic or other reproduction
of this Deed of Trust shall be sufficient as a financing
statement for filing wherever filing may be necessary to perfect
or continue the security interest granted herein.
(c) DEROGATION OF REAL PROPERTY. It is the intention
of the parties that the filing of a financing statement in the
records normally having to do with personal property shall never
be construed as in anyway derogating from or impairing the
express declaration and intention of the parties hereto as
hereinabove stated that everything used in connection with the
production of income from the Trust Estate and/or adapted for use
therein and/or which is described or reflected in this Deed of
Trust is, and at all times and for all purposes and in all
proceedings both legal or equitable, shall be regarded as part of
the real property encumbered by this Deed of Trust irrespective
of whether (i) any such item is physically attached to the
Improvements, (ii) serial numbers are used for the better
identification of certain equipment items capable of being thus
identified in a recital contained herein or in any list filed
with Beneficiary, or (iii) any such item is referred to or
reflected in any such financing statement so filed at any time.
It is the intention of the parties that the mention in any such
financing statement of (1) rights in or to the proceeds of any
fire and/or hazard insurance policy, or (2) any award in eminent
domain proceedings for a taking or for loss of value, or (3)
Trustor's interest as lessors in any present or future Space
Lease or rights to Rents, shall never be construed as in anyway
altering any of the rights of Beneficiary as determined by this
Deed of Trust or impugning the priority of Beneficiary's real
property lien granted hereby or by any other recorded document,
but such mention in the financing statement is declared to be for
the protection of Beneficiary in the event any court or judge
shall at any time hold with respect to the matters set forth in
the foregoing clauses (1), (2) and (3) that notice of
Beneficiary's priority of interest to be effective against a
particular class of persons, including but not limited to, the
federal government and any subdivisions or entity of the federal
government, must be filed in the UCC records.
(d) PRIORITY; PERMITTED FINANCING OF TANGIBLE
COLLATERAL. Except as provided in Section 1.10(d) hereof, all
Personal Property of any nature whatsoever, which is subject to
the provisions of this security agreement, shall be purchased or
obtained by Trustor in its name and free and clear of any lien or
encumbrance, except for Existing Encumbrances and Permitted Liens
and the lien hereof, for use only in connection with the business
and operation of the Las Vegas Showboat, and shall be and at all
times remain free and clear of any lease or similar arrangement,
chattel financing, installment sale agreement, security agreement
and any encumbrance of like kind, so that Beneficiary's security
interest shall attach to and vest in Trustor for the benefit of
Beneficiary, with the priority herein specified, immediately upon
the installation or use of the Personal Property at the Land and
Trustor warrants and represents that Beneficiary's security
interest in the Personal Property is a validly attached and
binding security interest, properly perfected and prior to all
other security interests therein except as otherwise permitted in
this Agreement.
(e) PRESERVATION OF CONTRACTUAL RIGHTS OF COLLATERAL.
Trustor shall, prior to delinquency, default, or forfeiture,
perform all obligations and satisfy all material conditions
required on its part to be satisfied to preserve its rights and
privileges under any contract, lease, license, permit, or other
authorization (i) under which it holds any Tangible Collateral or
(ii) which constitutes part of the Intangible Collateral except
where Trustor is contesting such obligations in good faith.
(f) REMOVAL OF COLLATERAL. Except as otherwise
permitted herein, none of the Tangible Collateral shall be
removed from the Trust Estate without Beneficiary's prior written
consent, and except damaged or obsolete Tangible Collateral which
is either no longer usable or which is removed temporarily for
repair or improvement or removed for replacement on the Trust
Estate with Tangible Collateral of similar function.
18
(g) CHANGE OF NAME. Trustor shall not change its
corporate or business name, or do business within the State of
Nevada under any name other than such name, or any trade name(s)
other than those as to which Trustor gives prior written notice
to Beneficiary of its intent to use such trade names, or any
other business names (if any) specified in the financing
statements delivered to Beneficiary for filing in connection with
the execution hereof, without providing Beneficiary with the
additional financing statement(s) and any other similar documents
deemed reasonably necessary by Beneficiary to assure that its
security interest remains perfected and of undiminished priority
in all such Personal Property notwithstanding such name change.
1.15 Assignment of Rents. The assignment of Leases and
Rents set out above in Granting Clause (G) shall constitute an
absolute and present assignment to Beneficiary, subject to the
license herein given to Trustor to collect the Rents, and shall
be fully operative without any further action on the part of any
party, and specifically Beneficiary shall be entitled upon the
occurrence of an Event of Default hereunder, and the expiration
of any applicable cure or grace period, to all Rents, whether or
not Beneficiary takes possession of the Trust Estate, or any
portion thereof. The absolute assignment contained in Granting
Clause (G) shall not be deemed to impose upon Beneficiary any of
the obligations or duties of Trustor provided in any such Space
Lease (including, without limitation, any liability under the
covenant of quiet enjoyment contained in any lease in the event
that any lessee shall have been joined as a party defendant in
any action to foreclose this Deed of Trust and shall have been
barred and foreclosed thereby of all right, title and interest
and equity of redemption in the Trust Estate or any part
thereof).
1.16 Expenses.
(a) Trustor shall pay when due and payable all costs,
including without limitation, those reasonable appraisal fees,
recording fees, taxes, brokerage fees and commissions, abstract
fees, title policy fees, escrow fees, attorneys' and paralegal
fees, travel expenses, fees for inspecting architect(s) and
engineer(s) and all other costs and expenses of every character
which have been incurred or which may hereafter be incurred by
Beneficiary or any assignee of Beneficiary in connection with the
preparation and execution of loan documents, amendments thereto
or instruments, agreements or documents of further assurance, the
funding of the loan secured hereby, and the enforcement of any
Loan Document; and
(b) Trustor shall, upon demand by Beneficiary,
reimburse Beneficiary or any assignee of Beneficiary for all such
reasonable expenses which have been incurred; and
(c) Trustor shall indemnify Beneficiary with respect
to any transaction or matter in any way connected with any
portion of the Trust Estate, this Deed of Trust, including any
occurrence at, in, on, upon or about the Trust Estate (including
any personal injury, loss of life, or property damage), or
Trustor's use, occupancy, or operation of the Trust Estate, or
the filing or enforcement of any mechanic's lien, or otherwise
caused in whole or in part by any act, omission or negligence
occurring on or at the Trust Estate, including failure to comply
with any Legal Requirement or with any requirement of this Deed
of Trust that applies to Trustor, or any Person's violation of
any environmental law or any contamination of any portion of the
Trust Estate. If Beneficiary is a party to any litigation as to
which either Trustor is required to indemnify Beneficiary (or is
made a defendant in any action of any kind against Trustor or
relating directly or indirectly to any portion of the Trust
Estate) then, at Beneficiary's option, Trustor shall undertake
Beneficiary's defense, using counsel satisfactory to Beneficiary
(and any settlement shall be subject to Beneficiary's consent),
and in any case shall indemnify Beneficiary against such
litigation. Trustor shall pay all reasonable costs and expenses,
including reasonable legal costs, that Beneficiary pays or incurs
in connection with any such litigation. Any amount payable under
any indemnity in this Deed of Trust shall be a demand obligation,
shall be added to, and become a part of, the secured obligations
under this Deed of Trust, shall be secured by this Deed of Trust,
and shall bear interest at the default interest rate on the
Promissory Note. Such indemnity shall survive any release of this
Deed of Trust and any Foreclosure.
1.17 Beneficiary's Cure of Trustor's Default. If Trustor
defaults in the payment of any tax, assessment, lien, encumbrance
or other Imposition, in its obligation to furnish insurance
hereunder, or in the performance or observance of any other
covenant, condition or term of this Deed of Trust or any Loan
Document (including any obligation relating to Trustor's
performance under any Facility Lease), Beneficiary may, but is
not obligated to, to preserve its interest in the Trust Estate,
perform or observe the same, and all payments made (whether such
payments are regular or accelerated payments) and reasonable
costs and expenses incurred or paid by Beneficiary in connection
therewith shall become due and payable immediately. The amounts
so incurred or paid by Beneficiary, together with interest
thereon at the default interest rate on the Promissory Note from
the date incurred until paid by Trustor, shall be added to the
indebtedness and secured by the lien of this Deed of Trust.
Beneficiary is hereby empowered to enter and to authorize others
to enter upon the Land or any
19
part thereof for the purpose of performing or observing any such
defaulted covenant, condition or term, without thereby becoming
liable to Trustor or any person in possession holding under
Trustor, provided, however, such entry upon the Land shall be
done in such manner so as not to disrupt the Trustor's business
conducted thereon. No exercise of any rights under this Section
by Beneficiary shall cure or waive any Event of Default or notice
of default hereunder or invalidate any act done pursuant hereto
or to any such notice, but shall be cumulative of all other
rights and remedies.
1.18 Use of Land. Trustor covenants that the Trust Estate
shall be used and operated in a manner consistent with the
description of the Las Vegas Showboat in the Prospectus open
during such days and hours as are customarily observed by casino-
hotels located in Las Vegas, Nevada.
1.19 Material Space Leases. Trustor shall not enter into
any Material Space Lease without first obtaining Beneficiary's
consent in writing, which consent shall not be unreasonably
withheld, as to (i) such Material Space Lease and (ii) the
identity of the Space Lessee thereunder.
1.20 Compliance with Permitted Lien Agreements. Trustor or
any Affiliate of Trustor shall comply with each and every
material obligation contained in any agreement pertaining to a
material Permitted Lien.
1.21 Defense of Actions. Trustor shall appear in and defend
any action or proceeding affecting or purporting to affect the
security hereof or the rights or powers of Beneficiary or
Trustee, and shall pay all reasonable costs and expenses,
including cost of title search and insurance or other evidence of
title, preparation of survey, and reasonable attorneys' fees in
any such action or proceeding in which Beneficiary or Trustee may
appear or may be joined as a party and in any suit brought by
Beneficiary based upon or in connection with this Deed of Trust
or any Loan Document. Nothing contained in this section shall,
however, limit the right of Beneficiary to appear in such action
or proceeding with counsel of its own choice, either on its own
behalf or on behalf of Trustor at the Trustor's sole cost and
expense.
1.22 Affiliates.
(a) SUBJECT TO TRUST DEED. Trustor shall cause all of
its Affiliates in any way involved with the operation of the
Trust Estate or the Las Vegas Showboat to observe the covenants
and conditions of this Deed of Trust to the extent necessary to
give the full intended effect to such covenants and conditions
and to protect and preserve the security of Beneficiary
hereunder. Trustor shall, at Beneficiary's request, cause any
such Affiliate to execute and deliver to Beneficiary or Trustee
such further instruments or documents as Beneficiary may
reasonably deem necessary to effectuate the terms of this Section
1.22.
(b) RESTRICTION ON USE OF SUBSIDIARY OR AFFILIATE.
Trustor shall not use any Affiliate in the operation of the Trust
Estate or the Las Vegas Showboat if such use would in any way
impair the security for the First Mortgage Bonds and the
Indenture or circumvent any covenant or condition of this Deed of
Trust or of any other Loan Document.
1.23 Title Insurance. Promptly after the execution and
delivery of this Deed of Trust, Trustor shall cause to be
delivered to Trustee at Trustor's expense, one or more ALTA
extended coverage Lender's Policies of Title Insurance showing
fee title to the Land vested in Trustor and the lien of this Deed
of Trust to be a perfected lien on a pari passu basis, prior to
any and all encumbrances other than Permitted Liens.
ARTICLE TWO
CORPORATE LOAN PROVISIONS
2.1 Interaction with Indenture and Loan Agreement.
(a) INCORPORATION BY REFERENCE. All terms, covenants,
conditions, provisions and requirements of the Indenture and Loan
Agreement are incorporated by reference in this Deed of Trust.
Any capitalized term used in this Deed
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of Trust without definition, but defined in the Indenture or Loan
Agreement, shall have the same meaning here as in the Indenture.
(b) CONFLICTS. Notwithstanding any other provision of
this Deed of Trust, the terms and provisions of this Deed of
Trust shall be subject and subordinate to the terms of the
Indenture, Intercreditor Agreement and Loan Agreement. To the
extent that the Indenture, Intercreditor Agreement or Loan
Agreement provides Trustor with a particular cure or notice
period, or establishes any limitations or conditions on
Beneficiary's actions with regard to a particular set of facts,
Trustor shall be entitled to the same cure periods and notice
periods, and Beneficiary shall be subject to the same limitations
and conditions, under this Deed of Trust, in place of the cure
periods, notice periods, limitations and conditions provided for
under this Deed of Trust; provided, however, that such cure
periods, notice periods, limitations and conditions shall not be
cumulative as between the Indenture, Intercreditor Agreement or
Loan Agreement and this Deed of Trust. In the event of any
conflict or inconsistency between the provisions of this Deed of
Trust and those of the Indenture, Intercreditor Agreement or Loan
Agreement, including, without limitation, any conflicts or
inconsistencies in any definitions herein or therein, the
provisions or definitions of the Indenture, Intercreditor
Agreement or Loan Agreement shall govern.
2.2 Other Collateral. This Deed of Trust is one of a
number of security agreements to secure the debt delivered by or
on behalf of Trustor pursuant to the Promissory Note and the
other Loan Documents and securing the Obligations secured
hereunder. All potential junior Lien claimants are placed on
notice that, under any of the Loan Documents or otherwise (such
as by separate future unrecorded agreement between Trustor and
Beneficiary), other collateral for the Obligations secured
hereunder (i. e., collateral other than the Trust Estate) may,
under certain circumstances, be released without a corresponding
reduction in the total principal amount secured by this Deed of
Trust. Such a release would decrease the amount of collateral
securing the same indebtedness, thereby increasing the burden on
the remaining Trust Estate created and continued by this Deed of
Trust. No such release shall impair the priority of the lien of
this Deed of Trust. By accepting its interest in the Trust
Estate, each and every junior Lien claimant shall be deemed to
have acknowledged the possibility of, and consented to, any such
release. Nothing in this paragraph shall impose any obligation
upon Beneficiary nor impair its Pari Passu Lien rights hereunder.
ARTICLE THREE
DEFAULTS
3.1 Event of Default. The term "Event of Default," wherever
used in this Deed of Trust, shall mean any one or more of the
following events (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order
of any court or any order, rule or regulation of any
administrative or governmental body):
(a) The failure by Trustor to pay any principal,
premium or interest when due, whether at maturity, upon
redemption, or otherwise, under the Promissory Note or First
Mortgage Bonds.
(b) The occurrence of an Event of Default and the
expiration of any applicable cure or grace period under any Loan
Document.
(c) A sale, lease, sublease, encumbrance or other
transfer in violation of Section 1.10 (Further Encumbrances)
hereof.
(d) Failure by Trustor to duly keep, perform and
observe any other covenant, condition, agreement, term,
representation or warranty in this Deed of Trust or any Loan
Document to be performed or observed by Trustor for a period of
sixty (60) days after notice from Beneficiary.
(e) Any representation or warranty of Trustor in this
Deed of Trust shall prove to be incorrect in any material respect
as of the time when the same shall have been made.
(f) The entry by any court of competent jurisdiction
of a judgment or decree that an undertaking by Trustor as herein
provided to pay the Promissory Note or Bonds or any interest
thereon, or any taxes, assessments, levies, liabilities,
obligations or encumbrances is legally inoperative or cannot be
enforced, so as to affect adversely either the security
21
of this Deed of Trust, the indebtedness or other Obligations
secured hereby, the rate of interest on the First Mortgage Bonds
or all or any portion of the indebtedness, and such judgment
shall not be appealed and stayed pending appeal within ten (10)
days after such notice.
ARTICLE FOUR
REMEDIES
4.1 Acceleration of Maturity. Following an Event of
Default and the expiration of any applicable cure or grace
period, Beneficiary may (except that such acceleration shall be
automatic if the Event of Default is caused by a Trustor's
Bankruptcy), declare the Indebtedness and all other sums secured
hereby, to be due and payable immediately, and upon such
declaration such principal and interest and other sums shall
immediately become due and payable without demand, presentment,
notice or other requirements of any kind (all of which Trustor
waives to the extent permitted by law to do so) notwithstanding
anything in this Deed of Trust or any Loan Document or applicable
law to the contrary.
4.2 Protective Advances. If Trustor fails to make any
payment or perform any other obligation under the First Mortgage
Bonds, the Promissory Note, or any other Loan Document, then
without thereby limiting Beneficiary's other rights or remedies,
waiving or releasing any of Trustor's obligations, or imposing
any obligation on Beneficiary, Beneficiary may either advance any
amount owing or perform any or all actions that Beneficiary
reasonably considers necessary or appropriate to cure such
default. All such advances shall constitute "Protective
Advances." No sums advanced or performance rendered by
Beneficiary shall cure, or be deemed a waiver of any Event of
Default.
4.3 Institution of Equity Proceedings. Following an Event
of Default and the expiration of any applicable cure or grace
period, Beneficiary may institute an action, suit or proceeding
in equity for specific performance of this Deed of Trust, the
Loan Agreement or any Loan Document, all of which shall be
specifically enforceable by injunction or other equitable remedy.
Trustor waives any defense based on laches or any applicable
statue of limitations.
4.4 Beneficiary's Power of Enforcement.
(a) Following an Event of Default and the expiration
of any applicable cure or grace period, Beneficiary shall be
entitled, at its option and in its sole and absolute discretion,
to prepare and record on its own behalf, or to deliver to Trustee
for recording, if appropriate, written declaration of default and
demand for sale and written Notice of Breach and Election to Sell
(or other statutory notice) to cause the Trust Estate to be sold
to satisfy the obligations hereof, and in the case of delivery to
Trustee, Trustee shall cause said notice to be filed for record.
(b) After the lapse of such time as may then be
required by law following the recordation of said Notice of
Breach and Election to Sell, and notice of sale having been given
as then required by law, including compliance with all applicable
Gaming Control Acts, Trustee, without demand on Trustor, shall
sell the Trust Estate or any portion thereof at the time and
place fixed by it in said notice, either as a whole or in
separate parcels, and in such order as it may determine, at
public auction to the highest bidder, of cash in lawful money of
the United States payable at the time of sale. Trustee may, for
any cause it deems expedient, postpone the sale of all or any
portion of said property until it shall be completed and, in
every case, notice of postponement shall be given by public
announcement thereof at the time and place last appointed for the
sale and from time to time thereafter Trustee may postpone such
sale by public announcement at the time fixed by the preceding
postponement. Trustee shall execute and deliver to the purchaser
its Deed, Xxxx of Sale, or other instrument conveying said
property so sold, but without any covenant or warranty, express
or implied. The recitals in such instrument of conveyance of any
matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Beneficiary, may bid at the sale.
(c) After deducting all costs, fees and expenses of
Trustee and of this Deed of Trust, including, without limitation,
costs of evidence of title and reasonable attorneys' fees of
Trustee or Beneficiary in connection with a sale, Trustee shall
apply the proceeds of such sale to payment of all sums expended
under the terms hereof not then repaid, with accrued interest at
the default interest rate on the Promissory Note then to the
payment of all other sums then secured hereby and the remainder,
if any, to the person or persons legally entitled thereto as
provided in NRS 40.462.
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(d) Subject to compliance with applicable Gaming
Control Acts, following any Event of Default and the expiration
of any applicable cure or grace period, Beneficiary may, either
with or without entry or taking possession of the Trust Estate,
and without regard to whether or not the indebtedness and other
sums secured hereby shall be due and without prejudice to the
right of Beneficiary thereafter to bring an action or proceeding
to foreclose or any other action for any default existing at the
time such earlier action was commenced, proceed by any
appropriate action or proceeding: (1) to enforce payment of the
Promissory Note, to the extent permitted by law, or the
performance of any term hereof or any other right; (2) to
foreclose this Deed of Trust in any manner provided by law for
the foreclosure of mortgages or deeds of trust on real property
and to sell, as an entirety or in separate lots or parcels, the
Trust Estate or any portion thereof pursuant to the laws of the
State of Nevada or under the judgment or decree of a court or
courts of competent jurisdiction, and Beneficiary shall be
entitled to recover in any such proceeding all costs and expenses
incident thereto, including reasonable attorneys' fees in such
amount as shall be awarded by the court; (3) to exercise any or
all of the rights and remedies available to it under the Loan
Agreement; and (4) to pursue any other remedy available to it.
Beneficiary shall take action either by such proceedings or by
the exercise of its powers with respect to entry or taking
possession, or both, as Beneficiary may determine.
(e) The remedies described in this Section 4.4 may be
exercised with respect to all or any portion of the Personal
Property, either simultaneously with the sale of any real
property encumbered hereby or independent thereof. Beneficiary
shall at any time be permitted to proceed with respect to all or
any portion of the Personal Property in any manner permitted by
the UCC. Trustor agrees that Beneficiary's inclusion of all or
any portion of the Personal Property in a sale or other remedy
exercised with respect to the real property encumbered hereby, as
permitted by the UCC, is a commercially reasonable disposition of
such property.
4.5 Beneficiary's Right to Enter and Take Possession,
Operate and Apply Income.
(a) Subject to the Intercreditor Agreement and
compliance with applicable Gaming Control Acts, following an
Event of Default and the expiration of any applicable cure or
grace period, (i) Trustor, upon demand of Beneficiary, shall
forthwith surrender to Beneficiary the actual possession and, if
and to the extent permitted by law, Beneficiary itself, or by
such officers or agents as it may appoint, may enter and take
possession of all the Trust Estate including the Personal
Property, without liability for trespass, damages or otherwise,
and may exclude Trustor and its agents and employees wholly
therefrom and may have joint access with Trustor to the books,
papers and accounts of Trustor; and (ii) Trustor shall pay
monthly in advance to Beneficiary on Beneficiary's entry into
possession, or to any receiver appointed to collect the Rents,
all Rents then due and payable.
(b) If Trustor shall for any reason fail to surrender
or deliver the Trust Estate, the Personal Property or any part
thereof after Beneficiary's demand, Beneficiary may obtain a
judgment or decree conferring on Beneficiary or Trustee the right
to immediate possession or requiring Trustor to deliver immediate
possession of all or part of such property to Beneficiary or
Trustee and Trustor hereby specifically consents to the entry of
such judgment or decree. Trustor shall pay to Beneficiary or
Trustee, upon demand, all reasonable costs and expenses of
obtaining such judgment or decree and reasonable compensation to
Beneficiary or Trustee, their attorneys and agents, and all such
costs, expenses and compensation shall, until paid, be secured by
the lien of this Deed of Trust.
(c) Subject to compliance with applicable Gaming
Control Acts, upon every such entering upon or taking of
possession, Beneficiary or Trustee may hold, store, use, operate,
manage and control the Trust Estate and conduct the business
thereof, and, from time to time in its sole and absolute
discretion and without being under any duty to so act:
(1) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise
acquire additional fixtures, personalty and other property;
(2) insure or keep the Trust Estate insured;
(3) manage and operate the Trust Estate and
exercise all the rights and powers of Trustor in their name or
otherwise with respect to the same;
(4) enter into agreements with others to exercise
the powers herein granted Beneficiary or Trustee, all as
Beneficiary or Trustee from time to time may determine; and,
subject to the absolute assignment of the Leases
23
and Rents to Beneficiary, Beneficiary or Trustee may collect and
receive all the Rents, including those past due as well as those
accruing thereafter; and shall apply the monies so received by
Beneficiary or Trustee in such priority as Beneficiary may
determine to (1) the payment of interest and principal due and
payable on the Promissory Note, (2) the deposits for taxes and
assessments and insurance premiums due, (3) the cost of
insurance, taxes, assessments and other proper charges upon the
Trust Estate or any part thereof; (4) the reasonable
compensation, expenses and disbursements of the agents, attorneys
and other representatives of Beneficiary or Trustee; and (5) any
other reasonable and necessary charges or costs required to be
paid by Trustor under the terms hereof; and
(5) rent or sublet the Trust Estate or any
portion thereof for any purpose permitted by the Facility Lease
or this Deed of Trust.
Beneficiary or Trustee shall surrender possession of
the Trust Estate and the Personal Property to Trustor only when
all that is due upon such interest and principal, tax and
insurance deposits, and all amounts under any of the terms of the
Loan Agreement or this Deed of Trust, shall have been paid and
all defaults made good. The same right of taking possession,
however, shall exist if any subsequent Event of Default shall
occur and be continuing.
4.6 Leases. Beneficiary is authorized to foreclose this
Deed of Trust subject to the Intercreditor Agreement and the
rights of any tenants of the Trust Estate, and the failure to
make any such tenants parties defendant to any such foreclosure
proceedings and to foreclose their rights shall not be, nor be
asserted by Trustor to be, a defense to any proceedings
instituted by Beneficiary to collect the sums secured hereby or
to collect any deficiency remaining unpaid after the foreclosure
sale of the Trust Estate, or any portion thereof. Unless
otherwise agreed by Beneficiary in writing, all Space Leases
executed subsequent to the date hereof, or any part thereof,
shall be subordinate and inferior to the lien of this Deed of
Trust, except that from time to time Beneficiary may execute and
record among the land records of the jurisdiction where this Deed
of Trust is recorded, subordination statements with respect to
such of said Space Leases as Beneficiary may designate in its
sole discretion, whereby the Space Leases so designated by
Beneficiary shall be made superior to the lien of this Deed of
Trust for the term set forth in such subordination statement.
From and after the recordation of such subordination statements,
and for the respective periods as may be set forth therein, the
Space Leases therein referred to shall be superior to the lien of
this Deed of Trust and shall not be affected by any foreclosure
hereof. All such Space Leases shall contain a provision to the
effect that the Trustor and Space Lessee recognize the right of
Beneficiary to elect and to effect such subordination of this
Deed of Trust and consents thereto.
4.7 Purchase by Beneficiary. Upon any foreclosure sale
(whether judicial or nonjudicial), Beneficiary may bid for and
purchase the property subject to such sale and, upon compliance
with the terms of sale, may hold, retain and possess and dispose
of such property in its own absolute right without further
accountability.
4.8 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Trustor agrees to the full extent permitted by
law that if an Event of Default occurs, neither Trustor nor
anyone claiming through or under it shall or will set up, claim
or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order
to prevent or hinder the enforcement or foreclosure of this Deed
of Trust or the absolute sale of the Trust Estate or any portion
thereof or the final and absolute putting into possession
thereof, immediately after such sale, of the purchasers thereof,
and Trustor for itself and all who may at any time claim through
or under it, hereby waives, to the full extent that it may
lawfully so do, the benefit of all such laws, and any and all
right to have the assets comprising the Trust Estate marshalled
upon any foreclosure of the lien hereof and agrees that Trustee
or any court having jurisdiction to foreclose such lien may sell
the Trust Estate in part or as an entirety.
4.9 Receiver. Following an Event of Default and the
expiration of any applicable cure or grace period, Beneficiary,
to the extent permitted by law and in accordance with all
applicable Gaming Control Acts, and without regard to the value,
adequacy or occupancy of the security for the indebtedness and
other sums secured hereby, shall be entitled as a matter of right
if it so elects to the appointment of a receiver to enter upon
and take possession of the Trust Estate and to collect all Rents
and apply the same as the court may direct, and such receiver may
be appointed by any court of competent jurisdiction upon
application by Beneficiary. Beneficiary may have a receiver
appointed without notice to Trustor or any third party, and
Beneficiary may waive any requirement that the receiver post a
bond. Beneficiary shall have the power to designate and select
the Person who shall serve as the receiver and to negotiate all
terms and conditions under which such receiver shall serve. Any
receiver appointed on Beneficiary's behalf may be an Affiliate of
Beneficiary. The expenses, including receiver's fees, reasonable
attorneys' fees, costs and agent's compensation, incurred
pursuant to the powers herein contained shall be secured by this
Deed of Trust. The right to enter and take possession of and to
manage and operate the Trust Estate
24
and to collect all Rents, whether by a receiver or otherwise,
shall be cumulative to any other right or remedy available to
Beneficiary under this Deed of Trust, the Indenture or otherwise
available to Beneficiary and may be exercised concurrently
therewith or independently thereof. Beneficiary shall be liable
to account only for such Rents (including, without limitation,
security deposits) actually received by Beneficiary, whether
received pursuant to this section or any other provision
hereof. Notwithstanding the appointment of any receiver or other
custodian, Beneficiary shall be entitled as pledgee to the
possession and control of any cash, deposits, or instruments at
the time held by, or payable or deliverable under the terms
of this Deed of Trust to, Beneficiary.
4.10 Suits to Protect the Trust Estate. Beneficiary shall
have the power and authority to institute and maintain any suits
and proceedings as Beneficiary, in its sole and absolute
discretion, may deem advisable (a) to prevent any impairment of
the Trust Estate by any acts which may be unlawful or any
violation of this Deed of Trust, (b) to preserve or protect its
interest in the Trust Estate, or (c) to restrain the enforcement
of or compliance with any legislation or other Legal Requirement
that may be unconstitutional or otherwise invalid, if the
enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to
Beneficiary's interest
4.11 Proofs of Claim. In the case of any receivership,
Insolvency, Bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceedings affecting Trustor, any
Affiliate or any guarantor, co-maker or endorser of any of
Trustor's obligations, its creditors or its property,
Beneficiary, to the extent permitted by law, shall be entitled to
file such proofs of claim or other documents as it may deem to be
necessary or advisable in order to have its claims allowed in
such proceedings for the entire amount due and payable by Trustor
under the Promissory Note or any other Loan Document, at the date
of the institution of such proceedings, and for any additional
amounts which may become due and payable by Trustor after such
date.
4.12 Trustor to Pay the First Mortgage Bonds and
Promissory Note on Any Default in Payment:
Application of Monies by Beneficiary.
(a) In case of a foreclosure sale of all or any part
of the Trust Estate and of the application of the proceeds of
sale to the payment of the sums secured hereby, Beneficiary shall
be entitled to enforce payment from Trustor of any additional
amounts then remaining due and unpaid and to recover judgment
against Trustor for any portion thereof remaining unpaid, with
interest at the default interest rate on the Promissory Note.
(b) Trustor hereby agrees to the extent permitted by
law, that no recovery of any such judgment by Beneficiary or
other action by Beneficiary and no attachment or levy of any
execution upon any of the Trust Estate or any other property
shall in any way affect the Lien and security interest of this
Deed of Trust upon the Trust Estate or any part thereof or any
Lien, rights, powers or remedies of Beneficiary hereunder, but
such Lien, rights, powers and remedies shall continue unimpaired
as before.
(c) Any monies collected or received by Beneficiary
under this Section 4.12 shall be first applied to the payment of
the reasonable compensation, expenses and disbursements of the
agents, attorneys and other representatives of Beneficiary, and
the balance remaining shall be applied to the payment of amounts
due and unpaid under the First Mortgage Bonds and Promissory
Note.
(d) The provisions of this section shall not be deemed
to limit or otherwise modify the provisions of any guaranty of
the indebtedness evidenced by the First Mortgage Bonds and
Promissory Note.
4.13 Delay or Omission: No Waiver. No delay or omission of
Beneficiary or Bondholder to exercise any right, power or remedy
upon any Event of Default (and after the expiration of any
applicable cure or grace period) shall exhaust or impair any such
right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every
right, power and remedy given to Beneficiary whether contained
herein or in the Indenture or otherwise available to Beneficiary
may be exercised from time to time and as often as may be deemed
expedient by Beneficiary.
4.14 No Waiver of One Default to Affect Another. No waiver
of any Event of Default hereunder shall extend to or affect any
subsequent or any other Event of Default then existing, or impair
any rights, powers or remedies consequent thereon. If
Beneficiary or any Bondholder (a) grants forbearance or an
extension of time for the payment of any sums secured hereby; (b)
takes other or additional security for the payment thereof; (c)
waives or does not exercise any right
25
granted in the First Mortgage Bonds, the Indenture, this Deed
of Trust, the Loan Agreement, or any other Loan Document; (d)
releases any part of the Trust Estate from the lien or security
interest of this Deed of Trust or any other instrument securing
the First Mortgage Bonds or the Loan; (e) consents to the filing
of any map, plat or replat of the Land; (f) consents to the
granting of any easement on the Land; or (g) makes or consents
to any agreement changing the terms of this Deed of Trust,
the Loan Agreement, or any Loan Document subordinating the lien
or any charge hereof, no such act or omission shall release,
discharge, modify, change or affect the original liability under
the First Mortgage Bonds, this Deed of Trust or any other Loan
Document or otherwise of Trustor, or any subsequent purchaser of
the Trust Estate or any part thereof or any maker, co-signer,
surety or guarantor. No such act or omission shall preclude
Beneficiary from exercising any right, power or privilege
herein granted or intended to be granted in case of any Event
of Default then existing or of any subsequent Event of Default,
nor, except as otherwise expressly provided in an instrument or
instruments executed by Beneficiary, shall the lien or security
interest of this Deed of Trust be altered thereby, except to
the extent expressly provided in any releases, maps, easements or
subordinations described in clause (d), (e), (f) or (g) above of
this Section 4.14. In the event of the sale or transfer by
operation of law or otherwise of all or any part of the Trust
Estate, Beneficiary, without notice to any person, firm or
corporation, is hereby authorized and empowered to deal with any
such vendee or transferee with reference to the Trust Estate or
the indebtedness secured hereby, or with reference to any of the
terms or conditions hereof, as fully and to the same extent as
it might deal with the original parties hereto and without in
any way releasing or discharging any of the liabilities
or undertakings hereunder, or waiving its right to declare such
sale or transfer an Event of Default as provided herein.
Notwithstanding anything to the contrary contained in this Deed
of Trust or any Loan Document, (i) in the case of any
non-monetary Event of Default (and after the expiration of any
applicable cure or grace period), Beneficiary may continue to
accept payments due hereunder without thereby waiving the
existence of such or any other Event of Default and (ii) in the
case of any monetary Event of Default, Beneficiary may accept
partial payments of any sums due hereunder without thereby
waiving the existence of such Event of Default if the partial
payment is not sufficient to completely cure such Event of
Default.
4.15 Discontinuance of Proceedings: Position of Parties
Restored. If Beneficiary shall have proceeded to enforce any
right or remedy under this Deed of Trust by foreclosure, entry of
judgement or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to
Beneficiary, then and in every such case Trustor and Beneficiary
shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Beneficiary shall continue
as if no such proceedings had occurred or had been taken.
4.16 Remedies Cumulative. No right, power or remedy,
including without limitation remedies with respect to any
security for the First Mortgage Bonds, conferred upon or reserved
to Beneficiary by the Subsidiary Guaranties, this Deed of Trust,
the other Deeds of Trust or any other Loan Document is exclusive
of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and
shall be in addition to any other right, power and remedy given
hereunder or under any Loan Document, now or hereafter existing
at law, in equity or by statute, and Beneficiary shall be
entitled to resort to such rights, powers, remedies or security
as Beneficiary shall in its sole and absolute discretion deem
advisable.
4.17 Interest After Event of Default. If an Event of
Default shall have occurred and is continuing, all sums
outstanding and unpaid under the Promissory Note and this Deed of
Trust shall, at Beneficiary's option, bear interest at the
default interest rate on the Promissory Note until such Event of
Default has been cured. Trustor's obligation to pay such interest
shall be secured by this Deed of Trust.
4.18 Foreclosure: Expenses of Litigation. If foreclosure be
made by Trustee, reasonable attorneys' fees for services in the
supervision of said foreclosure proceeding shall be allowed to
the Trustee and Beneficiary as part of the foreclosure costs. In
the event of foreclosure of the lien hereof, there shall be
allowed and included as additional indebtedness all reasonable
expenditures and expenses which may be paid or incurred by or on
behalf of Beneficiary for attorneys' fees, appraiser's fees,
outlays for documentary and expert evidence, stenographers'
charges, publication costs, and costs (which may be estimated as
to items to be expended after foreclosure sale or entry of the
decree) of procuring all such abstracts of title, title searches
and examinations, title insurance policies and guaranties, and
similar data and assurances with respect to title as Beneficiary
may deem reasonably advisable either to prosecute such suit or to
evidence to a bidder at any sale which may be had pursuant to
such decree the true condition of the title to or the value of
the Trust Estate or any portion thereof. All expenditures and
expenses of the nature in this section mentioned, and such
expenses and fees as may be incurred in the protection of the
Trust Estate and the maintenance of the lien and security
interest of this Deed of Trust, including the fees of any
attorney employed by Beneficiary in any litigation or proceeding
affecting this Deed of Trust or any Loan Document,
26
the Trust Estate or any portion thereof, including, without
limitation, civil, probate, appellate and bankruptcy
proceedings, or in preparation for the commencement or defense
of any proceeding or threatened suit or proceeding, shall be
immediately due and payable by Trustor, with interest thereon at
the default interest rate on the Promissory Note, and shall be
secured by this Deed of Trust. Trustee waives its right to
any statutory fee in connection with any judicial or nonjudicial
foreclosure of the lien hereof and agrees to accept a
reasonable fee for such services.
4.19 Deficiency Judgments. If after foreclosure of this
Deed of Trust or Trustee's sale hereunder, there shall remain any
deficiency with respect to any amounts payable under the
Promissory Note or hereunder or any amounts secured hereby, and
Beneficiary shall institute any proceedings to recover such
deficiency or deficiencies, all such amounts shall continue to
bear interest at the default interest rate on the Promissory
Note. Trustor waives, to the extent permitted by applicable law,
any defense to Beneficiary's recovery against Trustor of any
deficiency after any foreclosure sale of the Trust Estate.
Trustor expressly waives, to the extent permitted by applicable
law, any defense or benefits that may be derived from any statute
granting Trustor any defense to any such recovery by Beneficiary.
In addition, Beneficiary and Trustee shall be entitled to
recovery of all of their reasonable costs and expenditures
(including without limitation any court imposed costs) in
connection with such proceedings, including their reasonable
attorneys' fees, appraisal fees and the other costs, fees and
expenditures referred to in Section 4.18 above. This provision
shall survive any foreclosure or sale of the Trust Estate, any
portion thereof and/or the extinguishment of the lien hereof.
4.20 Waiver of Jury Trial. Beneficiary and Trustor each
waive, to the extent permitted by applicable law, any right to
have a jury participate in resolving any dispute, whether
sounding in contract, tort, or otherwise arising out of,
connected with, related to, or incidental to the relationship
established between them in connection with the First Mortgage
Bonds, the Promissory Note, the Loan Agreement, this Deed of
Trust or any Loan Document. Any such disputes shall be resolved
in a bench trial without a jury.
4.21 Exculpation of Beneficiary. The acceptance by
Beneficiary of the assignment contained herein with all of the
rights, powers, privileges and authority created hereby shall
not, prior to entry upon and taking possession of the Trust
Estate by Beneficiary, be deemed or construed to make Beneficiary
a "mortgagee in possession"; nor thereafter or at any time or in
any event obligate Beneficiary to appear in or defend any action
or proceeding relating to the Space Leases, the Rents or the
Trust Estate, or to take any action hereunder or to expend any
money or incur any expenses or perform or discharge any
obligation, duty or liability under any Space Lease or to assume
any obligation or responsibility for any security deposits or
other deposits except to the extent such deposits are actually
received by Beneficiary, nor shall Beneficiary, prior to such
entry and taking, be liable in any way for any injury or damage
to person or property sustained by any Person in or about the
Trust Estate.
ARTICLE FIVE
RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE
Notwithstanding anything to the contrary in this Deed of
Trust, Trustor and Beneficiary agree as follows.
5.1 Exercise of Remedies by Trustee. To the extent that
this Deed of Trust or applicable law, including all applicable
Gaming Control Acts, authorizes or empowers Beneficiary to
exercise any remedies set forth in Article Four hereof or
otherwise, or perform any acts in connection therewith, Trustee
(but not to the exclusion of Beneficiary unless so required under
the law of the State of Nevada) shall have the power to exercise
any or all such remedies, and to perform any acts provided for in
this Deed of Trust in connection therewith, all for the benefit
of Beneficiary and on Beneficiary's behalf in accordance with
applicable law of the State of Nevada. In connection therewith,
Trustee: (a) shall not exercise, or waive the exercise of, any
Beneficiary's Remedies (other than any rights of Trustee to any
indemnity or reimbursement), except at Beneficiary's request, and
(b) shall exercise, or waive the exercise of, any or all of
Beneficiary's remedies at Beneficiary's request, and in
accordance with Beneficiary's directions as to the manner of such
exercise or waiver. Trustee may, however, decline to follow
Beneficiary's request or direction if Trustee shall be advised by
counsel that the action or proceeding, or manner thereof, so
directed may not lawfully be taken or waived.
5.2 Rights and Privileges of Trustee. To the extent that
this Deed of Trust requires Trustor to indemnify Beneficiary or
reimburse Beneficiary for any expenditures Beneficiary may incur,
Trustee shall be entitled to the same
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indemnity and the same rights to reimbursement of expenses as
Beneficiary, subject to such limitations and conditions as would
apply in the case of Beneficiary. To the extent that this Deed
of Trust negates or limits Beneficiary's liability as to any
matter, Trustee shall be entitled to the same negation or
limitation of liability. To the extent that Trustor, pursuant
to this Deed of Trust, appoints Beneficiary as Trustor's attorney
in fact for any purpose, Beneficiary or (when so instructed by
Beneficiary) Trustee shall be entitled to act on Trustor's
behalf without joinder or confirmation by the other.
5.3 Resignation or Replacement of Trustee. Trustee may
resign by an instrument in writing addressed to Beneficiary, and
Trustee may be removed at any time with or without cause (i.e.,
in Beneficiary's sole and absolute discretion) by an instrument
in writing executed by Beneficiary. In case of the death,
resignation, removal or disqualification of Trustee or if for any
reason Beneficiary shall deem it desirable to appoint a
substitute, successor or replacement Trustee to act instead of
Trustee originally named (or in place of any substitute,
successor or replacement Trustee), then Beneficiary shall have
the right and is hereby authorized and empowered to appoint a
successor, substitute or replacement Trustee, without any
formality other than appointment and designation in writing
executed by Beneficiary, which instrument shall be recorded if
required by the law of the State of Nevada. The law of the State
of Nevada shall govern the qualifications of any Trustee. The
authority conferred upon Trustee by this Deed of Trust shall
automatically extend to any and all other successor, substitute
and replacement Trustee(s) successively until the Obligations
have been paid in full or the Trust Estate has been sold
hereunder or released in accordance with the provisions of the
Loan Documents. Beneficiary's written appointment and
designation of any Trustee shall be full evidence of
Beneficiary's right and authority to make the same and of all
facts therein recited. No confirmation, authorization, approval
or other action by Trustor shall be required in connection with
any resignation or other replacement of Trustee.
5.4 Authority of Beneficiary. If Beneficiary is a banking
corporation, state banking corporation or a national banking
association and the instrument of appointment of any successor or
replacement Trustee is executed on Beneficiary's behalf by an
officer of such corporation, state banking corporation or
national banking association, then such appointment shall be
conclusively presumed to be executed with authority and shall be
valid and sufficient without proof of any action by the board of
directors or any superior officer of Beneficiary.
5.5 Effect of Appointment of Successor Trustee. Upon the
appointment and designation of any successor, substitute or
replacement Trustee, Trustee's entire estate and title in the
Trust Estate shall vest in the designated successor, substitute
or replacement Trustee. Such successor, substitute or replacement
Trustee shall thereupon succeed to and shall hold, possess and
execute all the rights, powers, privileges, immunities and duties
herein conferred upon Trustee. All references herein to Trustee
shall be deemed to refer to Trustee (including any successor or
substitute appointed and designated as herein provided) from time
to time acting hereunder.
5.6 Confirmation of Transfer and Succession. Upon the
written request of Beneficiary or of any successor, substitute or
replacement Trustee, any former Trustee ceasing to act shall
execute and deliver an instrument transferring to such successor,
substitute or replacement Trustee all of the right, title, estate
and interest in the Trust Estate of Trustee so ceasing to act,
together with all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee, and shall duly assign,
transfer and deliver all properties and moneys held by said
Trustee hereunder to said successor, substitute or replacement
Trustee.
5.7 Ratification. Trustor hereby ratifies and confirms any
and all acts that any Trustee may properly take or perform by
virtue of this Deed of Trust and in accordance with all
applicable laws.
5.8 Exculpation. Trustee shall not be liable for any error
of judgment or act done by Trustee in good faith, or otherwise be
responsible or accountable under any circumstances whatsoever,
except for Trustee's gross negligence, willful misconduct or
knowing violation of law. Trustee shall have the right to rely on
any instrument, document or signature authorizing or supporting
any action taken or proposed to be taken by it hereunder,
believed by it in good faith to be genuine. All moneys received
by Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but
need not be segregated in any manner from any other moneys
(except to the extent required by law). Trustee shall be under no
liability for interest on any moneys received by it hereunder.
5.9 Endorsement and Execution of Documents. Upon
Beneficiary's written request, Trustee shall, without liability
or notice to Trustor, execute, consent to, or join in any
instrument or agreement in connection with or necessary to
effectuate the purposes of the Loan Documents. Trustor hereby
irrevocably designates Trustee as its attorney-in-fact to
execute, acknowledge and deliver, on Trustor's behalf and in
Trustor's name, all instruments or agreements necessary to
28
implement any provision(s) of this Deed of Trust or to further
perfect the lien created by this Deed of Trust on the Trust
Property. This power of attorney shall be deemed to be coupled
with an interest and shall survive any disability of Trustor.
5.10 Multiple Trustees. If Beneficiary appoints multiple
trustees, then any Trustee, individually, may exercise all powers
granted to Trustee under this instrument, without the need for
action by any other Trustee(s).
5.11 Terms of Trustee's Acceptance. Trustee accepts the
trust created by this Deed of Trust upon the following terms and
conditions.
(a) DELEGATION. Trustee may exercise any of its
powers through appointment of attorney(s)-in-fact or agents.
(b) COUNSEL. Trustee may select and employ legal
counsel (including any law firm representing Beneficiary).
Trustor shall reimburse all reasonable legal fees and expenses
that Trustee may thereby incur.
(c) SECURITY. Trustee shall be under no obligation to
take any action upon any Event of Default unless furnished
security or indemnity, in form satisfactory to Trustee, against
costs, expenses, and liabilities that Trustee may reasonably
incur.
(d) COSTS AND EXPENSES. Trustor shall reimburse
Trustee, as part of the Obligations secured hereunder, for all
reasonable disbursements and expenses (including reasonable legal
fees and expenses) incurred by reason of and as provided for in
this Deed of Trust, including any of the foregoing incurred in
Trustee's administering and executing the trust created by this
Deed of Trust and performing Trustee's duties and exercising
Trustee's powers under this Deed of Trust.
(e) RELEASE. Upon payment of the Obligations secured
hereunder, Beneficiary shall request Trustee to release this Deed
of Trust and shall surrender all the Obligations secured
hereunder to Trustee. Trustee shall release this Deed of Trust
without charge to Trustor. Trustor shall pay all costs of
recordation, if any.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
6.1 Heirs. Successors and Assigns Included in Parties.
Whenever one of the parties hereto is named or referred to
herein, the heirs, successors and assigns of such party shall be
included, and subject to the limitations set forth in Section
1.10, all covenants and agreements contained in this Deed of
Trust, by or on behalf of Trustor or Beneficiary shall bind and
inure to the benefit of its heirs, successors and assigns,
whether so expressed or not.
6.2 Notices. Whenever any notice, report, demand or other
instrument is authorized or required to be given or furnished
under this Deed of Trust to Beneficiary, an additional copy of
such notice, report, demand or other instrument shall be given or
furnished to the trustee under the Indenture, as collateral
assignee of this Deed of Trust pursuant hereto.
6.3 Addresses for Notices. Etc.
(a) Any notice, report, demand or other instrument
authorized or required to be given or furnished under this Deed
of Trust to Trustor or Beneficiary shall be deemed given or
furnished (i) when addressed to the party intended to receive the
same, at the address of such party set forth below, and delivered
at such address or (ii) three (3) days after the same is
deposited in the United States mail as first class certified
mail, return receipt requested, postage paid, whether or not the
same is actually received by such party:
Beneficiary: Natwest Bank, N.A.
00 Xxxxx 00 X
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Vice President
29
With a copy to:
Xxxxx X. Xxxxxxxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Xxxxx
Woodland Falls Corporate Park
000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Trustor: Showboat, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
With a copy to:
Xxxx X. Xxxxxx, Esquire
Kummer, Kaempfer, Xxxxxx & Xxxxxxx
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Trustee: Nevada Title Company
0000 Xxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000-0000
6.3.1 Change of Address. Any person may change the
address to which any such notice, report, demand or other
instrument is to be delivered or mailed to that person, by
furnishing written notice of such change to the other party but
no such notice of change shall be effective unless and until
received by such other party.
6.4 Headings. The headings of the articles, sections,
paragraphs and subdivisions of this Deed of Trust are for
convenience of reference only, are not to be considered a part
hereof, and shall not limit or expand or otherwise affect any of
the terms hereof.
6.5 Invalid Provisions to Affect No Others. In the event
that any of the covenants, agreements, terms or provisions
contained herein or in the First Mortgage Bonds, the Indenture or
any other Loan Document shall be invalid, illegal or
unenforceable in any respect, the validity of the lien hereof and
the remaining covenants, agreements, terms or provisions
contained herein or in the First Mortgage Bonds, the Indenture,
the Subsidiary Guaranties or any other Loan Document shall be in
no way affected, prejudiced or disturbed thereby. To the extent
permitted by law, Trustor waives any provision of law which
renders any provision hereof prohibited or unenforceable in any
respect.
6.6 Changes and Priority Over Intervening Liens. Neither
this Deed of Trust nor any term hereof may be changed, waived,
discharged or terminated orally, or by any action or inaction,
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought. Any agreement hereafter made by Trustor and
Beneficiary relating to this Deed of Trust shall be superior to
the rights of the holder of any intervening lien or encumbrance.
6.7 Estoppel Certificates. Within ten (10) Business Days
after Beneficiary's written request, Trustor shall from time to
time execute a certificate, in recordable form (an "Estoppel
Certificate"), stating, except to the extent it would be
inaccurate to so state: (a) the current amount of the Obligations
secured hereunder and all elements thereof, including principal,
interest, and all other elements; (b) Trustor has no defense,
offset, claim, counterclaim, right of recoupment, deduction, or
reduction against any of the Obligations secured hereunder; (c)
none of the Loan Documents have been amended, whether orally or
in writing; (d) Trustor has no claims against Beneficiary of any
kind; (e) any Power of Attorney granted to Beneficiary is in full
force and effect; and (f) such other matters relating to this
Deed of Trust, any Loan Documents and the relationship of Trustor
and Beneficiary as Beneficiary shall reasonably request. In
addition, the Estoppel Certificate shall set forth the reasons
why it would be inaccurate to make any of the foregoing
assurances ('a" through 'f").
30
6.8 Governing Law. This Deed of Trust shall be construed,
interpreted, enforced and governed by and in accordance with the
laws of the State of Nevada, without regard to its choice of law
provisions.
6.9 Required Notices. Trustor shall notify Beneficiary
promptly of the occurrence of any of the following and shall
immediately provide Beneficiary a copy of the notice or documents
referred to: (i) receipt of notice from any Governmental
Authority relating to all or any material part of the Trust
Estate if such notice relates to a default or act, omission or
circumstance which would result in a default after notice or
passage of time or both; (ii) receipt of any notice from any
tenant leasing all or any material portion of the Trust Estate if
such notice relates to a default or act, omission or circumstance
which would result in a default after notice or passage of time
or both; (iii) receipt of notice from the holder of any Permitted
Lien relating to a default or act, omission or circumstance which
would result in a default after notice or passage of time or
both; (iv) the commencement of any proceedings or the entry of
any judgment, decree or order materially affecting all or any
portion of the Trust Estate or which involve the potential
liability of Trustor or its Affiliates in an amount in excess of
$25,000,000 (other than for personal injury actions and related
property damage suits which have been acknowledged by the insurer
to be covered by such insurance); or (v) commencement of any
judicial or administrative proceedings or the entry of any
judgment, decree or order by or against or otherwise affecting
Trustor or any Affiliate of Trustor, a material portion of the
Trust Estate, or a material portion of the Personal Property, or
any other action by any creditor or lessor thereof as a result of
any material default under the terms of any lease.
6.10 Reconveyance. Upon written request of Beneficiary
stating that all sums secured hereby have been paid, and upon
surrender of this Deed of Trust to Trustee for cancellation and
retention and upon payment of its fees, Trustee shall reconvey,
without warranty, the property then held hereunder. The recitals
in such reconveyance of any matters or facts shall be conclusive
proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally
entitled thereto."
6.11 Attorneys Fees. Without limiting any other provision
contained herein, Trustor agrees to pay all reasonable costs of
Beneficiary or Trustee incurred in connection with the
enforcement of this Deed of Trust or the taking of this Deed of
Trust as security for the repayment of the Promissory Note,
including without limitation all reasonable attorneys' fees
whether or not suit is commenced, and including, without
limitation, fees incurred in connection with any probate,
appellate, bankruptcy, deficiency or any other litigation
proceedings, all of which sums shall be secured hereby.
6.12 Late Charges. By accepting payment of any sum secured
hereby after its due date, Beneficiary does not waive its right
to collect any late charge thereon or interest thereon at the
default interest rate on the Promissory Note, if so provided, not
then paid or its right either to require prompt payment when due
of all other sums so secured or to declare default for failure to
pay any amounts not so paid.
6.13 Cost of Accounting. Trustor shall pay to Beneficiary,
for and on account of the preparation and rendition of any
accounting, which Trustor may be entitled to require under any
law or statute now or hereafter providing therefor, the
reasonable costs thereof.
6.14 Right of Entry. Subject to compliance with applicable
Gaming Control Acts, Beneficiary may at any reasonable time or
times, upon no less than 24 hours advance notice (except in the
case of an emergency), make or cause to be made entry upon and
inspections of the Trust Estate or any part thereof in person or
by agent.
6.15 Corrections. Trustor shall, upon request of Trustee,
promptly correct any defect, error or omission which may be
discovered in the contents of this Deed of Trust or in the
execution or acknowledgement hereof, and shall execute,
acknowledge and deliver such further instruments and do such
further acts as may be necessary or as may be reasonably
requested by Trustee to carry out more effectively the purposes
of this Deed of Trust, to subject to the lien and security
interest hereby created any of Trustor's properties, rights or
interest covered or intended to be covered hereby, and to perfect
and maintain such lien and security interest. In the event that
there is a new Facility Lease, Trustor shall execute a
supplemental Deed of Trust if requested by Beneficiary.
6.16 Statute of Limitations. To the fullest extent allowed
by the law, the right to plead, use or assert any statute of
limitations as a plea or defense or bar of any kind, or for any
purpose, to any debt, demand or obligation secured or to be
secured hereby, or to any complaint or other pleading or
proceeding filed, instituted or maintained for the purpose of
enforcing this Deed of Trust or any rights hereunder, is hereby
waived by Trustor.
31
6.17 Subrogation. Should the proceeds of the loan made by
Beneficiary to Trustor, repayment of which is hereby secured, or
any part thereof, or any amount paid out or advanced by
Beneficiary, be used directly or indirectly to pay off,
discharge, or satisfy, in whole or in part, any prior or superior
lien or encumbrance upon the Trust Estate, or any part thereof,
then, as additional security hereunder, Trustee, on behalf of
Beneficiary, shall be subrogated to any and all rights, superior
titles, liens, and equities owned or claimed by any owner or
holder of said outstanding liens, charges, and indebtedness,
however remote, regardless of whether said liens, charges, and
indebtedness are acquired by assignment or have been released of
record by the holder thereof upon payment.
6.18 Joint and Several Liability. All obligations of
Trustor hereunder, if more than one, are joint and several.
Recourse for deficiency after sale hereunder may be had against
the property of Trustor, without, however, creating a present or
other lien or charge thereon.
6.19 Context. In this Deed of Trust, whenever the context
so requires, the neuter includes the masculine and feminine, and
the singular includes the plural, and vice versa.
6.20 Time. Time is of the essence of each and every term,
covenant and condition hereof. Unless otherwise specified herein,
any reference to "days" in this Deed of Trust shall be deemed to
mean "calendar days."
6.21 Interpretation. As used in this Deed of Trust unless
the context clearly requires otherwise: The terms "herein" or
"hereunder" and similar terms without reference to a particular
section shall refer to the entire Deed of Trust and not just to
the section in which such terms appear; the term "lien" shall
also mean a security interest, and the term "security interest"
shall also mean a lien.
6.22 Effect of NRS 57.030. To the extent not inconsistent
herewith, the provisions of NRS 57.030 are included herein by
reference.
6.23 Application of Certain Deed of Trust Provisions to
Showboat Operating Company. The parties hereto acknowledge that
many of the provisions set forth herein are inapplicable to the
Collateral owned by Showboat Operating Company whose
participation herein as co-trustor is premised solely upon
pledging Collateral comprised of certain equipment, personal
property and fixtures. To the extent any provision herein is
inapplicable to same, Showboat Operating Company shall be
relieved from compliance therewith.
ARTICLE SEVEN
POWER OF ATTORNEY
7.1 Grant of Power. Trustor irrevocably appoints
Beneficiary and any successor thereto as its attorney-in-fact,
with full power and authority, including the power of
substitution, exercisable only during the continuance of an Event
of Default following the expiration of any applicable cure or
grace period to act, subject to all applicable Gaming Control
Acts, for Trustor in its name, place and stead as hereinafter
provided:
7.2 Possession and Completion. To take possession of the
Land and Las Vegas Showboat, remove all employees, contractors
and agents of Trustor therefrom, complete or attempt to complete
the work of construction, and market, sell or lease the Land and
the Las Vegas Showboat.
7.3 Plans. To make such additions, changes and corrections
in the current Plans as may be necessary or desirable, in
Beneficiary's reasonable discretion, or as it deems proper to
complete the restoration of the Las Vegas Showboat.
7.4 Employment of Others. To employ such contractors,
subcontractors, suppliers, architects, inspectors, consultants,
property managers and other agents as Beneficiary, in its
discretion, deems proper for the restoration of the Las Vegas
Showboat, for the protection or clearance of title to the Land or
Personal Property, or for the protection of Beneficiary's
interests with respect thereto.
7.5 Security Guards. To employ watchmen to protect the
Land and the Las Vegas Showboat from injury.
32
7.6 Compromise Claims. To pay, settle or compromise all
bills and claims then existing or thereafter arising against
Trustor, which Beneficiary, in its discretion, deems proper for
the protection or clearance of title to the Land or Personal
Property, or for the protection of Beneficiary's interests with
respect thereto.
7.7 Legal Proceedings. To prosecute and defend all actions
and proceedings in connection with the Land or the Las Vegas
Showboat.
7.8 Other Acts. To execute, acknowledge and deliver all
other instruments and documents in the name of Trustor that are
necessary or desirable, to exercise Trustor's rights under all
contracts concerning the Land or the Projects, including, without
limitation, under any Space Leases, and to do all other acts with
respect to the Land or the Las Vegas Showboat that Trustor might
do on its own behalf, as Beneficiary, in its reasonable
discretion, deems proper.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust,
Assignment of Rents and Security Agreement the day and year first
above written.
SHOWBOAT, INC.
a Nevada corporation,
as Trustor
By: /s/ R. Xxxxx Xxxx
Name: R. Xxxxx Xxxx
Title: Executive Vice President
Finance and Administration
SHOWBOAT OPERATING COMPANY
a Nevada corporation,
as Trustor
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Treasurer
33
STATE OF NEVADA :
: ss.
COUNTY OF XXXXX :
This instrument was acknowledged before me on July 28, 1995
by R. Xxxxx Xxxx as Executive Vice President-Finance and
Administration of Showboat, Inc.
/s/ Xxxx X. Xxxx
NOTARY PUBLIC
STATE OF NEVADA :
: ss.
COUNTY OF XXXXX :
This instrument was acknowledged before me on July 28, 1995
by Xxxxx Xxxxxxxxx as Treasurer of Showboat Operating Co.
/s/ Xxxx X. Xxxx
NOTARY PUBLIC
34
SCHEDULE A
LAND DESCRIPTION
PARCEL ONE (1) :
THAT PORTION OF GOVERNMENT LOT THREE (3) IN SECTION 1,
TOWNSHIP 21 SOUTH, RANGE 61 EAST, M.D.B. & M., DESCRIBED AS
FOLLOWS:
BEGINNING AT THE POINT OF INTERSECTION OF THE WEST LINE OF SAID
GOVERNMENT LOT THREE (3) WITH THE SOUTHWESTERLY RIGHT OF WAY LINE
OF U.S. HIGHWAY NOS. 93-95-466 (200 FEET WIDE);
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE SAID RIGHT OF WAY LINE
A DISTANCE OF 244.63 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING SOUTH 42 DEGREES 27' EAST A DISTANCE OF 404.01
FEET TO A POINT OF THE SOUTH LINE OF SAID LOT THREE (3);
THENCE SOUTH 89 DEGREES 37' WEST ALONG THE SAID SOUTH LINE A
DISTANCE OF 405.99 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY
LINE OF ATLANTIC STREET (60 FEET WIDE);
THENCE NORTH 0 DEGREES 10' 30" WEST ALONG THE SAID EASTERLY RIGHT
OF WAY LINE, A DISTANCE OF 173.12 FEET TO A POINT;
THENCE NORTH 47 DEGREES 33' EAST A DISTANCE OF 181.63 FEET TO THE
TRUE POINT OF BEGINNING.
PARCEL TWO (2) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.B. & M., LYING XXXXXXXX XX X.X. XXXXXXX #00-00-000 (XXXXXXX
XXXXXXX), MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTH LINE OF THE SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) WITH
THE XXXX XXXX XX XXX X.X. XXXXXXX #00-00-000;
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE SAID WEST LINE OF THE
HIGHWAY A DISTANCE OF 135.87 FEET TO A POINT;
THENCE SOUTH 47 DEGREES 33' WEST A DISTANCE OF 500 FEET TO A
POINT;
THENCE NORTH 42 DEGREES 27' WEST AND PARALLEL WITH THE
AFOREMENTIONED WEST LINE OF THE U.S. HIGHWAY TO A POINT IN THE
WEST LINE OF THE SAID SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SAID SECTION 1;
THENCE NORTH ALONG THE LAST MENTIONED WEST LINE TO THE NORTHWEST
CORNER OF SAID SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1;
CONTINUED
THENCE NORTH 89 DEGREES 37' 50" EAST ALONG THE NORTH LINE OF SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) A
DISTANCE OF 435.99 FEET TO THE POINT OF BEGINNING.
EXCEPT THE INTEREST IN THE WEST 30 FEET OF THE ABOVE DESCRIBED
PROPERTY AS CONVEYED TO THE COUNTY OF XXXXX BY DEED DATED APRIL
17, 1950 AS DOCUMENT NO. 131015 OF OFFICIAL RECORDS, XXXXX
COUNTY, NEVADA RECORDS, FOR STREET PURPOSES.
PARCEL THREE (3) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.B. & M., DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE NORTH LINE OF THE SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF
SECTION 1, WITH THE WEST LINE OF THE STATE HIGHWAY (BOULDER
HIGHWAY);
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE SAID WEST LINE OF THE
STATE HIGHWAY A DISTANCE OF 135.87 FEET TO THE TRUE POINT OF
BEGINNING;
THENCE SOUTH 47 DEGREES 33' WEST A DISTANCE OF 500 FEET TO A
POINT;
THENCE SOUTH 42 DEGREES 27' EAST AND PARALLEL WITH THE WEST LINE
OF THE SAID STATE HIGHWAY A DISTANCE OF 200 FEET TO A POINT;
THENCE NORTH 47 DEGREES 33' EAST A DISTANCE OF 500 FEET TO A
POINT IN THE AFOREMENTIONED WEST LINE OF THE STATE HIGHWAY;
THENCE NORTH 42 DEGREES 27"; WEST ALONG THE SAID WEST LINE OF THE
HIGHWAY A DISTANCE OF 200 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL FOUR (4) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.B. & M., DESCRIBED AS FOLLOWS:
COMMENCING AT THE POINT OF INTERSECTION OF THE NORTH LINE OF THE
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF
SAID SECTION 1, WITH THE SOUTHWESTERLY RIGHT OF WAY LINE OF U.S.
HIGHWAY NOS. 93-95-466 (200 FEET WIDE);
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE SAID RIGHT OF WAY LINE
A DISTANCE OF 735.87 FEET TO A POINT;
THENCE SOUTH 47 DEGREES 33' WEST A DISTANCE OF 500 FEET TO THE
MOST SOUTHERLY CORNER OF THAT CERTAIN PARCEL OF LAND CONVEYED BY
XXXXX XXXX ET AL TO XXXXXXX X. XXXXXX ET UX BY DEED RECORDED JUNE
3, 1949 AS DOCUMENT NO. 314105, XXXXX COUNTY, NEVADA RECORDS, THE
TRUE POINT OF BEGINNING;
CONTINUED
THENCE SOUTH 89 DEGREES 57' 35" WEST AND PARALLEL TO THE SOUTH
LINE OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER
(NW 1/4) OF SAID SECTION 1 A DISTANCE OF 560.41 FEET MORE OR LESS
TO A POINT ON THE WEST LINE OF THE SOUTHEAST QUARTER (SE 1/4) OF
THE NORTHWEST QUARTER (NW 1/4) OF SAID SECTION 1;
THENCE NORTH 01 DEGREES 12' 57" WEST ALONG THE LAST MENTIONED
WEST LINE A DISTANCE OF 615.67 FEET MORE OR LESS TO A POINT
DISTANT SOUTH 47 DEGREES 33' WEST 500 FEET FROM THE
AFOREMENTIONED SOUTHWEST RIGHT OF WAY LINE;
THENCE SOUTH 42 DEGREES 27' EAST PARALLEL TO A DISTANT 500 FEET
FROM THE SAID SOUTHWESTERLY RIGHT OF WAY LINE A DISTANCE OF
833.74 FEET TO THE TRUE POINT OF BEGINNING.
EXCEPT THE INTEREST IN THE WEST THIRTY (30) FEET OF THE ABOVE
DESCRIBED PROPERTY AS CONVEYED TO THE COUNTY OF XXXXX BY DEED
DATED APRIL 17, 1950 AS DOCUMENT NO. 131015 OF OFFICIAL RECORDS,
XXXXX COUNTY, NEVADA RECORDS, FOR STREET PURPOSES.
PARCEL FIVE (5) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.M., DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF THE SOUTHEAST QUARTER
(SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF SAID SECTION 1;
THENCE NORTH 0 DEGREES 12' 57" WEST ALONG THE WEST LINE THEREOF A
DISTANCE OF 477.8 FEET TO THE SOUTHWEST CORNER OF THAT CERTAIN
PARCEL OF LAND CONVEYED TO XXXXXX XXXX, ET UX, BY DEED RECORDED
MAY 3, 1951 AS DOCUMENT NO. 370209 OF XXXXX COUNTY,
NEVADA RECORDS.
THENCE ALONG THE SOUTH LINE OF SAID CONVEYED PARCEL NORTH
89 DEGREES 57' 35" EAST, 560.41 FEET TO THE SOUTHEAST CORNER OF
SAID CONVEYED PARCEL, SAID SOUTHEAST CORNER BEING DISTANT SOUTH
47 DEGREES 33' 00" WEST, 500 FEET FROM THE SOUTHWESTERLY LINE OF
U.S. HIGHWAY NOS. 00-00-000 (BOULDER HIGHWAY);
THENCE SOUTH 42 DEGREES 27' 00" EAST, PARALLEL WITH THE
SOUTHWESTERLY LINE OF SAID HIGHWAY, 579.45 FEET TO A POINT
DISTANT 50 FEET NORTH OF AND MEASURED AT RIGHT ANGLES TO THE
SOUTH LINE OF THE SAID SOUTHEAST QUARTER (SE 1/4) OF THE
NORTHWEST QUARTER (NW 1/4);
THENCE NORTH 89 DEGREES 56' 35" EAST, PARALLEL WITH THE LAST
MENTIONED SOUTH LINE, 179.23 FEET TO THE SOUTHEAST CORNER OF THAT
CERTAIN PARCEL OF LAND COVEYED TO I.A. STUB BY DEED RECORDED
JANUARY 4, 1950 AS DOCUMENT NO. 330010 OF SAID COUNTY RECORDS;
THENCE SOUTH 47 DEGREES 33' 00" WEST, ALONG THE SOUTHWESTERLY
PROLONGATION OF THE SOUTHEASTERLY LINE OF SAID PARCEL CONVEYED BY
DOCUMENT NO. 330010, A DISTANCE OF 74.13 FEET;
continued
THENCE SOUTH 89 DEGREES 57' 43" WEST, ALONG THE SOUTH LINE OF THE
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF
SAID SECTION 1, A DISTANCE OF 1074.24 FEET TO THE POINT OF
BEGINNING.
EXCEPT THEREFROM THE INTEREST IN AND TO THE SOUTH 40.00 FEET OF
SAID LAND, AS CONVEYED TO THE COUNTY OF XXXXX, FOR ROAD PURPOSES,
BY DEED RECORDED MARCH 22, 1951, AS DOCUMENT NO. 366543 OF XXXXX
COUNTY NEVADA RECORDS.
ALSO EXCEPT THEREFROM THE INTEREST IN AND TO THE WEST 30 FEET
OF SAID LAND AS CONVEYED TO THE CITY OF LAS VEGAS, FOR ROAD
PURPOSES BY DEED RECORDED OCTOBER 9, 1962, AS DOCUMENT NO. 316163
OF OFFICIAL RECORDS OF XXXXX COUNTY, NEVADA.
ALSO EXCEPT THEREFROM THAT CERTAIN SPANDREL AREA IN THE SOUTHWEST
CORNER THEREOF AS CONVEYED TO THE CITY OF LAS VEGAS BY DEED
RECORDED JUNE 23, 1966 IN BOOK 725 AS DOCUMENT NO. 582913 AND
JULY 19, 1966 IN BOOK 731 AS DOCUMENT NO. 587980, OF OFFICIAL
RECORDS.
PARCEL SIX (6) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.M., LYING WEST OF U.S. HIGHWAY NOS. 93-95-466, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE NORTH LINE OF THE SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) WITH
THE WESTERLY LINE OF THE U.S. HIGHWAY NOS. 00-00-000 (BOULDER
HIGHWAY);
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE WEST LINE OF SAID U.S.
HIGHWAY A DISTANCE OF 335.87 FEET TO THE TRUE POINT OF BEGINNING;
THENCE SOUTH 47 DEGREES 33' WEST A DISTANCE OF 500.00 FEET TO A
POINT;
THENCE SOUTH 47 DEGREES 27' EAST AND PARALLEL WITH THE
AFOREMENTIONED WEST LINE OF THE U.S. HIGHWAY A DISTANCE OF 100
FEET TO A POINT;
THENCE NORTH 47 DEGREES 33' EAST A DISTANCE OF 500 FEET TO A
POINT IN THE WEST LINE OF THE U.S. HIGHWAY;
THENCE NORTH 42 DEGREES 27' WEST ALONG THE LAST MENTIONED WEST
LINE A DISTANCE OF 100 FEET TO THE TRUE POINT OF BEGINNING.
continued
PARCEL SEVEN (7) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.M., LYING SOUTHWESTERLY OF THE U.S. HIGHWAY NOS. 93-95-466,
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE NORTH LINE OF SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) WITH
THE SOUTHWESTERLY LINE OF SAID U.S. HIGHWAY NOS. 00-00-000
(BOULDER HIGHWAY);
THENCE SOUTH 42 DEGREES 27' EAST ALONG THE SOUTHWESTERLY LINE OF
THE SAID HIGHWAY A DISTANCE OF 435.87 FEET TO THE MOST EASTERLY
CORNER OF THAT CERTAIN PARCEL OF LAND CONVEYED BY XXXXX XXXX, ET
AL TO XXXXXX X. XXXX, ET UX, BY DEED DATED SEPTEMBER 13, 1948 AND
RECORDED SEPTEMBER 16, 1948 AS DOCUMENT NO. 295909, XXXXX COUNTY,
NEVADA RECORDS, BEING THE POINT OF BEGINNING;
THENCE SOUTH 47 DEGREES 33' WEST ALONG THE SOUTHEASTERLY LINE OF
THE SAID CONVEYED PARCEL, A DISTANCE OF 500 FEET TO THE MOST
SOUTHERLY CORNER OF THE PARCEL CONVEYED TO SAID XXXXXX X. XXXX;
THENCE SOUTH 42 DEGREES 27' EAST AND PARALLEL WITH THE SAID
SOUTHWESTERLY LINE OF THE U.S. HIGHWAY A DISTANCE OF 100 FEET TO
A POINT;
THENCE NORTH 47 DEGREES 33' EAST A DISTANCE OF 500 FEET TO A
POINT IN SAID SOUTHWESTERLY LINE OF THE HIGHWAY;
THENCE NORTH 47 DEGREES 27' WEST, ALONG THE LAST MENTIONED
SOUTHWESTERLY LINE A DISTANCE OF 100 FEET TO THE TRUE POINT OF
BEGINNING.
continued
PARCEL EIGHT (8) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.B. & M., LYING SOUTHWESTERLY OF U.S. HIGHWAY NOS. 93-95-466,
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE NORTH LINE OF SAID
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) WITH
THE SOUTHWESTERLY LINE OF SAID U.S. HIGHWAY NOS. 00-00-000
(BOULDER HIGHWAY);
THENCE NORTH 42 DEGREES 27' EAST ALONG THE SOUTHWESTERLY LINE OF
THE SAID HIGHWAY A DISTANCE OF 535.87 FEET TO THE MOST EASTERLY
CORNER OF THAT CERTAIN PARCEL OF LAND CONVEYED BY XXXXX XXXX, ET
AL TO XXXX X. XXXXXX BY DEED RECORDED NOVEMBER 22, 1948, AS SHOWN
AS DOCUMENT NO. 300678, XXXXX COUNTY, NEVADA RECORDS, BEING THE
TRUE POINT OF BEGINNING;
THENCE SOUTH 47 DEGREES 33' WEST ALONG THE SOUTHEASTERLY LINE OF
THE LAST MENTIONED CONVEYED PARCEL A DISTANCE OF 500 FEET TO
THE MOST SOUTHERLY CORNER OF THE SAID PARCEL CONVEYED TO XXXX X.
XXXXXX;
THENCE SOUTH 42 DEGREES 27' EAST AND PARALLEL WITH THE SAID
SOUTHWESTERLY LINE OF U.S. HIGHWAY NOS. 00-00-000 A DISTANCE OF
100 FEET TO A POINT;
THENCE NORTH 47 DEGREES 33' EAST A DISTANCE OF 500 FEET TO A
POINT IN THE AFOREMENTIONED SOUTHWESTERLY LINE OF THE U.S.
HIGHWAY;
THENCE NORTH 42 DEGREES 27' WEST ALONG THE LAST MENTIONED
SOUTHWESTERLY LINE A DISTANCE OF 100 FEET TO THE TRUE POINT OF
BEGINNING.
continued
PARCEL NINE (9) :
THAT PORTION OF THE SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST
QUARTER (NW 1/4) OF SECTION 1, TOWNSHIP 21 SOUTH, RANGE 61 EAST,
M.D.B. & M., (XXXXX COUNTY, NEVADA) BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTH INTERSECTION OF THE NORTH LINE OF THE
SOUTHEAST QUARTER (SE 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF
SAID SECTION 1, AND THE SOUTHWESTERLY RIGHT-OF-WAY LINE OF U.S.
HIGHWAY NOS. 93-95-466 (200.00 FEET WIDE);
THENCE SOUTH 42 DEGREES 27' 00" EAST ALONG THE SAID SOUTHWESTERLY
RIGHT-OF-WAY LINE A DISTANCE OF 635.87 FEET TO A POINT BEING THE
MOST EASTERLY CORNER OF THAT CERTAIN PARCEL OF LAND AS CONVEYED
TO FIRST NATIONAL BANK OF NEVADA, A NATIONAL BANKING ASSOCIATION,
BY DEED RECORDED DECEMBER 12, 1962 AS DOCUMENT NO. 327145
OFFICIAL RECORDS, XXXXX COUNTY, NEVADA, SAID POINT ALSO BEING THE
TRUE POINT OF BEGINNING;
THENCE SOUTH 47 DEGREES 33' 0" WEST ALONG THE SOUTHEASTERLY LINE
OF SAID FIRST NATIONAL BANK PARCEL A DISTANCE OF 500.00 FEET TO A
POINT IN THE NORTHEASTERLY LINE OF THAT CERTAIN PARCEL OF LAND
CONVEYED TO XXXXXX XXXX, ET UX BY DEED RECORDED MAY 3, 1951 AS
DOCUMENT NO. 37209 OFFICIAL RECORDS, XXXXX COUNTY, NEVADA;
THENCE SOUTH 42 DEGREES 27' 00" EAST ALONG THE NORTHEASTERLY LINE
OF SAID KING PARCEL A DISTANCE OF 400.00 FEET TO A POINT BEING
THE MOST WESTERLY CORNER OF THAT CERTAIN PARCEL OF LAND AS
CONVEYED TO THE I.A. STUB BY AN AGREEMENT DATED AUGUST 19,
1948 AS DOCUMENT NO. 294205 OFFICIAL RECORDS, XXXXX COUNTY,
NEVADA;
THENCE NORTH 47 DEGREES 33' 00" EAST ALONG THE NORTHWESTERLY LINE
OF SAID STUB PARCEL A DISTANCE OF 500.00 FEET TO A POINT IN THE
AFOREMENTIONED SOUTHWESTERLY RIGHT-OF-WAY LINE OF U.S. HIGHWAY
NOS. 93-95-466;
THENCE NORTH 47 DEGREES 27' 00" WEST ALONG SAID RIGHT-OF-WAY LINE
A DISTANCE OF 400.00 FEET TO THE TRUE POINT OF BEGINNING.
SCHEDULE B
List of Existing Encumbrances
(1) TAXES: State and County Taxes for the fiscal period of 1995
to 1996, a lien now due and payable in the total amount of
$515,564.46
First installment of $128,891.46 unpaid delinquent third Monday
in August
Second installment of $128,891.00 upaid delinquent first Monday
in October
Third installment of $128,891.00 unpaid delinquent first Monday
in January
Fourth installment of $128,891.00 unpaid delinquent first Monday
in March
AFFECTS: PARCELS 1 THROUGH 5
(2) TAXES: State and County Taxes for the fiscal period of 1995
to 1996, a lien now due and payable in the total amount of
$23,851.99
First installment of $5,965.99 unpaid delinquent third Monday in
August
Second installment of $5,962.00 unpaid delinquent first Monday in
October
Third installment of $5,962.00 unpaid delinquent first Monday in
January
Fourth installment of $5,962.00 unpaid delinquent first Monday in
March
AFFECTS: PARCELS 6 THROUGH 9
(3) SUPPLEMENTAL TAXES: Any supplemental taxes which may become
a lien on the subject property by reason of increased valuations
due to land use or improvement, NRS 361.260, or otherwise.
(4) PATENT: Reservations and Easements in the patent from the
State of Nevada, recorded November 30, 1902, in Book 3 "F" of
Miscellaneous Records, Page 270, Lincoln County, Records.
Affects: Parcel 1
(5) PATENT: Reservations and Easements in the patent from the
State of Nevada, recorded September 11, 1911, in Book 2 of Deeds,
Page 62 as Document No. 3168 of Official Records.
Affects: Parcels 2 through 9
(6) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto,
in favor of NEVADA POWER COMPANY, for electrical lines, recorded
October 14, 1959, as Document No. 176384 of Official Records.
Affects: The South 10 feet of Parcel 8
(7) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of SOUTHERN NEVADA POWER COMPANY, for electrical lines,
recorded April 18, 1961, as Document No. 237213 of Official
Records.
Affects: The Southeasterly 6.00 feet of Parcel 3; the Southerly
6.00 feet; and the Southeasterly 400.00 feet of the Northeasterly
6.00 feet of Parcel 4
A portion of said right-of-way has been relinquished by
instrument entitled "PARTIAL RELINQUISHMENT OF RIGHT-OF-WAY
GRANT" executed by NEVADA POWER COMPANY, recorded July 27, 1972
as Document No. 209184 of Offical Records.
Affects: The Southeasterly 6.00 feet of Parcel 3
(8) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of SOUTHERN NEVADA POWER COMPANY, for electrical lines,
recorded May 17, 1961, as Document No. 241058 and recorded June
20, 1961 as Document No. 245546 of Official Records.
Affects: The Northerly 6.00 feet of Parcel 5
(9) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
June 19, 1962, as Document No. 273434 of Official Records.
Affects: The Westerly 50.00 feet of the Southerly 10.00 feet of
the Northerly 156.00 feet of said Southeast Quarter of the
Northwest Quarter.
SAVING AND ACCEPTING that portion within Atlantic Avenue (60 feet
wide).
Affects: Parcel 2
(10) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical and communication
lines, recorded June 5, 1962, as Document No. 294462 of Official
Records.
Affects: The Southeasterly 6.00 feet of Parcel 9
(11) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
April 4, 1963, as Document No. 350080 of Official Records.
Affects: A strip of land 12.00 feet in width being 6.00 feet on
each side of the following described centerline:
COMMENCING at the Southeast Quarter (SE 1/4) of the Northwest
Quarter (NW 1/4) of said Section 1;
thence North 0 degrees 10' 00" West a distance of 155.00 feet to
a point;
thence North 89 degrees 59' 00" East a distance of 30.00 feet to
a point on the East line of Atlantic Street, said point being the
POINT OF BEGINNING;
thence continuing North 89 degrees 59' 00" East a distance of
25.00 feet to the point of ending.
Affects: Parcel 1
(12) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
April 26, 1963, as Document No. 355007 of Official Records.
Affects: The South 250.00 feet of the Easterly 6.00 feet of
Parcel 6
(13) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
June 21, 1963, as Document No. 366400 of Official Records.
Affects: The Easterly 6.00 feet of Parcel 6
(14) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
June 21, 1963, as Document No. 366415 of Official Records.
Affects: Westerly 6.00 feet of Parcel 7
(15) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of CENTRAL TELEPHONE COMPANY, for communication lines,
recorded November 23, 1971, as Document No. 147041 of Official
Records.
The exact location and extent of said easement is not disclosed
in the document of record.
Affects: Parcel 9
(16) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY and CENTRAL TELEPHONE COMPANY, for
electrical and communication lines, recorded March 21, 1972, as
Document No. 175649 of Official Records.
Affects: The South 6.00 feet of Parcel 6
(17) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY and CENTRAL TELEPHONE COMPANY, for
electrical and communication facilities, recorded April 3, 1975,
as Document No. 466430 of Official Records.
Affects: Strips of land 10.00 feet in width being 5.00 feet on
each side of the following centerlines:
CENTERLINE NO. 1:
COMMENCING at the point of intersection of the North line of the
Southeast Quarter (SE 1/4) of the Northwest Quarter (NW 1/4) of
said Section 1, with the Westerly line of the U.S. Highway Nos.
00-00-000 (Boulder Highway);
thence South 42 degrees 27' 00" East along the West line of said
highway a distance of 530.87 feet to a point hereinafter
designated as Point 1;
thence South 47 degrees 33' 00" West a distance of 505.00 feet to
a point;
thence South 42 degrees 27' 00" East a distance of 105.00 feet to
a point hereinafter designated as Point 2;
thence continuing South 42 degrees 27' 00" East a distance of
68.00 feet to a point hereinafter desifnated as Point 3;
thence continuing South 42 degrees 27' 00" East a distance of
32.00 feet to the POINT OF BEGINNING;
thence continuing South 42 degress 27' 00" East a distance of
276.00 feet to a point hereinafter designated as Point 4;
thence continuing South 42 degrees 27' 00" East to a point on
Grantor's Southerly property line, said point being the point of
ending of Centerline No. 1.
Continued
CENTERLINE NO. 2:
BEGINNING at aforementioned Point 1;
thence South 47 degrees 33' 00" West a distance of 535.00 feet to
the Point of ending of Centerline No. 2.
CENTERLINE NO. 3:
BEGINNING at aforementioned Point 2;
thence South 47 degress 33' 00" West a distance of 30.00 feet to
the point of ending of Centerline No. 3.
CENTERLINE NO. 4:
BEGINNING at aforementioned Point 3;
thence South 47 degrees 33' 00" West a distance of 30.00 feet to
the point of ending of Centerline No. 4.
CENTERLINE NO. 5:
BEGINNING at aforementioned Point 4;
thence South 47 degrees 33' 00" West a distance of 30.00 feet to
the point of ending of Centerline No. 5.
Affects: Parcels 4, 5 and 7
(18) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for an electrical substation,
recorded April 29, 1975, as Document No. 473255 of Official
Records.
Affects: COMMENCING at Southwest (SW) corner of the Southeast
Quarter (SE 1/4) of the Northwest Quarter (NW 1/4) of said
Section 1;
thence South 89 degrees 43' 39" East along the South line of the
Southeast Quarter (SE 1/4) of the Northwest Quarter (NW 1/4) of
said Section 1, per File 8 of Surveys, page 49, in the Office of
the County Recorder, a distance of 30.00 feet to a point;
thence North 00 degrees 00' 25" West a distance of 449.50 feet to
a point;
thence North 89 degrees 31' 40" East a distance of 425.00 feet to
the POINT OF BEGINNING;
thence continuing North 89 degrees 31' 40" East a distance of
80.00 feet to a point;
thence South 00 degrees 28' 20" East a distance of 25.00 feet to
a point;
thence South 89 degrees 31' 40" West a distance of 80.00 feet to
a point;
thence North 00 degrees 28' 20" West a distance of 25.00 feet to
the POINT OF BEGINNING.
Affects: Parcel 5
(19) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for electrical lines, recorded
November 1, 1978, in Book 964 as Document No. 923075 of Official
Records.
Affects: PARCEL NO. 1:
A strip of land 10.00 feet in width being 5.00 feet on each side
of the following described centerline:
COMMENCING at the centerline intersection of Atlantic Street and
Xxxxxxxx Avenue;
thence North 89 degrees 46' 20" East, 30.00 feet;
thence North 00 degrees 13' 40" West per File 13 of Surveys, page
26, recorded June 5, 1963 as Document No. 363093 in Book 450 of
Official Records, Xxxxx County, Nevada, a distance of 39.00 feet
to the POINT OF BEGINNING;
thence North 89 degrees 46' 20" East, 45.00 feet;
thence South 51 degrees 02' 30" East, 128.00 feet to a point
hereinafter designated as Point A, said point also being the
point of ending of said centerline.
PARCEL NO. 2:
A strip of land 20.00 feet in width being 10.00 feet on each side
of the following described centerline:
BEGINNING at the aforementioned Point A;
thence South 51 degrees 02' 30" East, 30.00 feet to the point of
ending of said centerline.
Affects: Parcels 1 and 2
(20) TERM, COVENANTS, CONDITIONS AND PROVISIONS in an instrument
entitiled, "ENCROACHMENT AGREEMENT", by and between CITY OF LAS
VEGAS, a municipal corporation and SHOWBOAT, INC. recorded
October 27, 1986, in Book 861027 as Document No. 00778, of
Official Records.
(21) A LEASE executed by and between the parties named herein,
for the term and upon and subject to all of the terms, covenants,
and provisions contained therein;
Dated: January 1, 1989
Lessor: SHOWBOAT, INC., a Nevada corporation
Lessee: SHOWBOAT OPERATING COMPANY, a Nevada corporation
Term: 10 YEARS
Disclosed by: MEMORANDUM OF LEASE (WITH CANCELLLATION OF PRIOR
LEASE)
Recorded: June 21, 1990 in Book 900621 as Document No. 00420
Affects: All Parcels
The herein above referenced lease was suboridnated to the lien or
charge of the Deed of trust referred to as Item No. 24 by
document entitiled "SUBORDINATION AGREEMENT", recorded May 18,
1993 in Book 930518 as Document No. 00392.
(22) EASEMENT: An easement affecting that portion of said land
and for the purposes therein and incidental purposes thereto, in
favor of NEVADA POWER COMPANY, for underground electric
system(s), recorded September 21, 1990, in Book 900921 as
Document No. 00787 of Official Records.
Affects: A strip of land 6.00 feet in width, being 3.00 feet on
each side of the following described centerline:
COMMENCING at the intersection of the North (N) line of the
Southeast Quarter of the Northwest Quarter (SE 1/4 NW 1/4) of
said Section 1 with the West line of the U.S. Highway 00-00-000;
thence South 42 degrees 27' 00" East, along the West right-of-way
line of said U.S. Highway 00-00-000, a distance of 124.37 feet;
thence South 48 degrees 05' 25" West, 26.43 feet to a point
hereinafter referred to as POINT "A", being also the POINT OF
BEGINNING;
thence continuing South 48 degrees 05' 25" West, 231.94 feet;
thence North 42 degrees 31' 33" West, 205.50 feet to a point
hereinafter referred to as POINT "B", being the point of ending.
The sideline boundaries of said Strip shall be lengthened or
shortened so as to intersect at the angle point.
Also, the following described parcels of land:
PARCEL 1:
BEGINNING at POINT "A";
thence North 42 degrees 27' 00" West, 37.49 feet;
thence North 47 degrees 33' 00" East, 26.43 to a point on the
Westerly right of way line of the U.S. Highway 00-00-000;
thence South 42 degrees 27' 00" East, along said Westerly right
of way line, 66.85 feet;
thence South 42 degrees 33' 00" West, 26.43 feet;
thence North 42 degrees 27' 00" West, 29.36 feet to the POINT OF
BEGINNING.
PARCEL 2:
BEGINNING at POINT "B";
thence North 46 degrees 45' 10" East, 15.61 feet;
thence North 43 degrees 14' 50" West, 23.00 feet;
thence South 46 degrees 45' 10" West, 20.10 feet;
thence South 43 degrees 14' 50" East, 23.00 feet;
thence North 46 degrees 45' 10" East, 4.49 feet to the POINT OF
BEGINNING.
Affects: Parcels 2 and 3
(23) FINANCING STATEMENT: The effect of a FINANCING STATEMENT to
secure an indebtedness of the amount stated herein, executed by
SHOWBOAT OPERATING COMPANY, in favor of SIGN SYSTEMS, in the
amount of $3,515,512.00, dated March 10, 1993, and recorded March
19, 1993 in Book 930319 as Document No. 00860 of Official
Records.
Affects: Pylon Display Sign situated on said property (Exact
Location not disclosed)
(24) DEED OF TRUST: A Deed of Trust to secure an indebtedness of
$215,000,000.00 and any other amounts payable under the terms
thereof:
Recorded: May, 18 1993 in Book 930518 Document No. 00390 of
Official Records.
Dated: May 18, 1993
Trustor: SHOWBOAT, INC., A NEVADA CORPORATION
Trustee: NEVADA TITLE COMPANY, A NEVADA CORPORATION
Beneficiary: IBJ XXXXXXXX BANK & TRUST COMPANY, A NEW YORK
BANKING CORPORATION AS INDENTURE TRUSTEE
The amount due, terms and conditions of the indebtedness should
be determined by contacting the owner if the debt.
Affects: All Parcels
(25) FINANCING STATEMENT: the effect of a FINANCING STATEMENT to
secure an indebtedness of the amount stated herein, executed by
SHOWBOAT, INC., A NEVADA CORPORATION, in favor of IBJ XXXXXXXX
BANK & TRUST COMPANY, A NEW YORK BANKING CORPORATION, AS TRUSTEE
UNDER THAT CERTAIN INDENTURE DATED AS OF MAY 17, 1993, in the
amount of $ (NOT SET OUT), dated May 17, 1993, and recorded May
18, 1993 in Book 930518 as Document No. 00391 of Official
Records.
Affects: All Parcels
(26) FINANCING STATEMENT: The effect of a FINANCING STATEMENT to
secure an indebtedness of the amount stated herein, executed by
SHOWBOAT OPERATING COMPANY, in favor of IBJ XXXXXXXX BANK & TRUST
COMPANY, in the amount of $ (NOT SET OUT), dated (NOT SET OUT),
and recorded May 18, 1993 in Book 930518 as Document No. 00393 of
Official Records.
Affects: All Parcels
(27) MECHANICS LIEN: A claim of MECHANIC'S LIEN by COM CON, INC.,
a Nevada corporation, recorded July 1, 1993 in Book 930701 of
Official Records as document number 01081.
Amount: $71,879.11
(28) MECHANICS LIEN: A claim of MECHANIC'S LIEN by XXX XXXXXXX'X
GLASS SHOP, recorded July 23, 1993 in Book 930723 of Official
Records as document number 00895.
Amount: $8,100.00
(29) MECHANICS LIEN: A claim of MECHANIC'S LIEN by MORENA TILE,
recorded August 3, 1993 in Book 930803 of Official Records as
document number 00963.
Amount: $4,653.40
(30) MECHANICS LIEN: A claim of MECHANIC'S LIEN by THE LABOR
EXCHANGE, recorded August 9, 1993 in Book 930809 of Official
Records as document number 01307.
Amount: $12,150.40
(31) MECHANICS LIEN: A claim of MECHANIC'S LIEN by VERSA-TILE,
recorded September 16, 1993 in Book 930916 of Official Records as
document number 00913.
Amount: $7,451.40
(32) LIS PENDENS: An action commenced in the DISTRICT COURT,
XXXXX COUNTY, NEVADA, dated December 17, 1993, Case No. A328549,
entitled, "AN ACTION TO FORECLOSE UPON THE NOTICE OF CLAIM OF
LIEN FILED BY PLAINTIFF", COM CON, INC., a Nevada Corporation
-vs- NEW HOTEL SHOWBOAT, INC., a Nevada Corporation
Notice of Pendency of said Action was recorded December 22, 1993
in Book 931222 as Dcoument No. 01263 of Official Records.
Affects: Mechanic's Lien shown as Item No. 27 herein.
Said Lis pendens was Amended by Notice recorded December 29, 1993
in Book 931229 as Document No. 01492 of Official Records.
NOTE: COM CON, INC., A NEVADA CORPORATION filed a petition for
relief under Chapter 7 of the Bankruptcy Code on March 21, 1995
in the U.S. Bankruptcy Court, District of Nevada, Case No.
95-1093.
Recording Requested By and
Return Recorded Counterparts to:
Xxxxx X. Xxxxxxxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Xxxxx
Woodland Falls Corporate Park
000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
LEASEHOLD IN PARI PASSU MORTGAGE, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
MADE BY
ATLANTIC CITY SHOWBOAT, INC,
a New Jersey Corporation,
as Mortgagor,
for the benefit of
NATWEST BANK, N.A.,
a National Banking Corporation
*****************************************************************
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL
ESTATE RECORDS OF ATLANTIC COUNTY, NEW JERSEY, UNDER THE NAMES OF
ATLANTIC CITY SHOWBOAT, INC., AS "MORTGAGOR" AND RESORTS
INTERNATIONAL, INC. AS "LESSOR."
THIS MORTGAGE OPERATES AS A FIXTURE FILING AND THE RECORD
OWNERS OF THE PROPERTY LOCATED IN ATLANTIC CITY, COUNTY OF
ATLANTIC, STATE OF NEW JERSEY, ARE ATLANTIC CITY SHOWBOAT, INC.,
AND RESORTS INTERNATIONAL, INC.
THIS MORTGAGE OPERATES AS A FEE MORTGAGE WITH RESPECT TO
REAL PROPERTY OWNED BY MORTGAGOR AS DESCRIBED HEREIN AND AS A
LEASEHOLD MORTGAGE WITH RESPECT TO REAL PROPERTY OWNED BY RESORTS
INTERNATIONAL, INC. AND LEASED BY MORTGAGOR AS DESCRIBED HEREIN.
1
TABLE OF CONTENTS
ARTICLE ONE
COVENANTS OF MORTGAGOR
1.1 Performance of Loan Documents 17
1.2 General Representations, Covenants and Warranties 17
1.3 Compliance with Legal Requirements 18
1.4 Taxes 18
1.5 Insurance 18
1.6 Condemnation 21
1.7 Care of Mortgaged Property 22
1.8 Environmental Laws 22
1.9 Leases 24
1.10 Treatment of Facility Leases in Bankruptcy 26
1.11 Rejection of Facility Leases by Facility Lessor 27
1.12 Assignment of Claims to Mortgagee 27
1.13 Offsets by Mortgagor 27
1.14 Mortgagor's Acquisition of Interest in Leased 28
Parcels
1.15 New Facility Leases Issued to Mortgagee 28
1.16 Further Encumbrance, Sale or Other Disposition of 28
Collateral
1.17 Partial Releases of Mortgaged Property 29
1.18 Lien Subrogation 30
1.19 Further Assurances 30
1.20 Security Agreement and Financing Statements 30
1.21 Assignment of Rents 32
1.22 Expenses 33
1.23 Mortgagee's Cure of Mortgagor's Default 33
1.24 Use of Land 34
1.25 Material Space Leases 34
1.26 Compliance with Permitted Lien Agreements 34
1.27 Defense of Actions 34
1.28 Affiliates 34
1.29 Future Advances 34
1.30 Title Insurance 34
1.31 Exculpation of Mortgagee 34
ARTICLE TWO
CORPORATE LOAN PROVISIONS
2.1 Interaction with Indenture, Loan Agreement and 35
Intercreditor Agreement
2.2 Other Collateral 35
ARTICLE THREE
DEFAULTS
3.1 Event of Default 35
2
PAGE
ARTICLE FOUR
REMEDIES
4.1 Acceleration of Maturity 36
4.2 Protective Advances 37
4.3 Institution of Equity Proceedings 37
4.4 Mortgagee's Power of Enforcement 37
4.5 Mortgagee's Right to Enter and Take Possession, 38
Operate and Apply Income
4.6 Leases 39
4.7 Purchase by Mortgagee 39
4.8 Waiver of Appraisement, Valuation, Stay, Extension 39
and Redemption Laws
4.9 Receiver 39
4.10 Suits to Protect the Mortgaged Property 40
4.11 Proofs of Claim 40
4.12 Mortgagor to Perform Obligations; Application of 40
Monies by Mortgagee
4.13 Delay or Omission; No Waiver 41
4.14 No Waiver of One Default to Affect Another 41
4.15 Discontinuance of Proceedings; Position of Parties 41
Restored
4.16 Remedies Cumulative 41
4.17 Interest After Event of Default 42
4.18 Foreclosure; Expenses of Litigation 42
4.19 Deficiency Judgments 42
4.20 Waiver of Jury Trial 42
4.21 Reasonable Use and Occupancy 42
4.22 Exculpation of Mortgagee 43
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
5.1 Heirs, Successors and Assigns Included in Parties 43
5.2 No Merger 43
5.3 Addresses for Notices, Etc 44
5.3.1 Change of Address 44
5.4 Headings 44
5.5 Invalid Provisions to Affect No Others 44
5.6 Changes and Priority Over Intervening Liens 45
5.7 Estoppel Certificates 45
5.8 Governing Law 45
5.9 Required Notices 45
5.10 Continued Priority of Lien 45
5.11 Attorneys' Fees 45
5.12 Late Charges 46
5.13 Cost of Accounting 46
5.14 Right of Entry 46
5.15 Corrections 46
5.16 Statute of Limitations 46
5.17 Subrogation 46
3
Page
5.18 Joint and Several Liability 46
5.19 Context 46
5.20 Time 47
5.21 Interpretation 47
5.22 Exhibits and Schedules 47
5.23 Integration 47
5.24 Recording of Mortgage, Etc 47
5.25 Consents 47
5.26 Usury Laws 47
5.27 Gaming Control Acts 47
ARTICLE SIX
POWER OF ATTORNEY
6.1 Grant of Power 48
6.2 Possession and Completion 48
6.3 Employment of Others 48
6.4 Security Guards 48
6.5 Compromise Claims 48
6.6 Legal Proceedings 48
6.7 Other Acts 48
EXHIBIT A FORM OF DISBURSEMENT REQUEST AND CERTIFICATE
SCHEDULE A LAND DESCRIPTION, INCLUDING LEASE DESCRIPTION
SCHEDULE B LIST OF EXISTING ENCUMBRANCES
4
LEASEHOLD IN PARI PASSU MORTGAGE, ASSIGNMENT OF
RENTS AND SECURITY
AGREEMENT
Pursuant to Section 1.16 of that certain Leasehold Mortgage,
Assignment of Rents and Security Agreement, dated as of May 18,
1993 among Atlantic City Showboat, Inc., as mortgagor and
Showboat, Inc., as mortgagee, recorded in the office of the Clerk
of Atlantic County on May 19, 1993 in Book 5028 Page 284 as
amended by that certain First Amendment to Leasehold Mortgage,
Assignment of Rents and Security Agreement dated July 9, 1993
recorded May 19, 1993 in Mortgage Book 5095, page 209; and
pursuant to that Leasehold Mortgage, Assignment of Rents and
Security Agreement made by Atlantic City Showboat, Inc. to IBJ
Xxxxxxxx Bank & Trust Company (as Trustee) recorded May 19, 1993
in Mortgage Book 5020, page 1 as amended by that First Amendment
to Leasehold Mortgage Assignment of Rents and Security Agreement
recorded July 28, 1993 in Mortgage Book 5095, page 209 as amended
by that Second Amendment to Leasehold Mortgage Assignment of
Rents and Security Agreement dated as of July 6, 1995; and,
pursuant to Section 1.10 of that certain Deed of Trust,
Assignment of Rents and Security Agreement, dated as of May 18,
1993 made by Showboat, Inc., as Trustor, to Nevada Title Company,
as Trustee for the benefit of IBJ Xxxxxxxx Bank and Trust Company
as Beneficiary, recorded on May 18, 1993 in Book 5500, page 284,
the lien created by this instrument ranks PARI PASSU with the
liens created by said Leasehold Mortgages, and Deed of Trust as
amended.
THIS LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT (hereinafter called "Leasehold Mortgage") is made as of
July 6, 1995, by and between ATLANTIC CITY SHOWBOAT, INC., a New
Jersey corporation ("Mortgagor"), whose address is 000 Xxxxxxxxx,
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000, and NATWEST BANK, N.A. a
National Banking Association, ("Mortgagee").
DEFINITIONS - As used in this Leasehold Mortgage, the
following terms have the meanings hereinafter set forth:
"ACCOUNTS RECEIVABLE" shall have the meaning set forth in
Section 9-106 of the UCC for the term "account."
"ACSI GUARANTY" means that certain guaranty made by
Mortgagor in favor of Mortgagee under the Loan Agreement.
"ACSI PROMISSORY NOTE" means that certain promissory note
in the amount of $215,000,000.00 between Atlantic City Showboat,
Inc., as payor and Showboat, Inc. as payee.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person, and, with
respect to any specified natural Person, any other Person having
a relationship by blood, marriage or adoption not more remote
than first cousins with such natural Person. For purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with") as used
with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the
ownership of voting securities or by agreement or otherwise;
PROVIDED, HOWEVER, that beneficial ownership of 10% or more of
the voting securities of a Person shall be deemed control.
"APPURTENANT RIGHTS" means all and singular tenements,
hereditaments, rights, reversions, remainders, development
rights, privileges, benefits, easements (in gross or
appurtenant), rights-of-way, gores or strips of land, streets,
ways, alleys, passages, sewer rights, water courses, water rights
and powers, and all appurtenances whatsoever and claims or
demands of Mortgagor at law or in equity in any way belonging,
benefitting, relating or appertaining to Mortgagee's interest in
the Land under any Facility Lease or otherwise, the airspace over
the Land, the
5
Improvements or any of the Mortgaged Property encumbered by this
Leasehold Mortgage, or which hereinafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter
acquired by Mortgagor.
"ATLANTIC CITY SHOWBOAT" means the Showboat Casino Hotel in
Atlantic City, New Jersey, as more particularly described in the
Prospectus and any other facilities, businesses or enterprises
owned or operated by Mortgagor on the Land.
"ATLANTIC CITY SHOWBOAT EXPANSION" means any addition,
improvement, extension or capital repair to the Atlantic City
Showboat or related or ancillary facilities.
"BANKRUPTCY" means, with respect to any Person, that such
Person is or becomes bankrupt or Insolvent or: (a) is the subject
of any order for relief under any Bankruptcy Law; (b)commences a
voluntary proceeding under any Bankruptcy Law; (c) consents to
the entry of an order for relief in an involuntary proceeding
under any Bankruptcy Law; (d) consents to the appointment of, or
taking possession by any Receiver; (e) makes any assignment for
the benefit of creditors; (f) is unable or fails, or admits in
writing its inability, to pay its debts as such debts become due;
(g) is the subject of any involuntary proceeding under any
Bankruptcy Law or involuntary appointment of a Receiver, and such
involuntary proceeding or appointment is not dismissed and
terminated within 90 days; (h) is the subject of any other
proceeding or relief similar to any of the foregoing under any
law; (i) is the subject of a warrant of attachment, execution, or
similar process with respect to such Person or any substantial
part of such Person's property, which warrant or similar process
remains in effect for sixty days without having been bonded or
discharged; or (j) otherwise ceases to do business as a going
concern.
"BANKRUPTCY CODE" means the United States Bankruptcy Code,
11 U.S.C. 101 et seq.
"BANKRUPTCY LAW" means the Bankruptcy Code and any other
state or federal insolvency, reorganization, moratorium or
similar law for the relief of debtors.
"BONDHOLDERS" means the holders of the First Mortgage
Bonds.
"BORROWER" means Showboat, Inc., a Nevada corporation.
"BUSINESS DAY" means any day that is not a Saturday, a
Sunday or a day on which banking institutions in the State of New
Jersey or the State of New York are not required to be open.
"COLLATERAL" means the property described in granting
clauses (A) through (S) (subject to the exclusions set forth in
clause T) below.
"DEEDS OF TRUST" means collectively (1) that certain Deed
of Trust, Assignment of Rents and Security Agreement made by
Showboat, Inc., dated of even date herewith, and securing, among
other things, the Loan Agreement; and (2) this Mortgage.
"DEP" means the New Jersey Department of Environmental
Protection and Energy together with its successors.
"DISBURSEMENT REQUEST" means a certificate in the form of
Exhibit "A" attached hereto and completed as to all information
required therein, with all required attachments attached and
executed by the president and a vice-president or at least two
vice-presidents of Mortgagor on behalf of Mortgagor.
"ENVIRONMENTAL LAWS" means any and all laws and Legal
Requirements relating to environmental matters, pollution, or
hazardous substances, including: the Comprehensive Environmental
Response, Compensation and
6
Liability Act of 1980,42 U.S.C. 9601-9657; the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq.;
the Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.); ISRA; the Spill Act; any other Laws that may form the
basis of any claim, action, demand, suit, proceeding, hearing, or
notice of violation that is based on or related to the
generation, manufacture, processing, distribution, use,
existence, treatment, storage, disposal, transport, or handling,
or the emission, discharge, release, or threatened release into
the environment, of any hazardous substance, or other threat to
the environment.
"EVENT OF DEFAULT" has the meaning set forth in Section 3.1
hereof.
"EXISTING ENCUMBRANCES" means those matters set forth on
Schedule "B" attached hereto constituting a prior lien, claim or
encumbrance upon the Mortgaged Property or any other prior lien,
claim or encumbrance upon the Mortgaged Property specifically
consented to in writing by Mortgagee.
"FACILITY LEASE(S)" means all of Mortgagor's estate, right,
title and interest in, to and under (1) the Resorts Lease, as it
may be amended, restated, renewed or extended from time to time
in the future in compliance with this Leasehold Mortgage,
including any options to purchase, extend, or renew provided for
in the Resorts Lease and (2) any or all other lease(s) or
sublease(s) with respect to the Atlantic City Showboat, under
which Mortgagor is lessee or sublessee, as such (sub)lease(s) may
be amended, restated, renewed, modified, supplemented, or
extended from time to time in the future in compliance with this
Leasehold Mortgage, including any options to purchase, extend or
renew provided for in such (sub)lease(s).
"FACILITY LEASE DAMAGE CLAIMS" means all of Mortgagor's
claims and rights to the payment of damages that may arise from
Facility Lessor's failure to perform under any Facility Lease, or
rejection of any Facility Lease under any Bankruptcy Law.
"FACILITY LESSOR" means each lessor under each Facility
Lease.
"FF&E" means all furniture, fixtures, equipment,
appurtenances and personal property now or in the future owned or
leased by Mortgagor contained in, used in connection with,
attached to, or otherwise useful or convenient to the use,
operation, or occupancy of, or placed on, but unattached to, any
part of the Land or Improvements whether or not the same
constitutes real property or fixtures in the State of New Jersey,
including all removable window and floor coverings, all furniture
and furnishings, heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, incinerating and elevator and
escalator plants, cooking facilities, vacuum cleaning systems,
public address and communications systems, sprinkler systems and
other fire prevention and extinguishing apparatus and materials,
motors, machinery, pipes, appliances, equipment, fittings,
fixtures, and building materials, together with all venetian
blinds, shades, draperies, drapery and curtain rods, brackets,
bulbs, cleaning apparatus, mirrors, lamps, ornaments, cooling
apparatus and equipment, ranges and ovens, garbage disposals,
dishwashers, mantels, and any and all such property which is at
any time installed in, affixed to or placed upon the Land or
Improvements.
"FF&E FINANCING AGREEMENT" shall have the meaning ascribed
to that term in Section 1.16(d) hereof.
"FIRST MORTGAGE BONDS" means Mortgagee's 9-1/4% First
Mortgage Bonds due May 1, 2008, issued pursuant to the Indenture,
or any notes exchanged therefor as contemplated in the Indenture.
"GAMING AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any
nature whatsoever of the United States federal or foreign
government, any state, province or any city or other political
subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof with authority to
regulate any gaming operation (or proposed gaming operation)
owned, managed or operated by the Issuer or any of its
Subsidiaries, including, without limitation, the Nevada Gaming
Commission,
7
The Nevada State Gaming Control Board, the City Council of the
City of Las Vegas, and the New Jersey Casino Control Commission.
"GAMING CONTROL ACTS" means the laws, regulations and
supervision procedures of the Nevada Gaming Control Act and the
New Jersey Casino Control Act, as from time to time amended, or
any successor provision of law, and the regulations promulgated
thereunder and such other laws, regulations and supervision
procedures of the United States federal or foreign government,
any state, province or any city or other political subdivision or
otherwise and whether now or hereafter in existence, or any
officer or official thereof with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed, or
operated by the Mortgagor or any of its subsidiaries including,
without limitation, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the City Council of the City of Las
Vegas, and the New Jersey Casino Control Commission.
"GAMING PERMITS" means every license, franchise, permit or
other authorization on the date of the Indenture or thereafter
required to own, lease, operate or otherwise conduct casino
gaming at the Las Vegas Showboat and the Atlantic City Showboat,
including, without limitation, all such licenses granted under
the Gaming Control Acts, the regulations of the Gaming
Authorities and other applicable laws.
"GOVERNMENTAL AUTHORITY" means any agency, authority,
board, bureau, commission, department, office, public entity or
instrumentality of any nature whatsoever of the United States
federal or foreign government, any state, province or any city or
other political subdivision or otherwise, whether now or
hereafter in existence, or any officer or official thereof,
including, without limitation, any Gaming Authority.
"GUARANTORS" means each of (i) SBOC, OSI and Mortgagor and
(ii) any other Subsidiary that executes a Subsidiary Guaranty in
accordance with the provisions of the Loan Agreement, and their
respective successors and assigns.
"HAZARDOUS MATERIALS" means any hazardous substance or
toxic chemical and shall include, without limitation, gasoline,
refined petroleum products, explosives, radioactive materials,
asbestos, polychlorinated biphenyls or related or similar
materials, or any other substance or material defined as a
hazardous or toxic substance or waste or toxic pollutant by any
federal, state or local law, ordinance, rule, or regulation,
including without limitation, Environmental Laws.
"IBJ" means IBJ Xxxxxxxx Bank & Trust Company, Trustee
under the Indenture.
"IMPOSITIONS" means all taxes, assessments, water rates,
sewer rents, maintenance charges, other governmental inspections
and other charges now or hereafter levied or assessed or imposed
against the Mortgaged Property or any part thereof.
"IMPROVEMENTS" means (1) all the buildings, structures,
facilities and improvements of every nature whatsoever now or
hereafter situated on the Land or any real property encumbered
hereby, and (2) all of the following to the extent owned or
leased by Mortgagor: all fixtures, machinery, appliances, goods,
building or other materials and equipment, including without
limitation all gaming equipment and devices, all bowling balls,
bowling shoes, bowling pins, pin-setting and ball return
machines, ball drilling and polishing machines, racks, cases,
cabinets, trophies, towels, furniture, furnishings, machinery,
equipment and supplies relating to the operation of the bowling
center located on the Land, and all machinery, equipment,
engines, appliances and fixtures for generating or distributing
air, water, heat, electricity, light, fuel or refrigeration, or
for ventilating or sanitary purposes, or for the exclusion of
vermin or insects, or for the removal of dust, refuse or garbage;
all wall-beds, wall-safes, built-in furniture and installations,
shelving, lockers, partitions, doorstops, vaults, motors,
elevators, dumb-waiters, awnings, window shades, venetian blinds,
light fixtures, fire hoses and brackets and boxes for the same,
fire sprinklers, alarm, surveillance and security systems,
computers, drapes, drapery rods and brackets, mirrors, mantels,
screens, linoleum,
8
carpets and carpeting, plumbing, bathtubs, sinks, basins, pipes,
faucets, water closets, laundry equipment, washers, dryers, ice-
boxes and heating units; all kitchen and restaurant equipment,
including but not limited to silverware, dishes, menus, cooking
utensils, stoves, refrigerators, ovens, ranges, dishwashers,
disposals, water heaters, incinerators, furniture, fixtures and
furnishings, communication systems, and equipment; all cocktail
lounge supplies, including but not limited to bars, glassware,
bottles and tables used in connection with the Land; all chaise
lounges, hot tubs, swimming pool heaters and equipment and all
other recreational equipment (computerized and otherwise), beauty
and xxxxxx equipment, and maintenance supplies used in connection
with the Land; all specifically designed installations and
furnishings, and all furniture, furnishings and tangible personal
property of every nature whatsoever now or hereafter owned or
leased by Mortgagor or in which Mortgagor has any rights or
interest and located in or on, or attached to, or used or
intended to be used or which are now or may hereafter be
appropriated for use on or in connection with the operation of
the Land or any real or personal property encumbered hereby or
any other Improvements, or in connection with any construction
being conducted or which may be conducted thereon, and all
extensions, additions, accessions, improvements, betterments,
renewals, substitutions, and replacements to any of the
foregoing, and all of the right, title and interest of Mortgagor
in and to any such property (subject to any Permitted Liens),
which, to the fullest extent permitted by law, shall be
conclusively deemed fixtures and improvements and a part of the
real property hereby encumbered.
"INDENTURE" means that certain indenture, dated as of May
18, 1993, by and among the Mortgagee, as issuer, Mortgagor, OSI
and SBOC, as guarantors, and Trustee, as trustee, as such
Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
"INSOLVENT" means with respect to any person or entity,
that such person or entity shall be deemed to be insolvent if he
or it is unable to pay his or its debts as they become due and/or
if the fair market value of his or its assets does not exceed his
or its aggregate liabilities.
"INTANGIBLE COLLATERAL" means, subject to the terms and
conditions of the Indenture, (a) the rights to use all names and
all derivations thereof now or hereafter used by Mortgagor in
connection with the Land or Improvements, including, without
limitation, the names "Atlantic City Showboat," "Atlantic City
Showboat Casino" and any use of the name "Showboat Casino" in the
State of New Jersey, including any variations thereon, together
with the goodwill associated therewith, and all names, logos, and
designs used by Mortgagor, or in connection with the Land or in
which Mortgagor has rights, with the exclusive right to use such
names, logos and designs wherever they are now or hereafter used
in connection with the Atlantic City Showboat, and any and all
other trade names, trademarks or service marks, whether or not
registered, now or hereafter used in the operation of the
Atlantic City Showboat, including, without limitation, any
interest as a lessee, licensee or franchisee, and, in each case,
together with the goodwill associated therewith; (b) subject to
the absolute assignment contained herein, the Rents; (c) any and
all books, records, customer lists, concession agreements, supply
or service contracts, licenses, permits, governmental approvals
(to the extent such licenses, permits and approvals may be
pledged under applicable law), signs, goodwill, casino and hotel
credit and charge records, supplier lists, checking accounts,
safe deposit boxes (excluding the contents of such deposit boxes
owned by persons other than Mortgagor and its subsidiaries),
cash, instruments, chattel papers, documents, unearned premiums,
deposits, refunds, including but not limited to income tax
refunds, prepaid expenses, rebates, tax and insurance escrow and
impound accounts, if any, actions and rights in action, and all
other claims, including without limitation condemnation awards
and insurance proceeds, and all other contract rights and general
intangibles resulting from or used in connection with the
operation of the Mortgaged Property and in which Mortgagor now or
hereafter has rights; (d) all of Mortgagor's documents,
instruments, contract rights, and general intangibles including,
without limitation, all permits, licenses, franchises and
agreements required for the use, occupancy or operation of any
Improvements (to the extent such licenses, permits and approvals
are not prohibited from being pledged under applicable law); and
(e) general intangibles, vacation license resort agreements or
other time share license or right to use agreements, including
without limitation all rents, issues, profits, income and
maintenance fees resulting therefrom, whether any of the
foregoing is now owned or hereafter acquired.
9
"INTERCREDITOR AGREEMENT" means, collectively, the
Intercreditor Agreements, of even date herewith, entered into
between Mortgagee, IBJ, Borrower, and Mortgagor.
"INVENTORY" shall have the meaning set forth in section 9-
109(4) of the UCC.
"ISRA" means the Industrial Site Recovery Act, N.J. S A.13:
1K-6 et seq.
"LAND" means the real property situated in Atlantic City,
County of Atlantic, State of New Jersey, more specifically
described in Schedule A attached hereto, including any after
acquired title thereto.
"LEGAL REQUIREMENTS" means all applicable restrictive
covenants, applicable zoning and subdivision ordinances and
building codes, all applicable health and environmental laws and
regulations, all applicable gaming laws and regulations, and all
other applicable laws, ordinances, rules, regulations, judicial
decisions, administrative orders, and other requirements of any
Governmental Authority having jurisdiction over Mortgagor, the
Mortgaged Property and/or any Affiliate of Mortgagor, in effect
either at the time of execution of this Leasehold Mortgage or at
any time during the term hereof, including, without limitation,
all Environmental Laws and Gaming Control Acts.
"LIEN" means with respect to any portion of the Mortgaged
Property, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such portion of the
Mortgaged Property whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof,
any option or other agreement to sell or give a security interest
in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"LOAN AGREEMENT" means that certain Loan and Guaranty
Agreement between Borrower, Mortgagor, Mortgagee, SBOC and OSI of
even date herewith.
"LOAN DOCUMENTS" means this Leasehold Mortgage, the
Promissory Note, the Loan Agreement, the In PARI PASSU Assignment
of Leases and Rents, the Intercreditor Agreements, and any other
documents evidencing, guaranteeing or securing the Obligations of
Borrower, Mortgagor and Guarantors to Mortgagee or IBJ under such
document.
"MATERIAL SPACE LEASE" means any Space Lease that provides
for an annual rent in excess of $100,000.
"MORTGAGED PROPERTY" means all of the property described in
Granting Clauses (A) through (S) below, inclusive, and each item
of property therein described, provided, however, that such term
shall not include the property described in Granting Clause (T)
below.
"MORTGAGEE" means NatWest Bank, N.A. a national banking
corporation, and any assignee of its rights hereunder or of the
Promissory Note secured hereby.
"MORTGAGOR" means Atlantic City Showboat, Inc., a New
Jersey corporation and includes not only the original Mortgagor
hereunder, but also any successors or assigns of the Mortgagor,
or any part thereof, at any time and from time to time, as the
case requires.
"OBLIGATIONS" means the payment and performance of each
covenant and agreement of Mortgagor contained in this Leasehold
Mortgage and the Loan Documents.
"OSI" means Ocean Showboat, Inc., a New Jersey corporation.
10
"OSI GUARANTY" means the Subsidiary Guaranty contained in
the Loan Agreement of even date herewith made by OSI in favor of
Mortgagee.
"PERMITTED DISPOSITION" means the sale, transfer or other
disposition of Collateral not to exceed an aggregate value of
$3,000,000.00 per annum.
"PERMITTED LIENS" means Liens that are permitted under
Section 6.05 of the Loan Agreement.
"PERSON" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or any governmental agency or
political subdivision thereof.
"PLANS" shall have the meaning ascribed to that term in
Section 1.5 hereof.
"PROCEEDS" has the meaning assigned to it under the UCC
and, in any event, shall include but not be limited to (i) any
and all proceeds of any insurance (including without limitation
property casualty and title insurance), indemnity, warranty or
guaranty payable from time to time with respect to any of the
Mortgaged Property; (ii) any and all proceeds in the form of
accounts, security deposits, tax escrows (if any), down payments
(to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel
paper, liens and security instruments, guaranties or general
intangibles relating in whole or in part to the Atlantic City
Showboat and all rights and remedies of whatever kind or nature
Mortgagor may hold or acquire for the purpose of securing or
enforcing any obligation due Mortgagor thereunder; (iii) any and
all payments in any form whatsoever made or due and payable from
time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Mortgaged Property by any Governmental Authority; (iv) subject to
the absolute assignment contained herein, the Rents or other
benefits arising out of, in connection with or pursuant to any
Space Lease of the Mortgaged Property; and (v) any and all other
amounts from time to time paid or payable in connection with any
of the Mortgaged Property; PROVIDED, HOWEVER, that the Mortgagor
is not authorized to dispose of any of the Mortgaged Property
unless such disposition is a Permitted Disposition.
"PROMISSORY NOTE" means that certain Revolving Note as same
may be amended pursuant to the Loan Agreement, between Borrower
and Mortgagee as Lender, both of even date herewith, in the
maximum aggregate amount of $25,000,000.00.
"PROSPECTUS" means that certain prospectus, dated as of May
18, 1993, relating to the offering of the First Mortgage Bonds of
Mortgagor, and all supplements, schedules or other attachments
thereto.
"PROTECTIVE ADVANCES" has the meaning set forth in Section
4.2.
"RECEIVER" means, with respect to any Person (including
Mortgagor), any receiver, trustee, custodian, debtor in
possession, liquidator, sequestrator, administrator, conservator,
or other successor appointed (whether by a court or otherwise)
pursuant to any creditor's exercise of remedies against such
Person, or pursuant to a Bankruptcy of such Person, or for
purposes of reorganization or liquidation, or otherwise for the
benefit of such Person's creditors, or under any similar
circumstances, or otherwise having similar powers over such
Person or its property, whether such Receiver acts on an interim,
temporary, or final basis and whether such appointment applies to
all or any significant portion of such Person's assets or
property, including or not including any of the Mortgaged
Property.
"RENTS" means all rents, income, receipts, issues, profits,
revenues and maintenance fees, room, food and beverage revenues,
license and concession fees, income, proceeds and other benefits
to which Mortgagor may now or hereafter be entitled from the
Land, the Improvements, the Facility Leases or Space Leases or
any property encumbered hereby or any business or other activity
conducted by Mortgagor at the Land or the Improvements.
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"RESORTS" means Resorts International, Inc., a Delaware
corporation.
"RESORTS LEASE" means that certain Lease Agreement dated as
of October 26, 1983 between Resorts and 0S1, 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 0S1 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) that 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 18, 1993 in
Deed Book 5500, page 284.
"SBOC" means Showboat Operating Company, a Nevada
corporation.
"SBOC GUARANTY" means the Guaranty of even date herewith
and made by SBOC in favor of Mortgagee.
"SPACE LEASES" means any and all leases, subleases,
lettings, licenses, concessions, operating agreements, management
agreements, and all other agreements affecting the Mortgaged
Property that Mortgagor has entered into, taken by assignment,
taken subject to, or assumed, or has otherwise become bound by,
now or in the future, that give any person or entity other than
Mortgagor the right to conduct its business on, or otherwise use,
operate or occupy, all or any portion of the Land or Improvements
and any leases, agreements or arrangements permitting anyone or
any entity other than Mortgagor to enter upon or use any of the
Mortgaged Property to extract or remove natural resources of any
kind, together with all amendments, extensions, and renewals of
the foregoing entered into in compliance with this Leasehold
Mortgage, together with all rental, occupancy, service,
maintenance or any other similar agreements pertaining to use or
occupation of, or the rendering of services at the Land, the
Improvements or any part thereof.
"SPACE LESSEE(S)" means any and all tenants, licensees, or
other grantees of the Space Leases and any and all guarantors,
sureties, endorsers or others having primary or secondary
liability with respect to such Space Lease.
"SPILL ACT" means the Spill Compensation and Control Act,
N.J.S.A. 58:10-23.11 ET SEQ. together with any amendments or
revisions thereof and any regulations promulgated pursuant
thereto.
"SUBSIDIARY GUARANTIES" means, collectively, the OSI
Guaranty, the ACSI Guaranty, the SBOC Guaranty and any other
guaranties issued pursuant to the Loan Agreement with respect to
the Borrower's obligations thereunder.
"TANGIBLE COLLATERAL" means all personal property, goods
(other than intangible personal property), equipment, supplies,
building and other materials of every nature whatsoever and all
other tangible personal property constituting a part or portion
of the Atlantic City Showboat and/or used in the operation of the
hotel, casino, restaurants, stores, parking facilities, bowling
alley and all other commercial operations on the Land or
12
Improvements, including but not limited to communication systems,
visual and electronic surveillance systems and transportation
systems and not constituting a part of the real property subject
to the real property lien of this Leasehold Mortgage or any
Facility Lease and including all property and materials stored
therein in which Mortgagor has an interest and all tools,
utensils, food and beverage, liquor, uniforms, linens,
housekeeping and maintenance supplies, vehicles, fuel,
advertising and promotional material, blueprints, surveys, plans
and other documents relating to the Land or Improvements, and all
construction materials and all furnishings, fixtures and
equipment, including, but not limited to, all bowling balls,
bowling shoes, bowling pins, pin-setting and ball return
machines, ball drilling and polishing machines, racks, cases,
cabinets, trophies, towels, furniture, furnishings, machinery,
equipment and supplies relating to the operation of the bowling
center located on the Land; to the extent permitted by all
applicable Gaming Control Acts, all gaming equipment and devices
which are or are to be installed and used in connection with the
operation of the Atlantic City Showboat and those items of
furniture, fixtures and equipment which are to be purchased or
leased by Mortgagor, machinery and any other item of personal
property in which Mortgagor now or hereafter own or acquire an
interest or right, and which are used or useful in the
construction, operation, use and occupancy of the Atlantic City
Showboat; to the extent permitted by the applicable contract or
applicable Gaming Control Acts, all gaming and financial
equipment, computer equipment, calculators, adding machines,
gaming tables, video game and slot machines, and any other
electronic equipment of every nature used or located on any part
of the Land or Improvements, and all present and future right,
title and interest of Mortgagor in and to any casino operator's
agreement, license agreement or sublease agreement used in
connection with the Land or Improvements; excluding therefrom,
however, all Inventory.
"365(H) ELECTION" means Mortgagor's election to treat a
Facility Lease as terminated under 365(h) of the Bankruptcy Code
or any similar Bankruptcy Law, or any comparable right provided
under any other Bankruptcy Law, together with all rights,
remedies and privileges related thereto.
"TITLE INSURER" means Commonwealth Land Title Insurance
Company, a Pennsylvania corporation.
"TRUSTEE" means IBJ Xxxxxxxx Trust & Bank Company, a New
York corporation, as trustee under the Indenture.
"UCC" means the Uniform Commercial Code in effect in the
State of New Jersey from time to time.
Capitalized terms used in this Leasehold Mortgage which are not
otherwise defined herein shall have the meaning ascribed to such
terms in the Loan Agreement. In the event of a substantive
conflict between capitalized terms used herein and in the Loan
Agreement, the Loan Agreement shall govern.
WI T N E S S E T H:
IN CONSIDERATION OF TEN DOLLARS AND OTHER GOOD AND VALUABLE
CONSIDERATION; THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, AND FOR THE PURPOSE OF SECURING as an in PARI PASSU
first priority Lien, subject to the terms and conditions set
forth in the Intercreditor Agreement, in favor of Mortgagee (I)
the Promissory Note and the payment of all sums payable
thereunder as such sums become due and payable; (2) the
performance of each covenant and agreement of Mortgagor which is
(a) to be performed for the benefit of Mortgagee and (b)
contained in the Loan Agreement, in this Leasehold Mortgage or in
the other Loan Documents; (3) the payment of such additional
loans or advances as hereafter may be made to Mortgagor or its
successors or assigns, when evidenced by a promissory note or
notes reciting that they are secured by this Leasehold Mortgage;
PROVIDED, HOWEVER, that any and all future advances made to
Mortgagor for the improvement, protection or preservation of the
Mortgaged Property together with interest at the rate then
payable on the Promissory Note, shall be automatically secured
hereby unless such a note or instrument evidencing such advances
specifically recites that it is not intended to be secured
hereby; and
13
(4) the payment of all sums expended or advanced by Mortgagee
under or pursuant to the terms hereof or to protect the security
hereof, together with interest thereon as herein provided.
Mortgagor does hereby GRANT, ASSIGN, BARGAIN, CONVEY,
HYPOTHECATE, MORTGAGE, PLEDGE, RELEASE, TRANSFER AND GRANT A
SECURITY INTEREST IN AND WARRANT UNTO MORTGAGEE, UPON THE TERMS
AND CONDITIONS OF THIS LEASEHOLD MORTGAGE, WITH POWER OF SALE AND
RIGHT OF ENTRY AS PROVIDED BELOW:
(A) Any present or future interest in the Land.
(B) TOGETHER WITH the Improvements.
(C) TOGETHER WITH all Appurtenant Rights.
(D) TOGETHER WITH the Tangible Collateral.
(E) TOGETHER WITH the Intangible Collateral.
(F) TOGETHER WITH any fee simple interest in the Land and
all that certain leasehold estate and interest of the Mortgagor
in and to the Land, together with any and all other, further or
additional, title, estates, interests or rights which may at any
time be acquired by Mortgagor in or to the Land demised by the
Resorts Lease, and Mortgagor expressly agrees that if Mortgagor
shall, at any time (whether by exercise of the purchase option
set forth in Article 24 of the Resorts Lease or otherwise) prior
to payment in full of all indebtedness secured hereby, acquire
fee title to or any other greater interest in the Land, the lien
of this Mortgage shall attach, extend to, cover and be a lien
upon such fee simple title or other greater estate involving real
property.
(G) TOGETHER WITH all of Mortgagor's estate, right, title
and interest in, to and under any other Facility Lease now or
hereafter on or affecting any of the Land or property described
in Granting Clause (B), (C) or (D) hereof or any part thereof,
together with all credits, deposits, options (including any
options to purchase or renew set forth in the Facility Lease(s)),
privileges, rights, estate, title and interest of Mortgagor as
tenant or subtenant under the Facility Lease(s), and all books
and records which contain records of payments of rent or security
made under the Facility Lease(s) and all Facility Lease Damage
Claims.
(H) TOGETHER WITH all modifications, extensions and
renewals of any Facility Lease.
(I) TOGETHER WITH all credits, deposits, options,
privileges and rights of the Mortgagor, as lessee under any
Facility Lease.
(J) TOGETHER WITH (i) all the estate, right, title and
interest of Mortgagor of, in and to all judgments and decrees,
insurance proceeds, awards of damages and settlements hereafter
made resulting from condemnation proceedings or the taking of any
of the property described in Granting Clauses (A), (B), (C), (D),
(E), (F), (G), (H) and (I) hereof or any part thereof under the
power of eminent domain, or for any damage (whether caused by
such taking or otherwise) to the property described in Granting
Clauses (A), (B), (C), (D), (E), (F), (G), (H) and (I) hereof or
any part thereof, or to any Appurtenant Rights thereto, and
Mortgagee is hereby authorized to collect and receive said awards
and proceeds and to give proper receipts and acquittance
therefor, and (subject to the terms hereof) to apply the same
toward the payment of the indebtedness and other sums secured
hereby, notwithstanding the fact that the amount owing thereon
may not then be due and payable; (ii) all proceeds of any sales
or other dispositions of the property or rights described in
Granting Clauses (A), (B), (C), (D), (E), (F), (G), (H) and (I)
hereof or any part thereof whether voluntary or involuntary,
provided, however, that the foregoing shall not be deemed to
permit such sales, transfers, or other dispositions except as
specifically permitted herein; and (iii) whether arising from any
voluntary or involuntary disposition of the property described
14
in Granting Clauses (A), (B), (C), (D), (E), (F), (G), (H) and
(I) all Proceeds, products, replacements, additions,
substitutions, renewals and accessions, remainders, reversions
and after-acquired interest in, of and to such property.
(K) TOGETHER WITH the absolute assignment of any Space
Leases or any part thereof that Mortgagor has entered into, taken
by assignment, taken subject to, or assumed, or has otherwise
become bound by, now or in the future, together with all of the
following (including all "Cash Collateral" within the meaning of
the Bankruptcy Code) arising from the Space Leases: (a) Rents
(subject, however, to the aforesaid absolute assignment to
Mortgagee and the conditional permission hereinafter given to
Mortgagor to collect the Rents), (b) all guaranties, letters of
credit, security deposits, collateral, cash deposits, and other
credit enhancement documents, arrangements and other measures
with respect to the Space Leases, (c) all of Mortgagor's right,
title, and interest under the Space Leases, including the
following: (i) the right to receive and collect the Rents from
the lessee, sublessee or licensee, or their Successor(s), under
any Space Lease(s) and (ii) the right to enforce against any
tenants thereunder and otherwise any and all remedies under the
Space Leases, including Mortgagor's right to evict from
possession any tenant thereunder or to retain, apply, use, draw
upon, pursue, enforce or realize upon any guaranty of any Space
Lease; to terminate, modify, or amend the Space Leases; to obtain
possession of, use, or occupy, any of the real or personal
property subject to the Space Leases; and to enforce or exercise,
whether at law or in equity or by any other means, all provisions
of the Space Leases and all obligations of the tenants thereunder
based upon (A) any breach by such tenant under the applicable
Space Lease (including any claim that Mortgagor may have by
reason of a termination, rejection, or disaffirmance of such
Space Lease pursuant to any Bankruptcy Law) and (B) the use and
occupancy of the premises demised, whether or not pursuant to the
applicable Space Lease (including any claim for use and occupancy
arising under landlord-tenant law of the State of New Jersey or
any Bankruptcy Law). Notwithstanding the foregoing, permission is
hereby given to Mortgagor, so long as no Event of Default has
occurred and is continuing hereunder, to collect and use the
Rents and to exercise the rights set forth in Granting Clause
(K)(c)(ii) in accordance with the provisions of the Leasehold
Mortgage, as they become due and payable, but not in advance
thereof. Upon the occurrence of an Event of Default and the
expiration of any applicable cure or grace period, the permission
hereby given to Mortgagor to collect the Rents and to exercise
the rights set forth in Granting Clause (K)(c)(ii) in accordance
with the provisions of the Leasehold Mortgage shall automatically
terminate, but such permission shall be reinstated upon a cure of
such Event of Default. Mortgagee shall have the right, at any
time and from time to time, to notify any Space Lessee of the
rights of Mortgagee as provided by this section.
Notwithstanding anything to the contrary contained herein,
the foregoing provisions of this Paragraph (K) shall not
constitute an assignment for purposes of security but shall
constitute an absolute and present assignment of the Rents to
Mortgagee, subject, however, to the license given to Mortgagor to
collect and use the Rents as hereinabove provided; and the
existence or exercise of such right of Mortgagor shall not
operate to subordinate this assignment to any subsequent
assignment, in whole or in part, by Mortgagor.
(L) TOGETHER WITH all of Mortgagor's right, title and
interest in and to any and all maps, plans, specifications,
surveys, studies, tests, reports, data and drawings relating to
the development of the Land or the Atlantic City Showboat and the
construction of the Improvements, including, without limitation,
all marketing plans, feasibility studies, soils tests, design
contracts and all contracts and agreements of Mortgagor relating
thereto including, without limitation, architectural, structural,
mechanical and engineering plans and specifications, studies,
data and drawings prepared for or relating to the development of
the Land or the Atlantic City Showboat or the construction,
renovation or restoration of any of the Improvements or the
extraction of minerals, sand, gravel or other valuable substances
from the Land.
(M) TOGETHER WITH, to the extent permitted by applicable
law, all of Mortgagor's right, title, and interest in and to any
and all licenses, permits, variances, special permits,
franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents,
approvals, waivers, orders, rights and agreements (including
options, option rights and contract rights) now or hereafter
obtained by Mortgagor from
15
any Governmental Authority having or claiming jurisdiction over
the Land, the FF&E, the Atlantic City Showboat, or any other
element of the Mortgaged Property or providing access thereto,
or the operation of any business on, at, or from the Land
including, without limitation, any Gaming Permits; PROVIDED, that
upon an Event of Default hereunder or under the Indenture and the
expiration of any applicable cure or grace period, if Mortgagee
is not qualified under the Gaming Control Acts to hold such
Gaming Permits, then Mortgagee shall designate an appropriately
qualified third party to which an assignment of such Gaming
Permits can be made in compliance with the Gaming Control Acts.
(N) TOGETHER WITH all water stock, water permits and other
water rights relating to the Land.
(O) TOGETHER WITH all oil and gas and other mineral
rights, if any, in or pertaining to the Land and all royalty,
leasehold and other rights of Mortgagor pertaining thereto.
(P) TOGETHER WITH any and all monies and other property,
real or personal, which may from time to time be subjected to the
lien hereof by Mortgagor or by anyone on its behalf or with its
consent, or which may come into the possession or be subject to
the control of Mortgagee pursuant to this Leasehold Mortgage or
any Loan Document, including, without limitation, any Protective
Advances under this Leasehold Mortgage; and all of Mortgagor's
right, title, and interest in and to all extensions,
improvements, betterments, renewals, substitutes for and
replacements of, and all additions, accessions, and appurtenances
to, any of the foregoing that Mortgagor may subsequently acquire
or obtain by any means, or construct, assemble, or otherwise
place on any of the Mortgaged Property, and all conversions of
any of the foregoing; it being the intention of Mortgagor that
all property hereafter acquired by Mortgagor and required by this
Leasehold Mortgage or the Indenture to be subject to the lien of
this Leasehold Mortgage or intended so to be shall forthwith upon
the acquisition thereof by Mortgagor be subject to the lien of
this Leasehold Mortgage as if such property were now owned by
Mortgagor and were specifically described in this Leasehold
Mortgage and granted hereby or pursuant hereto, and Mortgagee is
hereby authorized to receive any and all such property as and for
additional security for the obligations secured or intended to be
secured hereby. Mortgagor agrees to take any action as may
reasonably be necessary to evidence and perfect such liens or
security interests, including, without limitation, the execution
of any documents reasonably necessary to evidence and perfect
such liens or security interests.
(Q) TOGETHER WITH, to the extent permitted by the Act, any
and all Accounts Receivable, royalties, earnings, income,
proceeds, products, rents, revenues, reversions, remainders,
issues, profits, avails, production payments, and other benefits
directly or indirectly derived or otherwise arising from any of
the foregoing, all of which are hereby assigned to Mortgagee,
who, except as otherwise expressly provided in this Leasehold
Mortgage, is authorized to collect and receive the same, to give
receipts and acquittances therefor and to apply the same to the
Obligations secured hereunder, whether or not then due and
payable.
(R) TOGETHER WITH Proceeds of the foregoing property
described in Granting Clauses (A) through (Q).
(S) TOGETHER WITH Mortgagor's rights further to assign,
mortgage, sell, encumber or otherwise transfer or dispose of the
property described in Granting Clauses (A) through (R) inclusive,
above, for debt or otherwise.
(T) EXPRESSLY EXCLUDING, HOWEVER, (i) Inventory; and (ii)
FF&E (to the extent that (a) Mortgagor is permitted to enter into
a FF&E Financing Agreement for such FF&E under the Indenture and
the Loan Agreement and (b) such FF&E Financing Agreement
prohibits Mortgagee from maintaining a security interest in the
FF&E covered thereby); together with the proceeds of the property
described in this Granting Clause (T).
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Mortgagor, for itself and its successors and assigns,
covenants and agrees to and with Mortgagee that, at the time or
times of the execution of and delivery of these presents or any
instrument of further assurance with respect thereto, Mortgagor
has good right, full power and lawful authority to assign, grant,
convey, warrant, transfer, bargain or sell its interests in the
Mortgaged Property in the manner and form as aforesaid and that
the Mortgaged Property is free and clear of all liens and
encumbrances whatsoever, except the Existing Encumbrances and
Permitted Liens, and Mortgagor shall warrant and forever defend
the above-bargained property in the quiet and peaceable
possession of Mortgagee and its successors and assigns against
all and every person or persons lawfully or otherwise claiming or
to claim the whole or any part thereof, except for Permitted
Liens. Mortgagor agrees that any greater title to the Mortgaged
Property hereafter acquired by Mortgagor during the term hereof
shall be automatically subject hereto.
PROVIDED HOWEVER, these presents are upon the express
condition that, if Borrower, Mortgagor and/or any other Guarantor
shall well and truly pay, or cause to be paid, to Mortgagee all
amounts required to be so paid under the Loan Documents,
including without limitation, the ACSI Guaranty and shall well
and truly abide by and perform each of the Obligations, then,
these presents and the estate granted hereby shall terminate,
cease and be void.
ARTICLE ONE
COVENANTS OF MORTGAGOR
1.1 PERFORMANCE OF LOAN DOCUMENTS. Mortgagor shall
perform, observe and comply with, or cause to be performed,
observed or complied with, each and every provision hereof, and
with each and every provision contained in the Loan Documents
and shall promptly pay to Mortgagee, when payment shall become
due, the principal with interest thereon and all other sums
required to be paid by Mortgagor under this Leasehold Mortgage
and the Loan Documents.
1.2 GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES.
Mortgagor represents, covenants and warrants that: (a) Mortgagor
has good and marketable leasehold title to a Leasehold estate in
a portion of the Land, free and clear of all encumbrances except
Permitted Liens, and that it has the right to hold, occupy and
enjoy its interest in the Mortgaged Property, and has good right,
full power and lawful authority to mortgage and pledge the same
as provided herein and, subject to the Gaming Control Acts,
Mortgagee may at all times peaceably and quietly enter upon,
hold, occupy and enjoy the entire Mortgaged Property in
accordance with the terms hereof; (b) Mortgagor has good and
marketable title to a fee estate (subject and subordinate to a
reversionary interest of the Housing Authority of the City of
Atlantic City in certain of the real property described on
Schedule A) in that portion of the Land which is not covered by
the Resorts Lease, free and clear of all encumbrances except
Permitted Liens, and that it has the right to hold, occupy and
enjoy its interest in the Mortgaged Property, and has good right,
full power and lawful authority to mortgage and pledge the same
as provided herein and Mortgagee may at all times peaceably and
quietly enter upon, hold, occupy and enjoy the entire Mortgaged
Property in accordance with the terms hereof; (c) neither
Mortgagor nor any Affiliate of Mortgagor is Insolvent and no
bankruptcy or insolvency proceedings are pending or contemplated
by or, to the best of Mortgagor's knowledge, against Mortgagor or
any Affiliate of Mortgagor; (d) all costs arising from
construction of any Improvements, the performance of any labor
and the purchase of all Tangible Collateral and Improvements have
been or shall be paid when due, unless same are being contested
in good faith and adequately bonded; (e) the Mortgaged Property
has frontage on, and direct access for ingress and egress to
dedicated street(s); (f) Mortgagor shall at all times conduct and
operate the Mortgaged Property in a manner so as not to lose the
right to conduct gaming activities at the Atlantic City Showboat;
(g) no material part of the Mortgaged Property has been damaged,
destroyed, condemned or abandoned; (h) no part of the Mortgaged
Property is the subject of condemnation proceedings and Mortgagor
has no knowledge of any contemplated or pending condemnation
proceeding with respect to any portion of the Mortgaged Property;
(i) Mortgagor shall warrant, defend and preserve its fee,
easement and leasehold rights and title to the Mortgaged
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Property and (j) no Space Lessee has been granted an option to
purchase or right of first refusal with respect to Mortgagor's
interest in the Mortgaged Property.
1.3 COMPLIANCE WITH LEGAL REQUIREMENTS. Mortgagor shall
promptly, fully, and faithfully comply with all Legal
Requirements and shall cause all portions of the Mortgaged
Property and its use and occupancy to fully comply with Legal
Requirements at all times, whether or not such compliance
requires work or remedial measures that are ordinary or
extraordinary, foreseen or unforeseen, structural or
nonstructural, or that interfere with the use or enjoyment of the
Mortgaged Property.
1.4 TAXES. Mortgagor shall pay all Impositions as they
become due and payable and shall deliver to Mortgagee promptly
upon Mortgagee's request, evidence satisfactory to Mortgagee that
the Impositions have been paid or are not delinquent. Mortgagor
shall not suffer to exist, permit or initiate the joint
assessment of the real and personal property, or any other
procedure whereby the lien of the real property taxes and the
lien of the personal property taxes shall be assessed, levied or
charged to the Land as a single lien, except as may be required
by law. In the event of the passage of any law deducting from the
value of real property for the purposes of taxation any lien
thereon, or changing in any way the taxation of mortgages or
obligations secured thereby for state or local purposes, or the
manner of collecting such taxes and imposing a tax, either
directly or indirectly, on this Leasehold Mortgage or the
Promissory Note, Mortgagor shall pay all such taxes. If at any
time any Governmental Authority shall require internal revenue or
other documentary stamps or any other tax on the Promissory Note
or this Leasehold Mortgage, then, if Mortgagor lawfully pays for
such stamps or tax, including interest and penalties thereon, to
or for Mortgagee, Mortgagor shall pay, when payable, for all such
stamps and taxes, including interest and penalties thereon.
Mortgagor shall not be entitled to any credit against any of the
indebtedness secured by the Leasehold by reason of the payment of
taxes in respect of the Mortgaged Property.
1.5 INSURANCE.
(a) Hazard Insurance Requirements and Proceeds.
(1) HAZARD INSURANCE. Mortgagor shall at its
sole expense obtain for, deliver to, assign and maintain for the
benefit of Mortgagee, during the term of this Leasehold Mortgage,
insurance policies insuring the Mortgaged Property and liability
insurance policies, all in accordance with the requirements of
Section 4.17 of the Indenture and of the Loan Agreement.
Mortgagor shall pay promptly when due any premiums on such
insurance policies and on any renewals thereof. The form of such
policies and the companies issuing them shall be reasonably
acceptable to Mortgagee. All such policies and renewals thereof
shall be held by Mortgagee and shall contain a lender's loss
payable endorsement, and a noncontributory standard mortgagee or
beneficiary endorsement (Form 438 BFU or its equivalent) making
losses payable to Mortgagee as its interests may appear and shall
name the Mortgagee as an additional insured. At least thirty (30)
days prior to the expiration date of all such policies, renewals
thereof satisfactory to Mortgagee shall be delivered to Mortgagee
together with receipts evidencing the payment of all premiums on
such insurance policies and renewals. Should Mortgagor fail to
deliver such receipts, Mortgagee shall have the right, but shall
not be obligated, to purchase such insurance and pay such premium
as Mortgagee shall deem advisable and the amount of any such
premium shall be added to Mortgager's liability secured hereby.
In the event of loss, Mortgagor shall give immediate written
notice to Mortgagee and Mortgagee may make proof of loss if not
made promptly by Mortgagor. In the event of the foreclosure of
this Leasehold Mortgage or any other transfer of title to the
Mortgaged Property in extinguishment of the indebtedness and
other sums secured hereby, all right, title and interest of
Mortgagee in and to all insurance policies and renewals thereof
then in force, shall pass to the purchaser or grantee upon
delivery of written notice to Mortgagee within thirty (30) days
following the occurrence of such loss.
(2) PAYMENT OF PROCEEDS TO MORTGAGEE. Pursuant
to its rights granted hereunder in all proceeds from any
insurance policies, Mortgagee is hereby authorized and empowered
at its option to adjust
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or compromise any loss under any insurance policies on the
Mortgaged Property and to collect and receive the proceeds from
any such policy or policies. Each insurance company is hereby
authorized and directed to make payment for all such losses
directly to Mortgagee alone and not to Mortgagor and Mortgagee
jointly. After deducting from such insurance proceeds any
reasonable expenses incurred by Mortgagee in the collection or
handling such funds, including reasonable attorneys' fees,
Mortgagee shall apply such insurance proceeds as follows:
(A) Mortgagor shall, within one (1)
month following the event giving rise to a payment under
an insurance policy ("Loss"), notify and inform Mortgagee
whether Mortgagor intends to restore the Improvements or
any portion thereof and provide an Officers Certificate
(as defined in the Indenture) certifying that such
restoration is allowed under Section 4.10(d) of the
Indenture and the Loan Agreement. If Mortgagor notifies
Mortgagee that it intends to restore the Improvements or
any portion thereof, and such restoration is allowed under
the Indenture and the Loan Agreement, then Mortgagor shall
have the right to use the balance of such award or
settlement in accordance with the provisions of Section
1.5(a)(3) hereof to reimburse Mortgagor or pay for the
costs of such rebuilding, reconstruction or repair by
Mortgagor pursuant to this Section 1.5(a)(2)(A). Any
proceeds allocable to Improvements which Mortgagor has
elected not to restore shall be applied in accordance with
Section 4.10 of the Indenture. Mortgagor shall not invest
or use any insurance proceeds from the Loss of the
Improvements to purchase or invest in real estate, real
property, or accessions or improvements to real estate or
real property, except for the restoration of the
Improvements in accordance with Section 1 .5(a)(3).
(B) If Mortgagor fails to notify
Mortgagee that it intends to restore the Improvements
within said one (1) year period as provided in Section 1.5
(a)(2)(A) hereof, or Mortgagor has elected not to restore
the Improvements or any portion thereof, or a Purchase
Offer is required under Section 4.10 of the Indenture, or
in the event there remain any insurance proceeds following
such reconstruction or repair, then in any such event such
award or settlement or amounts then remaining shall be
applied in accordance with Section 4.10 of the Indenture
and the Loan Agreement.
(3) RESTORATION. Provided that (1) the
Indenture does not require a repurchase of the First Mortgage
Bonds and the maturity of the First Mortgage Bonds has not been
accelerated under the Indenture at the time of a Loss, or at the
time Mortgagor seeks the benefit of this paragraph, (2) the Loan
Agreement does not require an acceleration of the Promissory Note
and Loan evidenced thereby, and (3) Mortgagee reasonably
determines that Mortgagor has the ability (including financial
ability) to restore the Improvements or any portion thereof to a
condition substantially the same as prior to the Loss, and pay
for the complete costs of such restoration (taking into account
available insurance proceeds), Mortgagee agrees that Mortgagor
shall have the right to require Mortgagee to apply the insurance
proceeds received by Mortgagee under the provisions of Section
1.5(a)(2) on account of such Loss for the purpose of the
restoration of the Mortgaged Property in the following manner and
upon satisfaction of the following conditions:
(A) If the insurance proceeds resulting
from the Loss of the Improvements or any portion thereof
are made available to Mortgagor under the provisions of
this section 1.5(a)(3), then upon the occurrence of a
Loss, Mortgagor shall, following its election to restore
the Improvements under Section 1.5(a)(2)(A) hereof,
commence the restoration of the Improvements to as good and
substantially the same condition as such property was prior
to such Loss and upon commencement thereof shall diligently
prosecute the same to completion.
(B) Subject to the Intercreditor
Agreement, such insurance proceeds shall be paid over to
Mortgagee or its designee, as depository for the
disbursement thereof as provided herein. In the event such
proceeds are to be used to restore the Improvements, such
proceeds shall be invested in Investment Grade Securities
(the interest from which shall inure to the benefit of
Mortgagor). Pending disbursement of such proceeds,
Mortgagor hereby grants to Mortgagee a security interest in
such
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Investment Grade Securities and pledges such Investment
Grade Securities to Mortgagee as further security for the
indebtedness secured hereby. Mortgagor shall file all
documents and take all other steps necessary to perfect the
pledge of the Investment Grade Securities. If an Event of
Default occurs (and any applicable cure or grace period has
expired) prior to the completion of the restoration,
Mortgagee at its option shall, during the continuance of
such Event of Default, have the right to either apply all
or any portion of such Investment Grade Securities toward
restoration of the Mortgaged Property or toward any amounts
secured hereby.
(C) The depository of such insurance
proceeds shall disburse such proceeds following Mortgagor's
delivery of a Disbursement Request, not more than once per
week and only if (1) said depository has not received any
notice from Mortgagee that an Event of Default has occurred
hereunder or under the Indenture or (2) the depository
shall have received a commitment from Title Insurer,
attached to the Disbursement Request, evidencing the Title
Insurer's unconditional commitment to issue an endorsement
in the form of a 122 CLTA Endorsement insuring the
continuing priority of the lien of the Mortgage as security
for each advance of funds from the insurance proceeds.
Mortgagor covenants and agrees (a) to comply with all
material covenants and conditions set forth in the
Indenture and the Loan Agreement and which are incorporated
herein by reference to the extent such provisions are
applicable to the restoration of the Improvements or any
portion thereof and (b) to cause each Disbursement Request
to be true, correct and complete.
(D) If Mortgagee reasonably determines
that the amount of the insurance proceeds available for the
restoration work to be completed under Section 1.5(a)(2)(A)
hereunder shall be insufficient for the performance and
completion of such work, Mortgagor covenants and agrees, as
a condition precedent to any disbursement of insurance
proceeds, to deliver to Mortgagee an amount, which,
together with the insurance proceeds, shall be sufficient
to pay the total amount necessary or reasonably required to
restore the Mortgaged Property as herein provided, and
which amounts shall be disbursed in accordance with
subsection (iii) of this section.
(E) Without limiting the generality of
the foregoing provisions, the restoration work and the
performance thereof shall be subject to and performed in
accordance with each of the following provisions: (1) such
work and the performance thereof shall be conducted in a
first-class, workmanlike manner, shall not permanently
weaken nor impair the structural strength of any existing
Improvements, nor change the character thereof or the
purpose for which the same may be used, nor lessen the
value of the Mortgaged Property; (2) before the
commencement of any such work, the plans and specifications
(the "Plans") therefor shall be filed with and approved by
all Governmental Authorities having jurisdiction and all
necessary licenses, permits and/or authorizations from all
Governmental Authorities shall have been obtained, and all
such work shall be done subject to and in accordance with
all applicable Legal Requirements; (3) before commencing
any such work, Mortgagor shall have delivered to Mortgagee
the Plans and a line item budget setting forth with
reasonable particularity the cost of completing such work
together with a certificate in a form, and from a licensed
architect, reasonably satisfactory to Mortgagee certifying
(a) that the execution of the work described in the Plans
will substantially restore the Mortgaged Property and (b)
that the budget constitutes a reasonable estimate of the
cost of restoring the Mortgaged Property in accordance with
the Plans; and (4) before commencing any such work, should
Mortgagee so request, Mortgagor shall, at Mortgagor's
expense, give to Mortgagee surety company labor and
material, payment and performance bonds in a company or
companies and in form reasonably satisfactory to Mortgagee
(or other security guaranteeing performance satisfactory to
Mortgagee) in an aggregate amount equal to one hundred
twenty percent (120%) of the estimated cost of such work,
guaranteeing the completion of such work, free and clear of
all liens, encumbrances, claims, chattel mortgages,
conditional bills of sale and security agreements;
PROVIDED, HOWEVER, that such bonds or other security shall
not be required from contractors which, in the reasonable
judgment of Mortgagee
20
do not need to post such bonds or provide such security.
Notwithstanding the foregoing, to the extent that the
restoration work is contracted for under fixed-price
contracts, such surety company labor and material payment
and performance bonds (or other security guaranteeing
performance satisfactory to Mortgagee) may be equal to one
hundred ten percent (110%) of the amount of such fixed
price contracts.
(b) Insurance Escrow. In order to secure the
performance and discharge of the Mortgagor's obligations under
this Section 1.5, but not in lieu of such obligations, Mortgagor
shall, upon a failure to pay or provide such insurance, at the
times and in the manner required herein, pay over to Mortgagee an
amount equal to one-twelfth (1/12th) of the next maturing annual
insurance premiums for each month that has elapsed since the last
date to which such premiums were paid; and Mortgagor shall, in
addition, pay over to Mortgagee, on the first day of each month,
sufficient funds (as estimated from time to time by Mortgagee in
its sole discretion) to permit Mortgagee to pay said premiums
when due. Such deposits shall not be, nor be deemed to be, trust
funds but may be commingled with the general funds of Mortgagee,
and no interest shall be payable in respect thereof except as
required by law. Upon demand by Mortgagee, Mortgagor shall
deliver to Mortgagee such additional monies as are necessary to
make up any deficiencies in the amounts necessary to enable
Mortgagee to pay such premiums when due.
(c) Compliance with Insurance Policies. Mortgagor
shall not violate or permit to be violated any of the conditions
or provisions of any policy of insurance required by the
Indenture or this Leasehold Mortgage and Mortgagor shall so
perform and satisfy the requirements of the companies writing
such policies that, at all times, companies of good standing
reasonably satisfactory to Mortgagee shall be willing to write
and/or continue such insurance. Mortgagor further covenants to
promptly send to Mortgagee all notices relating to any violation
of such policies or otherwise affecting Mortgagor's insurance
coverage or ability to obtain and maintain such insurance
coverage. Mortgagor shall not obtain insurance as to the
Mortgaged Property except that of which Mortgagee is aware and
which complies with the provisions of this Leasehold Mortgage,
the Indenture, and the Loan Agreement.
1.6 CONDEMNATION. Pursuant to its rights in condemnation
awards and proceeds Mortgagee shall be entitled to the receipt of
all compensation awards, damages, claims, rights of action and
proceeds of, or on account of, any damage or taking through
condemnation and is hereby authorized, at its option, to
commence, appear in and prosecute in its own or Mortgagor's name
any action or proceeding relating to any condemnation and to
settle or compromise any claim in connection therewith, and
Mortgagor hereby appoints Mortgagee as its attorney-in-fact to
take any action in Mortgagor's name pursuant to Mortgagee's
rights hereunder. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the
Mortgaged Property or any portion thereof, Mortgagor shall notify
Mortgagee of the pendency of such proceedings. Mortgagor from
time to time shall execute and deliver to Mortgagee all
instruments requested by it to permit such participation
provided, however, that such instruments shall be deemed as
supplemental to the foregoing grant of permission to Mortgagee,
and unless otherwise required, the foregoing permission shall,
without more, be deemed sufficient to permit Mortgagee to
participate in such proceedings on behalf of Mortgagor. All such
compensation awards, damages, claims, rights of action and
proceeds, and any other payments or relief, and the right
thereto, are included in the Mortgaged Property, and Mortgagee,
after deducting therefrom all its expenses, including reasonable
attorneys fees, shall apply such proceeds as follows:
(a) In the event that any Land or Improvements are
condemned (whether by one or successive condemnation
proceedings), proceeds of such condemnation shall be applied in
accordance with the provisions of Section 4.10 of the Indenture.
(b) Mortgagor shall notify Mortgagee within one (1)
year following the conclusion of such condemnation proceeding
whether or not Mortgagor intends to (i) restore the Improvements
or replace the Improvements with substantially similar
improvements, (ii) replace the Improvements with other
improvements which are not substantially similar to the
Improvements lost or damaged through condemnation, or (iii) not
restore
21
the Improvements. In the event that Mortgagor makes an election
pursuant to 1.6(b)(i) or (ii) hereinabove, Mortgagor shall cause
such restoration to be completed substantially in accordance
with the provisions of Section 1 .5(a)(3) hereof. In the event
Mortgagor makes an election pursuant to 1.6(b)(ii) above, then,
in addition to any other obligations of Mortgagor hereunder,
Mortgagor shall deliver to Mortgagee an MAI appraisal performed
by an MAI appraiser selected by Mortgagor and reasonably
satisfactory to Mortgagee showing that the value of the Mortgaged
Property upon completion of such restoration shall be in an
amount not less than 100% of the indebtedness secured by this
Leasehold Mortgage and any indebtedness secured by a Permitted
Lien which is secured on a PARI PASSU basis with or which is
senior to the lien hereof. In the event that there shall remain
any balance of such award after the payment of settlement costs
and the payment of costs of demolition, repair, restoration and
replacement under 1 .6(b)(i) or (ii) above, any balance shall be
retained by Mortgagor.
(c) In the event that (i) the Improvements are not
so rebuilt, reconstructed or substituted with other improvements,
or repaired in accordance with Section 1.6(b) hereof, (ii)
Mortgagor fails to notify Mortgagee within said one (1) year
period as provided in Section 1.6(b) hereof or elects under 1.6
(b)(iii) hereof not to restore, repair, replace or substitute
such Improvements or (iii) all or substantially all of the
Mortgaged Property is condemned, then such award or settlement
shall be applied in accordance with the provisions of Section
4.10 of the Indenture, PROVIDED, HOWEVER, should any events
described in clauses 1.6(c)(i), 1.6(c)(ii), or l.6(c)(iii) occur,
Mortgagor shall not invest any portion of any such award or
settlement in real property, real estate, improvements or
accessions to real estate or real property.
1.7 CARE OF MORTGAGED PROPERTY.
(a) Mortgagor shall preserve and maintain the
Mortgaged Property in good condition and repair. Mortgagor shall
not permit, commit or suffer to exist any waste, impairment or
deterioration of the Mortgaged Property or of any part thereof
that in any manner materially impairs Mortgagee's security
hereunder, and shall not take any action which will increase the
risk of fire or other hazard to the Mortgaged Property or to any
part thereof.
(b) Except for Permitted Dispositions, no part of
the Improvements shall be removed, demolished or materially
altered without the prior written consent of Mortgagee, which
consent shall not be unreasonably withheld. Mortgagor shall have
the right, without such consent, to remove and dispose of free
from the lien of this Leasehold Mortgage any part of the
Improvements as from time to time may become worn out or
obsolete, provided that either (i) such removal or disposition
does not materially adversely affect the value of the Mortgaged
Property or (ii) prior to or promptly following such removal, any
such property shall be replaced with other property of
substantially equal utility and of a value at least substantially
equal to that of the replaced property when first acquired and
free from any security interest of any other person (subject to
Permitted Liens), and by such removal and replacement Mortgagor
shall be deemed to have subjected such replacement property to
the lien of this Leasehold Mortgage.
1.8 ENVIRONMENTAL LAWS.
(a) Mortgagor represents and warrants that, to the
best of Mortgagor's knowledge, after due inquiry and
investigation, (a) there are no Hazardous Materials on or at the
Mortgaged Property, except those in compliance with all
applicable federal, state and local laws, ordinances, rules and
regulations, and (b) neither Mortgagor nor any occupant of, nor
any prior owner or occupant of, the Mortgaged Property has
received any notice or advice of violations of any applicable
federal, state or local law, ordinance, rule or regulation from
any governmental agency or any source whatsoever with respect to
Hazardous Materials on, from or affecting the Mortgaged Property.
Mortgagor covenants that the Mortgaged Property shall be kept
free of Hazardous Materials except in compliance with all
applicable federal, state and local laws, ordinances, rules and
regulations, and neither Mortgagor nor any occupant of the
Mortgaged Property shall use, transport, store, dispose of or in
any manner deal
22
with Hazardous Materials on the Mortgaged Property, except in
compliance with all applicable federal, state and local laws,
ordinances, rules and regulations. Mortgagor shall comply with,
and ensure compliance by all occupants or the Mortgaged Property
with, all applicable federal, state and local laws, ordinances,
rules and regulations, including Environmental Laws. Mortgagor
shall have 90 days to cure any lien imposed on any portion of the
Mortgaged Property pursuant to Environmental Laws. In the event
that Mortgagor receives any notice or advice from any
governmental agency or any source whatsoever with respect to
Hazardous Materials on, from or affecting the Mortgaged Property,
Mortgagor shall immediately notify Mortgagee. Mortgagor shall
conduct and complete all investigations, studies, sampling, and
testing and all remedial actions necessary to clean up and remove
all Hazardous Materials on or at the Mortgaged Property in
accordance with all applicable federal, state, and local laws,
ordinances, rules and regulations or as Mortgagee may reasonably
require.
(b) Mortgagor represents and warrants that, to the
best of Mortgagor's knowledge after due inquiry and
investigation, no lien has attached to the Mortgaged Property as
a result of any action by DEP or its designee pursuant to the
Spill Compensation Fund, as such term is defined in the Spill
Act, expending monies from said fund to pay for "cleanup and
removal costs" or "natural resources" damages as a result of any
"discharge" of any "hazardous substances" on or at the Mortgaged
Property, as such terms are defined in the Spill Act. Mortgagor
further represents, warrants and covenants that Mortgagor did not
in the past, and does not now, own, operate or control and shall
not prior to the satisfaction and discharge of the lien of this
Mortgage acquire, own, operate or control any "major facility"
(as such term is defined in the Spill Act) or any hazardous or
solid waste disposal facility.
(c) If a lien is filed against the Mortgaged
Property pursuant to the Spill Act, Mortgagor shall immediately
either (i) pay the claim and remove the lien from the Mortgaged
Property, or (ii) furnish (a) a bond satisfactory to Mortgagee
and the title insurance company which insured the priority of
lien of this Mortgage in the amount of the claim out of which the
lien arises, or (b) other security reasonably satisfactory to the
Mortgagee in an amount sufficient to discharge the claim of which
the lien arises.
(d) Upon Mortgagee's request in connection with the
"closing, terminating or transferring of operations" (as such
term is defined in ISRA) relating to Mortgagor or any one or more
of the Tenants (as hereinafter defined), Mortgagor shall promptly
provide Mortgagee with:
(i) a letter of non-applicability from the
DEP accompanied by the supporting affidavit of the applicant or
an attorney's opinion letter addressed to Mortgagee, from counsel
satisfactory to a Mortgagee and in a form satisfactory to
Mortgagee's counsel, stating that ISRA does not apply to such
closing, terminating or transferring of operations; or
(ii) a Negative Declaration (as such term is
defined in ISRA) duly and finally approved by DEP; or
(iii) a Cleanup Plan (as such term is defined
in ISRA) duly and finally approved by DEP; or
(iv) an Administrative Consent Order ("ACO"),
issued by the DEP permitting the closing, terminating or
transferring of operations; or
(v) other administrative approval issued by
DEP permitting the closing, terminating or transferring of
operations.
Nothing in this subsection (d) shall be construed as
limiting Mortgagor's obligation to otherwise comply with ISRA.
23
(e) If Mortgagor complies with subsection (d) of
this Section by obtaining an approved and final Cleanup Plan or
ACO, Mortgagor shall promptly implement and prosecute to
completion or cause to be so implemented and prosecuted, the
Cleanup Plan or the requirements of the ACO, as the case may be,
in accordance with the schedules contained therein or as may be
otherwise ordered or directed by DEP. Mortgagor expressly
understands and acknowledges that Mortgagor's compliance with
the provisions of this subsection (e) may require Mortgagor to
expend funds or do acts after the expiration or termination of
the term of one or more leases. Mortgagor shall expend such
funds though the terms of the relevant Lease shall have
previously in any such Lease or the provisions of ISRA have
placed the burden of compliance on the Tenant.
(f) The obligations and liabilities of Mortgagor
under this Section shall survive any entry of a judgment of
foreclosure or a foreclosure sale or the delivery of a deed in
lieu of foreclosure of this Leasehold Mortgage.
(g) The Mortgagor will defend, indemnify, and hold
harmless Mortgagee, its employees, agents, officers, and
directors, from and against any and all claims, demands,
penalties, causes of action, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or
unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, court
costs, and litigation expenses) arising out of, or in any way
related to, (i) any breach by the Mortgagor of any of the
provisions set forth above, (ii) the presence, disposal,
spillage, discharge, emission, leakage, release, or threatened
release of any Hazardous Material which is at, in, on, under,
about, from or affecting the Mortgaged Property, including,
without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Mortgaged Property or the
soil, water, air, vegetation, buildings, personal property,
persons or animals located on the Mortgaged Property or on any
other property or otherwise, (iii) any personal injury (including
wrongful death) or property damage (real or personal) arising out
of or related to any such Hazardous Material, (iv) any lawsuit
brought or threatened, settlement reached, or order or directive
of or by any governmental authority relating to such Hazardous
Material, or (v) any violation of any Environmental Law.
1.9 LEASES.
(a) Mortgagor represents and warrants that:
(i) Mortgagor has delivered to Mortgagee
true, correct and complete copies of all Facility Leases
and Material Space Leases, including all amendments and
modifications, written or oral existing as of the date
hereof;
(ii) Mortgagor has not executed or entered
into any modifications or amendments of the Facility Leases
or Material Space Leases, either orally or in writing,
other than written amendments that have been disclosed to
Mortgagee in writing;
(iii) no default now exists under any Facility
Lease or Space Lease;
(iv) except for the Bankruptcy of Resorts, no
event has occurred that, with the giving of notice or the
passage of time or both, would constitute such a default or
would entitle Mortgagor or any other party under such
Facility Lease or Space Lease to cancel the same or
otherwise avoid its obligations;
(v) Mortgagor has not accepted prepayments of
installments of Rent under any Space Leases more than one
month in advance of the date when the same are due, except
for security deposits not in excess of one month's Rent;
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(vi) except for this Leasehold Mortgage and
the Existing Encumbrances, Mortgagor has not executed any
assignment or pledge of any of the Facility Leases or the
Space Leases, the Rents, or of Mortgagor 's right, title
and interest in the same;
(vii) this Leasehold Mortgage conforms and
complies with all Facility Leases and Space Leases, does
not constitute a violation or default under any Facility
Lease or Space Lease, and is and shall at all t xxxx
constitute a valid lien (subject only to Permitted Liens)
on Mortgagor's interests in the Facility Leases and Space
Leases; and
(viii) all rents (including additional rents
and other charges reserved in the Facility Lease) have been
paid to the extent they were due and payable to the date
hereof.
(b) Subject to Section 5.2 of this Leasehold
Mortgage, Mortgagor shall not enter into any new Facility Leases
or Space Leases or any modifications or amendments of existing
FacilityLeases or Space Leases in the future other than written,
bona fide amendments or modifications entered into in arms-
length transactions. Mortgagor will not, without the prior
written consent of Mortgagee, which consent shall not be
unreasonably withheld, modify, supplement, change or amend the
Resorts Lease, PROVIDED, HOWEVER, that Mortgagor may modify,
supplement, change or amend the Resorts Lease (other than Article
26 thereof), without Mortgagee's prior written consent, (i) to
the extent necessary to comply with the requirements of any of
the Gaming Control Acts or any order, rule or regulation of any
Gaming Control Authority or other state or local governmental
body or authority having jurisdiction to require the Resorts or
Mortgagor to change the Resorts Lease, or (ii) if the following
items shall have been delivered to Mortgagee prior to the
occurrence of any such amendment and as a condition to the
effectiveness thereof: (A) opinion of an investment banking firm
of national character, reputation and prominence to the effect
that the proposed amendment does not materially impair the
security of this Leasehold Mortgage, which opinion may be given
in reliance upon the opinion required by clause (B) below, (B) an
opinion of independent legal counsel given to Mortgagee to the
effect that the proposed amendment does not impair the rights of
Mortgagee under the Resorts Lease and this Leasehold Mortgage to
foreclose this Leasehold Mortgage and take possession of the
Facility Lease, and (C) such other instruments, statements,
agreement and documents as such investment banking firm or such
counsel may require in order to render the opinions described in
clauses (A) and (B) above. Mortgagor shall send notice and a copy
of any new Facility Lease, any new Material Space Lease or any
amendment or modification of a Space Lease which causes such
Space Lease to become a Material Space Lease to Mortgagee with a
certificate attached thereto from a licensed real estate broker
in the State of New Jersey attesting to the substantially fair
market terms and conditions of such transaction.
(c) Promptly after the date hereof, and again
promptly after execution of any amendment to this Leasehold
Mortgage, Mortgagor shall notify each Facility Lessor of the
execution and delivery of this Leasehold Mortgage or amendment,
as the case may be.
(d) Mortgagor shall pay, when due and payable, the
rentals, additional rentals, and other charges required by, and
payable under, each Facility Lease in accordance with such
Facility Lease.
(e) Mortgagor shall perform and observe all terms,
covenants, and conditions that Mortgagor must perform and observe
as lessee under the Facility Leases, and do everything necessary
to preserve and to keep unimpaired Mortgagor's rights under the
Facility Leases. Mortgagor shall provide all insurance required
by any Facility Lease. All such insurance shall also comply with
this Leasehold Mortgage. Mortgagor shall enforce the Facility
Lessor's obligations under each of the Facility Leases so that
Mortgagor may enjoy all its rights as lessee under the Facility
Leases. Mortgagor shall furnish to Mortgagee all information that
Mortgagee may reasonably request from time to time concerning
Mortgagor's compliance with Facility Leases.
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(f) Subject to the Gaming Control Acts, Mortgagor
hereby irrevocably delegates to Mortgagee, following an Event of
Default and the expiration of any applicable cure or grace
period, the nonexclusive authority to exercise any or all of
Mortgagor's rights, including the right to give any and all
notices to the Facility Lessor, under each and every Facility
Lease, whether or not Mortgagor has failed to exercise any such
right. Nothing in the foregoing delegation of authority shall be
deemed to impose any obligation or duty upon Mortgagee.
(g) Mortgagor shall promptly deliver to Mortgagee a
copy of any notice of default or termination that it receives
from any Facility Lessor. Mortgagor shall promptly notify
Mortgagee of any request that either party to a Facility Lease
makes for arbitration pursuant to such Facility Lease and of the
institution of any such arbitration. Mortgagor shall promptly
deliver to Mortgagee a copy of the arbitrators' determination in
each such arbitration.
(h) Mortgagor shall renew all Facility Leases when
and as permitted in accordance with their terms except to the
extent Mortgagee directs otherwise in writing. Mortgagor shall
not, without Mortgagee's consent, fail or refuse to take timely
and appropriate action to renew any Facility Lease when and as
permitted by such Facility Lease.
(i) Mortgagor shall not, without Mortgagee's
consent which consent shall not be unreasonably withheld, consent
or refuse to consent to any action that any Facility Lessor or
any third party takes or desires to take under or with respect to
any Facility Lease.
(j) Mortgagor shall not subordinate, or consent to
the subordination of, any Facility Lease to any mortgage or deed
of trust encumbering the Facility Lessor's estate in the affected
portion of the Mortgaged Property.
(k) Mortgagor's obligations under this Leasehold
Mortgage are independent of and in addition to Mortgagor's
obligations under any Facility Lease. Nothing in this Leasehold
Mortgage shall be construed to require Mortgagor or Mortgagee to
take or omit to take any action that would cause a default under
any Facility Lease.
(l) Mortgagor promptly shall notify Mortgagee
orally after learning of the commencement of any Bankruptcy
affecting any Facility Lessor or the occurrence of any event
that, with the passage of time, could constitute such a
Bankruptcy. Mortgagor also shall give written notice of such
event to Mortgagee, which shall include any information available
to Mortgagor as to the date of such filing, the court in which
such petition was filed, and the relief sought in such petition.
Mortgagor promptly shall deliver to Mortgagee any and all
notices, summonses, pleadings, applications, and other documents
that Mortgagor receives in connection with any Facility Lessor's
Bankruptcy and any related proceedings.
(m) Each Material Space Lease hereafter entered
into shall provide (i) that it is subordinate to this Leasehold
Mortgage, (ii) that the Space Lessee shall attorn to the
Mortgagee and (iii) that the tenant must comply, at its own cost,
with ISRA.
1.10 TREATMENT OF FACILITY LEASES IN BANKRUPTCY.
(a) 365(h) Election. If any Facility Lessor rejects
or disaffirms, or seeks or purports to reject or disaffirm, any
Facility Lease pursuant to any Bankruptcy Law, then Mortgagor
shall not exercise the 365(h) Election except as otherwise
provided in this paragraph. To the extent permitted by law,
Mortgagor shall not suffer or permit the termination of any
Facility Lease by exercise of the 365(h) Election or otherwise
without Mortgagee's consent. Mortgagor acknowledges that because
the Facility Leases are a primary element of Mortgagee's security
for the Obligations secured hereunder, it is not anticipated that
Mortgagee would consent to termination of any
26
Facility Lease. If Mortgagor makes any 365(h) Election in
violation of this Leasehold Mortgage, then such 365(h) Election
shall be void and of no force or effect.
(b) Assignment to Mortgagee. Mortgagor hereby
assigns to Mortgagee the 365(h) Election with respect to any
Facility Lease. Mortgagor acknowledges and agrees that the
foregoing assignment of the 365(h) Election and related rights is
one of the rights that Mortgagee may use at any time to protect
and preserve Mortgagee's other rights and interests under this
Leasehold Mortgage. Mortgagor further acknowledges that exercise
of the 365(h) Election in favor of terminating any Facility Lease
would constitute waste prohibited by this Leasehold Mortgage.
Mortgagor acknowledges and agrees that the 365(h) Election is in
the nature of a remedy available to Mortgagor under a Facility
Lease, and is not a property interest that Mortgagor can separate
from the Facility Lease as to which it arises. Therefore,
Mortgagor agrees and acknowledges that exercise of the 365(h)
Election in favor of preserving the right to possession under a
Facility Lease shall not be deemed to constitute Mortgagee's
taking or sale of the Mortgaged Property (or any element thereof)
and shall not entitle Mortgagor to any credit against the
Obligations secured hereunder or otherwise impair Mortgagee's
Remedies.
(c) Scope of Collateral. Mortgagor acknowledges
that if the 365(h) Election is exercised in favor of Mortgagor's
remaining in possession under the affected Facility Lease, then
Mortgagor's resulting occupancy rights, as adjusted by the effect
of Section 365 of the Bankruptcy Code, shall then be part of the
Mortgaged Property and shall be subject to the lien of this
Leasehold Mortgage.
1.11 REJECTION OF FACILITY LEASES BY FACILITY LESSOR. If
any Facility Lessor rejects or disaffirms a Facility Lease or
purports or seeks to disaffirm such Facility Lease pursuant to
any Bankruptcy Law, then:
(a) Continuance of Possession. Mortgagor shall
attempt to remain in possession of the premises demised under
such Facility Lease and shall perform all acts necessary for
Mortgagor to remain in such possession for the unexpired term of
such Facility Lease (including all renewals), whether the then
existing terms and provisions of such Facility Lease require such
acts or otherwise; and
(b) Extension of Lien Under Bankruptcy Code. All
the terms and provisions of this Leasehold Mortgage and the lien
created by this Leasehold Mortgage shall remain in full force and
effect and shall extend automatically to all of Mortgagor's
rights and remedies arising at any time under, or pursuant to,
365(h) of the Bankruptcy Code, including all of Mortgagor's
rights to remain in possession of the Mortgaged Property.
1.12 ASSIGNMENT OF CLAIMS TO MORTGAGEE. Mortgagor,
immediately upon learning that any Facility Lessor has failed to
perform the terms and provisions under any Facility Lease
(including by reason of a rejection or disaffirmance or purported
rejection or disaffirmance of such Facility Lease pursuant to any
Bankruptcy Law), shall notify Mortgagee of any such failure to
perform. Mortgagor unconditionally assigns, transfers, and sets
over to Mortgagee the Facility Lease Damage Claims. This
assignment constitutes a present, irrevocable, and unconditional
assignment of the Facility Lease Damage Claims, and shall
continue in effect until the Obligations secured hereunder have
been satisfied in full.
1.13 OFFSETS BY MORTGAGOR. If pursuant to Section
365(h)(2) of the Bankruptcy Code or any other similar Bankruptcy
Law, Mortgagor seeks to offset against the rent under any
Facility Lease the amount of any Facility Lease Damage Claim,
then Mortgagor shall notify Mortgagee of its intent to do so at
least 20 days before effecting such offset. Such notice shall set
forth the amounts proposed to be so offset and the basis for such
offset. If Mortgagee objects to all or any part of such offset,
then Mortgagor shall not effect any offset of the amounts to
which Mortgagee objects. If Mortgagee approves such offset, then
Mortgagor may effect such offset as set forth in Mortgagor's
notice. Neither Mortgagee's failure to object, nor any objection
or other communication between Mortgagee and Mortgagor that
relates to such offset, shall constitute Mortgagee's approval of
any such offset. Mortgagor shall indemnify Mortgagee against any
offset against the rent reserved in any Facility Lease.
27
1.14 MORTGAGOR'S ACQUISITION OF INTEREST IN LEASED
PARCELS. If Mortgagor acquires the fee or any other interest in
any of Land or Improvements, such acquired interest shall
immediately become subject to the lien of this Leasehold Mortgage
as fully and completely, and with the same effect, as if
Mortgagor now owned it and as if this Leasehold Mortgage
specifically described it, without need for the delivery and/or
recording of a supplement to this Leasehold Mortgage or any other
instrument. In the event of any such acquisition, the fee and
leasehold interests in such Land or Improvements, unless
Mortgagee elects otherwise in writing, remain separate and
distinct and shall not merge, notwithstanding any principle of
law to the contrary.
1.15 NEW FACILITY LEASES ISSUED TO MORTGAGEE. If any
Facility Lease is for any reason whatsoever terminated before the
expiration of its term and, pursuant to any provision of such
Facility Lease, and Mortgagee or its designee shall acquire from
Facility Lessor a new lease of the relevant leased parcel, then
Mortgagor shall have no right, title or interest in or to such
new lease or the estate created thereby. If, however, the
Promissory Note has been satisfied, then Mortgagee shall convey
(as Mortgagor shall direct) without warranty its right, title and
interest in such new lease or estate, provided that Mortgagor
simultaneously pays any taxes, fees, expenses and including,
without limitation, reasonable legal fees and expenses, relating
to such conveyance.
1.16 FURTHER ENCUMBRANCE, SALE OR OTHER DISPOSITION OF
COLLATERAL.
(a) Mortgagor covenants that at all times prior to
the discharge of this Mortgage, except for Permitted Liens and
Permitted Dispositions, Mortgagor shall not, without Mortgagee's
prior written consent, make nor suffer to exist, nor enter into
any agreement for, any sale, assignment, exchange, mortgage,
transfer, Lien, hypothecation or encumbrance of all or any part
of the Mortgaged Property, including, without limitation, the
Rent as used herein, "transfer" includes the actual transfer or
other disposition, whether voluntary, involuntary, by law, or
otherwise, except those transfers specifically permitted herein,
provided however, that "transfer" shall not include the granting
of utility or other beneficial easements with respect to the
Mortgaged Property which have been granted by Mortgagor and are
reasonably necessary to the construction, maintenance or
operation of the Atlantic City Showboat. Notwithstanding any
other provisions hereof, the liens created by that certain
Leasehold Mortgage, Assignment of Rents and Security Agreement
made by Mortgagor in favor of Trustee and SBI and recorded in the
records of the Atlantic County Recorder, on May 19, 1993 in Book
5028 Page 1; and the First Amendment to Leasehold Mortgage,
Assignment of Rents and Security Agreement dated July 9, 1993
recorded July 28, 1993 in Mortgage Book 5028, page 79; and in the
Second Amendment to Leasehold Mortgage, Assignment of Leases and
Rents and Security Agreement dated as of July 6, 1995; and the
Leasehold Mortgage, Assignment of Rents and Security Agreement
made by Atlantic City Showboat, Inc. to Showboat, Inc. recorded
May 19, 1993 in Mortgage Book 5028, page 79, as amended, shall be
PARI PASSU Encumbrances.
(b) Any Permitted Lien described in the definition
of "Permitted Liens" set forth in Section 1.01 of the Indenture
which is junior to the lien of the Loan Documents (a "Subordinate
Mortgage") shall be permitted hereunder so long as there shall
have been delivered to Mortgagee, not less than thirty (30) days
prior to the date thereof, a copy thereof which shall contain
express covenants in form and substance satisfactory to Mortgagee
to the effect that: (i) the Subordinate Mortgage is in all
respects subject and subordinate to this Leasehold Mortgage; (ii)
if any action or proceeding shall be brought to foreclose the
Subordinate Mortgage (regardless of whether the same is a
judicial proceeding or pursuant to a power of sale contained
therein), no tenant of any portion of the Mortgaged Property
shall be named as a party defendant nor shall any action be taken
with respect to the Mortgaged Property which would terminate any
occupancy or tenancy of the Mortgaged Property, or any portion
thereof, without the consent of Mortgagee; (iii) any Rents, if
collected through a receiver or by the holder of the Subordinate
Mortgage, shall be applied first to the obligations secured by
this Leasehold Mortgage, including principal and interest due and
owing on or to become due and owing on the Promissory Note, and
then to the payment of maintenance expenses, operating charges,
taxes, assessments, and disbursements incurred in connection with
the ownership, operation, and maintenance of the Mortgaged
Property; and (iv) if any action or
28
proceeding shall be brought to foreclose the Subordinate
Mortgage, prompt notice of the commencement thereof shall be
given to Mortgagee.
(c) Mortgagor agrees that in the event the
Leasehold interest held by Mortgagor in the Mortgaged Property or
any part thereof becomes vested in a person other than
Mortgagor, Mortgagee may, without notice to Mortgagor, deal in
any way with such successor or successors in interest with
reference to this Leasehold Mortgage, the Promissory Note and
other Obligations hereby secured without in any way vitiating or
discharging Mortgagor's or any Guarantor's, surety's or
endorser's liability hereunder or upon the obligations hereby
secured. No sale of the Mortgaged Property and no forbearance to
any person with respect to this Leasehold Mortgage and no
extension to any person of the time for payment of the Promissory
Note, and other sums hereby secured given by Mortgagee shall
operate to release, discharge, modify, change or affect the
original liability of Mortgagor, or such Guarantor, surety or
endorser either in whole or in part.
(d) This Leasehold Mortgage may be subordinated to
the liens of any FF&E Financing Agreements (as hereinafter
defined in this Section 1.16(d) and any future or further
advances made thereunder and to any modifications, renewals or
extensions thereof to which the lien of this Leasehold Mortgage
attaches. Mortgagor covenants and agrees to comply with all of
the terms and conditions set forth in any FF&E Financing
Agreement. If Mortgagor shall fail to make any payment of
principal of or pursuant to any FF&E Financing Agreement on its
part to be performed or observed, except where Mortgagor is
contesting such payment in good faith, then Mortgagee may make
such payment of the principal of or interest on the sums secured
by such security interest or may make any payment in order to
perform or observe any other term, covenant, condition or
agreement of any FF&E Financing Agreement on Mortgagor's part to
be performed or observed and any and all sums so expended by
Mortgagee shall be secured by this Leasehold Mortgage and shall
be repaid by Mortgagor upon demand, together with interest
thereon at the interest rate on the Promissory Note from the date
of advance. In furtherance of such subordination, Mortgagee
shall execute, acknowledge and deliver to Mortgagor, at
Mortgagor's expense, any and all such evidence and document the
subordination of this Leasehold Mortgage in accordance with the
foregoing provisions of this Section 1.16(d). As used herein,
"FF&E Financing Agreement" shall mean the agreement with respect
to any financing (i) as to which the lender holds a security
interest in only the assets purchased with the proceeds of such
financing for the payment of principal and interest, (ii) which
is permitted by the Loan Agreement to be incurred and (iii) the
proceeds of which are used to acquire or lease the FF&E subject
to such security interest.
1.17 PARTIAL RELEASES OF MORTGAGED PROPERTY. Mortgagor
may from xxx to time (i) transfer a portion of the Mortgaged
Property (including any temporary taking) to any person legally
empowered to exercise the power of eminent domain, (ii) make a
Permitted Disposition or (iii) grant utility and other easements
reasonably necessary for the construction and operation of the
Atlantic City Showboat, which grant or transfer is for the
benefit of the Mortgaged Property. In each such case, Mortgagee
shall execute and deliver any instruments necessary or
appropriate to effectuate or confirm any such transfer or grant,
free from the lien of this Leasehold Mortgage, provided, however,
that Mortgagee shall execute a lien release or subordination
agreement, as appropriate, for matters described in clauses (i)
and (iii) above only if Mortgagee shall have received the
following:
(a) A written request of Mortgagor, dated as of the
date of such transfer, grant or release and signed by an
authorized officer of Mortgagor, requesting Mortgagee to execute
one or more described instruments, and certifying that (i) no
Event of Default hereunder, and no event which with notice or
lapse of time or both would constitute such Event of Default, has
occurred and is continuing and that the conditions of this
Section 1.17 have been fulfilled, (ii) the transfer, grant or
release is not materially adverse to the proper conduct of the
business of Mortgagor on the Land, (iii) in the case of a
transfer of property whose value is greater than $1,000,000 to a
person legally empowered to exercise the power of eminent domain,
the consideration being paid for the portion of the Mortgaged
Property being transferred, and that such consideration is not
less than the fair market value of such portion, and in the case
of a grant or release of easements or other rights, the
consideration,
29
if any, being paid for such grant or release, (iv) in the case of
a transfer to a person legally empowered to exercise the power of
eminent domain, that such transfer is being made in anticipation
that such portion would otherwise be taken under the power of
eminent domain, and (v) that such transfer, grant or release
does not materially impair the use of the Mortgaged Property for
the purposes for which it is then held by Mortgagor;
(b) A counterpart of the instrument pursuant to
which such transfer, grant or release is to be made, and each
instrument which Mortgagee is requested to execute in order to
effectuate or confirm such transfer, grant or release;
(c) In the case of a transfer to a person legally
empowered to exercise the power of eminent domain, which transfer
involves property whose value is greater than $6,000,000, an
opinion of counsel, who may be counsel to Mortgagor, to the
effect that the assignee or grantee of the portion of the
Mortgaged Property being transferred is legally empowered to take
such portion under the power of eminent domain;
(d) An opinion of counsel, who may be counsel to
Mortgagor to the effect that the transfer of property does not
violate New Jersey's subdivision laws and that the transferred
property and the remaining portions of the Land constitute
legally subdivided lots;
(e) Such other instruments, certificates (including
evidence of authority) and opinions as Mortgagee may reasonably
request.
Any consideration received for a transfer to any
person empowered to exercise the right of eminent domain shall be
subject to Section 1.6 hereof.
1.18 LIEN SUBROGATION. As further security, Mortgagee
shall be subrogated to any and all liens or encumbrances prior or
superior to this Leasehold Mortgage, whether or not released of
record, to the extent paid out of the proceeds received in
exchange for the indebtedness or obligations secured by this
Leasehold Mortgage.
1.19 FURTHER ASSURANCES.
(a) At its sole cost and without expense to
Mortgagee, Mortgagor shall do, execute, acknowledge and deliver
any and all such further acts, deeds, conveyances, notices,
requests for notices, financing statements, continuation
statements, certificates, assignments, notices of assignments,
agreements, instruments and further assurances, and shall xxxx
any chattel paper, deliver any chattel paper or instruments to
Mortgagee and take any other actions that are reasonably
necessary, prudent or requested by Mortgagee to perfect or
continue the perfection and first priority (in PARI PASSU) of
Mortgagee's security interest in the Mortgaged Property, to
protect the Mortgaged Property against the rights, claims, or
interests of third persons other than holders of Permitted Liens
or to effect the purposes of this Leasehold Mortgage, including
the security agreement and the absolute assignment of Rents
contained herein, or for the filing, registering or recording
thereof.
(b) Mortgagor shall forthwith upon the execution
and delivery of this Leasehold Mortgage, and thereafter from time
to time, cause this Leasehold Mortgage and each instrument of
further assurance to be filed, indexed, registered, recorded,
given or delivered in such manner and in such places as may be
required by any present or future law in order to publish notice
of and fully to protect the lien hereof upon, and the title of
Mortgagee to, the Mortgaged Property.
1.20 SECURITY AGREEMENT AND FINANCING STATEMENTS.
Mortgagor (as debtor) hereby grants to Mortgagee (as creditor and
secured party) a present and future security interest in all
Tangible Collateral, Intangible Collateral, FF&E (to the extent
Mortgagee is permitted in each applicable FF&E Financing
Agreement to maintain a security interest therein), Improvements,
all other personal property now or hereafter owned or leased by
30
Mortgagor or in which Mortgagor has or will have any interest, to
the extent that such property constitutes a part of the Mortgaged
Property (whether or not such items are stored on the premises or
elsewhere), Proceeds of the foregoing comprising a portion of the
Mortgaged Property and all proceeds of insurance policies and
condemnation awards arising therefrom and all proceeds, products,
substitutions, and accessions therefor and thereto, subject to
Mortgagee's rights to treat such property as real property as
herein provided (collectively, the "PERSONAL PROPERTY") Mortgagor
shall execute any and all documents and writings, including
without limitation financing statements pursuant to the UCC, as
may be reasonably necessary or prudent to preserve and maintain
the priority of the security interest granted hereby on property
which may be deemed subject to the foregoing security agreement
or as Mortgagee may reasonably request, and shall pay to
Mortgagee on demand any reasonable expenses incurred by Mortgagee
in connection with the preparation, execution and filing of any
such documents. Mortgagor hereby authorizes and empowers
Mortgagee to execute and file, on Mortgagor's behalf, all
financing statements and refiling and continuations thereof as
Mortgagee deems necessary or advisable to create, preserve and
protect said security interest. This Leasehold Mortgage
constitutes both a real property mortgage and a "security
agreement," within the meaning of the UCC and the Mortgaged
Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature,
of Mortgagor in the Mortgaged Property. Mortgagor by executing
and delivering this Leasehold Mortgage has granted to Mortgagee,
as security for the Debt, a security interest in the Mortgaged
Property.
(a) Fixture Filing. Without in any way limiting the
generality of the immediately preceding paragraph or of the
definition of Mortgaged Property, this Leasehold Mortgage
constitutes a fixture filing under Section 9-402 of the UCC. For
such purpose, (i) the "debtor" is Mortgagor and its address is
the address given for it in the initial paragraph of this
Leasehold Mortgage; (ii) the "secured party" is Mortgagee, and
its address for the purpose of obtaining information is the
address given for it in the initial paragraph of this Leasehold
Mortgage; (iii) the real estate to which the fixtures are or are
to become attached is Mortgagor's interest in the Land; and (iv)
the record owner of such real estate is Resorts.
(b) Remedies. The remedies for any violation of the
covenants, terms and conditions of the agreements herein
contained shall include any or all of (i) those prescribed herein
and (ii) those available under applicable law, and (iii) those
available under the UCC, all at Mortgagee's sole election. In
addition, a photographic or other reproduction of this Leasehold
Mortgage shall be sufficient as a financing statement for filing
wherever filing may be necessary to perfect or continue the
security interest granted herein.
(c) Derogation of Real Property. It is the
intention of the parties that the filing of a financing statement
in the records normally having to do with personal property shall
never be construed as in anyway derogating from or impairing the
express declaration and intention of the parties hereto as
hereinabove stated that everything used in connection with the
production of income from the Mortgaged Property and/or adapted
for use therein and/or which is described or reflected in this
Leasehold Mortgage is, and at all times and for all purposes and
in all proceedings both legal or equitable, shall be regarded as
part of the real property encumbered by this Leasehold Mortgage
irrespective of whether (i) any such item is physically attached
to the Improvements, (ii) serial numbers are used for the better
identification of certain equipment items capable of being thus
identified in a recital contained herein or in any list filed
with Mortgagee, or (iii) any such item is referred to or
reflected in any such financing statement so filed at any time.
It is the intention of the parties that the mention in any such
financing statement of (1) rights in or to the proceeds of any
fire and/or hazard insurance policy, or (2) any award in eminent
domain proceedings for a taking or for loss of value, or (3)
Mortgagor's interest as lessor in any present or future Space
Lease or rights to Rents, shall never be construed as in anyway
altering any of the rights of Mortgagee as determined by this
Leasehold Mortgage or impugning the priority of Mortgagee's real
property lien granted hereby or by any other recorded document,
but such mention in the financing statement is declared to be for
the protection of Mortgagee in the event any court or judge shall
at any time hold with respect to the matters set forth in the
foregoing clauses (1), (2) and (3) that notice of Mortgagee's
priority of interest to be
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effective against a particular class of persons, including but
not limited to, the federal government and any subdivisions or
entity of the federal government, must be filed in the UCC
records.
(d) Priority; Permitted Financing of Tangible
Collateral. Except for Permitted Liens and as provided in
Section 1.16(b) hereof, all Personal Property of any nature
whatsoever, which is subject to the provisions of this security
agreement, shall be purchased or obtained by Mortgagor in its
name and free and clear of any lien or encumbrance, except for
Existing Encumbrances and Permitted Liens and the lien hereof,
for use only in connection with the business and operation of the
Atlantic City Showboat, and shall be and at all times remain free
and clear of any lease or similar arrangement, chattel financing,
installment sale agreement, security agreement and any
encumbrance of like kind, so that Mortgagee's security interest
shall attach to and vest in Mortgagor for the benefit of
Mortgagee, with the priority herein specified, immediately upon
the installation or use of the Personal Property at the Land and
Mortgagor warrants and represents that Mortgagee's security
interest in the Personal Property is a validly attached and
binding security interest, properly perfected and prior to all
other security interests therein except as otherwise permitted in
this Agreement.
(e) Preservation of Contractual Rights of
Collateral. Mortgagor shall, prior to delinquency, default, or
forfeiture, perform all obligations and satisfy all material
conditions required on its part to be satisfied to preserve its
rights and privileges under any contract, lease, license, permit,
or other authorization (i) under which it holds any Tangible
Collateral or (ii) which constitutes part of the Intangible
Collateral except where Mortgagor is contesting such obligations
in good faith.
(f) Removal of Collateral. Except as otherwise
permitted herein, none of the Tangible Collateral shall be
removed from the Mortgaged Property without Mortgagee's prior
written consent, and except damaged or obsolete Tangible
Collateral which is either no longer usable or which is removed
temporarily for repair or improvement or removed for replacement
on the Mortgaged Property with Tangible Collateral of similar
function.
(g) Change of Name. Mortgagor shall not change its
corporate or business name, or do business within the State of
New Jersey under any name other than such name, or any trade
name(s) other than those as to which Mortgagor gives prior
written notice to Mortgagee of its intent to use such trade
names, or any other business names (if any) specified in the
financing statements delivered to Mortgagee for filing in
connection with the execution hereof, without providing Mortgagee
with the additional financing statement(s) and any other similar
documents deemed reasonably necessary by Mortgagee to assure that
its security interest remains perfected and of undiminished
priority in all such Personal Property notwithstanding such name
change.
1.21 ASSIGNMENT OF RENTS. The assignment of Leases and
Rents set out above in Granting Clauses (F), (G), (H), (I) and
(K) shall constitute an absolute and present assignment to
Mortgagee, subject to the license herein given to Mortgagor to
collect the Rents and to exercise the rights set forth in
Granting Clause (K)(c)(ii), and shall be fully operative without
any further action on the part of any party, and specifically
Mortgagee shall be entitled upon the occurrence of an Event of
Default hereunder and the expiration of any applicable cure or
grace periods to all Rents, whether or not Mortgagee takes
possession of the Mortgaged Property, or any portion thereof. The
absolute assignment contained in Granting Clause (K) shall not be
deemed to impose upon Mortgagee any of the obligations or duties
of Mortgagor provided in any such Space Lease (including, without
limitation, any liability under the covenant of quiet enjoyment
contained in any lease in the event that any lessee shall have
been joined as a party defendant in any action to foreclose this
Leasehold Mortgage and shall have been barred and foreclosed
thereby of all right, title and interest and equity of redemption
in the Mortgaged Property or any part thereof). Mortgagor hereby
consents to the appointment of a receiver to collect all Rents
under any Space Lease upon the occurrence of an Event of Default
and the expiration of any applicable cure or grace periods.
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1.22 EXPENSES.
(a) Mortgagor shall pay when due and payable all
costs, including without limitation, those reasonable appraisal
fees, recording fees, taxes, brokerage fees and commissions,
abstract fees, title policy fees, escrow fees, attorneys and
paralegal fees, travel expenses, fees for inspecting architect(s)
and engineer(s) and all other costs and expenses of every
character which have been incurred or which may hereafter be
incurred by Mortgagee or any assignee of Mortgagee in connection
with the preparation and execution of loan documents, amendments
thereto or instruments, agreements or documents of further
assurance, the funding of the Loan secured hereby, and the
enforcement of any Loan Document; and
(b) Mortgagor shall, upon demand by Mortgagee,
reimburse Mortgagee or any assignee of Mortgagee for all such
reasonable expenses which have been incurred or which shall be
incurred by it; and
(c) Mortgagor shall indemnify Mortgagee with respect
to any transaction or matter in any way connected with any
portion of the Mortgaged Property, this Leasehold Mortgage,
including any occurrence at, in, on, upon or about the Mortgaged
Property (including any personal injury, loss of life, or
property damage), or Mortgagor's use, occupancy, or operation of
the Mortgaged Property, or the filing or enforcement of any
mechanic's lien, or otherwise caused in whole or in part by any
act, omission or negligence occurring on or at the Mortgaged
Property, including failure to comply with any Legal Requirement
or with any requirement of this Leasehold Mortgage that applies
to Mortgagor, or any Person's violation of any environmental law
or any contamination of any portion of the Mortgaged Property. If
Mortgagee is a party to any litigation as to which either
Mortgagor is required to indemnify Mortgagee (or is made a
defendant in any action of any kind against Mortgagor or relating
directly or indirectly to any portion of the Mortgaged Property)
then, at Mortgagee's option, Mortgagor shall undertake
Mortgagee's defense, using counsel satisfactory to Mortgagee (and
any settlement shall be subject to Mortgagee's consent), and in
any case shall indemnify Mortgagee against such litigation.
Mortgagor shall pay all reasonable costs and expenses, including
reasonable legal costs, that Mortgagee pays or incurs in
connection with any such litigation. Any amount payable under any
indemnity in this Leasehold Mortgage shall be a demand
obligation, shall be added to, and become a part of, the secured
obligations under this Leasehold Mortgage, shall be secured by
this Leasehold Mortgage, and shall bear interest at the interest
rate on the Promissory Note. Such indemnity shall survive any
release of this Leasehold Mortgage and any Foreclosure.
1.23 MORTGAGEE'S CURE OF MORTGAGOR'S DEFAULT. If Mortgagor
defaults in the payment of any tax, assessment, lien, encumbrance
or other imposition, in its obligation to furnish insurance
hereunder, or in the performance or observance of any other
covenant, condition or term of this Leasehold Mortgage or any
Loan Document (including any obligation relating to Mortgagor's
performance under any Facility Lease), Mortgagee may, but is not
obligated to, to preserve its interest in the Mortgaged Property,
perform or observe the same, and all payments made (whether such
payments are regular or accelerated payments) and reasonable
costs and expenses incurred or paid by Mortgagee in connection
therewith shall become due and payable immediately. The amounts
so incurred or paid by Mortgagee, together with interest thereon
at the default interest rate on the Promissory Note from the date
incurred until paid by Mortgagor, shall be added to the
indebtedness and secured by the lien of this Leasehold Mortgage.
Mortgagee is hereby empowered to enter and to authorize its
agents to enter upon the Land or any part thereof for the purpose
of performing or observing any such defaulted covenant, condition
or term, without thereby becoming liable to Mortgagor or any
person in possession holding under Mortgagor; provided, however,
such entry upon the Land shall be done in such manner so as not
to disrupt the Mortgagor's business conducted thereon. No
exercise of any rights under this Section by Mortgagee shall cure
or waive any Event of Default or notice of default hereunder or
invalidate any act done pursuant hereto or to any such notice,
but shall be cumulative of all other rights and remedies.
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1.24 USE OF LAND. Mortgagor covenants that the Mortgaged
Property shall be used and operated in a manner consistent with
the description of the Atlantic City Showboat in the Prospectus
open during such days and hours as are customarily observed by
casino-hotels located in Atlantic City, New Jersey.
1.25 MATERIAL SPACE LEASES. Mortgagor shall not enter into
any Material Space Lease without first obtaining Mortgagee's
consent in writing, which consent shall not be unreasonably
withheld or delayed. A copy of such Material Space Lease and
(ii) the identity of the Space Lessee thereunder shall be
furnished to Mortgagee by Mortgagor upon receipt of such request.
1.26 COMPLIANCE WITH PERMITTED LIEN AGREEMENTS. Mortgagor
or any Affiliate of Mortgagor shall comply with each and every
material obligation contained in any agreement pertaining to a
material Permitted Lien.
1.27 DEFENSE OF ACTIONS. Mortgagor shall appear in and
defend any action or proceeding affecting or purporting to affect
the security hereof or the rights or powers of Mortgagee, and
shall pay all reasonable costs and expenses, including cost of
title search and insurance or other evidence of title,
preparation of survey, and reasonable attorneys' fees in any such
action or proceeding in which Mortgagee may appear or may be
joined as a party and in any suit brought by Mortgagee based upon
or in connection with this Leasehold Mortgage or any Loan
Document. Nothing contained in this section shall, however, limit
the right of Mortgagee to appear in such action or proceeding
with counsel of its own choice, either on its own behalf or on
behalf of Mortgagor.
1.28 AFFILIATES.
(a) Subject to Leasehold Mortgage. Mortgagor shall
cause all of its Affiliates in any way involved with the
operation of the Mortgaged Property or the Atlantic City Showboat
to observe the covenants and conditions of this Leasehold
Mortgage to the extent necessary to give the full intended effect
to such covenants and conditions and to protect and preserve the
security of Mortgagee hereunder. Mortgagor shall, at Mortgagee's
request, cause any such Affiliate to execute and deliver to
Mortgagee such further instruments or documents as Mortgagee may
reasonably deem necessary to effectuate the terms of this Section
1.28.
(b) Restriction on Use of Subsidiary or Affiliate.
Mortgagor shall not use any Affiliate in the operation of the
Mortgaged Property or the Atlantic City Showboat if such use
would in any way impair the security for the Promissory Note or
circumvent any covenant or condition of this Leasehold Mortgage
or of any other Loan Document.
1.29 FUTURE ADVANCES. All funds advanced in the reasonable
exercise of Mortgagee's judgment that the same are needed to
protect its security hereunder are deemed to be obligatory
advances and are to be added to the total indebtedness secured by
this Leasehold Mortgage and such indebtedness shall be increased
accordingly. All sums so advanced shall be secured by this
Leasehold Mortgage with the same priority of Lien as the security
for the Obligations secured hereunder.
1.30 TITLE INSURANCE. Promptly after the execution and
delivery of this Leasehold Mortgage, Mortgagor shall cause to be
delivered to Mortgagee at Mortgagor's expense, one or more ALTA
extended coverage Lender's Policies of Title Insurance showing
leasehold title to the Land vested in Mortgagor and the lien of
this Leasehold Mortgage to be a perfected lien, prior to any and
all encumbrances other than Permitted Liens.
1.31 EXCULPATION OF MORTGAGEE. The acceptance by Mortgagee
of the assignment contained herein with all of the rights,
powers, privileges and authority created hereby shall not, prior
to entry upon and taking possession of the Mortgaged Property by
Mortgagee, be deemed or construed to make Mortgagee a "mortgagee
in possession"; nor thereafter or at any time or in any event
obligate Mortgagee to appear in or defend any action or
proceeding relating to the Space Leases, the Rents or the
Mortgaged Property, or to take any action hereunder
34
or to expend any money or incur any expenses or perform or
discharge any obligation, duty or liability under any Space Lease
or to assume any obligation or responsibility for any security
deposits or other deposits except to the extent such deposits are
actually received by Mortgagee, nor shall Mortgagee, prior to
such entry and taking, be liable in any way for any injury or
damage to person or property sustained by any Person in or about
the Mortgaged Property.
ARTICLE TWO
CORPORATE LOAN PROVISIONS
2.1 INTERACTION WITH INDENTURE, LOAN AGREEMENT AND
INTERCREDITOR AGREEMENT.
(a) Incorporation Reference. All terms, covenants,
conditions, provisions and requirements of the Loan Agreement and
Intercreditor Agreement are incorporated by reference in this
Leasehold Mortgage.
(b) Conflicts. Notwithstanding any other provision
of this Agreement, the terms and provisions of this Leasehold
Mortgage shall be subject and subordinate to the terms of the
Loan Agreement and the Indenture. To the extent that the Loan
Agreement provides Mortgagor with a particular cure or notice
period, or establishes any limitations or conditions on
Mortgagee's actions with regard to a particular set of facts,
Mortgagor shall be entitled to the same cure periods and notice
periods, and Mortgagee shall be subject to the same limitations
and conditions, under this Leasehold Mortgage, in place of the
cure periods, notice periods, limitations and conditions provided
for under this Leasehold Mortgage; PROVIDED, HOWEVER, that such
cure periods, notice periods, limitations and conditions shall
not be cumulative as between the Loan Agreement and this
Leasehold Mortgage. In the event of any conflict or inconsistency
between the provisions of this Leasehold Mortgage and those of
the Loan Agreement, including, without limitation, any conflicts
or inconsistencies in any definitions herein or therein, the
provisions or definitions of the Indenture, Loan Agreement and
Intercreditor Agreement shall govern.
2.2 OTHER COLLATERAL. This Leasehold Mortgage is one of a
number of security agreements to secure the debt delivered by or
on behalf of Mortgagor pursuant to the Indenture and the other
Loan Documents and securing the Obligations secured hereunder.
All potential junior Lien claimants are placed on notice that,
under any of the Loan Documents or otherwise (such as by separate
future unrecorded agreement between Mortgagor and Mortgagee),
other collateral for the Obligations secured hereunder (i.e.,
collateral other than the Mortgaged Property) may, under certain
circumstances, be released without a corresponding reduction in
the total principal amount secured by this Leasehold Mortgage.
Such a release would decrease the amount of collateral securing
the same indebtedness, thereby increasing the burden on the
remaining Mortgaged Property created and continued by this
Leasehold Mortgage. No such release shall impair the priority of
the lien of this Leasehold Mortgage. By accepting its interest in
the Mortgaged Property, each and every junior Lien claimant shall
be deemed to have acknowledged the possibility of, and consented
to, any such release. Nothing in this paragraph shall impose any
obligation upon Mortgagee.
ARTICLE THREE
DEFAULTS
3.1 EVENT OF DEFAULT. The term "Event of Default,"
wherever used in this Leasehold Mortgage, shall mean any one or
more of the following events (whether any such event shall be
voluntary or involuntary or come
35
about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
(a) The failure by Mortgagor to pay any principal,
premium or interest when due, whether at maturity, upon
redemption, or otherwise, under the Promissory Note if such
failure results in the failure to pay in full any principal,
premium or interest when due (after any grace period) on the
Promissory Note.
(b) The occurrence of an Event of Default and the
expiration of any applicable cure or grace period under any Loan
Document.
(c) Failure by Mortgagor to perform any obligation
under any Facility Lease and (if such Facility Lease provides for
a cure period) such failure continues for a period equal to (a)
the cure period provided in such Facility Lease, if any, less (b)
five Business Days.
(d) A sale, lease, sublease, encumbrance or other
transfer in violation of Section 1.16 (Further Encumbrances)
hereof.
(e) Failure by Mortgagor to duly keep, perform and
observe any other covenant, condition, agreement, term,
representation or warranty in this Leasehold Mortgage or any Loan
Document to be performed or observed by Mortgagor for a period of
sixty (60) days after notice from Mortgagee.
(f) Any representation or warranty of Mortgagor in
this Leasehold Mortgage shall prove to be incorrect in any
material respect as of the time when the same shall have been
made.
(g) The entry by any court of competent jurisdiction
of a judgment or decree that an undertaking by Mortgagor as
herein provided to pay or perform its obligation under the ACSI
Guaranty or any interest on amounts payable thereon, or any
taxes, assessments, levies, liabilities, obligations or
encumbrances is legally inoperative or cannot be enforced, so as
to affect adversely either the security of this Leasehold
Mortgage, the indebtedness or other Obligations secured hereby,
the rate of interest on the Promissory Note or all or any portion
of the indebtedness, and such judgment shall not be appealed and
stayed pending appeal within ten (10) days after the entry
thereof.
(h) The Bankruptcy of Mortgagor.
ARTICLE FOUR
REMEDIES
4.1 ACCELERATION OF MATURITY. Following an Event of
Default and the expiration of any applicable cure or grace
period, Mortgagee may (except that such acceleration shall be
automatic if the Event of Default is caused by Mortgagor's
Bankruptcy) declare all indebtedness or sums secured hereby,
including the Promissory Note, to be due and payable immediately,
and upon such declaration such principal and interest and other
sums shall immediately become due and payable without demand,
presentment, notice or other requirements of any kind (all of
which Mortgagor waives to the extent permitted by law to do so)
notwithstanding anything in this Leasehold Mortgage or any Loan
Document or applicable law to the contrary.
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4.2 PROTECTIVE ADVANCES. If Mortgagor fails to make any
payment or perform any other obligation under the Promissory Note
or any other Loan Document, then without thereby limiting
Mortgagee's other rights or remedies, waiving or releasing any of
Mortgagor's obligations, or imposing any obligation on Mortgagee,
Mortgagee may either advance any amount owing or perform any or
all actions that Mortgagee considers necessary or appropriate to
cure such default. All such advances and the expense of all such
actions shall constitute "Protective Advances." No sums advanced
or performance rendered by Mortgagee shall cure, or be deemed a
waiver of any Event of Default.
4.3 INSTITUTION OF EQUITY PROCEEDINGS. Following an Event
of Default and the expiration of any applicable cure or grace
period, Mortgagee may institute an action, suit or proceeding in
equity for specific performance of this Leasehold Mortgage, the
ACSI Guaranty or any Loan Document, all of which shall be
specifically enforceable by injunction or other equitable remedy.
Mortgagor waives any defense based on laches or any applicable
statue of limitations.
4.4 MORTGAGEE'S POWER OF ENFORCEMENT.
(a) Following an Event of Default and the expiration
of any applicable cure or grace period, Mortgagee may, subject to
compliance with applicable Gaming Control Acts, either with or
without entry or taking possession of the Mortgaged Property, and
without regard to whether or not the indebtedness and other sums
secured hereby shall be due and without prejudice to the right of
Mortgagee thereafter to bring an action or proceeding to
foreclose or any other action for any default existing at the
time such earlier action was commenced, proceed by any
appropriate action or proceeding: (1) to enforce the ACSI
Promissory Note, to the extent permitted by law, or the
performance of any term hereof or any other right; (2) to
foreclose this Leasehold Mortgage in any manner provided by law
for the foreclosure of mortgages or deeds of trust on real
property and to sell, as an entirety or in separate lots or
parcels, the Mortgaged Property or any portion thereof pursuant
to the laws of the State of New Jersey or under the judgment or
decree of a court or courts of competent jurisdiction, and
Mortgagee shall be entitled to recover in any such proceeding all
costs and expenses incident thereto, including reasonable
attorneys' fees in such amount as shall be awarded by the court;
(3) to exercise any or all of the rights and remedies available
to it under the Loan Documents; and (4) to pursue any other
remedy available to it. Mortgagee shall take action either by
such proceedings or by the exercise of its powers with respect to
entry or taking possession, or both, as Mortgagee may determine.
(b) Following an Event of Default and the expiration
of any applicable cure or grace period, Mortgagee may, subject to
the Intercreditor Agreement and compliance with applicable Gaming
Control Acts and other applicable law, sell the Mortgaged
Property, and all estate, right, title, interest, claim and
demand of Mortgagor therein, and all rights of redemption
thereof, at one or more sales, as an entirety or in parcels, with
such elements of real and personal property, and at such time and
place and upon such terms, as it may deem expedient, or as may be
required by applicable law, and in the event of a sale of less
than all of the Mortgaged Property, this Mortgage shall continue
as a lien and security interest on the remaining portion of the
Mortgaged Property.
(c) The remedies described in this Section 4.4 may
be exercised with respect to all or any portion of the Personal
Property, either simultaneously with the sale of any real
property encumbered hereby or independent thereof. Mortgagee
shall at any time be permitted to proceed with respect to all or
any portion of the Personal Property in any manner permitted by
the UCC. Mortgagor agrees that Mortgagee's inclusion of all or
any portion of the Personal Property in a sale or other remedy
exercised with respect to the real property encumbered hereby, as
permitted by the UCC, is a commercially reasonable disposition of
such property. Mortgagor agrees that Mortgagee may dispose of any
or all of the Personal Property at the same time and place and
after giving the same notice provided for in this Leasehold
Mortgage in connection with a nonjudicial foreclosure sale under
the terms and conditions set forth in this Leasehold Mortgage. In
this connection, Mortgagor agrees that the sale of the real
estate, leaseholds and Improvements described in this Leasehold
Mortgage and the Personal Property or any part
37
thereof may be conducted separately and/or together; and that in
the event the real estate, leaseholds and Improvements described
herein and the Personal Property or any part thereof are sold
together, Mortgagee shall not be obligated to allocate the
consideration received as between the real estate, leaseholds and
Improvements and the Personal Property. The Personal Property
need not be present at the place of sale.
4.5 MORTGAGEE'S RIGHT TO ENTER AND T AKE POSSESSION.
OPERATE AND APPLY INCOME.
(a) Following an Event of Default and the expiration
of any applicable cure or grace period, (i) subject to the
Intercreditor Agreement and compliance with applicable Gaming
Control Acts and other applicable law, Mortgagor upon demand of
Mortgagee, shall forthwith surrender to Mortgagee the actual
possession and, if and to the extent permitted by law, Mortgagee
itself, or by such officers or agents as it may appoint, may
enter and take possession of all the Mortgaged Property including
the Personal Property, without liability for trespass, damages or
otherwise, and may exclude Mortgagor and its agents and employees
wholly therefrom and may have joint access with Mortgagor to the
books, papers and accounts of Mortgagor; and (ii) Mortgagor shall
pay monthly in advance to Mortgagee on Mortgagee's entry into
possession, or to any receiver appointed to collect the Rents,
all Rents then due and payable.
(b) If Mortgagor shall for any reason fail to
surrender or deliver the Mortgaged Property, the Personal
Property or any part thereof after Mortgagee's demand, Mortgagee
may obtain a judgment or decree conferring on Mortgagee the right
to immediate possession or requiring Mortgagor to deliver
immediate possession of all or part of such property to Mortgagee
and Mortgagor hereby specifically consents to the entry of such
judgment or decree. Mortgagor shall pay to Mortgagee, upon
demand, all reasonable costs and expenses of obtaining such
judgment or decree and reasonable compensation to Mortgagee, its
attorneys and agents, and all such costs, expenses and
compensation shall, until paid, be secured by the lien of this
Leasehold Mortgage.
(c) Upon every such entering upon or taking of
possession, Mortgagee may, subject to compliance with applicable
Gaming Control Acts, hold, store, use, operate, manage and
control the Mortgaged Property and conduct the business thereof,
and, from time to time in its sole and absolute discretion and
without being under any duty to so act:
(1) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise
acquire additional fixtures, personalty and other property;
(2) insure or keep the Mortgaged Property
insured;
(3) manage and operate the Mortgaged Property
and exercise all the rights and xxxxxx of Mortgagor in their name
or otherwise with respect to the same;
(4) enter into agreements with others to
exercise the powers herein granted Mortgagee, all as Mortgagee
from time to time may determine; and, subject to the absolute
assignment of the Leases and Rents to Mortgagee, Mortgagee may
collect and receive all the Rents, including those past due as
well as those accruing thereafter; and shall apply the monies so
received by Mortgagee in such priority as Mortgagee may determine
to (l) the payment of all amounts due and payable on the
Promissory Note; (2) the deposits for taxes and assessments and
insurance premiums due, (3) the cost of insurance, taxes,
assessments and other proper charges upon the Mortgaged Property
or any part thereof; (4) the reasonable compensation, expenses
and disbursements of the agents, attorneys and other
representatives of Mortgagee; and (5) any other reasonable and
necessary charges or costs required to be paid by Mortgagor under
the terms hereof; and
38
(5) rent or sublet the Mortgaged Property or
any portion thereof for any purpose permitted by the Facility
Lease or this Leasehold Mortgage.
Mortgagee shall surrender possession of the Mortgaged
Property and the Personal Property to Mortgagor only when all
that is due upon such interest and principal, tax and insurance
deposits, and all amounts under any of the terms of the
Promissory Note, the Loan Agreement, Loan Documents, or this
Leasehold Mortgage, shall have been paid and all defaults made
good. The same right of taking possession, however, shall exist
if any subsequent Event of Default shall occur and be continuing.
If Mortgagor shall exercise any right or remedy herein
contained, Mortgagee shall not be deemed to have entered into or
taken possession of the Mortgaged Property except upon the
exercise of its option to do so evidenced by Mortgagee's overt
act to do so, nor shall Mortgagee be deemed to be a mortgagee in
possession by reason of such entry or taking possession.
4.6 LEASES. Mortgagee is authorized to foreclose this
Leasehold Mortgage subject to the rights of any tenants of the
Mortgaged Property, and the failure to make any such tenants
parties defendant to Intercreditor Agreement and any such
foreclosure proceedings and to foreclose their rights shall not
be, nor be asserted by Mortgagor to be, a defense to any
proceedings instituted by Mortgagee to collect the sums secured
hereby or to collect any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property, or any portion
thereof. Unless otherwise agreed by Mortgagee in writing, all
Space Leases executed subsequent to the date hereof, or any part
thereof, shall be subordinate and inferior to the lien of this
Leasehold Mortgage, except that from time to time Mortgagee may
execute and record among the land records of the jurisdiction
where this Leasehold Mortgage is recorded, subordination
statements with respect to such of said Space Leases as Mortgagee
may designate in its sole discretion, whereby the Space Leases so
designated by Mortgagee shall be made superior to the lien of
this Leasehold Mortgage for the term set forth in such
subordination statement. From and after the recordation of such
subordination statements, and for the respective periods as may
be set forth therein, the Space Leases therein referred to shall
be superior to the lien of this Leasehold Mortgage and shall not
be affected by any foreclosure hereof. All such Space Leases
shall contain a provision to the effect that the Mortgagor and
Space Lessee recognize the right of Mortgagee to elect and to
effect such subordination of this Leasehold Mortgage and consents
thereto.
4.7 PURCHASE BY MORTGAGEE. Upon any foreclosure sale
(whether judicial or nonjudicial), Mortgagee may bid for and
purchase the property subject to such sale and, upon compliance
with the terms of sale, may hold, retain and possess and dispose
of such property in its own absolute right without further
accountability.
4.8 WAIVER OF APPRAISEMENT, VALUATION, STAY, EXTENSION AND
REDEMPTION LAWS. Mortgagor agrees to the full extent permitted
by law that if an Event of Default occurs, neither Mortgagor nor
anyone claiming through or under it shall or will set up, claim
or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order
to prevent or hinder the enforcement or foreclosure of this
Leasehold Mortgage or the absolute sale of the Mortgaged Property
or any portion thereof or the final and absolute putting into
possession thereof, immediately after such sale, of the
purchasers thereof, and Mortgagor for itself and all who may at
any time claim through or under it, hereby waives, to the full
extent that it may lawfully so do, the benefit of all such laws,
and any and all right to have the assets comprising the Mortgaged
Property marshalled upon any foreclosure of the lien hereof and
agrees that Mortgagee or any court having jurisdiction to
foreclose such lien may sell the Mortgaged Property in part or as
an entirety and cash collateral as derived from the Mortgaged
Property.
4.9 RECEIVER. Following an Event of Default and the
expiration of any applicable cure or grace period, Mortgagee, to
the extent permitted by law and applicable Gaming Control Acts
and without regard to the value, adequacy or occupancy of the
security for the indebtedness and other sums secured hereby,
shall be entitled as a matter of right if it so elects to the
appointment of a receiver to enter upon and take possession of
the
39
Mortgaged Property and to collect all Rents and apply the same as
the court may direct, and such receiver may be appointed by any
court of competent jurisdiction upon application by Mortgagee.
Mortgagee may have a receiver appointed without notice to
Mortgagor or any third party, and Mortgagee may waive any
requirement that the receiver post a bond. Mortgagee shall have
the power to designate and select the Person who shall serve as
the receiver and to negotiate all terms and conditions under
which such receiver shall serve. Any receiver appointed on
Mortgagee's behalf may be an Affiliate of Mortgagee. The
expenses, including receiver's fees, reasonable attorneys' fees,
costs and agent's compensation, incurred pursuant to the powers
herein contained shall be secured by this Leasehold Mortgage. The
right to enter and take possession of and to manage and operate
the Mortgaged Property and to collect all Rents, whether by a
receiver or otherwise, shall be cumulative to any other right or
remedy available to Mortgagee under this Leasehold Mortgage, the
Indenture or otherwise available to Mortgagee and may be
exercised concurrently therewith or independently thereof.
Mortgagee shall be liable to account only for such Rents
(including, without limitation, security deposits) actually
received by Mortgagee, whether received pursuant to this section
or any other provision hereof. Notwithstanding the appointment
of any receiver or other custodian, Mortgagee shall be entitled
as pledgee to the possession and control of any cash, deposits,
or instruments at the time held by, or payable or deliverable
under the terms of this Leasehold Mortgage to, Mortgagee.
4.10 SUITS TO PROTECT THE MORTGAGED PROPERTY. Mortgagee
shall have the power and authority to institute and maintain any
suits and proceedings as Mortgagee, in its sole and absolute
discretion, may deem advisable (a) to prevent any impairment of
the Mortgaged Property by any acts which may be unlawful or any
violation of this Leasehold Mortgage, (b) to preserve or protect
its interest in the Mortgaged Property, or (c) to restrain the
enforcement of or compliance with any legislation or other Legal
Requirement that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or
order might impair the security hereunder or be prejudicial to
Mortgagee's interest.
4.11 PROOFS OF CLAIM. In the case of any receivership,
Insolvency, Bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceedings affecting Mortgagor,
any Affiliate or any guarantor, co-maker or endorser of any of
Mortgagor's obligations, its creditors or its property,
Mortgagee, to the extent permitted by law, shall be entitled to
file such proofs of claim or other documents as it may deem to be
necessary or advisable in order to have its claims allowed in
such proceedings for the entire amount due and payable by
Mortgagor under the Promissory Note, this Leasehold Mortgage or
any other Loan Document, at the date of the institution of such
proceedings, and for any additional amounts which may become due
and payable by Mortgagor after such date.
4.12 MORTGAGOR TO PERFORM OBLIGATIONS; APPLICATION OF
MONIES BY MORTGAGEE. Subject to the Intercreditor
Agreement:
(a) In lieu of a foreclosure sale of all or any part
of the Mortgaged Property and of the application of the proceeds
of sale to the payment of the sums secured hereby, Mortgagee
shall be entitled to enforce payment from Mortgagor of any
additional amounts then remaining due and unpaid and to recover
judgment against Mortgagor for any portion thereof remaining
unpaid, with interest at the interest rate on the Promissory
Note.
(b) Mortgagor hereby agrees to the extent permitted
by law, that no recovery of any such judgment by Mortgagee or
other action by Mortgagee and no attachment or levy of any
execution upon any of the Mortgaged Property or any other
property shall in any way affect the Lien and security interest
of this Leasehold Mortgage upon the Mortgaged Property or any
part thereof or any Lien, rights, powers or remedies of
Mortgagee hereunder, but such Lien, rights, powers and remedies
shall continue unimpaired as before.
(c) Any monies collected or received by Mortgagee
under this Section 4.12 shall be first applied to the payment of
reasonable compensation, expenses and disbursements of the
agents, attorneys and other
40
representatives of Mortgagee, and the balance remaining shall be
applied to the payment of amounts due and unpaid under the
Promissory Note, and this Leasehold Mortgage.
4.13 DELAY OR OMISSION; NO WAIVER. No delay or omission of
Mortgagee, any holder of the Note or any Bondholder to exercise
any right, power or remedy upon any Event of Default and the
expiration of any applicable cure or grace period shall exhaust
or impair any such right, power or remedy or shall be construed
to waive any such Event of Default or to constitute acquiescence
therein. Every right, power and remedy given to Mortgagee
whether contained herein or in the Indenture or otherwise
available to Mortgagee may be exercised from time to time and as
often as may be deemed expedient by Mortgagee.
4.14 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER. No waiver
of any Event of Default hereunder shall extend to or affect any
subsequent or any other Event of Default then existing, or impair
any rights, powers or remedies consequent thereon. If Mortgagee
or any Bondholder (a) grants forbearance or an extension of time
for the payment of any sums secured hereby; (b)takes other or
additional security for the payment thereof; (c) waives or does
not exercise any right granted in the ASCI Guaranty, this
Leasehold Mortgage or any other Loan Document; (d) releases any
part of the Mortgaged Property from the lien or security interest
of this Leasehold Mortgage or any other instrument securing the
Promissory Note; (e) consents to the filing of any map, plat or
replat of the Land; (f) consents to the granting of any easement
on the Land; or (g) makes or consents to any agreement changing
the terms of this Leasehold Mortgage or any Loan Document
subordinating the lien or any charge hereof, then no such act or
omission shall release, discharge, modify, change or affect the
original liability under the Promissory Note, this Leasehold
Mortgage, any other Loan Document or otherwise of Mortgagor, or
any subsequent purchaser of the Mortgaged Property or any part
thereof or any maker, co-signer, surety or guarantor. No such act
or omission shall preclude Mortgagee from exercising any right,
power or privilege herein granted or intended to be granted in
case of any Event of Default then existing or of any subsequent
Event of Default, nor, except as otherwise expressly provided in
an instrument or instruments executed by Mortgagee, shall the
lien or security interest of this Leasehold Mortgage be altered
thereby, except to the extent expressly provided in any releases,
maps, easements or subordinations described in clause (d), (e),
(f) or (g) above of this Section 4.14. In the event of the sale
or transfer by operation of law or otherwise of all or any part
of the Mortgaged Property, Mortgagee, without notice to any
person, firm or corporation, is hereby authorized and empowered
to deal with any such vendee or transferee with reference to the
Mortgaged Property or the indebtedness secured hereby, or with
reference to any of the terms or conditions hereof, as fully and
to the same extent as it might deal with the original parties
hereto and without in any way releasing or discharging any of the
liabilities or undertakings hereunder, or waiving its right to
declare such sale or transfer an Event of Default as provided
herein. Notwithstanding anything to the contrary contained in
this Leasehold Mortgage or any Loan Document, (i) in the case of
any non-monetary Event of Default and the expiration of any
applicable cure or grace period, Mortgagee may continue to accept
payments due hereunder without thereby waiving the existence of
such or any other Event of Default and (ii) in the case of any
monetary Event of Default, Mortgagee may accept partial payments
of any sums due hereunder without thereby waiving the existence
of such Event of Default if the partial payment is not sufficient
to completely cure such Event of Default.
4.15 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES
RESTORED. If Mortgagee shall have proceeded to enforce any right
or remedy under this Leasehold Mortgage by foreclosure, entry of
judgment or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to
Mortgagee, then and in every such case Mortgagor and Mortgagee
shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Mortgagee shall continue
as if no such proceedings had occurred or had been taken.
4.16 REMEDIES CUMULATIVE. No right, power or remedy,
including without limitation remedies with respect to any
security for the Promissory Note, conferred upon or reserved to
Mortgagee by the ACSI Guaranty, this Leasehold Mortgage or any
Loan Document is exclusive of any other right, power or remedy,
but each and
41
every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and
remedy given hereunder or under any Loan Document, now or
hereafter existing at law, in equity or by statute, and Mortgagee
shall be entitled to resort to such rights, powers, remedies or
security as Mortgagee shall in its sole and absolute discretion
deem advisable.
4.17 INTEREST AFTER EVENT OF DEFAULT. If an Event of
Default shall have occurred and is continuing, all sums
outstanding and unpaid under the Promissory Note and this
Leasehold Mortgage shall, at Mortgagee's option, bear interest at
the default interest rate on the Promissory Note until such Event
of Default has been cured. Mortgagor's obligation to pay such
interest shall be secured by this Leasehold Mortgage.
4.18 FORECLOSURE: EXPENSES OF LITIGATION. If foreclosure be
made by Mortgagee, reasonable attorneys' fees for services in the
supervision of said foreclosure proceeding shall be allowed to
Mortgagee as part of the foreclosure costs. In the event of
foreclosure of the lien hereof, there shall be allowed and
included as additional indebtedness all reasonable expenditures
and expenses which may be paid or incurred by or on behalf of
Mortgagee for attorneys fees, appraiser's fees, outlays for
documentary and expert evidence, stenographers' charges,
publication costs, and costs (which may be estimated as to items
to be expended after foreclosure sale or entry of the decree) of
procuring all such abstracts of title, title searches and
examinations, title insurance policies and guaranties, and
similar data and assurances with respect to title as Mortgagee
may deem reasonably advisable either to prosecute such suit or to
evidence to a bidder at any sale which may be had pursuant to
such decree the true condition of the title to or the value of
the Mortgaged Property or any portion thereof. All expenditures
and expenses of the nature in this section mentioned, and such
expenses and fees as may be incurred in the protection of the
Mortgaged Property and the maintenance of the lien and security
interest of this Leasehold Mortgage, including the reasonable
fees of any attorney employed by Mortgagee in any litigation or
proceeding affecting this Leasehold Mortgage or any Loan
Document, the Mortgaged Property or any portion thereof,
including, without limitation, civil, probate, appellate and
bankruptcy proceedings, or in preparation for the commencement or
defense of any proceeding or threatened suit or proceeding, shall
be immediately due and payable by Mortgagor, with interest
thereon at the default interest rate on the Promissory Note, and
shall be secured by this Leasehold Mortgage.
4.19 DEFICIENCY JUDGMENTS. If after foreclosure of this
Leasehold Mortgage hereunder, there shall remain any deficiency
with respect to any amounts payable under the Promissory Note or
hereunder or any amounts secured hereby, and Mortgagee shall
institute any proceedings to recover such deficiency or
deficiencies, all such amounts shall continue to bear interest at
the default interest rate under the Promissory. Mortgagor waives
to the extent permitted by applicable law, any defense to
Mortgagee's recovery against Mortgagor of any deficiency after
any foreclosure sale of the Mortgaged Property. Mortgagor
expressly waives to the extent permitted by applicable law, any
defense or benefits that may be derived from any statute granting
Mortgagor any defense to any such recovery by Mortgagee. In
addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation
any court imposed costs) in connection with such proceedings,
including its reasonable attorneys' fees, appraisal fees and the
other costs, fees and expenditures referred to in Section 4.18
above. This provision shall survive any foreclosure or sale of
the Mortgaged Property, any portion thereof and/or the
extinguishment of the lien hereof.
4.20 WAIVER OF JURY TRIAL. Mortgagee and Mortgagor each
waive to the extent permitted by applicable law, any right to
have a jury participate in resolving any dispute, whether
sounding in contract, tort, or otherwise arising out of,
connected with, related to, or incidental to the relationship
established between them in connection with the Promissory Note,
this Leasehold Mortgage or any Loan Document. Any such disputes
shall be resolved in a bench trial without a jury.
4.21 REASONABLE USE AND OCCUPANCY. Subject to all
applicable Gaming Control Acts in addition to the rights which
Mortgagee may have herein, upon the occurrence of any Event of
Default, Mortgagee, at its option, may require Mortgagor to pay
monthly in advance to Mortgagee, or any receiver appointed to
collect the Rents,
42
the fair and reasonable rental value for the use and occupation
of such part of the Mortgaged Property as may be occupied by
Mortgagor or may require Mortgagor to vacate and surrender
possession of the Mortgaged Property to Mortgagee or to such
receiver and, in default thereof, Mortgagor may be evicted by
summary proceedings or otherwise.
4.22 EXCULPATION OF MORTGAGEE. The acceptance by Mortgagee
of the assignment contained herein with all of the rights,
powers, privileges and authority created hereby shall not, prior
to entry upon and taking possession of the Mortgaged Property by
Mortgagee, be deemed or construed to make Mortgagee a "mortgagee
in possession"; nor thereafter or at any time or in any event
obligate Mortgagee to appear in or defend any action or
proceeding relating to the Space Leases, the Rents or the
Mortgaged Property, or to take any action hereunder or to expend
any money or incur any expenses or perform or discharge any
obligation, duty or liability under any Space Lease or to assume
any obligation or responsibility for any security deposits or
other deposits except to the extent such deposits are actually
received by Mortgagee, nor shall Mortgagee, prior to such entry
and taking, be liable in any way for any injury or damage to
person or property sustained by any Person in or about the
Mortgaged Property.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
5.1 HEIRS, SUCCESSORS AND ASSIGNS INCLUDED IN PARTIES.
Whenever one of the parties hereto is named or referred to
herein, the heirs, successors and assigns of such party shall be
included, and subject to the limitations set forth in Section
1.16, all covenants and agreements contained in this Leasehold
Mortgage, by or on behalf of Mortgagor or Mortgagee shall bind
and inure to the benefit of its heirs, successors and assigns,
whether so expressed or not.
5.2 NO MERGER. If both the lessor's and the lessee's
interests under any Facility Lease shall at any time become
vested in any one person, this Mortgage and the lien and security
interest created hereby shall not be destroyed or terminated by
the application of the doctrine of merger and, in such event,
Mortgagee shall continue to have and enjoy all of the rights and
privileges of Mortgagee hereunder as to the estate subject to the
lien of this Mortgage. If Mortgagor elects to acquire the fee
simple interest in any portion of the Land, then, as a condition
to such acquisition, Mortgagor shall deliver to Mortgagee an
opinion of independent legal counsel to the effect that the
ownership of lessee's interest under the Facility Lease and the
fee simple interest in the Land by Mortgagor shall not cause or
result in, by operation of law or otherwise, a merger of the
lessee's interest under the Facility Lease and the fee simple
interest in the Land and that Mortgagee shall be entitled to
continue to have and enjoy all of the rights of Mortgagee
hereunder as to the estate subject to the lien of the Mortgage.
Notwithstanding the foregoing, if Mortgagor elects to merge the
lessee's interest under the Facility Lease and the fee simple
interest in the Land, or otherwise, Mortgagor shall cause the
following items to be delivered to Mortgagee as a condition
thereto: (a) an opinion of independent legal counsel to Mortgagee
to the effect that Mortgagee has a valid and enforceable first
priority security interest in PARI PASSU in the Mortgaged
Property and in the fee simple interest in the Land, subject to
the Permitted Liens, which opinion may be given in reliance on
the search conducted by the title insurance company described in
clause (b) below, (b) a validly-issued and fully-paid title
insurance policy of a title insurance company reasonably
acceptable to Mortgagee, insuring Mortgagee's first priority
security interest in PARI PASSU in the Improvements and the fee
simple interest in the Land, subject to the Permitted Liens, and
(c) such other instruments, statements, agreements and documents,
including any supplements to this Mortgage as Mortgagee or its
counsel may require in order to (i) subject to the lien hereby
created the fee simple interest in the Land, and (ii) perfect and
maintain a first priority security interest in PARI PASSU in the
Mortgaged Property, subject
43
to the Permitted Liens. Upon compliance with the foregoing
requirements, Mortgagee shall execute and deliver a written
instrument in recordable form to Mortgagor to confirm its consent
to the merger of such estates.
5.3 ADDRESSES FOR NOTICES, ETC.
(a) Any notice, report, demand or other instrument
authorized or required to be given or furnished under this
Leasehold Mortgage to Mortgagor or Mortgagee shall be deemed
given or furnished (i) when addressed to the party intended to
receive the same, at the address of such party set forth below,
and delivered at such address or (ii) three (3) days after the
same is deposited in the United States mail as first class
certified mail, return receipt requested, postage paid, whether
or not the same is actually received by such party:
Mortgagor: Showboat, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
With a copy to:
Atlantic City Showboat, Inc.
000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: General Counsel
Mortgagee: NatWest Bank, N.A.
00 Xxxxx 00 X
Xxxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, V.P.
With a copy to:
Xxxxx X. Xxxxxxxxxx, Esq.
Clark, Ladner, Xxxxxxxxxxx & Xxxxx
Woodland Falls Corporate Park
000 Xxxx Xxxxx Xxxx - Xxxxx 000
Xxxxxx Xxxx, XX 00000
5.3.1 CHANGE OF ADDRESS. Any person may change the address
to which any such notice, report, demand or other instrument
is to be delivered or mailed to that person, by furnishing
written notice of such change to the other party, but no such
notice of change shall be effective unless and until received
by such other party.
5.4 HEADINGS. The headings of the articles, sections,
paragraphs and subdivisions of this Leasehold Mortgage are for
convenience of reference only, are not to be considered a part
hereof, and shall not limit or expand or otherwise affect any of
the terms hereof.
5.5 INVALID PROVISIONS TO AFFECT NO OTHERS. In the event
that any of the covenants, agreements, terms or provisions
contained herein or in the Promissory Note, the ACSI Guaranty or
any Loan Document shall be invalid, illegal or unenforceable in
any respect, the validity of the lien hereof and the remaining
covenants, agreements, terms or provisions contained herein or in
the Promissory Note, the Loan Agreement, the ACSI Guaranty or any
other Loan Document shall be in no way affected, prejudiced or
disturbed thereby. To the extent
44
permitted by law, Mortgagor waives any provision of law which
renders any provision hereof prohibited or unenforceable in any
respect.
5.6 CHANGES AND PRIORITY OVER INTERVENING LIENS. Neither
this Leasehold Mortgage nor any term hereof may be changed,
waived, discharged or terminated orally, or by any action or
inaction, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge
or termination is sought. Any agreement hereafter made by
Mortgagor and Mortgagee relating to this Leasehold Mortgage shall
be superior to the rights of the holder of any intervening lien
or encumbrance.
5.7 ESTOPPEL CERTIFICATES. Within ten (10) Business Days
after Mortgagee's written request, Mortgagor shall from time to
time execute a certificate, in recordable form (an "Estoppel
Certificate"), stating, except to the extent that it would be
inaccurate to so state: (a) the current amount of the Obligations
secured hereunder and all elements thereof, including principal,
interest, and all other elements; (b) Mortgagor has no defense,
offset, claim, counterclaim, right of recoupment, deduction, or
reduction against any of the Obligations secured hereunder; (c)
none of the Loan Documents have been amended, whether orally or
in writing; (d) Mortgagor has no claims against Mortgagee of any
kind; (e) any Power of Attorney granted to Mortgagee is in full
force and effect; and (f) such other matters relating to this
Leasehold Mortgage, any Loan Documents and the relationship of
Mortgagor and Mortgagee as Mortgagee shall request. In addition,
the Estoppel Certificate shall set forth the reasons why it would
be inaccurate to make any of the foregoing assurances ("a"
through "f").
5.8 GOVERNING LAW. This Leasehold Mortgage shall be
construed, interpreted, enforced and governed by and in
accordance with the laws of the State of New Jersey without
regard to its choice of law provisions.
5.9 REQUIRED NOTICES. Mortgagor shall notify Mortgagee
promptly of the occurrence of any of the following and shall
immediately provide Mortgagee a copy of the notice or documents
referred to: (a) receipt of notice from any Governmental
Authority relating to all or any material part of the Mortgaged
Property if such notice relates to a default or act, omission or
circumstance which would result in a default after notice or
passage of time or both; (b) receipt of any notice from any
tenant leasing all or any material portion of the Mortgaged
Property if such notice relates to a default or act, omission or
circumstance which would result in a default after notice or
passage of time or both; (c) receipt of notice from the holder of
any Permitted Lien relating to a default or act, omission or
circumstance which would result in a default after notice or
passage of time or both; (d) the commencement of any proceedings
or the entry of any judgment, decree or order materially
affecting all or any portion of the Mortgaged Property or which
involve the potential liability of Mortgagor or its Affiliates in
an amount in excess of $250,000.00 (other than for personal
injury actions and related property damage suits which have been
acknowledged by the insurer to be covered by such insurance); or
(e) commencement of any judicial or administrative proceedings or
the entry of any judgment, decree or order by or against or
otherwise affecting Mortgagor or any Affiliate of Mortgagor, a
material portion of the Mortgaged Property, or a material portion
of the Personal Property, or any other action by any creditor or
lessor thereof as a result of any default under the terms of any
lease.
5.10 CONTINUED PRIORITY OF LIEN. This Leasehold Mortgage,
the ASCI Guaranty, the Promissory Note, the other Loan Documents,
and the Obligations are subject to "modification" (as such term
is defined in Chapter 353 of the Public Laws of 1985, N.J.S.A.
46:9-8.1 et seq.), and the priority of the lien of this Mortgage
with respect to any and all modifications (as so defined) shall
relate back to and remain as it was at time of the recording of
this Mortgage (as if such modification were originally included
in this Mortgage or as if the modification occurred at the time
of the recording of this Mortgage), as provided in such statute.
5.11 ATTORNEYS' FEES. Without limiting any other provision
contained herein, Mortgagor agrees to pay all reasonable costs of
Mortgagee incurred in connection with the enforcement of this
Leasehold Mortgage or the taking of this Leasehold Mortgage as
security for the performance of SBI's obligations under the
Promissory Note,
45
including without limitation all reasonable attorneys' fees
whether or not suit is commenced, and including, without
limitation, fees incurred in connection with any probate,
appellate, bankruptcy, deficiency or any other litigation
proceedings, all of which sums shall be secured hereby.
5.12 LATE CHARGES. By accepting payment of any sum secured
hereby after its due date, Mortgagee does not waive its right to
collect any late charge thereon or interest thereon at the
applicable interest rate on the Promissory Note, if so provided,
not then paid or its right either to require prompt payment when
due of all other sums so secured or to declare default for
failure to pay any amounts not so paid.
5.13 COST OF ACCOUNTING. Mortgagor shall pay to Mortgagee,
for and on account of the preparation and rendition of any
accounting, which Mortgagor may be entitled to require under any
law or statute now or hereafter providing therefor, the
reasonable costs thereof.
5.14 RIGHT OF ENTRY. Subject to compliance with applicable
Gaming Control Acts, Mortgagee may at any reasonable time or
times, upon no less than 24 hours advance notice (except in the
case of an emergency), make or cause to be made entry upon and
inspections of the Mortgaged Property or any part thereof in
person or by agent.
5.15 CORRECTIONS. Mortgagor shall, upon request of
Mortgagee, promptly correct any defect, error or omission which
may be discovered in the contents of this Leasehold Mortgage or
in the execution or acknowledgement hereof, and shall execute,
acknowledge and deliver such further instruments and do such
further acts as may be necessary or as may be reasonably
requested by Mortgagee to carry out more effectively the purposes
of this Leasehold Mortgage, to subject to the lien and security
interest hereby created any of Mortgagor's properties, rights or
interest covered or intended to be covered hereby, and to perfect
and maintain such lien and security interest. In the event that
there is a new Facility Lease, Mortgagor shall execute a
supplemental Mortgage if requested by Mortgagee.
5.16 STATUTE OF LIMITATIONS. To the fullest extent allowed
by the law, the right to plead, use or assert any statute of
limitations as a plea or defense or bar of any kind, or for any
purpose, to any debt, demand or obligation secured or to be
secured hereby, or to any complaint or other pleading or
proceeding filed, instituted or maintained for the purpose of
enforcing this Leasehold Mortgage or any rights hereunder, is
hereby waived by Mortgagor.
5.17 SUBROGATION. Should the proceeds of the Obligations
which are hereby secured, or any part thereof, or any amount paid
out or advanced by Mortgagee, be used directly or indirectly to
pay off, discharge, or satisfy, in whole or in part, any prior or
superior lien or encumbrance upon the Mortgaged Property, or any
part thereof, then, as additional security hereunder, Mortgagee
shall be subrogated to any and all rights, superior titles,
liens, and equities owned or claimed by any owner or holder of
said outstanding liens, charges, and indebtedness, however
remote, regardless of whether said liens, charges, and
indebtedness are acquired by assignment or have been released of
record by the holder thereof upon payment.
5.18 JOINT AND SEVERAL LIABILITY. All obligations of
Mortgagor hereunder, if more than one, are joint and several.
Recourse for deficiency after sale hereunder may be had against
the property of Mortgagor, without, however, creating a present
or other lien or charge thereon.
5.19 CONTEXT. In this Leasehold Mortgage, whenever the
context so requires, the neuter includes the masculine and
feminine, and the singular includes the plural, and vice versa.
46
5.20 TIME. Time is of the essence of each and every term,
covenant and condition hereof. Unless otherwise specified
herein, any reference to "days" in this Leasehold Mortgage shall
be deemed to mean "calendar days."
5.21 INTERPRETATION. As used in this Leasehold Mortgage
unless the context clearly requires otherwise: The terms "herein"
or "hereunder" and similar terms without reference to a
particular section shall refer to the entire Leasehold Mortgage
and not just to the section in which such terms appear; the term
"lien" shall also mean a security interest, and the term
"security interest" shall also mean a lien.
5.22 EXHIBITS AND SCHEDULES. All Exhibits and Schedules
attached hereto shall be deemed a part hereof and incorporated
herein by reference.
5.23 INTEGRATION. This Leasehold Mortgage, the Exhibits
hereto, the Loan Documents and any other agreement or document
contemplated by the Loan Agreement or Loan Documents constitute
the entire agreement of the parties hereto and thereto with
respect to the subject matter hereof and thereof. There are no
oral agreements.
5.24 RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon
the execution and delivery of this Leasehold Mortgage and
thereafter, from time to time, shall cause this Leasehold
Mortgage, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged
Property and each instrument of further assurance, to be filed,
registered or recorded in such manner and in such places as may
be required by any present or future law in order to publish
notice of and fully to protect the lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged
Property. Mortgagor shall pay all filing, registration or
recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Leasehold Mortgage, any
modification of or supplement to this Leasehold Mortgage or the
Obligations, any security instrument with respect to the
Mortgaged Property and any instrument of further assurance, and
all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the
execution and delivery of this Leasehold Mortgage, any
modification of or supplement to this Leasehold Mortgage or the
Obligations, any security instrument with respect to the
Mortgaged Property or any instrument of further assurance, except
where prohibited by law so to do. Mortgagor shall hold harmless
and indemnify Mortgagee, its successors and assigns, against any
liability incurred by reason of the imposition of any tax on the
making and recording of this Leasehold Mortgage.
5.25 CONSENTS. Whenever any provision of this Leasehold
Mortgage calls for the consent of Mortgagee, such consent shall
be deemed given, unless within twenty days after receiving
Mortgagor's request for such consent, Mortgagee informs Mortgagor
that such consent will not be forthcoming.
5.26 USURY LAWS. This Leasehold Mortgage and the
Promissory Note are subject to the express limitations that at no
time shall Mortgagor be obligated or required to pay interest on
the Promissory Note at a rate which could subject the holder of
the Promissory Note to either civil or criminal liability as a
result of being in excess of the maximum interest rate which
Mortgagee is permitted by applicable law (Federal or State,
whichever is more favorable to Mortgagee) to collect or receive.
If by the terms of this Leasehold Mortgage or the ACSI Promissory
Note, Mortgagor is at any time required or obligated to pay
interest at a rate in excess of such maximum rate, the rate of
interest under the same shall be deemed to be immediately reduced
to such maximum rate and the interest payable shall be computed
at such maximum rate and all prior interest payments in excess
of such maximum rate shall be applied and shall be deeded to
have been payments in reduction of the principal balance of the
Promissory Note.
5.27 GAMING CONTROL ACTS. Mortgagee acknowledges that
every provision of the Leasehold Mortgage and the other Loan
Documents is subject to and may be limited, restricted or
invalidated by Gaming Control Act(s),
47
including the Act, notwithstanding anything to the contrary
contained or not contained in this Leasehold Mortgage or the
other Loan Documents.
ARTICLE SIX
POWER OF ATTORNEY
6.1 GRANT OF POWER. Mortgagor irrevocably appoints
Mortgagee and any successor thereto as its attorney-in-fact, with
full power and authority, including the power of substitution,
exercisable only during the continuance of an Event of Default
following the expiration of any applicable cure or grace period
to act, subject to all applicable Gaming Control Acts, for
Mortgagor in its name, place and stead as hereinafter provided:
6.2 POSSESSION AND COMPLETION. To take possession of the
Land and Atlantic City Showboat, remove all employees,
contractors and agents of Mortgagor therefrom and market, sell,
assign or lease the Mortgaged Property and the Atlantic City
Showboat.
6.3 EMPLOYMENT OF OTHERS. To employ such contractors,
subcontractors, suppliers, architects, inspectors, consultants,
property managers and other agents as Mortgagee, in its
discretion, deems proper for the completion of the restoration of
the Atlantic City Showboat, for the protection or clearance of
title to Mortgaged Property, or for the protection of Mortgagee's
interests with respect thereto.
6.4 SECURITY GUARDS. To employ watchmen to protect the
Land and Atlantic City Showboat from injury.
6.5 COMPROMISE CLAIMS. To pay, settle or compromise all
bills and claims then existing or thereafter arising against
Mortgagor, which Mortgagee, in its discretion, deems proper for
the completion of the Atlantic City Showboat, for the protection
or clearance of title to the Land or Personal Property, or for
the protection of Mortgagee's interests with respect thereto.
6.6 LEGAL PROCEEDINGS. To prosecute and defend all
actions and proceedings in connection with the Land or the
Atlantic City Showboat.
6.7 OTHER ACTS. To execute, acknowledge and deliver all
other instruments and documents in the name of Mortgagor that are
necessary or desirable, to exercise Mortgagor's rights under all
contracts concerning the Land or the Atlantic City Showboat,
including, without limitation, under any Facility Leases or Space
Leases, and to do all other acts with respect to the Land or
Atlantic City Showboat that Mortgagor might do on its own behalf,
as Mortgagee, in its reasonable discretion, deems proper.
48
MORTGAGOR HEREBY ACKNOWLEDGES RECEIPT, WITHOUT CHARGE, OF A
TRUE COPY OF THIS MORTGAGE.
IN WITNESS WHEREOF, Mortgagor has executed this Leasehold
Mortgage, Assignment of Rents and Security Agreement the day and
year first above written.
ATLANTIC CITY SHOWBOAT, INC.
a New Jersey corporation,
as Mortgagor
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President/CEO
Attest:
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Asst. Secretary, Atlantic City Showboat, Inc.
49
STATE OF NEVADA )
) ss.
COUNTY OF XXXXX)
On this 14th day of July, 1995, before me, the undersigned,
personally appeared Xxxxxxx X. Xxxxx, the President/CEO of
Atlantic City Showboat, Inc. who, I am satisfied, is the person
who signed the foregoing instrument, and he did acknowledge under
oath that he signed, sealed with the corporate seal, and
delivered the same in (his/her) capacity as such officer ad that
the foregoing instrument is the voluntary act and deed of such
corporation, made by virtue of the authority of its board of
directors.
/s/ Xxxxxx X. Xxxxxxx
Notary Public
50
EXHIBIT "A"
FORM OF DISBURSEMENT REQUEST AND CERTIFICATE
[DATE]
ATTENTION___________________________
RE: DISBURSEMENT REQUEST OF $_____________
GENTLEMEN:
PURSUANT TO SECTION 1.5 (A)(3)(B) OF THAT CERTAIN DEED OF
TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT DATED AS OF
JULY 14, 1995, MADE BY SHOWBOAT, INC., A NEVADA CORPORATION
("TRUSTOR") IN FAVOR OF NATWEST BANK, N.A., TRUSTOR, REQUESTS
THAT A DISBURSEMENT OF $____________________________ (THE
"DISBURSEMENT") BE MADE TO ACCOUNT NO. ______________________ AT
________________________BANK (THE "SEGREGATED ACCOUNT"), FOR USE
BY TRUSTOR IN CONNECTION WITH THE CAPITALIZED TERMS USED HEREIN
SHALL HAVE THE MEANING AFFORDED THEM UNDER THE DEED OF TRUST. IN
CONNECTION WITH THE REQUESTED DISBURSEMENT, THE PARTIES SIGNING
BELOW HEREBY REPRESENT, WARRANT AND CERTIFY AS FOLLOWS:
1. THE DISBURSEMENT WILL BE APPLIED TO THE FOLLOWING LINE
ITEMS IN THE BUDGET IN THE FOLLOWING AMOUNT:
DESCRIPTION AMOUNT
___________________________ __________________
___________________________ __________________
___________________________ __________________
___________________________ __________________
___________________________ __________________
FOLLOWING DISBURSEMENT OF THE FUNDS REQUESTED PURSUANT TO
THIS DISBURSEMENT REQUEST, THE BALANCE OF THE SEGREGATED ACCOUNT
WILL NOT EXCEED $100,000 HEREUNDER. ALL FUNDS HERETOFORE
DISBURSED FROM THE SEGREGATED ACCOUNT HAVE BEEN USED ONLY TO PAY
EXPENSES DESCRIBED IN PREVIOUS DISBURSEMENT REQUESTS.
2. THE AMOUNT REQUESTED HEREUNDER RELATES ONLY TO AMOUNTS
THAT HAVE BEEN PAID TO MATERIALMEN, ENGINEERS, ARCHITECTS,
CONTRACTORS, AND SUBCONTRACTORS FOR WORK THAT IS PART OF THE
RESTORATION OF THE TRUST ESTATE. THE CONSTRUCTION PERFORMED AS
OF THE DATE HEREOF IS IN ACCORDANCE WITH THE PLANS AND ALL LEGAL
REQUIREMENTS FOR RESTORATION OF THE TRUST ESTATE AND THE
DISBURSEMENT IS APPROPRIATE IN LIGHT OF THE PERCENTAGE OF
CONSTRUCTION COMPLETED AND THE AMOUNT OF STORED MATERIALS.
3. APPROPRIATE EVIDENCE OF LIEN RELEASES OR TITLE
INSURANCE ENDORSEMENTS HAVE BEEN RECEIVED FOR ALL WORK, MATERIALS
AND/OR SERVICES PERFORMED AND/OR DELIVERED IN CONNECTION WITH THE
VARIOUS COMPONENTS OF THE RESTORATION OF THE DEED OF TRUST
PREMISES. THE TITLE ENDORSEMENTS REQUIRED BY SECTION
1.5(A)(3)(B) OF THE DEED OF TRUST ARE ATTACHED HERETO.
4. THE BUDGET IN EFFECT ACCURATELY SETS FORTH THE
ANTICIPATED COSTS OF RESTORING THE TRUST ESTATE, AND THERE ARE
SUFFICIENT FUNDS AVAILABLE FROM INSURANCE PROCEEDS, CONDEMNATION
PROCEEDS AND ADDITIONAL AMOUNTS PAID BY TRUSTOR TO BENEFICIARY IN
ACCORDANCE WITH SECTION 1.5(A)(3)(D) OF THE DEED OF TRUST TO
COMPLETE THE VARIOUS COMPONENTS OF THE RESTORATION OF THE DEED OF
TRUST PREMISES WITHIN THE LINE ITEM ALLOCATIONS ESTABLISHED FOR
THOSE COMPONENTS CONTAINED IN THE BUDGET.
5. THERE IS NO EVENT OF DEFAULT UNDER THE DEED OF TRUST
OR INDENTURE OR ANY EVENT, OMISSION OR FAILURE OF A CONDITION
WHICH WOULD CONSTITUTE AN EVENT OF DEFAULT UNDER THE DEED OF
TRUST OR INDENTURE AFTER NOTICE OR LAPSE OF TIME OR BOTH.
6. NO CIRCUMSTANCES HAVE OCCURRED WHICH WOULD PROVIDE
BENEFICIARY WITH ANY DEFENSES AGAINST ENFORCEMENT OF THE DEED OF
TRUST.
THE FOREGOING REPRESENTATIONS, WARRANTIES AND CERTIFICATIONS
ARE TRUE AND CORRECT AND BENEFICIARY IS ENTITLED TO RELY ON THE
FOREGOING IN AUTHORIZING AND MAKING THE DISBURSEMENT.
SHOWBOAT, INC., A NEVADA CORPORATION
BY:________________________________
NAME:______________________________
TITLE:_____________________________
SHOWBOAT OPERATING COMPANY,
A NEVADA CORPORATION
BY:________________________________
NAME:______________________________
TITLE:_____________________________
SCHEDULE "A"
DESCRIPTION OF THE LAND
PREMISES A
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
(50.00 feet wide), South 62 degrees, 32 minutes, 00 seconds West,
266.00 feet from the westerly line of New Jersey Avenue (50.00
feet wide), said beginning point being in the division line
between Lots 140 and 144.05 in Block 13 as shown on the Atlantic
City Tax Map, and extending from said beginning point; thence
1. South 27 degrees, 38 minutes, 00 seconds East, in and along
said division line, parallel with New Jersey Avenue, 1432.20
feet to the Interior or Inland Line of the Public Park;
thence
2. Southwestwardly in and along same in the arc of a circle
curving to the right having a radius of 1102.57 feet, the
arc length of 8.94 feet to a point of tangent; thence
3. Continuing in and along same, South 59 degrees, 24 minutes,
40 seconds West, 308.53 feet to the easterly line of Lot
128.03; thence
4. North 27 degrees, 28 minutes, 00 seconds West in and along
same, parallel with New Jersey Avenue, 1369.53 feet to a
point in the southerly line of Lot 130; thence
5. North 62 degrees, 32 minutes, 00 seconds East, parallel with
Pacific Avenue, 25.00 feet to a point in the easterly line
of Lot 129.02; thence
6. North 27 degrees, 28 minutes, 00 seconds West, in and along
same, parallel with New Jersey Avenue, 80.00 feet to the
southerly line of Pacific Avenue, said point being North 62
degrees, 32 minutes, 00 seconds East, 577.00 feet from the
easterly line of Virginia Avenue (80.00 feet wide); thence
7. North 62 degrees, 32 minutes, 00 seconds East in and along
the southerly line of Pacific Avenue, 292.00 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 Xxxxxx X. Xxxxxx
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 140, Tax Map of the City of Atlantic City,
New Jersey.
1
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 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 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
2
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.
3
PREMISES B
ALL THOSE CERTAIN, lots and parcels of land lying and being in
the City of Atlantic City, County of Atlantic and State of New
Jersey, being more particularly described as follows:
TRACT 1
Beginning at the intersection of the northerly line of Atlantic
Avenue (100 feet wide), with the easterly line of Maryland Avenue
(50 feet wide), and extending from said beginning point; thence
1. North 27 degrees, 28 minutes, 00 seconds west in and along
the easterly line of Maryland Avenue, 550.00 feet to the
southerly line of Arctic Avenue (60 feet wide); thence
2. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 230.50 feet to the westerly line of lot 7 in block
109; thence
3. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 105.00 feet to the north line of lot 68; thence
4. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 25.00 feet to the westerly line of lot 8; thence
5. North 27 degrees, 28 minutes, 00 seconds west in and along
same, 105.00 feet to the southerly line of Arctic Avenue;
thence
6. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 94.50 feet to the westerly line of Delaware Avenue (82
feet wide); thence
7. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 400.00 feet to the northerly line of lot 62; thence
8. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 60.00 feet to the easterly line of lot 61; thence
9. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 25.00 feet to the northerly line of lot 72; thence
10. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 40.00 feet to the westerly line of lot 61; thence
11. North 27 degrees, 28 minutes, 00 seconds west in and along
same, 25.00 feet to the southerly line of lot 80; thence
12. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 7.00 feet to the easterly line of lot 74; thence
13. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 150.00 feet to the northerly line of Atlantic Avenue;
thence
14. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 243.00 feet to the point and place of beginning.
4
BEING KNOWN AS LOTS 97, 98, 71, 96, 38, 39, 74, 61, 35, 34, 33,
53, 54, 31, 30, 29, 28, 27, 68, 49, 48, 82, 81, 8, 6, 5, 10, 95,
94, 84, 83, 65, 66, 11, 69, 87, 88, 89, 63, 64, 90, 91, 86, 85,
15, 16, 17, 92, 93, 19, 20, 26, 75, 76, 77, 78, 79, 80 and the
area of a former public alley in Block 109, Atlantic City Tax
Map, Atlantic City, New Jersey.
TRACT II:
BEGINNING at the intersection of the westerly line of Delaware
Avenue (82 feet wide) with the northerly line of Atlantic Avenue
(100 feet wide), and extending from said beginning point; thence
1. South 62 degrees, 32 minutes, 00 seconds west in and along
the northerly line of Atlantic Avenue, 71.10 feet to the
easterly line of lot 47 in block 109; thence
2. North 27 degrees, 28 minutes, 00 seconds in and along same,
100.00 feet to the southerly line of lot 72; thence
3. North 62 degrees, 32 minutes, 00 seconds east in and along
same and continuing in and along the southerly line of lot
62, 71.10 feet to the westerly line of Delaware Avenue;
4. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 100.00 feet to the point and place of beginning.
BEING known as Lot 42 in Block 109 as shown on the Atlantic City
Tax Map, Atlantic City, New Jersey.
5
RECITAL:
PREMISES A
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.
ASSIGNMENT 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.
AMENDMENT TO SHORT FORM LEASE: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated January 15, 1985 recorded August 16,
1985 in Deed Book 4107 page 141.
SECOND AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated July 5, 1985
recorded November 25, 1985 in Deed Book 4158 page 221.
THIRD AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated October 28, 1985 recorded November
25, 1985 in Deed Book 4158 page 227.
RESTATED THIRD AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated October 28, 1985
recorded February 20, 1987 in Deed Book 4406 page 17.
FOURTH AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated December 16, 1986
recorded February 20, 1987 in Deed Book 4406 page 37.
FIFTH AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated March 2, 1987 recorded March 23,
1987 in Deed Book 4421 page 10.
SIXTH AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated March 13, 1987 recorded March 23,
1987 in Deed Book 4421 page 17.
SEVENTH AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated October 18, 1988
recorded December 19, 1988 in Deed Book 4814 page 231.
EIGHTH AMENDMENT TO LEASE: between Resorts International Inc.
(Delaware Corp.) and Atlantic City Showboat Inc. (New Jersey
Corp.) dated May 18, 1993 recorded May 18, 1993 in Deed Book 550
page 284.
RECITAL: (As To Fee Estate)
BEING the same premises which Resorts International, Inc. of New
Jersey, a New Jersey Corporation by a deed dated October 28, 1986
and recorded on December 24, 1986 in Atlantic County in Deed Book
4366 page 214 granted and conveyed unto Resorts International,
Inc., a Delaware Corporation in fee.
6
SCHEDULE B
EXISTING ENCUMBRANCES
1. Lease 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.
DECLARATION OF COMMENCEMENT DATE OF LEASE: by Resorts
International Inc. a Delaware Corporation and Ocean Showboat
Inc. a New Jersey Corporation dated December 15, 1983
recorded May 1, 1984 in Deed Book 3911 page 63.
ASSIGNMENT AND ASSUMPTION OF LEASE: by Ocean 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: between Resorts International Inc.
a Delaware Corporation and Atlantic City Showboat, Inc. a
New Jersey Corporation dated January 15, 1985 recorded
August 16, 1985 in Deed Book 4107 page 141.
SECOND AMENDMENT TO LEASE: between Resorts International
Inc. a Delaware Corporation and Atlantic City Showboat, Inc.
a New Jersey Corporation dated July 5, 1985 recorded
November 25, 1985 in Deed Book 4158 page 221.
THIRD AMENDMENT TO LEASE: between Resorts International Inc.
a Delaware Corporation and Atlantic City Showboat Inc. a New
Jersey Corporation dated October 28, 1985 recorded November
25, 1985 in Deed Book 4158 page 227.
RESTATED THIRD AMENDMENT TO LEASE: between Resorts
International Inc. a Delaware Corporation and Atlantic City
Showboat, Inc. a New Jersey Corporation dated October 28,
1985 recorded February 20, 1987 in Deed Book 4406 page 17.
FOURTH AMENDMENT TO LEASE: between Resorts International
Inc. a Delaware Corporation and Atlantic City Showboat Inc.
a New Jersey Corporation dated December 16, 1986 recorded
February 20, 1987 in deed Book 4406, page 37.
FIFTH AMENDMENT TO LEASE: between Resorts International Inc.
a Delaware Corporation and Atlantic City Showboat Inc. a New
Jersey Corporation dated March 2, 1987 recorded March 23,
1987 in Deed Book 4421 page 10.
SIXTH AMENDMENT TO LEASE: between Resorts International Inc.
a Delaware Corporation and Atlantic City Showboat, Inc. a
New Jersey Corporation dated March 13, 1987 recorded March
23, 1987 in Deed Book 4421 page 17.
SEVENTH AMENDMENT TO LEASE: between Resorts International
Inc. a Delaware Corporation and Atlantic City Showboat, Inc.
a New Jersey Corporation dated October 18, 1988 recorded
December 19, 1988 in Deed Book 4814 page 231.
EIGHTH AMENDMENT TO LEASE: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat,
Inc. a New Jersey Corporation dated May 18, 1993 recorded
May 18, 1993 in Deed Book 5500, page 284.
2. LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT: made by Atlantic City Showboat, Inc., a New
Jersey Corporation to IBJ Xxxxxxxx Bank & Trust Company, a
New York Banking Corporation (as Trustee) dated May 18, 1993
recorded May 19, 1993 in Mortgage Book 5028 page 1; to
secure $275,000,000.00.
A. ASSIGNMENT OF RENTS AND LEASES by ACSI, Inc. to IBJ
dated May 18, 1993, recorded on May 19, 1993 in
Mortgage Book 5028, page 66.
B. FIRST AMENDMENT TO LEASEHOLD MORTGAGE, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT: dated July 9, 1993
recorded July 28, 1993 in Mortgage Book 5095 page 209.
C. SECOND AMENDMENT to the Leasehold Mortgage,
Assignment of Rents and Security Agreement between
Atlantic City Showboat, Inc. and Showboat, Inc., dated
as of July 6, 1995 and intended to be forthwith
recorded in the Atlantic County Clerk's Office.
3. LEASEHOLD MORTGAGE ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT: made by Atlantic City Showboat, Inc., a New
Jersey Corporation to Showboat, Inc., a Nevada Corporation
dated May 18, 1993 recorded May 19, 1993 in Mortgage Book
5028 page 79; to secure $215,000,000.00.
A. ASSIGNMENT OF RENTS AND LEASES: by Atlantic City
Showboat, Inc., a New Jersey Corporation to Showboat,
Inc., a Nevada Corporation dated May 18, 1993 recorded
May 19, 1993 in Mortgage Book 5028 page 144.
B. ISSUER COLLATERAL ASSIGNMENT: by Showboat, Inc., a
Nevada Corporation to IBJ Xxxxxxxx Bank & Trust
Company, a New York banking corporation dated May 18,
1993 recorded May 19, 1993 in Assignment Book 624 page
195.
C. FIRST AMENDMENT TO THE LEASEHOLD MORTGAGE,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT: dated July
9, 1993 recorded July 28, 1993 in Mortgage Book 5095
page 226.
D. SECOND AMENDMENT to the Leasehold Mortgage,
Assignment of Rents and Security Agreement between
Atlantic City Showboat, Inc. and IBJ Xxxxxxxx Bank &
Trust Company as Trustee, dated as of July 6, 1995 and
intended to be forthwith recorded in the Atlantic
County Clerk's Office.
4. FINANCING STATEMENT: Atlantic City Showboat Inc. (New Jersey
Corp.) Debtor to IBJ Xxxxxxxx Bank & Trust Company, as
trustee Secured Party filed May 19, 1993 #13205.
2
A. Amended July 21, 1993 #13685
5. FINANCING STATEMENT: Atlantic City Showboat Inc. (New Jersey
Corp.) Debtor filed May 19, 1993 #13206.
A. Amended July 21, 1993 #13686
6. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor to
Xxxx Atlantic Tri-Con Leasing filed June 11, 1993 #13362.
7. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor to
Xxxx-Atlantic Tri-Con Leasing filed December 13, 1993
#14556.
8. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx-Atlantic Tri-Con Leasing filed December 13, 1993
#14557.
9. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con Leasing filed December 13, 1993
#14558.
10. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Citi-Lease filed August 2, 1991 #1410565.
11. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed June 16, 1993 #1515591.
12. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed June 17, 1993 #1515700.
13. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed February 15, 1994 #1554169.
14. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed February 15, 1994 #1554172.
15. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed February 15, 1994 #1554175.
16. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con filed February 11, 1991 #1383827.
17. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxxxx Financial Services, Inc. dated December 8, 1994
#1607251.
18. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
IBJ dated May 25, 1993 #1511984.
19. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
IBJ dated May 25, 1993 #1511986.
3
20. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
[?] dated [?] #1430675.
21. FINANCING STATEMENT: Atlantic City Showboat Inc., Debtor, to
Xxxx Atlantic Tri-Con Leasing filed June 25, 1993 #13459.
22. AGREEMENT AS TO ASSUMPTION OF OBLIGATIONS WITH RESPECT TO
PROPERTIES: between Atlantic City Showboat Inc., a New
Jersey Corporation, Xxxxx Xxx Xxxxx Associates Limited
Partnership, a New Jersey Limited Partnership, Xxxxx Xxx
Mahal Realty Corp., a New Jersey Corporation and Resorts
International Inc., a Delaware Corporation dated September
21, 1988 and recorded November 17, 1988 in Deed Book 4795
page 243. (Lot 140)
23. AGREEMENT AS TO ASSUMPTION OF OBLIGATIONS WITH RESPECT TO
PROPERTIES: between Atlantic City Showboat, Inc., a New
Jersey Corporation, Xxxxx Xxx Xxxxx Associates Limited
Partnership, a New Jersey Limited Partnership, Xxxxx Xxx
Mahal Realty Corp., a New Jersey Corporation, and Resorts
International Inc. a Delaware Corporation dated September
21, 1988 recorded March 14, 1989 in Deed Book 4863 page 5.
(Lot 140)
24. Restrictions, covenants, agreements, and easements contained
in Deed Book 2436 page 110; Misc. Book 12 page 242; and
Misc. Book 12 page 377. (Lot 140)
25. Restrictions, covenants, agreements and easements,
contained in Deed Book 3978 page 219, Certification in Deed
Book 4524 page 192 as modified in Deed Book 4646 page 166
and in Deed Book 3846 page 199 as amended by Correction and
Confirmatory Deed in Deed Book 4636 page 218, and Deed Book
4016 page 70. (Lot 140)
NOTE: Certificate of Final Completion Showboat Parcel
dated March 20, 1987 recorded April 2, 1987 in
Deed Book 4426, page 331. Certificate of Final
Completion Service Road and Extension dated March
20, 1987 recorded April 2, 1987 in Deed Book 4426,
page 335.
26. Rights granted to the Atlantic City Electric Company in Deed
Book 1991 page 100. (Lots 140, 144.03, 144.06 and 144.04)
27. Subject to an easement within a portion of the fifty feet
wide service road lying within the insured premises and more
particularly described as Parcel D of Premises A set forth
in Schedule A to Commonwealth Land Title Insurance Company
title insurance commitment #L950152 (third revision) dated
June 30, 1995. (Lot 140)
28. Easement for Service Road (50 feet wide) (Parcel B) and
Easement within Showboat Lands (Parcel D) construction and
in use partially across lands and premises of adjoining
owner on Northwest, (City of Atlantic City). (Lot 140)
29. Terms and conditions contained in Riparian Grants from the
State of New Jersey to Xxxxxxxx Xxxxx recorded March 28,
1882 in Deed Book 88, page 80, and to Xxxxx X.
4
Xxxxxx, recorded August 11, 1899 in Deed Book 233, page 41.
(Lot 140)
30. Rights of the Federal Government to take, without
compensation, any land now or formerly flowed by tidal
waters for the purpose of commerce and navigation and its
authority to regulate and control navigation and in that
connection to establish and change bulkhead and pierhead
lines. (This exception is limited to the area southerly
side of the 1852 high water line on the survey made by
Xxxxxx X. Xxxxxx dated January 8, 1985), last revised March
10, 1987. (Lot 140)
31. Declaration of Easement and Rights of Way Agreement between
Atlantic City Showboat Inc. a New Jersey Corporation and
Housing Authority and Redevelopment Agency of City of
Atlantic City recorded in Deed Book 4814 page 215. (Lot 140)
32. Rights granted to Atlantic City Electric Company and New
Jersey Xxxx Telephone Company in Deed Book 4903 page 245.
(Lot 140)
33. FEE MORTGAGE: made by Resorts International Inc. (Delaware
Corp.) to the Bank of New York dated September 14, 1990
recorded September 27, 1990 in Mortgage Book 4445 page 209;
to secure $105,333,000.00
A. ASSIGNMENT OF LEASES AND RENTS: by Resorts
International Inc. (Delaware Corp.) to the Bank of New
York dated September 14, 1990 recorded September 27,
1990 in Deed Book 5136 page 45.
B. LANDLORD'S WAIVER between Resorts International, Inc.
and Maryland National Leasing Corporation dated
September 18, 1986, recorded December 30, 1986 in Deed
Book 4372, page 282. (Xxx 000)
XXXXX 000
00. RELEASE AND TERMINATION: dated May 28, 1993 recorded June
22, 1993 in Deed Book 5515 page 124.
35. Subject to conditions set forth in Vacation Ordinance No. 82
of 1993 recorded in Vacation Book 17 page 91. (Premises B)
36. Easement and right of way as set forth in Deed Book 1140
page 196. (Affects Lot 8)
37. Rights of the City of Atlantic and the public in, over and
along the westerly 3 feet of the premises as set forth in
Deed Book 177 page 138 and Deed Book 402 page 106. (Affects
Lot 61)
38. Rights granted to the Atlantic City Electric Company as in
Deed Book 3155 page 42. (Affects Lot 11)
39. Rights granted to Atlantic City Electric and New Jersey Xxxx
Telephone Company in Deed Book 5671 page 234.
5
40. Rights granted to Atlantic City Electric Company in Deed
Book 5609 page 248.
6
PREMISES B
Being the same premises which Xxxx Xxxxxx by a deed dated March
15, 1993 recorded March 17, 1993 in Atlantic County in Deed Book
5477 page 1 granted and conveyed unto Atlantic City Showboat Inc.
(N.J. Corp.) in fee.
BEING the same premises which the City of Atlantic City, a
Municipal Corporation of the State of New Jersey by a deed dated
February 28, 1994 recorded March 3, 1994 in Atlantic County in
Deed Book 5616 page 145 granted and conveyed unto Atlantic City
Showboat, Inc., in fee.
BEING the same premises which Xxxx Xxxxxx by a deed dated May 19,
1994 recorded May 27, 1994 in Atlantic County in Deed Book 5646
page 307 granted and conveyed unto Atlantic City Showboat Inc., a
New Jersey Corporation in fee.
ALSO including that portion of an alleyway (off Delaware Avenue)
that became vested in Atlantic City Showboat Inc. (NJ Corp.) by
virtue of Vacation Ordinance No. 82 of 1993 filed on September 9,
1994 in Vacation Book 17 page 91.
7
[Original on Showboat Casino Hotel Atlantic City Letterhead]
July 26, 1995
Mr. Xxxx Xxxxxxxx
Vice President
NatWest Bank N.A.
00 Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000
RE: NatWest to Showboat, Inc., $25,000,000.00
Revolving Credit Facility
Dear Xx. Xxxxxxxx:
In connection with the above-captioned credit facility, Atlantic
City Showboat, Inc. ("ASCI") was required to grant you a mortgage
lien on certain premises (the "Tower Property") in the City of
Atlantic City, County of Atlantic and State of New Jersey known
and designated as Lot 144.03, Block 13 on the Tax Map of the City
of Atlantic City, which premises were acquired from the Housing
Authority and Redevelopment Agency of the City of Atlantic City
(the "Authority"). However, under and pursuant to that certain
deed dated July 7, 1993, and recorded July 14, 1993 in Deed Book
5524, Page 201, ACSI is prohibited from executing and delivering
a mortgage covering the Tower Property until issuance by the
Authority of a Certificate of Completion under and pursuant to
the terms of certain contracts between the Authority and ACSI.
Litigation (captioned ATLANTIC CITY SHOWBOAT, INC. V. HOUSING
AUTHORITY & URBAN REDEVELOPMENT AGENCY OF THE CITY OF ATLANTIC)
is currently pending in the Superior Court of New Jersey,
Atlantic County, pursuant to which ACSI is seeking, INTER ALIA to
overturn an Authority resolution whereby the Authority has
declared ACSI in default of the above-referenced contracts
between the Authority and ACSI. The Authority contends that such
declared default, if sustained, implicates reverter of the Tower
Property as well as other property acquired by ACSI from the
Authority (the "Undeveloped Authority Properties").
Under and pursuant to the Loan and Guaranty Agreement (the "Loan
Agreement") evidencing the above-referenced credit facility, the
Tower Property constitutes part of the Atlantic City Showboat as
defined in the Loan Agreement, as to which property ACSI is
required to execute and deliver a mortgage to you to secure
ACSI's obligation under the Loan Agreement. You have confirmed
that you are willing to close under the Loan Agreement
notwithstanding that ACSI is unable to execute and deliver a
mortgage covering the Tower Property as well as the Undeveloped
Authority Properties, acquired from the Authority. In
consideration thereof, the undersigned parties hereby agree as
follows:
Mr. Xxxx Xxxxxxxx -2- July 26, 1995
1. The mortgage granted under the Loan Agreement as to the
Atlantic City Showboat shall not include the Tower Property
and the Undeveloped Authority Properties.
2. Simultaneous with closing under the Loan Agreement, ACSI
will execute and deliver in escrow to the Lender's counsel a
mortgage spreader agreement (the "Spreader Agreement")
covering the Tower Property. Said instrument will be held in
escrow by Lender's counsel until the litigation is resolved
and a Certificate of Completion is issued by the Housing
Authority. Within five (5) Business Days after issuance of
a Certificate of Completion covering the Tower Property, you
will deliver the Spreader Agreement to the Clerk of Atlantic
County for recording. Notwithstanding the foregoing,
NatWest acknowledges that ACSI, as part of a settlement
relating to the litigation referenced above, may convey a
part of the Tower Property to the Housing Authority (the
"Tower Carve-out Property"). The conveyance by ACSI of the
Tower Carve-out Property shall consist of unimproved land
and shall not adversely affect the use and occupancy of the
remaining Tower Property which shall contain all of the
improvements presently part of the Tower Property (the
"Remaining Tower Property") or other Mortgaged Property. It
is further contemplated that the Remaining Tower Property
may be augmented by a conveyance by the Housing Authority of
real property contiguous to the Remaining Tower Property.
In the event of such conveyance by ACSI, the legal
description appended to the Spreader Agreement shall be
revised and a revised legal description of the Remaining
Tower Property, prepared by a licensed New Jersey surveyor,
shall be substituted therefor. Additionally, ACSI shall
deliver to NatWest a revised survey depicting the Remaining
Tower Property.
3. Upon recording of the Spreader Agreement, ACSI will execute
and deliver such other and further instruments as shall be
necessary or appropriate to grant to the Lender a first
mortgage lien on the Tower Property as required by the Loan
Agreement, in PARI PASSU with the lien of the Indenture
Trustee.
4. From time to time and upon request, we shall keep you
apprised of the status of the litigation and provide you
with copies of pleadings and other significant documents in
connection therewith.
5. Upon issuance of a Certificate of Completion covering any of
the Undeveloped Authority Property, ACSI will execute and
deliver to you a Mortgage Spreader Agreement substantially
in the form of the Spreader Agreement granting to you a
first mortgage lien on such property IN PARI PASSU with the
lien of the Indenture Trustee.
6. In the event we receive an adverse decision in the
litigation, paragraph 7 of the Loan Agreement shall govern.
7. All capitalized terms not otherwise defined herein shall
have the meaning set forth in the Loan Agreement.
Thank you for your cooperation.
Mr. Xxxx Xxxxxxxx -3- July 26, 1995
Very truly yours,
ATLANTIC CITY SHOWBOAT, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxxxxx
Vice President Finance
THE UNDERSIGNED HEREBY
AGREE TO THE TERMS HEREOF:
BORROWER:
SHOWBOAT, INC.
By: /s/ R. Xxxxx Xxxx
Name: R. Xxxxx Xxxx
Title: V/P Finance and Administration
Address: 0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
GUARANTORS:
SHOWBOAT OPERATING COMPANY
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Treasurer
Address: 0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
OCEAN SHOWBOAT, INC.
By: /s/ R. Xxxxx Xxxx
Name:
Title: Vice President Finance and Adm
Address: 000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Mr. Xxxx Xxxxxxxx -4- July 26, 1995
ATLANTIC CITY SHOWBOAT, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx
Name: Xxxxxxxx Xxxxxxxxxx
Title: Vice President Finance
Address: 000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
LENDER:
NATWEST BANK, N.A.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
ADDENDUM #1
(attached to and forming a part of the Letter
dated July 26, 1995, from Atlantic City
Showboat, Inc. to NatWest Bank, N.A.)
8. This will confirm that, notwithstanding that the Lender
is not now receiving a mortgage on the Tower Property
and the Undeveloped Authority Properties, the Lender
is, however, receiving and ACSI is granting to Lender,
under the terms set forth in the Leasehold Mortgage, a
security interest in any Collateral (as defined in the
Leasehold Mortgage) which is located on or used in
connection with the Tower Property and the Undeveloped
Authority Properties, provide said Collateral does not
constitute real estate, and the Leasehold Mortgage
shall be deemed to be amended hereby to said effect.
9. The Letter dated July 26, 1995, together with this
Addendum #1 thereto, shall be attached to and form a
part of the Loan Agreement and the Leasehold Mortgage.
THE UNDERSIGNED HEREBY AGREE TO THE TERMS HEREOF:
BORROWER: GUARANTORS:
SHOWBOAT, INC. SHOWBOAT OPERATING COMPANY
By: /s/ R. Xxxxx Xxxx By: /s/ Xxxxx Xxxxxxxxx
R. Xxxxx Xxxx, Exec. V.P. Xxxxx Xxxxxxxxx, Treasurer
Finance & Adm. 0000 Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx Xxx Xxxxx, XX 00000
Xxx Xxxxx, XX 00000
LENDER: ATLANTIC CITY SHOWBOAT, INC.
NATWEST BANK, N.A.
By: /s/ Xxxxxxxx Xxxxxxxxxx
By: /s/ Xxxx X. Xxxxxxxx Xxxxxxxx Xxxxxxxxxx, V.P.
Xxxx X. Xxxxxxxx Finance
Vice President 801 Boardwalk
0000 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxx, XX 00000
Xxxxxxxx xxxx, XX 00000
OCEAN SHOWBOAT, INC.
By: /s/ R. Xxxxx Xxxx
R. Xxxxx Xxxx, V.P.
Financial Administration
000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Record and return to:
Xxxxx X. Xxxxxxxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Xxxxx
Woodland Falls Corporate Park
000 Xxxx Xxxxx Xxxx
Xxxxxx Xxxx, XX 00000
IN PARI PASSU ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
dated as of July 14, 1995 by ATLANTIC CITY SHOWBOAT, INC., a New
Jersey corporation ("Assignor"), in favor of NATWEST BANK, N.A a
national banking association ("Assignee").
RECITALS
WHEREAS, under that certain Loan and Guaranty Agreement
dated as of July 14, 1995 (as it may be amended from time to
time, the "Loan Agreement"), among Assignee as lender ("Lender"),
Showboat, Inc., a Nevada corporation as borrower ("Borrower" or
"SBI") and Assignor, Ocean Showboat, Inc., a New Jersey
corporation ("0SI"), and Showboat Operating Company, a Nevada
corporation, as guarantors, Borrower will issue to Assignee a
$25,000,000.00 principal amount Revolving Note as may be amended
pursuant to the Loan Agreement (the "Promissory Note").
WHEREAS, Assignor is the lessee under that certain Lease
Agreement (the "Resorts Lease") dated as of October 26, 1983
between Resorts International, Inc. ("Resorts") and OSI, recorded
January 18, 1984 in Deed Book 3878, page 1, as assigned to
Assignor pursuant to that certain Assignment and Assumption of
Lease made December 3, 1984 between OSI and Assignor, recorded
December 24, 1984 in Deed Book 4004, page 310, and as amended by
(i) that certain First Amendment to Lease Agreement dated as of
January 15, 1985 between Resorts and Assignor, 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 Assignor, 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
Assignor, 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 Assignor,
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 Assignor, 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
Assignor, 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 Assignor, 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 Assignor, 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 Assignor,
recorded May 18, 1993 in Deed Book 5500 page 284. The Resorts
Lease covers, among other things, that certain real property
located in Atlantic City, New Jersey, more particularly described
in Schedule "A" attached hereto (the "Land").
WHEREAS, Assignee has agreed to loan $25,000,000.00 of the
proceeds of the Promissory Note to SBI (the "SBI Loan"). Assignor
has agreed to execute certain additional documents to evidence
and secure the SBI Loan, including, without limitation, (1) that
certain Leasehold Mortgage, Assignment of Rents and Security
Agreement (the "Mortgage") made by Assignor in favor of Assignee,
dated as of even date herewith, encumbering, among other things,
all of Assignor's interests in and to the Resorts Lease; and (2)
this Assignment. The Promissory Note, the Mortgage, this
Assignment and all other documents now or hereafter evidencing,
guaranteeing or securing the SBI Loan shall be referred to
collectively herein as the "Loan Documents." All amounts owing
to Assignee under the Promissory Note shall be referred to
collectively herein as the "Debt." Capitalized terms not
otherwise defined herein shall have the meanings set forth for
such terms in the Loan Agreement and Promissory Note.
WHEREAS, Assignor has previously assigned all of its right,
title and interest in the Resorts Lease to SBI which assignment
was recorded on May 19, 1993, in Mortgage Book 5028, page 144.
SBI then collaterally assigned, with Assignor's consent, all of
its rights, title and interest in said assignment to IBJ Xxxxxxxx
Bank & Trust Company ("Trustee") which assignment was recorded on
May 19, 1993 in Assignment of Mortgage Book 624, page 195. Said
collateral assignment was given in order to induce the issuance
of $275,000,000.00 9-1/4% First Mortgage Bonds under a certain
Indenture, which Indenture provides for additional secured
lending on a PARI PASSU basis with the Trustee.
WHEREAS, to induce Assignee to make the SBI Loan and to
secure its guaranty thereof, and subject to (i) the terms of an
intercreditor agreement between Assignee and Trustee of even date
herewith (the "Intercreditor Agreement") and (ii) the provisions
of the New Jersey Casino Control Act, as amended from time to
time and the regulations promulgated thereunder from time to time
(collectively, the "Act"), Assignor wishes to assign, pledge and
encumber, as security for the Debt, all of Assignor's right,
title and interest in and to any and all leases, subleases,
lettings, licenses, concessions, operating agreements, management
agreements, and all other agreements affecting the Land and the
improvements now or in the future located or constructed thereon
(the "Improvements") that Assignor has entered into, taken by
assignment, taken subject to, or assumed, or has otherwise become
bound by, now or in the future, that give any person the right to
conduct
2
its business on, or otherwise use, operate or occupy, all or any
portion of the Land or Improvements and any leases, agreements or
arrangements permitting anyone to enter upon or use any of
the Land to extract or remove natural resources of any kind
(together with all amendments, extensions, and renewals of the
foregoing and all rental, occupancy, service, maintenance or any
other similar agreements pertaining to use or occupation of, or
the rendering of services at the Land, the Improvements or any
part hereof, the "Space Leases").
AGREEMENT
NOW THEREFORE, in consideration of Assignee making the SBI
Loan and to secure its guaranty thereof, Assignor hereby agrees
as follows:
ASSIGNOR hereby assigns, grants and transfers to Assignee
Assignor's entire interest in and to all Space Leases;
TOGETHER WITH the immediate and continuing right to collect
and receive all of the rents, income, issues and profits arising
from the Space Leases or otherwise from the use or occupancy of
the Land and the Improvements, now or hereafter due (herein
called collectively the "Rents"), including (without limitation)
base rents, minimum rents, additional rents, percentage rents;
charges for parking, maintenance, taxes and insurance; deficiency
rents for damages following default; the premium payable by any
lessee upon the exercise of a cancellation privilege originally
provided in any Space Leases; all proceeds payable under any
policy of insurance covering loss of rent resulting from any
destruction or damage to the Land and the Improvements; and all
other rights and claims of any kind which Assignor may have
against any lessee or any other occupant of the Land and the
Improvements in respect of the Land and the Improvements.
SUBJECT, however, to the terms of the Intercreditor
Agreement and the provisions of the Act.
THIS ASSIGNMENT is an absolute, unconditional and present
assignment by Assignor to Assignee of the Leases and Rents, and
not merely the passing of a security interest. Upon the execution
and delivery of this Assignment, title to the Rents shall vest in
Assignee, and no further act shall be required to effectuate such
conveyance.
THIS ASSIGNMENT is made on the following terms, covenants
and conditions:
3
l. REPRESENTATIONS AND WARRANTIES. Assignor represents
and warrants, as to the Leases now existing, that except for the
assignments to SBI, as subsequently collaterally assigned to
Trustee, and the Lender, (a) Assignor is the sole owner of the
entire lessor's interest in the Space Leases; (b) the Space
Leases are valid and enforceable and have not been altered or
amended in any manner whatsoever, except for such amendments as
have been delivered to Assignee; (c) except as provided herein,
none of the Rents has been assigned or otherwise pledged or
hypothecated; (d) none of the Rents has been collected for more
than one (1) month in advance; (e) the premises demised under the
Space Leases have been completed and the tenants under the Space
Leases have accepted the same and have taken possession of the
same on a rent-paying basis; (f) there exists no offset or
defense to the payment of any portion of the Rents; and (g)
Assignor has the power to execute and deliver, and hereby does
voluntarily execute and deliver, this Assignment.
2. CERTAIN COVENANTS. Assignor shall perform and observe
all the covenants contained in the Mortgage relating to the Space
Leases and the Rents.
3. LICENSE TO COLLECT. This Assignment constitutes a
present, absolute assignment of the Space Leases and the Rents.
Nevertheless, subject to the terms of this Section 3, Assignee
grants to Assignor a revocable license to collect (but not prior
to accrual) the Rents. After an Event of Default, Assignor shall
hold the Rents in trust for Assignee for the payment of such
sums. Upon or at any time after an Event of Default (as such term
is defined in the Mortgage) and the expiration of any applicable
cure or grace period, the license granted to Assignor herein
shall be, at the election of Assignee, automatically revoked.
4. REMEDIES OF ASSIGNEE. Subject to compliance with
applicable Gaming Control Acts and the Intercreditor Agreement,
upon or at any time after an Event of Default and the expiration
of any applicable cure or grace period, Assignee may, at its
option, without waiving such Event of Default, without notice and
without regard to the adequacy of the security for the Debt,
either in person or by agent, with or without bringing any action
or proceeding, or by a receiver appointed by a court, take any or
all of the following actions:
(a) revoke the license granted in the immediately
preceding Section of this Assignment;
(b) take possession of the Land and the Improvements
and have, hold, manage, lease and operate the Land and the
Improvements on such terms and for such period of time as
Assignee may deem proper, with full power to make from time
to time all alterations, renovations, repairs or
replacements thereto or thereof as may seem proper to
Assignee;
4
(c) either with or without taking possession of the
Land and the Improvements, in its own name, demand, xxx for
and otherwise collect and receive all Rents, including
those past due and unpaid, and may apply the Rents to the
payment of the following in such order and proportion as
Assignee in its sole discretion may determine, any law,
custom or use to the contrary notwithstanding: (i) all
expenses of managing and securing the Land and the
Improvements, including (without limitation) the salaries,
fees and wages of a managing agent and such other employees
or agents as Assignee may deem necessary or desirable, and
all reasonable expenses of operating and maintaining the
Land and the Improvements, including (without limitation)
all taxes, charges, claims, assessments, water charges,
sewer rents ,and premiums for all insurance which Assignee
may deem necessary or desirable, and the cost of all
alterations, renovations, repairs or replacements, and all
reasonable expenses incident to taking and retaining
possession of the Land and the Improvements; and (ii) the
Debt, including (without limitation) all costs and
reasonable attorneys' fees.
In addition to the rights which Assignee may have herein
and subject to the Intercreditor Agreement upon the occurrence of
an Event of Default and the expiration of any applicable cure or
grace period, Assignee, at its option, either may require
Assignor to pay monthly in advance to Assignee, or any receiver
appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of such part of the Land and the
Improvements as may be in possession of Assignor, or may require
Assignor to vacate and surrender possession of the Land and the
Improvements to Assignee or to such receiver and, in default
thereof, Assignor may be evicted by summary proceedings or
otherwise.
For purposes of this Section 4, Assignor grants to Assignee
its irrevocable power of attorney, coupled with an interest, to
take any and all of the aforementioned actions and any or all
other actions designated by Assignee for the proper management
and preservation of the Land and the Improvements. The exercise
by Assignee of the remedies granted it in this Section 4 and the
collection of the Rents and the application thereof as herein
provided shall not be considered a waiver of any Event of
Default.
5. NO LIABILITY OF ASSIGNEE. Assignee shall not be liable
for any loss sustained by Assignor resulting from Assignee's
failure to let the Land and the Improvements after an Event of
Default and the expiration of any applicable cure or grace period
or from any other act or omission of Assignee in managing the
Land and the Improvements after an Event of Default and the
expiration of any applicable cure or grace period, unless such
loss is caused by the willful misconduct, gross negligence or bad
faith of Assignee. Assignee shall not be obligated to perform or
discharge any obligation, duty or liability under the Space
Leases or under or by reason of this Assignment. Without limiting
5
the generality of the immediately preceding sentence, Assignee
shall not be bound by or liable under any covenant of quiet
enjoyment contained in any Space Lease in the event that the
lessee thereunder is joined as a party defendant in any action to
foreclose the Mortgage and is barred and foreclosed thereby
of its interest in the Land and the Improvements. Except for the
gross negligence, willful misconduct or bad faith of Assignee,
Assignor shall indemnify Assignee and hold Assignee harmless from
and against any and all liability, loss or damage which may or
might be incurred under the Space Leases or under or by reason of
this Assignment and from any and all claims and demands
whatsoever, including the defense of any such claims or demands
which may be asserted against Assignee by reason of any alleged
obligations and undertakings on its part to perform or discharge
any of the terms, covenants or agreements contained in the
Leases. Should Assignee incur any such liability, loss or damage,
the amount thereof, including reasonable costs, expenses and
reasonable attorneys' fees, together with interest thereon at the
interest rate on the SBI Promissory Note, shall be secured hereby
and by the Mortgage,and Assignor shall pay Assignee therefor
immediately upon demand and upon the failure of Assignor so to do
Assignee may, at its option, declare the Note and all other sums
secured by the Mortgage immediately due and payable. Except for
the gross negligence, willful misconduct or bad faith of
Assignee, this Assignment shall not operate to place any
obligation or liability for the control, care, management or
repair of the Land and the Improvements upon Assignee, nor for
the carrying out of any of the terms and conditions of the
leases; nor shall it operate to make Assignee responsible or
liable for any waste committed on the Land and the Improvements
by the tenants or any other parties, or for any dangerous or
defective condition of the Land and the Improvements, including
without limitation the presence of any Hazardous Materials (as
defined in the Mortgage), or for any negligence in the
management, upkeep, repair or control of the Land and the
Improvements resulting in loss or injury or death to any tenant,
licensee, employee or stranger.
6. NOTICE TO LESSEES. Upon an uncured event of default,
Assignor hereby irrevocably authorizes and directs the lessees
and other occupants under the Space Leases, upon receipt from
Assignee of an express written notice, to pay over to Assignee
all Rents and to continue so to do until otherwise notified by
Assignee. Assignor agrees that lessees shall have the right to
rely upon any such notice from Assignee, and that lessees shall
pay the Rents to Assignee without any obligation and without any
right to inquire as to whether an Event of Default has occurred,
notwithstanding any claim of Assignor to the contrary. Assignor
shall have no claim against lessees for any Rents paid by them to
Assignee.
7. FUTURE SPACE LEASES. This Assignment is and shall be
automatically effective as to each and every Space Lease entered
into after the date hereof, without any necessity of any further
or supplemental assignment.
6
8. RELEASE OF SECURITY. Assignee may take or release
security for the payment of the Promissory Note, may release any
party primarily or secondarily liable therefor and may apply any
security held by it to the reduction or satisfaction of the Debt
without prejudice to any of its rights under this Assignment.
9. OTHER REMEDIES. Nothing contained in this Assignment
and no act done or omitted by Assignee pursuant to the powers and
rights granted to Assignee hereunder shall be deemed to be a
waiver by Assignee of its rights and remedies under any of the
Loan Documents, and this Assignment is made and accepted without
prejudice to any of the rights and remedies possessed by Assignee
under the terms thereof. The right of Assignee to collect the
debt and to enforce any other security therefor held by it may be
exercised by Assignee either prior to, simultaneously with, or
subsequent to any action taken by it hereunder.
10. NO MORTGAGEE IN POSSESSION. Nothing herein contained
shall be construed as constituting Assignee a "mortgagee in
possession" in the absence of the taking of actual possession of
the Land and the Improvements by Assignee. In the exercise of
the powers herein granted to Assignee, no liability shall be
asserted or enforced against Assignee, all such liability being
expressly waived and released by Assignor.
11. CONFLICT OF TERMS. In case of any conflict between the
terms of this Assignment and the terms of the Mortgage, the terms
of the Mortgage shall prevail.
12. NO ORAL CHANGES. This Assignment 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 Assignor or Assignee, but only by an agreement
in writing signed by the party against whom the enforcement of
any modification, amendment, waiver, extension, change,
discharge or termination is sought.
13. NO IMPAIRMENT
(a) The failure of Assignee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver
of any term of this Assignment.
(b) Assignor shall not be relieved of Assignor's
obligations hereunder or in respect of the Debt by reason of any
or all of the following:
(i) the failure of Assignee to comply with any
request of Assignor or any guarantor to take any action to
realize upon this Assignment or otherwise enforce any of
the provisions hereof or of the Debt; or
7
(ii) the release, regardless of consideration,
of the whole or any part of the Land and the Improvements
or any other security for the SBI Promissory Note, or of
any person liable for the First Mortgage Bonds or any
portion thereof; or
(iii) any agreement or stipulation by Assignee
with Assignor or (without any necessity of notice to or
consent by Assignor) with any subsequent owner of the Land
and the Improvements, extending the time of payment or
otherwise modifying or supplementing the terms of the Debt,
this Assignment or of any instrument or agreement executed
in connection herewith;
any and all of which may be done by Assignee without any
necessity of notice to or consent by the holder of any
subordinate lien or encumbrance or any other person, and without
in any manner impairing this Assignment of its priority.
(c) Assignee may resort for the payment of the Debt
to any other security held by Assignee in such order and manner
as Assignee, in its discretion, may elect.
(d) Assignee may take action to recover the Debt, or
any portion thereof, without prejudice to the right of Assignee
thereafter to enforce this Assignment.
(e) No omission on the part of Assignee to name any
tenant as a defendant in any foreclosure proceeding shall impair
in any way whatsoever the entitlement of Assignee to a deficiency
judgment or diminish the amount of the deficiency.
(f) Acceptance of any payment after the occurrence
of any default or Event of Default shall not be deemed a waiver
or cure of such default or Event of Default and shall not impair
any acceleration of the maturity of the Debt or any other right
or remedy to enforce the Debt or this Assignment. Acceptance of
any payment less than any amount then due shall be deemed an
acceptance on account only.
(g) The rights of Assignee under this Assignment and
under the Loan Documents shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the
others. No act of Assignee shall be construed as an election to
proceed under any one provision hereof or thereof to the
exclusion of any other provision. Assignee shall not be limited
exclusively to the rights and remedies herein or therein stated
but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
8
14. INAPPLICABLE PROVISIONS. If any term, covenant or
condition of this Assignment is held to be invalid, illegal or
unenforceable in any respect, this Assignment shall be construed
without such provision.
15. GOVERNING LAW. This Assignment shall be construed and
enforced in accordance with the laws of the state of New Jersey.
16. TERMINATION OF ASSIGNMENT. This Assignment shall
continue to be effective until payment in full of the Debt and
the delivery and recording of a satisfaction or discharge of the
Mortgage duly executed by Assignee, whereupon this Assignment
shall be terminated. The affidavit, certificate, letter or
statement of any officer of Assignee showing any part of the Debt
to remain unpaid shall, absent manifest error, constitute
conclusive evidence of the continuing effectiveness of this
Assignment, and any person is hereby authorized to rely thereon.
THIS ASSIGNMENT, including the covenants, warranties,
powers and other provisions herein contained, shall inure to the
benefit of Assignee and any subsequent holder of the Mortgage,
and shall be binding upon Assignor, its heirs, successors and
assigns, including any subsequent lessee under the Resorts Lease.
IN WITNESS WHEREOF, Assignor has executed this instrument
the day and year first above written.
Attest witness: ATLANTIC CITY SHOWBOAT, INC.,
a New Jersey corporation
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Assistant Secretary Title: President/CEO
9
STATE OF NEW JERSEY )
) ss:
COUNTY OF ATLANTIC )
On this 2nd day of August, 1995, before me, the
undersigned, personally appeared Xxxxxxx X. Xxxxx, the President/
CEO of Atlantic City Showboat, Inc., who, I am satisfied, is the
person who signed the foregoing instrument, and he did
acknowledge under oath that he signed, sealed with the corporate
seal, and delivered the same in (his/her) capacity as such
officer and that the foregoing instrument is the voluntary act
and deed of such corporation, made by virtue of the authority of
its board of directors.
/s/ Xxxxxx X. Xxxxxxx
Notary Public
10
SCHEDULE "A"
DESCRIPTION OF THE LAND
PREMISES A
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
(50.00 feet wide), South 62 degrees, 32 minutes, 00 seconds West,
266.00 feet from the westerly line of New Jersey Avenue (50.00
feet wide), said beginning point being in the division line
between Lots 140 and 144.05 in Block 13 as shown on the Atlantic
City Tax Map, and extending from said beginning point; thence
1. South 27 degrees, 38 minutes, 00 seconds East, in and along
said division line, parallel with New Jersey Avenue, 1432.20
feet to the Interior or Inland Line of the Public Park;
thence
2. Southwestwardly in and along same in the arc of a circle
curving to the right having a radius of 1102.57 feet, the
arc length of 8.94 feet to a point of tangent; thence
3. Continuing in and along same, South 59 degrees, 24 minutes,
40 seconds West, 308.53 feet to the easterly line of Lot
128.03; thence
4. North 27 degrees, 28 minutes, 00 seconds West in and along
same, parallel with New Jersey Avenue, 1369.53 feet to a
point in the southerly line of Lot 130; thence
5. North 62 degrees, 32 minutes, 00 seconds East, parallel with
Pacific Avenue, 25.00 feet to a point in the easterly line
of Lot 129.02; thence
6. North 27 degrees, 28 minutes, 00 seconds West, in and along
same, parallel with New Jersey Avenue, 80.00 feet to the
southerly line of Pacific Avenue, said point being North 62
degrees, 32 minutes, 00 seconds East, 577.00 feet from the
easterly line of Virginia Avenue (80.00 feet wide); thence
7. North 62 degrees, 32 minutes, 00 seconds East in and along
the southerly line of Pacific Avenue, 292.00 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 Xxxxxx X. Xxxxxx
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 140, Tax Map of the City of Atlantic City,
New Jersey.
1
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 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 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
2
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.
3
PREMISES B
ALL THOSE CERTAIN, lots and parcels of land lying and being in
the City of Atlantic City, County of Atlantic and State of New
Jersey, being more particularly described as follows:
TRACT 1
Beginning at the intersection of the northerly line of Atlantic
Avenue (100 feet wide), with the easterly line of Maryland Avenue
(50 feet wide), and extending from said beginning point; thence
1. North 27 degrees, 28 minutes, 00 seconds west in and along
the easterly line of Maryland Avenue, 550.00 feet to the
southerly line of Arctic Avenue (60 feet wide); thence
2. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 230.50 feet to the westerly line of lot 7 in block
109; thence
3. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 105.00 feet to the north line of lot 68; thence
4. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 25.00 feet to the westerly line of lot 8; thence
5. North 27 degrees, 28 minutes, 00 seconds west in and along
same, 105.00 feet to the southerly line of Arctic Avenue;
thence
6. North 62 degrees, 32 minutes, 00 seconds east in and along
same, 94.50 feet to the westerly line of Delaware Avenue (82
feet wide); thence
7. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 400.00 feet to the northerly line of lot 62; thence
8. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 60.00 feet to the easterly line of lot 61; thence
9. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 25.00 feet to the northerly line of lot 72; thence
10. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 40.00 feet to the westerly line of lot 61; thence
11. North 27 degrees, 28 minutes, 00 seconds west in and along
same, 25.00 feet to the southerly line of lot 80; thence
12. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 7.00 feet to the easterly line of lot 74; thence
13. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 150.00 feet to the northerly line of Atlantic Avenue;
thence
14. South 62 degrees, 32 minutes, 00 seconds west in and along
same, 243.00 feet to the point and place of beginning.
4
BEING KNOWN AS LOTS 97, 98, 71, 96, 38, 39, 74, 61, 35, 34, 33,
53, 54, 31, 30, 29, 28, 27, 68, 49, 48, 82, 81, 8, 6, 5, 10, 95,
94, 84, 83, 65, 66, 11, 69, 87, 88, 89, 63, 64, 90, 91, 86, 85,
15, 16, 17, 92, 93, 19, 20, 26, 75, 76, 77, 78, 79, 80 and the
area of a former public alley in Block 109, Atlantic City Tax
Map, Atlantic City, New Jersey.
TRACT II:
BEGINNING at the intersection of the westerly line of Delaware
Avenue (82 feet wide) with the northerly line of Atlantic Avenue
(100 feet wide), and extending from said beginning point; thence
1. South 62 degrees, 32 minutes, 00 seconds west in and along
the northerly line of Atlantic Avenue, 71.10 feet to the
easterly line of lot 47 in block 109; thence
2. North 27 degrees, 28 minutes, 00 seconds in and along same,
100.00 feet to the southerly line of lot 72; thence
3. North 62 degrees, 32 minutes, 00 seconds east in and along
same and continuing in and along the southerly line of lot
62, 71.10 feet to the westerly line of Delaware Avenue;
4. South 27 degrees, 28 minutes, 00 seconds east in and along
same, 100.00 feet to the point and place of beginning.
BEING known as Lot 42 in Block 109 as shown on the Atlantic City
Tax Map, Atlantic City, New Jersey.
5
RECITAL:
PREMISES A
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.
ASSIGNMENT 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.
AMENDMENT TO SHORT FORM LEASE: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated January 15, 1985 recorded August 16,
1985 in Deed Book 4107 page 141.
SECOND AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated July 5, 1985
recorded November 25, 1985 in Deed Book 4158 page 221.
THIRD AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated October 28, 1985 recorded November
25, 1985 in Deed Book 4158 page 227.
RESTATED THIRD AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated October 28, 1985
recorded February 20, 1987 in Deed Book 4406 page 17.
FOURTH AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated December 16, 1986
recorded February 20, 1987 in Deed Book 4406 page 37.
FIFTH AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated March 2, 1987 recorded March 23,
1987 in Deed Book 4421 page 10.
SIXTH AMENDMENT TO LEASE AGREEMENT: between Resorts International
Inc., a Delaware Corporation and Atlantic City Showboat, Inc., a
New Jersey Corporation dated March 13, 1987 recorded March 23,
1987 in Deed Book 4421 page 17.
SEVENTH AMENDMENT TO LEASE AGREEMENT: between Resorts
International Inc., a Delaware Corporation and Atlantic City
Showboat, Inc., a New Jersey Corporation dated October 18, 1988
recorded December 19, 1988 in Deed Book 4814 page 231.
EIGHTH AMENDMENT TO LEASE: between Resorts International Inc.
(Delaware Corp.) and Atlantic City Showboat Inc. (New Jersey
Corp.) dated May 18, 1993 recorded May 18, 1993 in Deed Book 550
page 284.
RECITAL: (As To Fee Estate)
BEING the same premises which Resorts International, Inc. of New
Jersey, a New Jersey Corporation by a deed dated October 28, 1986
and recorded on December 24, 1986 in Atlantic County in Deed Book
4366 page 214 granted and conveyed unto Resorts International,
Inc., a Delaware Corporation in fee.
6
PREMISES B
Being the same premises which Xxxx Xxxxxx by a deed dated March
15, 1993 recorded March 17, 1993 in Atlantic County in Deed Book
5477 page 1 granted and conveyed unto Atlantic City Showboat Inc.
(N.J. Corp.) in fee.
BEING the same premises which the City of Atlantic City, a
Municipal Corporation of the State of New Jersey by a deed dated
February 28, 1994 recorded March 3, 1994 in Atlantic County in
Deed Book 5616 page 145 granted and conveyed unto Atlantic City
Showboat, Inc., in fee.
BEING the same premises which Xxxx Xxxxxx by a deed dated May 19,
1994 recorded May 27, 1994 in Atlantic County in Deed Book 5646
page 307 granted and conveyed unto Atlantic City Showboat Inc., a
New Jersey Corporation in fee.
ALSO including that portion of an alleyway (off Delaware Avenue)
that became vested in Atlantic City Showboat Inc. (NJ Corp.) by
virtue of Vacation Ordinance No. 82 of 1993 filed on September 9,
1994 in Vacation Book 17 page 91.
7
INTERCREDITOR AGREEMENT FOR PARI PASSU INDEBTEDNESS
RELATING TO ATLANTIC CITY SHOWBOAT
INTERCREDITOR AGREEMENT, dated July 14, 1995, among
Showboat, Inc., a Nevada corporation (the "Company"), Atlantic
City Showboat, Inc., a New Jersey corporation, ("ACSI"), IBJ
Xxxxxxxx Bank & Trust Company (the "Trustee") and NatWest Bank,
N.A., (the "Lender"). The term "Collateral" as used herein means
the following: all of the properties and assets in which the
Trustee has a lien or security interest pursuant to the Indenture
(as defined below) or any other Related Document, in which the
Company has a lien or security interest pursuant to the ACSI
Intercompany Note (as hereinafter defined), and which properties
and assets are to be subject to a lien or security interest in
favor of the Lender of the priority specified in this
Intercreditor Agreement.
WHEREAS, the Company has issued its 9-1/4% First Mortgage
Bonds due May 1, 2008 (the "First Mortgage Bonds") under that
certain indenture, (the "Indenture"), dated as of May 18, 1993,
among the Company, Ocean Showboat, Inc., ACSI, and Showboat
Operating Company, as guarantors, and the Trustee, as amended or
supplemented from time to time;
WHEREAS, the First Mortgage Bonds are secured by, INTER
ALIA a Deed of Trust, Assignment of Rents and Security Agreement
(the "Deed of Trust") in favor of Trustee on certain real
property situated in the City of Las Vegas, County of Xxxxx,
State of Nevada and assets of the Company and are guaranteed by
ACSI (the "Guaranty") and such guaranty is secured by a Leasehold
Mortgage, Assignment of Rents and Security Agreement (the
"Leasehold Mortgage") on the Showboat Hotel Casino in Atlantic
City, New Jersey (the "Atlantic City Showboat");
WHEREAS, ACSI has issued an intercompany note ("the ACSI
Intercompany Note") in favor of the Company in the principal
amount of $215,000,000 representing a loan made to ACSI by the
Company with the proceeds from the sale of the First Mortgage
Bonds;
WHEREAS, the ACSI Intercompany Note is secured by a
Leasehold Mortgage, Assignment of Rents and Security Agreement
(the "Intercompany Leasehold Mortgage," and together with the
Leasehold Mortgage, collectively the "Leasehold Mortgages") on
the Atlantic City Showboat;
WHEREAS, the Company has collaterally assigned all of its
interest in the ACSI Intercompany Note and the Intercompany
Leasehold Mortgage to the Trustee as security
for the Company's obligations under the First Mortgage Bonds;
WHEREAS, the Company and ACSI propose to provide the Lender
with a lien or security interest in the Collateral as security
for Indebtedness of the Company and ACSI as guarantor thereof;
WHEREAS, it has been agreed by the Trustee, that the
Company and its Subsidiaries, subject to the terms and provisions
of the Indenture, be permitted to obtain additional financing
from other lenders to finance the costs of various improvements
and for other purposes;
WHEREAS, the Indenture permits the Company and its
Subsidiaries, subject to certain limitations, to create or cause
to be created additional liens and security interests in the
Collateral in favor of Persons other than the Trustee and the
Company which will have equal priority with the lien of the
Leasehold Mortgages or any other applicable Related Document
pursuant to an Intercreditor Agreement and requires the Trustee
and the Company, upon fulfillment of certain conditions
precedent, to execute and deliver an Intercreditor Agreement in
substantially the form hereof to the holder of the Indebtedness
to be secured by such additional liens and security interests (or
such holder's agent, trustee or other authorized representative);
WHEREAS, the Company and/or ACSI have entered into a
Revolving Note, Loan and Guaranty Agreement, In PARI PASSU
Leasehold Mortgage, Assignment of Rents and Security Agreement,
In PARI PASSU Deed of Trust, Assignment of Rents and Security
Agreement, In PARI PASSU Assignment of Leases and Rents and
certain other documents and agreements all of even date herewith,
providing for the grant to the Lender of liens, mortgages and
security interests in certain of the property and assets
constituting the Collateral (" Lender's Documents") (the property
and assets constituting the Collateral in which each of the
Trustee, the Company and the Lender have obtained liens,
mortgages or security interests being referred to herein as the
"PARI PASSU Collateral");
WHEREAS, the aggregate outstanding principal amount of the
First Mortgage Bonds at the date hereof is $275,000,000.00;
WHEREAS, the aggregate outstanding principal amount of the
ACSI Intercompany Note at the date hereof is $215,000,000.00;
2
WHEREAS, the maximum aggregate principal amount of
Indebtedness to be provided by Lender is $25,000,000.00;
WHEREAS, the parties hereto desire to set forth their
agreement as to the nature of priority of the liens, mortgages
and security interests held by the Trustee, the Company and the
Lender in the PARI PASSU Collateral and certain other matters
related thereto.
NOW, THEREFORE, in consideration of the mutual premises and
agreements herein contained it is hereby agreed as follows:
1. DEFINITIONS.- As used in this Agreement, the following
terms have the meanings hereinafter set forth:
"Bankruptcy Code" means the United States Bankruptcy
Code, 11 U.S.C. Sec. 101 et seq.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
and any other state or federal insolvency, reorganization,
moratorium or similar law for the relief of debtors.
"Bankruptcy Proceeding" means any proceeding commenced
under any Bankruptcy Law.
"PARI PASSU PARTIES" means, collectively, the Trustee
and the Lender.
All capitalized terms used herein which are not
otherwise defined herein shall have the meaning ascribed to such
terms in the Indenture.
2. LIEN ACKNOWLEDGMENT. (a) The Trustee hereby agrees
that each lien, mortgage, and security interest of the Trustee in
the property and assets constituting the PARI PASSU
Collateral pursuant to the Indenture and Related Documents to the
extent of the obligations secured by such lien, mortgage or
security interest (provided that the aggregate principal
amount of Indebtedness secured by such lien, mortgage or
security interest shall not exceed $275,000,000.00), shall be
equal in priority with (i) each lien, mortgage or security
interest of the Company in the property and assets constituting
the PARI PASSU Collateral pursuant to the Intercompany Leasehold
Mortgage, to the extent of the obligations secured by such
lien, mortgage or security interest (provided that the
aggregate principal amount of Indebtedness secured by such lien,
mortgage or security interest shall not exceed $215,000,000.00)
(which represents the principal amount of Indebtedness under the
ACSI Intercompany Note on the date of this Intercreditor
Agreement) and (ii) each lien, mortgage, or security interest
of the Lender in the property and assets constituting the PARI
PASSU Collateral pursuant to the Lender's Documents, to the
extent of the obligations secured by such liens, mortgages or
security interests (provided that the aggregate principal
3
amount of the indebtedness secured by such liens, mortgages or
security interests shall not exceed the lesser of
$25,000,000.00 or the principal amount extended by Lender under
the Lender's Documents and not repaid by the Company and/or ACSI
(which represents the principal amount of Indebtedness to
be provided by Lender's Documents).
(b) The Company hereby agrees that each lien, mortgage
or security interest of the Company in the property and assets
constituting the PARI PASSU Collateral pursuant to the
Intercompany Leasehold Mortgage, to the extent of the obligations
secured by such lien, mortgage or security interest (provided
that the aggregate principal amount of Indebtedness secured by
such lien, mortgage or security interest shall not exceed
$215,000,000.00) (which represents the principal amount of
Indebtedness under the ACSI Intercompany Note on the date of this
Intercreditor Agreement), shall be equal in priority with, (i)
each lien, mortgage or security interest of the Trustee in the
property and assets constituting the PARI PASSU Collateral
pursuant to the Deed of Trust and the Related Documents, to the
extent of the obligations secured by such lien, mortgage or
security interest (provided that the aggregate principal amount
of Indebtedness secured by such lien, mortgage or security
interest shall not exceed $275,000,000.00) (which represents the
principal amount of Indebtedness under the Indenture on the date
of this Intercreditor Agreement) and (ii) each lien, mortgage, or
security interest of the Lender in the property and assets
constituting the PARI PASSU Collateral pursuant to the Lender's
Documents, to the extent of the obligations secured by such
liens, mortgages or security interests (provided that the
aggregate principal amount of the indebtedness secured by such
liens, mortgages or security interests shall not exceed the
lesser of $25,000,000.00 or the principal amount extended by
Lender under the Lender's Documents and not repaid by the Company
and/or ACSI) (which represents the principal amount of
Indebtedness to be provided by Lender's Documents).
(c) The Lender hereby agrees that each lien, mortgage
or security interest of the Lender in the property and assets
constituting the PARI PASSU Collateral pursuant to the Lender's
Documents, to the extent of the obligations secured by such lien,
mortgage or security interest (provided that the aggregate
principal amount of the Indebtedness secured by such lien,
mortgage or security interest shall not exceed the lesser of
$25,000,000.00 or the principal amount extended by Lender under
the Lender's Documents and not repaid by the Company and/or ACSI
(which represents the principal amount of Indebtedness to be
provided by Lender's Documents) shall be equal in priority with
(i) each lien, mortgage or security interest of the Trustee in
the property and assets constituting the PARI PASSU Collateral
pursuant to the Deed of Trust and the Related Documents, to the
extent of the obligations secured by such lien, mortgage or
security interest (provided that the aggregate principal amount
of Indebtedness secured by such lien, mortgage or security
interest shall not exceed $275,000,000.00) (which represents the
principal amount of Indebtedness under the Indenture on the date
of this Intercreditor Agreement) and (ii) each lien, mortgage, or
security interest of the Company in the property and assets
constituting the PARI PASSU Collateral pursuant to the
Intercompany Leasehold Mortgage, to the extent of the obligations
secured by such lien, mortgage, or security interest (provided
that the aggregate
4
principal amount of Indebtedness secured by such lien, mortgage
or security interest shall not exceed $215,000,000.00) (which
represents the principal amount of Indebtedness under the ACSI
Intercompany Note on the date of this Intercreditor Agreement).
3. LIEN PRIORITY. The priorities of the liens, mortgages
or security interests established, altered or specified herein
are applicable irrespective of:
(i) the time or order of attachment or
perfection thereof;
(ii) the method of perfection;
(iii) the time or order of filing or
recording of financing statements, mortgages or
other instruments; or
(iv) any amendments to the liens, mortgages
or security interests established, altered or specified
herein, provided that such amendments do not alter the
aggregate principal amount of the Indebtedness secured
by such lien, mortgage or security interest; and
(v) the time or order of foreclosure,
taking of possession or the exercise of any remedy;
PROVIDED, HOWEVER that the priorities of any liens, mortgages or
security interests which are not established, altered or
specified herein shall be unaffected and shall exist and continue
in accordance with applicable law. The agreements in paragraph 2
hereof are solely for the purpose of establishing the relative
priorities of the interests of the PARI PASSU Parties in the PARI
PASSU Collateral and shall not inure to the benefit of any other
Person.
4. CONTROLLING PARTY. The PARI PASSU Party or Parties
holding a majority in principal amount of Indebtedness of the
Company and ACSI secured by the PARI PASSU Collateral (the
"Controlling Party") shall have the sole right, without the
affirmative consent of any of the other PARI PASSU Parties (the
"Minority Party"), and on behalf of itself and each PARI PASSU
Party, to (i) request to take any action, or fail to request to
take any action, to enforce or exercise any right or remedy with
respect to the PARI PASSU Collateral and to foreclose upon,
collect, dispose of the PARI PASSU Collateral or any portion
thereof; and (ii) exercise any right or remedy, or decline to
exercise any right or remedy, with respect to the PARI PASSU
Collateral in any Bankruptcy Proceeding, including, without
limitation, any right of election under Sections 1111(b) or
365(h) of the Bankruptcy Code, any other rights of election,
determinations, proofs of claims or other rights or remedies in
connection with any Bankruptcy Proceeding; PROVIDED that each
Minority Party shall have the right to file its own proof(s) of
claim in any Bankruptcy Proceeding; and PROVIDED FURTHER that the
Company agrees that irrespective of the amount of Indebtedness of
ACSI held by the Company, it shall not be a Controlling Party
hereunder and the Company and the Lender agree that the Trustee
shall act as the Controlling Party on behalf of the Company in
the event that the
5
Company would be the Controlling Party hereunder except for the
operation of this clause.
5. MINORITY PARTY AGREEMENTS. In accordance with
paragraph 4 hereof, the Minority Party agrees (regardless of
whether any individual PARI PASSU Party agrees, disagrees or
abstains with respect to any action or failure to act by the
Controlling Party) that the Controlling Party shall have the
authority to act or fail to act, as it deems necessary in its
sole discretion, with respect to the rights and remedies of all
of the PARI PASSU Parties and that the Controlling Party shall
have no liability for acting or failing to act (provided such
action or failure to act does not conflict with the express terms
of this Agreement). Each PARI PASSU Party further acknowledges
and agrees that, until the obligations under the Indenture and
the Guaranty are no longer outstanding, the only right of such
PARI PASSU Party with respect to the PARI PASSU Collateral is to
be secured by the PARI PASSU Collateral as and to the extent
provided in its respective loan document or agreement and as
provided herein and to receive a share of the proceeds of the
PARI PASSU Collateral, if any, to the extent provided under
paragraph 6 hereof; PROVIDED HOWEVER that, until the obligations
under the Indenture and the Guaranty are no longer outstanding,
in no event shall any rights or benefits accorded any PARI
PASSU Party include any right to challenge, contest or dispute
any action taken or not taken, by the Controlling Party, the
Collateral Agent (as hereinafter defined) or any other PARI
PASSU Party in accordance with this Agreement, and, until the
obligations under the Indenture and the Guaranty are no longer
outstanding, in no event shall the security interest granted
to the Lender under this Agreement entitle any PARI PASSU Party
to enforce its respective rights in respect of the PARI PASSU
Collateral except through the Controlling Party and the
Collateral Agent (as hereinafter defined) in accordance with
this Agreement. In addition, the Minority Party agrees that it
(i) shall not attack nor challenge the validity, perfection or
priority of the Controlling Party's lien with respect to the
PARI PASSU Collateral; (ii) will release all liens, mortgages and
security interests in all or any portion of the PARI PASSU
Collateral (to the extent of its respective interest therein) in
the event that the Controlling Party elects to sell all or any
portion of the PARI PASSU Collateral in exercising any right or
remedy with respect to the PARI PASSU Collateral; and (iii)
waives any right of election it may have under Sections 1111(b)
or 365(h) of the Bankruptcy Code, or any other rights of
election, determinations, proofs of claims or other rights or
remedies in connection with any Bankruptcy Proceeding with
respect to the PARI PASSU Collateral.
6. ALLOCATION OF PAYMENTS. The PARI PASSU Parties each
agree that all money or funds collected with respect to the PARI
PASSU Collateral (including, without limitation, any net
condemnation proceeds or other awards, insurance or other loss
recoveries which are required or permitted under each of the
documents and agreements governing the PARI PASSU Collateral, and
any property (real and personal) and any amounts in respect of
any deficiency recoveries) in connection with the enforcement or
exercise of any right or remedy with respect to the PARI PASSU
Collateral following the acceleration of the Indebtedness of ACSI
to any of the PARI PASSU Parties, shall be directed to a
collateral agent appointed by the Controlling Party on behalf of
all of the PARI PASSU Parties (the "Collateral Agent"), which
Collateral Agent shall be instructed by the Controlling Party to
distribute such money,
6
funds or other property in the following order of priority:
FIRST: to the payment to each PARI PASSU Party in respect of all
reasonable expenses in connection with the collection or
realization of such cash or funds or the administration of this
Agreement in connection with the collection or realization of
such cash or funds; SECOND: to each such PARI PASSU Party a
proportion of such remaining money or funds as the total
outstanding obligations secured by a lien, mortgage or security
interest on the PARI PASSU Collateral held by such PARI PASSU
Party bears to the total amount of outstanding obligations
secured by liens, mortgages or security interests on the PARI
PASSU Collateral held by all PARI PASSU Parties until all such
secured obligations of such PARI PASSU Party have been paid in
full (disregarding any reduction of any such secured obligations
arising or occurring because of a foreclosure sale or the
exercise of any other right or remedy with respect to the PARI
PASSU Collateral); provided, however, that in no event shall the
principal amount received by the Trustee with respect to the
Guaranty and the ACSI Intercompany Note exceed $275,000,000;
THIRD: to the Trustor under the Leasehold Mortgages or other
obligor under any other applicable Related Document or to
whosoever may be lawfully entitled to receive the same as a court
of competent jurisdiction may direct.
7. ENFORCING RIGHTS. Each PARI PASSU Party agrees not to
take any action whatsoever to enforce any term or provision of
its respective security document or this Agreement or to enforce
any of its rights in respect of the PARI PASSU Collateral, except
through the Controlling Party in accordance with paragraphs 5 and
6 hereof; PROVIDED HOWEVER that this Agreement shall not prevent
any PARI PASSU Party from enforcing or exercising any right or
remedy with respect to the PARI PASSU Collateral granted to it by
its respective documents and agreements to the extent that such
enforcement or exercise of rights or remedies does not impair the
security interest of the Controlling Party or any other PARI
PASSU Party in the PARI PASSU Collateral; nor shall this
Agreement grant any of the PARI PASSU Parties any right or remedy
under the documents or agreements of the other PARI PASSU
Parties.
8. DISTRIBUTIONS. The Company, ACSI, the Trustee and the
Lender each agree that if any PARI PASSU Party receives any
money, funds or other property that are distributed pursuant to
paragraph 7 above (or any similar provision in any other
Intercreditor Agreement substantially in the form of this
Agreement), such money, funds or other property shall not
discharge any secured obligation held by the Person receiving
such money, funds or other property to the extent such money,
funds or other property were distributed to any other Person. In
the event that any payment in respect of, or distribution of, the
PARI PASSU Collateral, of any kind or character, whether in cash,
property or securities, shall be received by any PARI PASSU Party
before all Indebtedness secured by PARI PASSU Collateral is paid
in full, such payment or distribution shall be held in trust for
the benefit of, and shall be paid over to, the PARI PASSU Parties
in accordance with paragraph 6 above.
7
9. COMMUNICATIONS TO THE COMPANY AND ACSI. Each of the
PARI PASSU Parties agrees to transmit to the Controlling Party a
copy of any communication sent by such PARI PASSU Party to the
Company, ACSI or any other Person (contemporaneously with the
transmittal of any such communication) with respect to any event
of default, any acceleration of Indebtedness, or any notice of
sale of any PARI PASSU Collateral as a result of a default. The
Controlling Party will then transmit a copy of same to the other
PARI PASSU Parties. Any failure by any PARI PASSU Party to
furnish a notice pursuant to this paragraph 9 shall in no way
diminish the rights of such party hereunder.
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey,
without regard to its choice of law provisions, and shall be
binding upon and inure to the benefit of the PARI PASSU Parties,
and their respective successors, designees and assigns.
11. DEFINED TERMS. All terms used herein which are defined
in the New Jersey Uniform Commercial Code shall have the meanings
therein stated, unless the context otherwise requires.
12. NOTICES. All notices or other communications required
or permitted hereunder shall be in writing and shall be given by
personal delivery or United States mail, first class, registered
or certified, postage prepaid, return receipt requested,
addressed to the parties at the addresses indicated on the
signature pages hereof. Each such notice or other communication
shall be deemed given on (a) the date of receipt of personal
delivery thereof, or (b) if not by mail (as aforesaid), the date
which is three (3) business days after such communication is
deposited in the mail (postage prepaid as aforesaid). Any party
may change its address for notice by notice to the other parties
hereto in accordance with the foregoing.
13. FURTHER ASSURANCES. Each of the PARI PASSU Parties
(including the Trustee), upon the request of any PARI PASSU
Party, shall execute and deliver and cause to be recorded with
the appropriate authorities an Intercreditor Agreement
substantially in the form of this Agreement, which Intercreditor
Agreement shall be effective if and only if all PARI PASSU
Parties shall have executed and delivered the same or a
counterpart thereof. Simultaneously with the repayment or other
discharge of Indebtedness secured by any PARI PASSU Collateral,
the PARI PASSU Party whose Indebtedness is so repaid or
discharged shall execute and deliver such instruments as may be
reasonably required by any of the other PARI PASSU Parties to
release or extinguish such PARI PASSU Party's interest in the
PARI PASSU Collateral.
14. LIABILITY. No PARI PASSU Party shall be liable to any
other PARI PASSU Party for any action taken by it, including the
payment of any monies hereunder, in connection with this
Agreement, provided the same was taken in good faith and did not
constitute gross negligence or willful misconduct.
8
15. AMENDMENTS. Each PARI PASSU Party shall have the right
to alter or amend its respective loan agreements and documents
and to release or take additional collateral pursuant thereto.
Nothing in this agreement is intended to alter or amend the
obligations of any PARI PASSU Party with respect to the Company
or any of its Subsidiaries under its respective loan agreements
and documents. Nothing herein is intended to confer upon the
Company or any of its Subsidiaries any right or benefit with
respect to any PARI PASSU Party and the Company and its
Subsidiaries hereby acknowledge that they have no right to
enforce the terms hereunder against any PARI PASSU Party. Their
signatures hereto are merely to acknowledge this agreement, which
is for the sole benefit of the PARI PASSU Parties.
16. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
17. SEVERABILITY. In the event any provision hereof is
determined to be unenforceable or invalid, such provision or such
part thereof which may be unenforceable shall be deemed severed
from this Agreement and the remaining provisions carried out with
the same force and effect as if the severed provision or part
thereof had not been made a part hereof.
IN WITNESS WHEREOF, the Company, ACSI, Lender and the
Trustee, as trustee, have caused this Agreement to be duly
executed as of the date first above written.
COMPANY:
ATTEST: SHOWBOAT, INC., a Nevada corporation
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
/s/ Xxxx X. Xxxxxx By: /s/ R. Xxxxx Xxxx
Assistant Secretary
ACSI:
ATLANTIC CITY SHOWBOAT, INC., a New
Jersey corporation
000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Assistant Secretary
9
LENDER:
NATWEST BANK, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Attorney at Law of Xxxx X. Harrison
New Jersey Vice President
TRUSTEE:
IBJ XXXXXXXX BANK & TRUST COMPANY
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxx By: /s/ Xxx Xxxxxx
Assistant Secretary Xxx Xxxxxx
Vice President
10
INTERCREDITOR AGREEMENT FOR PARI PASSU INDEBTEDNESS
RELATING TO LAS VEGAS SHOWBOAT
INTERCREDITOR AGREEMENT, dated July 14, 1995, among IBJ
Xxxxxxxx Bank & Trust Company as trustee (the "Trustee") under
the Indenture (as hereinafter defined), Showboat, Inc., a Nevada
corporation (the "Company"), and NatWest Bank, N.A. (the
"Lender"). The term "Collateral" as used herein means the
following: all of the property, real and personal, and other
assets of the Company in which the Trustee has a lien or security
interest pursuant to the Indenture or any other Related Document.
WHEREAS, the Company has issued its 9-1/4% First Mortgage
Bonds due May 1, 2008 (the "First Mortgage Bonds") under that
certain indenture, (the "Indenture"), dated as of May 18, 1993,
among the Company, Ocean Showboat, Inc., Atlantic City Showboat,
Inc. ("ACSI"), and Showboat Operating Company, as guarantors, and
the Trustee, as amended or supplemented from time to time;
WHEREAS, the First Mortgage Bonds are secured by, INTER
ALIA, a Deed of Trust, Assignment of Rents and Security Agreement
(the "Deed of Trust") on the Showboat Hotel, Casino and Bowling
Center in Las Vegas, Nevada (the "Las Vegas Showboat") and other
assets of the Company;
WHEREAS, the Company proposes to provide the Lender with a
lien or security interest in the Collateral as security for
Indebtedness of the Company;
WHEREAS, it has been agreed by the Trustee, that the Company
and its Subsidiaries, subject to the terms and provisions of the
Indenture, be permitted to obtain additional financing from other
lenders to finance the costs of various improvements and for
other purposes;
WHEREAS, the Indenture permits the Company, subject to
certain limitations, to create or cause to be created additional
liens and security interests in the Collateral in favor of
Persons other than the Trustee and the Company which will have
equal priority with the lien of the Deed of Trust or any other
applicable Related Document pursuant to an Intercreditor
Agreement and requires the Trustee and the Company, upon
fulfillment of certain conditions precedent, to execute and
deliver an Intercreditor Agreement in substantially the form
hereof to the holder of the Indebtedness to be secured by such
additional liens and security interests (or such holder's agent,
trustee or other authorized representative);
WHEREAS, the Company and/or ACSI have entered into a
Revolving Note, Loan and Guaranty Agreement, In PARI PASSU
Leasehold Mortgage, Assignment of Rents and Security Agreement,
In PARI PASSU Deed of Trust, Assignment of Rents and Security
Agreement, In PARI PASSU Assignment of Leases and Rents and
certain other documents and agreements all of even date herewith,
providing for the grant to the Lender of liens, mortgages and
security interests in certain of the property and assets
constituting the Collateral (" Lender's Documents") (the property
and assets constituting the Collateral in which each of the
Trustee, the Company and the Lender have obtained liens,
mortgages or security interests being referred to herein as the
"PARI PASSU Collateral");
WHEREAS, the aggregate outstanding principal amount of the
First Mortgage Bonds at the date hereof is $275,000,000.00;
WHEREAS, the parties hereto desire to set forth their
agreement as to the nature of priority of the liens, mortgages
and security interests held by the Trustee and the Lender in the
PARI PASSU Collateral and certain other matters related thereto;
NOW, THEREFORE, in consideration of the mutual premises and
agreements herein contained it is hereby agreed as follows:
1. DEFINITIONS. As used in this Agreement, the following
terms have the meanings hereinafter set forth:
"Bankruptcy Code" means the United States Bankruptcy
Code, 11 U.S.C Sec. 101 et seq.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
and any other state or federal insolvency, reorganization,
moratorium or similar law for the relief of debtors.
"Bankruptcy Proceeding" means any proceeding commenced
under any Bankruptcy Law.
"PARI PASSU Parties means, collectively, the Trustee
and the Lender.
All capitalized terms used herein which are not
otherwise defined herein shall have the meaning ascribed in such
terms in the Indenture.
2. LIEN ACKNOWLEDGMENT. (a) The Trustee hereby agrees
that each lien, mortgage, and security interest of the Trustee in
the property and assets constituting the PARI PASSU Collateral
pursuant to the Deed of Trust and the Related Documents, to the
extent of the obligations secured by such lien, mortgage or
security interest (provided that the aggregate principal amount
of Indebtedness secured by such lien, mortgage or security
interest shall not exceed $275,000,000.00), shall be equal in
priority with each lien, mortgage, or security interest of the
Lender in the property and assets constituting the PARI PASSU
Collateral pursuant to the Lender's Documents, to the extent of
the obligations secured by such liens, mortgages or security
interests (provided that the aggregate principal amount of the
Indebtedness secured by such liens, mortgages or security
interests shall not exceed the
2
lesser of $25,000,000.00 or the principal amount extended by
Lender to the Company under the Lender's Documents and not repaid
by the Company or ACSI).
(b) The Lender hereby agrees that each lien, mortgage
or security interest of the Lender in the property and assets
constituting the PARI PASSU Collateral pursuant to the Lender's
Documents, to the extent of the obligations secured by such lien,
mortgage or security interest (provided that the aggregate
principal amount of the Indebtedness secured by such lien,
mortgage or security interest shall not exceed the lesser of
$25,000,000.00 or the principal amount extended by Lender under
the Lender's Documents and not repaid by the Company and/or ACSI
) shall be equal in priority with each lien, mortgage or security
interest of the Trustee in the property and assets constituting
the PARI PASSU Collateral pursuant to the Deed of Trust and the
Related Documents, to the extent of the obligations secured by
such lien, mortgage or security interest (provided that the
aggregate principal amount of Indebtedness secured by such lien,
mortgage or security interest shall not exceed $275,000,000.00.
3. LIEN PRIORITY. The priorities of the liens, mortgages
or security interests established, altered or specified herein
are applicable irrespective of:
(i) the time or order of attachment or
perfection thereof;
(ii) the method of perfection;
(iii) the time or order of filing or recording of
financing statements, mortgages or other
instruments; or
(iv) any amendments to the liens, mortgages or
security interest established, altered or
specified herein, provided that such
amendment does not alter the aggregate
principal amount of the Indebtedness
secured by such lien, mortgage or security
interest; and
(v) the time or order of foreclosure, taking of
possession or the exercise of any remedy;
PROVIDED, HOWEVER, that the priorities of any liens, mortgages or
security interests which are not established, altered or
specified herein shall be unaffected and shall exist and continue
in accordance with applicable law. The agreements in paragraph 2
hereof are solely for the purpose of establishing the relative
priorities of the interests of the PARI PASSU Parties in the PARI
PASSU Collateral and shall not inure to the benefit of any other
Person.
4. CONTROLLING PARTY. The PARI PASSU Party or Parties
holding a majority in principal amount of Indebtedness of the
Company secured by the PARI PASSU Collateral (the "Controlling
Party") shall have the sole right, without the affirmative
consent of any of the other PARI PASSU Parties (the "Minority
Party"), and on behalf of itself and each PARI
3
PASSU Party, to (i) request to take any action, or fail to
request to take any action, to enforce or exercise any right or
remedy with respect to the PARI PASSU Collateral and to foreclose
upon, collect, dispose of the PARI PASSU Collateral or any
portion thereof; and (ii) exercise any right or remedy, or
decline to exercise any right or remedy, with respect to the PARI
PASSU Collateral in any Bankruptcy Proceeding, including, without
limitation, any right of election under Sections 1111(b) or
365(h) of the Bankruptcy Code, any other rights of election,
determinations, proofs of claims or other rights or remedies in
connection with any Bankruptcy Proceeding; PROVIDED that each
Minority Party shall have the right to file its own proof(s) of
claim in any Bankruptcy Proceeding.
5. MINORITY PARTY AGREEMENTS. In accordance with
paragraph 4 hereof, the Minority Party agrees (regardless of
whether any individual PARI PASSU Party agrees, disagrees or
abstains with respect to any action or failure to act by the
Controlling Party) that the Controlling Party shall have the
authority to act or fail to act, as it deems necessary in its
sole discretion, with respect to the rights and remedies of all
of the PARI PASSU Parties and that the Controlling Party shall
have no liability for acting or failing to act (provided such
action or failure to act does not conflict with the express terms
of this Agreement). Each PARI PASSU Party further acknowledges
and agrees that, until the obligations under the Indenture are no
longer outstanding, the only right of such PARI PASSU Party with
respect to the PARI PASSU Collateral is to be secured by the PARI
PASSU Collateral as and to the extent provided in its respective
loan document or agreement and as provided herein and to receive
a share of the proceeds of the PARI PASSU Collateral, if any, to
the extent provided under paragraph 6 hereof; PROVIDED, HOWEVER,
that, until the obligations under the Indenture are no longer
outstanding, in no event shall any rights or benefits accorded
any PARI PASSU Party include any right to challenge, contest or
dispute any action taken or not taken, by the Controlling Party,
the Collateral Agent (as hereinafter defined) or any other PARI
PASSU Party in accordance with this Agreement, and, until the
obligations under the Indenture are no longer outstanding, in no
event shall the security interest granted to the Lender under
this Agreement entitle any PARI PASSU Party to enforce its
respective rights in respect of the PARI PASSU Collateral except
through the Controlling Party and the Collateral Agent (as
hereinafter defined) in accordance with this Agreement. In
addition, the Minority Party agrees that it (i) shall not attack
nor challenge the validity, perfection or priority of the
Controlling Party's lien with respect to the PARI PASSU
Collateral; (ii) will release all liens, mortgages and security
interests in all or any portion of the PARI PASSU Collateral (to
the extent of its respective interest therein) in the event that
the Controlling Party elects to sell all or any portion of the
PARI PASSU Collateral in exercising any right or remedy with
respect to the PARI PASSU Collateral; and (iii) waives any right
of election it may have under Sections 1111(b) or 365(h) of the
Bankruptcy Code, or any other rights of election, determinations,
proofs of claims or other rights or remedies in connection with
any Bankruptcy Proceeding with respect to the PARI PASSU
Collateral.
6. ALLOCATION OF PAYMENTS. The PARI PASSU Parties each
agree that all money or funds collected with respect to the PARI
PASSU Collateral (including; without limitation, any net
condemnation proceeds or other awards, insurance or other loss
recoveries which
4
are required or permitted under each of the documents and
agreements governing the PARI PASSU Collateral, and any property
(real and personal) and any amounts in respect of any deficiency
recoveries) in connection with the enforcement or exercise of any
right or remedy with respect to the PARI PASSU Collateral
following the acceleration of the Indebtedness of the Company
to any of the PARI PASSU Parties, shall be directed to a
collateral agent appointed by the Controlling Party on behalf of
all of the PARI PASSU Parties (the "Collateral Agent"), which
Collateral Agent shall be instructed by the Controlling Party to
distribute such money, funds or other property in the following
order of priority: FIRST: to the payment to each PARI PASSU Party
in respect of all reasonable expenses in connection with the
collection or realization of such cash or funds or the
administration of this Agreement in connection with the
collection or realization of such cash or funds; SECOND: to each
such PARI PASSU Party a proportion of such remaining money or
funds as the total outstanding obligations secured by a lien,
mortgage or security interest on the PARI PASSU Collateral held
by such PARI PASSU Party bears to the total amount of outstanding
obligations secured by liens, mortgages or security interests on
the PARI PASSU Collateral held by all PARI PASSU Parties until
all such secured obligations of such PARI PASSU Party have been
paid in full (disregarding any reduction of any such secured
obligations arising or occurring because of a foreclosure sale or
the exercise of any other right or remedy with respect to the
PARI PASSU Collateral); THIRD: to the Trustor under the Deed of
Trust or other obligor under any other applicable Related
Document or to whosoever may be lawfully entitled to receive the
same as a court of competent jurisdiction may direct.
7. ENFORCING RIGHTS. Each PARI PASSU Party agrees not to
take any action whatsoever to enforce any term or provision of
its respective security document or this Agreement or to enforce
any of its rights in respect of the PARI PASSU Collateral, except
through the Controlling Party in accordance with paragraphs 5 and
6 hereof; PROVIDED, HOWEVER, that this Agreement shall not
prevent any PARI PASSU Party from enforcing or exercising any
right or remedy with respect to the PARI PASSU Collateral granted
to it by its respective documents and agreements to the extent
that such enforcement or exercise of rights or remedies does not
impair the security interest of the Controlling Party or any
other PARI PASSU Party in the PARI PASSU Collateral; nor shall
this Agreement grant any of the PARI PASSU Parties any right or
remedy under the documents or agreements of the other PARI PASSU
Parties.
8. DISTRIBUTIONS. The Company, the Trustee and the Lender
each agree that if any PARI PASSU Party receives any money, funds
or other property that are distributed pursuant to paragraph 7
above (or any similar provision in any other Intercreditor
Agreement substantially in the form of this Agreement), such
money, funds or other property shall not discharge any secured
obligation held by the Person receiving such money, funds or
other property to the extent such money, funds or other property
were distributed to any other Person. In the event that any
payment in respect of, or distribution of, the PARI PASSU
Collateral, of any kind or character, whether in cash, property
or securities, shall be received by any PARI PASSU Party before
all Indebtedness secured by PARI PASSU Collateral
5
is paid in full, such payment or distribution shall be held in
trust for the benefit of, and shall be paid over to, the PARI
PASSU Parties in accordance with paragraph 6 above.
9. COMMUNICATIONS. Each of the PARI PASSU Parties agrees
to transmit to the Controlling Party a copy of any communication
sent by such PARI PASSU Party to the Company, or any other Person
(contemporaneously with the transmittal of any such
communication) with respect to any event of default, any
acceleration of Indebtedness, or any notice of sale of any PARI
PASSU Collateral as a result of a default. The Controlling Party
will transmit a copy of said notice to the other PARI PASSU
Parties. Any failure by any PARI PASSU Party to furnish a notice
pursuant to this paragraph 9 shall in no way diminish the rights
of such party hereunder.
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada,
without regard to its choice of law provisions, and shall be
binding upon and inure to the benefit of the PARI PASSU Parties,
and their respective successors, designees and assigns.
11. DEFINED TERMS. All terms used herein which are defined
in the Nevada Uniform Commercial Code shall have the meanings
therein stated, unless the context otherwise requires.
12. NOTICES. All notices or other communications required
or permitted hereunder shall be in writing and shall be given by
personal delivery or United States mail, first class, registered
or certified, postage prepaid, return receipt requested,
addressed to the parties at the addresses indicated on the
signature pages hereof. Each such notice or other communication
shall be deemed given on (a) the date of receipt of personal
delivery thereof, or (b) if not by mail (as aforesaid), the date
which is three (3) business days after such communication is
deposited in the mail (postage prepaid as aforesaid). Any party
may change its address for notice by notice to the other parties
hereto in accordance with the foregoing.
13. FURTHER ASSURANCES. Each of the PARI PASSU Parties
(including the Trustee), upon the request of any PARI PASSU
Party, shall execute and deliver and cause to be recorded with
the Clerk of Xxxxx County, Nevada an Intercreditor Agreement
substantially in the form of this Agreement, which Intercreditor
Agreement shall be effective if and only if all PARI PASSU
Parties shall have executed and delivered the same or a
counterpart thereof. Simultaneously with the repayment or other
discharge of Indebtedness secured by any PARI PASSU Collateral,
the PARI PASSU Party whose Indebtedness is so repaid or
discharged shall execute and deliver such instruments as may be
reasonably required by any of the other PARI PASSU Parties to
release or extinguish such PARI PASSU Party's interest in the
PARI PASSU Collateral.
14. LIABILITY. No PARI PASSU Party shall be liable to any
other PARI PASSU Party for any action taken by it, including the
payment of any monies hereunder, in connection
6
with this Agreement, provided the same was taken in good faith
and did not constitute gross negligence or willful misconduct.
15. AMENDMENTS. Each PARI PASSU Party shall have the right
to alter or amend its respective loan agreements and documents
and to release or take additional collateral pursuant thereto.
Nothing in this agreement is intended to alter or amend the
obligations of any PARI PASSU Party with respect to the Company
or any of its Subsidiaries under its respective loan agreements
and documents. Nothing herein is intended to confer upon the
Company or any of its Subsidiaries any right or benefit with
respect to any PARI PASSU Party and the Company and its
Subsidiaries hereby acknowledge that they have no right to
enforce the terms hereunder against any PARI PASSU Party. Their
signatures hereto are merely to acknowledge this agreement, which
is for the sole benefit of the PARI PASSU Parties.
16. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
17. SEVERABILITY. In the event any provision hereof is
determined to be unenforceable or invalid, such provision or such
part thereof which may be unenforceable shall be deemed severed
from this Agreement and the remaining provisions carried out with
the same force and effect as if the severed provision or part
thereof had not been made a part hereof.
IN WITNESS WHEREOF, the Trustee, the Company, Lender and
the Trustee, as trustee, have caused this Agreement to be duly
executed as of the date first above written.
ATTEST: SHOWBOAT, INC., a Nevada corporation
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
/s/ Xxxx X. Xxxxxx By: /s/ R. Xxxxx Xxxx
Assistant Secretary Name: R. Xxxxx Xxxx
Title: Exec. VP Finance & Administration
7
IBJ XXXXXXXX BANK & TRUST COMPANY
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxx By: /s/ Xxx Xxxxxx
Xxxxx Xxxxxxx Name: Xxx Xxxxxx
Assistant Secretary Title: Vice President
NATWEST BANK, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx Name: Xxxx Xxxxxxxx
Attorney at Law of Title: Vice President
New Jersey
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