INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
(Credit Facility Mortgage)
TRUMP'S CASTLE ASSOCIATES, L.P.
Mortgagor/Debtor
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent under the Credit Agreement, Mortgagee/Secured Party
Dated as of June 12, 2002
Record and Return to:
John Tripodoro
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.1. Definitions.................................................. 7
Section 1.2. Notices...................................................... 15
Section 1.3. Form and Contents of Documents Delivered to Mortgagee........ 16
Section 1.4. Compliance-Certificates and Opinions......................... 17
Section 1.5. Effect of Headings and Table of Contents..................... 17
Section 1.6. Successors and Assigns; Amendments........................... 17
Section 1.7. Separability Clause.......................................... 18
Section 1.8. Benefits of Mortgage......................................... 18
Section 1.9. Governing Law................................................ 18
Section 1.10. Limitation on Liability...................................... 18
Section 1.11. Provisions required by Credit Agreement...................... 19
Section 1.12. Rights of Trustee as Mortgagee............................... 19
Section 1.13. Mortgage Subject to Casino Control Act....................... 20
Section 1.14. Discharge of Lien............................................ 20
Section 1.15. General Application.......................................... 20
Section 1.16. Credit Facility Mortgage Deemed to be Security Agreement..... 21
ARTICLE TWO
RELEASE; SUBORDINATION
Section 2.1. Possession by Mortgagor...................................... 21
Section 2.2. Obsolete Property............................................ 21
Section 2.3. FF&E Financing Agreements.................................... 22
ARTICLE THREE
REMEDIES
Section 3.1. Events of Default............................................ 23
Section 3.2. Acceleration of Maturity; Recision and Annulment ............ 24
Section 3.3. Application of Moneys Received by Mortgagee ................. 25
Section 3.4. Restoration of Rights and Remedies .......................... 25
Section 3.5. Rights and Remedies Cumulative .............................. 25
Section 3.6. Delay or Omission Not waiver ................................ 25
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Section 3.7. Undertaking for Costs ....................................................26
Section 3.8. Waiver of Appraisement and Other Laws ....................................26
Section 3.9. Entry ....................................................................26
Section 3.10. Power of Sale; Suits for Enforcement .....................................27
Section 3.11. Incidents of Sale ........................................................27
Section 3.12. Receiver .................................................................28
Section 3.13. Suits to Protect the Trust Estate ........................................28
Section 3.14. Management of the Premises ...............................................29
ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 4.1. Consolidation, Merger, Conveyance or Transfer only on Certain Terms ......29
Section 4.2. Successor Entity Substituted .............................................29
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
Section 5.1. Performance of Senior Guarantee Obligations ..............................29
Section 5.2. FF&E Financing Agreements ................................................30
Section 5.3. Limitations on Liens and Transfers .......................................30
Section 5.4. Environmental ............................................................31
Section 5.5. Warranty of Leasehold Estate and Title ...................................34
Section 5.6. After-Acquired Property; Further Assurances; Recording ...................35
Section 5.7. Payment of Taxes and Certain Claims;
Maintenance of Properties; Compliance with
Legal Requirements and Insurance Requirements .........................37
Section 5.8. Permitted Contests .......................................................38
Section 5.9. Mechanics' and Other Liens ...............................................39
Section 5.10. To Insure ................................................................39
Section 5.11. Limitations on Building Demolition, Alterations, Improvements and
New Construction. .....................................................45
Section 5.12. Leases ...................................................................46
Section 5.13. Compliance Certificates ..................................................48
Section 5.14. To Keep Books-Inspection by Mortgagee ....................................48
Section 5.15. Advances by Mortgagee ....................................................49
Section 5.16. Waiver of Stay, Extension or Usury Laws ..................................49
Section 5.17. Eminent Domain ...........................................................49
Section 5.18. Facility Leases ..........................................................51
Section 5.19. Indemnification ..........................................................54
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SCHEDULE 1 - OWNED LAND ............................................. 1 - 1
SCHEDULE 2 - LEASED LAND ............................................ 2 - 1
SCHEDULE 3 - EXISTING ENCUMBRANCES .................................. 3 - 1
SCHEDULE 4 - FORM OF NON-DISTURBANCE ................................
AND ATTORNMENT AGREEMENT ............................... 4 - 1
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INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT ("Credit Facility Mortgage"),
dated as of June 12, 2002, between TRUMP'S CASTLE ASSOCIATES, L.P., a New Jersey
limited partnership having an office at Brigantine Boulevard and Huron Avenue,
Atlantic City, New Jersey 08401 ("Mortgagor"), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, not individually but in its capacity as Administrative Agent under the
Credit Agreement (as hereinafter defined), having an office at 31 West 52nd
Street, New York, New York, 10019 ("Mortgagee" or "Administrative Agent").
W I T N E S S E T H:
In consideration of $10.00 in hand paid by Mortgagee to Mortgagor and for
other good and valuable consideration, the receipt and sufficiency whereof is
hereby acknowledged, and in order to secure (i) the punctual payment and
performance when due of all of Mortgagor's obligations under the Credit
Agreement; (ii) payment by Mortgagor to Mortgagee of all sums expended or
advanced by Mortgagee pursuant to any term or provision of this Credit Facility
Mortgage; (iii) performance of each covenant, term, condition and agreement of
Mortgagor herein contained; (iv) all costs and expenses, including, without
limitation, reasonable counsel fees and expenses as provided in Section 3.7 of
this Credit Facility Mortgage, which may arise in respect of this Credit
Facility Mortgage or of the obligations secured hereby; and (v) performance and
observance of all of the provisions herein contained, Mortgagor has executed and
delivered this Credit Facility Mortgage and has bargained, sold, aliened,
mortgaged, pledged, released, conveyed and confirmed unto Mortgagee and its
successors hereunder and assigns forever, and does hereby grant to Mortgagee and
its successors a security interest in and to, all of Mortgagor's right, title
and interest in, to and under all of the following described property and the
proceeds thereof:
GRANTING CLAUSES
Granting Clause First
All of the property, rights, title, interest, privileges and franchises
particularly described in annexed Schedule 1 (the "Owned Land"), which Schedule
is hereby made a part of, and deemed to be described in, this Granting Clause as
fully as if set forth in this Granting Clause at length.
Granting Clause Second
[Intentionally omitted]
Granting Clause Third
All of the property, rights, title, interest, privileges and franchises of
Mortgagor as lessee under all Facility Leases (including, to the extent
permissible under the Marina Lease, the Marina Lease), together with (i) all
credits, deposits, privileges and rights of Mortgagor as lessee under the
Facility Leases, now or at any time existing, (ii) the leaseholds and the
leasehold estates created by
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the Facility Leases and (iii) all of the estates, rights, titles, claims or
demands whatsoever of Mortgagor, either in law or in equity, in possession or in
expectancy, of, in and to the Facility Leases and the Leased Facilities
(including, but not limited to, the Leased Land particularly described in
annexed Schedule 2), together with (x) 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 Leased Facilities or any part thereof, and Mortgagor
expressly agrees that if Mortgagor shall, at any time prior to payment in full
of all indebtedness secured hereby, acquire fee simple title or any other
greater estate to the Leased Facilities, the lien of this Credit Facility
Mortgage shall attach, extend to, cover and be a lien upon such fee simple title
or other greater estate and thereupon the lien of this Credit Facility Mortgage,
subject to Permitted Encumbrances, shall be prior to the lien of any mortgage or
deed of trust placed on such acquired title, estate, interest or right
subsequent to the date of this Credit Facility Mortgage and (y) any right to
possession or statutory term of years derived from, or incident to, the Facility
Leases pursuant to Section 365(h) of the Code or any Comparable Provision.
Granting Clause Fourth
All of the rents, issues, profits, revenues, accounts, accounts receivable
and other income and proceeds (including, without limitation, all rents, fees,
charges, accounts, issues, profits, revenues and payments for or from (a) the
use or occupancy of the rooms and other public facilities in the Hotel and (b)
the operation of the Casino) of the property subjected or required to be
subjected to the lien of this Credit Facility Mortgage, including, without
limitation, the property described in Granting Clauses First, Third and Seventh
(said property described in Granting Clauses First, Third and Seventh and
similar other property subjected or required to be subjected to the lien of this
Credit Facility Mortgage, together with all such rents, issues, profits,
revenues, accounts, accounts receivable and other income and proceeds therefrom
is hereinafter collectively referred to as the "Premises") and all of the
estate, right, title and interest of every nature whatsoever of Mortgagor in and
to the same and every part thereof.
Granting Clause Fifth
All of the rights of Mortgagor as lessor under the Leases in effect on the
date of execution of this Credit Facility Mortgage or hereafter entered into by
Mortgagor, including modifications, extensions and renewals of all of the same
and the immediate and continuing right as security after the occurrence, and
during the continuance, of an Event of Default, to (a) make claim for, collect,
receive and receipt for (and to apply the same as provided herein) any and all
rents, fees, charges, income, revenues, issues, profits, security and other sums
of money payable or receivable thereunder or pursuant thereto, and all proceeds
thereof, whether payable as rent, insurance proceeds, condemnation awards,
security or otherwise and whether payable prior to or subsequent to the Maturity
Date, (b) receive and give notices and consents thereunder, (c) bring actions
and proceedings thereunder or for the enforcement thereof, (d) make waivers and
agreements thereunder or with respect thereto, (e) take such action upon the
happening of a default under any Lease, including the commencement, conduct and
consummation of any proceedings at law or in equity as shall be permitted by any
provision of any Lease, and (f) do any and all things which Mortgagor or any
lessor is or may become entitled to do under the Leases; provided that, except
as may be set forth to the contrary herein, the assignment
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made by this Granting Clause Fifth shall not impair or diminish any right,
privilege or obligation of Mortgagor under the Leases nor shall any such
obligation be imposed upon Mortgagee.
Granting Clause Sixth
Without limiting the generality of the provisions of Granting Clause
Fourth, all of Mortgagor's rights, title, interest, privileges and franchises in
and to the following, now owned or hereafter acquired by Mortgagor, to the
extent of Mortgagor's interest therein and thereto and to the extent assignable
(collectively, "Operating Assets"):
(a) bookings for the use of guest rooms, banquet facilities, meeting
rooms at the Casino Hotel or at any other improvements now or hereafter
located on any of the Land;
(b) all contracts respecting utility services for, and the
maintenance, operations, or equipping of, the Premises, including
guaranties and warranties relating thereto;
(c) the Permits;
(d) all contract rights, leases (whether with respect to real
property, personal property or both real and personal property),
concessions, trademarks, trade names, service marks, logos, copyrights,
warranties and other items of intangible personal property, and any and all
good will associated with the same, relating to the ownership or operation
of the Casino Hotel or of any other improvements now or hereafter located
on any of the Land, including, without limitation, (1) employment contracts
with officers and other employees of Mortgagor, (2) telephone and other
communication numbers, (3) all software licensing agreements as are
required to operate computer software systems at the Casino Hotel or at any
other improvements now or hereafter located on any of the Land and books
and records relating to the software programs and (4) Mortgagor's interest
under leases of Tangible Personal Property (as hereinafter defined);
(e) all contracts, purchase orders, requisitions and agreements
entered by or on behalf of Mortgagor or which have been assigned to
Mortgagor, for the design, construction, and furnishing of the Casino Hotel
or of any other improvements now or hereafter located on any of the Land,
including, without limitation, architect's agreements, engineering
agreements, construction contracts, consulting agreements and agreements or
purchase orders for all items of Tangible Personal Property and payment and
performance bonds in favor of Mortgagor in connection with the Trust Estate
(and all warranties and guarantees thereunder and warranties and guarantees
of any subcontractor and bond issued in connection with the work to be
performed by any subcontractor);
(f) the following personal property (the "Tangible Personal Property")
now or hereafter acquired by Mortgagor (directly or by way of lease) which
is located on, or to be located on, or which is in use or held in reserve
storage for future use in connection with the gaming or other operations
of, the Casino Hotel or of any other improvements now or
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hereafter located on any of the Land, which is on hand or on order whether
stored on-site or off-site:
(i) all furniture, furnishings, equipment, machinery, lighting,
apparatus (both interior and exterior), appliances, fixtures and fittings
and other articles of tangible personal property;
(ii) all slot machines, electronic gaming devices, crap tables,
blackjack tables, poker tables, roulette tables, baccarat tables, big six
wheels and other gaming tables, and all furnishings and equipment to be
used in connection with the operation thereof;
(iii) all cards, dice, gaming chips and plaques, tokens, chip racks,
dealing shoes, dice cups, dice sticks, layouts, paddles, roulette balls and
other consumable supplies and items;
(iv) all china, glassware, linens, kitchen utensils, silverware and
uniforms;
(v) all consumable and operating supplies of every kind and nature,
including, without limitation, accounting supplies, guest supplies, forms,
printing, stationery, food and beverage stock, bar supplies, laundry
supplies and brochures to existing purchase orders;
(vi) all upholstery material, carpets and rugs, beds, bureaus,
chiffoniers, chairs, chests, desks, bookcases, tables, curtains, hangings,
pictures, divans, couches, ornaments, bars, bar fixtures, safes, stoves,
ranges, refrigerators, radios, televisions, clocks, electrical equipment,
lamps, mirrors, heating and lighting fixtures and equipment, ice machines,
air conditioning machines, fire prevention and extinguishing apparatus,
laundry machines, and all similar and related articles used in bedrooms,
sitting rooms, bathrooms, boudoirs, halls, closets, kitchens, dining rooms,
offices, lobbies, basements and cellars in the Casino Hotel and in any
other improvements now or hereafter located on any of the Land;
(vii) all sets and scenery, costumes, props and other items of
tangible personal property on hand or on order for use in the production of
shows in any showroom, convention space, exhibition hall, or sports and
entertainment arena of the Casino Hotel or in any other improvements now or
hereafter located on any of the Land; and
(viii) all cars, limousines, vans, buses, trucks and other vehicles
owned or leased by Mortgagor for use in connection with the operation of
the Premises, together with all equipment, parts and supplies used to
service, repair, maintain and equip the foregoing;
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(g) all drawings, designs, plans and specifications prepared by
architects, engineers, interior designers, landscape designers and any
other professionals or consultants for the design, development,
construction and/or improvement for the Casino Hotel, or for any other
development of the Premises, as amended from time to time;
(h) any administrative and judicial proceedings initiated by
Mortgagor, or in which Mortgagor has intervened, concerning the Premises,
and agreements, if any, which are the subject matter of such proceedings;
(i) any customer lists utilized by Mortgagor including lists of
transient guest and restaurant and bar patrons and "high roller" lists; and
(j) all of the good will in connection with the assets listed in this
Granting Clause Sixth and in connection with the operation of the Premises.
Except as may be set forth to the contrary herein, the assignment made by
this Granting Clause Sixth shall not impair or diminish any right, privilege or
obligation of Mortgagor with respect to the Operating Assets, nor shall any such
obligations be imposed on Mortgagee.
Granting Clause Seventh
(a) All of the Mortgagor's rights, title, interest, privileges and
franchises, if any, in and to all buildings, structures (surface and
subsurface), and other improvements of every kind and description, including,
without limitation, all pedestrian bridges, entrance-ways, parking lots, plazas,
curb-cuts, walkways, driveways and landscaping and such fixtures as constitute
real property, now or hereafter erected or placed on the Land or on any other
land or any interest therein hereafter acquired by Mortgagor and all of the
Mortgagor's rights, title, interest, privileges and franchises in and to all
fixtures and articles of personal property now or hereafter attached to or
contained in and used in connection with such buildings and improvements,
including, without limitation, all apparatus, furniture, furnishings, lighting
equipment machinery, motors, elevators, fittings, radiators, cooking ranges, ice
boxes, ice machines, printing presses, mirrors, bars, mechanical refrigerators,
furnaces, coal and oil burning apparatus, wall cabinets, machinery, generators,
partitions, steam and hot water boilers, lighting and power plants, pipes,
plumbing, radiators, sinks, bath tubs, water closets, gas and electrical
fixtures, awnings, shades, screens, blinds, dishwashers, freezers, vacuum
cleaning systems, office equipment and other furnishings, and all plumbing,
heating, lighting, cooking, laundry, ventilating, incinerating, air-conditioning
and sprinkler equipment or other fire prevention or extinguishing apparatus and
material, and fixtures and appurtenances thereto; and all renewals or
replacements thereof or articles in substitution therefor, whether or not the
same are or shall be attached to the Land, any other land or any interest
therein hereafter acquired by Mortgagor or to any such buildings and
improvements thereon, in any manner.
(b) All of Mortgagor's rights, title, interest, privileges and franchises
in and to all other property, real, personal or mixed (other than Excepted
Property), of every kind and description and wheresoever situated, now owned or
which may be hereafter acquired by Mortgagor, it being the intention hereof that
all property, interests, rights, privileges and franchises now owned by
Mortgagor
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or acquired by Mortgagor after the date hereof (other than Excepted Property)
shall be as fully embraced within and subjected to the lien hereof as if such
property were specifically described herein.
* * *
TOGETHER with all of Mortgagor's right, title and interest in and to any
and all mineral and water rights and any title or reversion, in and to the beds
of the ways, streets, avenues and alleys adjoining the Premises to the center
line thereof and in and to all strips, gaps and gores adjoining the Premises on
all sides thereof; and
TOGETHER with any and all of Mortgagor's right, title and interest in and
to the tenements, hereditaments, easements, appurtenances, passages, waters,
water courses, riparian rights, other rights, liberties and privileges thereof
or in any way now or hereafter appertaining to the Premises, including, without
limitation, any other claim at law or in equity as well as any after-acquired
title, franchise or license and the reversion and reversions and remainder and
remainders thereof; and
TOGETHER with any and all awards and other compensation heretofore or
hereafter to be made to the present and all subsequent owners of the Trust
Estate for any taking by eminent domain, either permanent or temporary, of all
or any part of the Trust Estate or any easement or appurtenances thereof,
including severance and consequential damage and change in grade of streets, all
in accordance with and subject to the provisions of the Superior Instrument
Requirements and Section 5.17; and
TOGETHER with any and all proceeds of any unearned premiums on any
insurance policies described in Section 5.10, and the right to receive and apply
the proceeds of any insurance, judgments, or settlements made in lieu thereof,
for damage to the Trust Estate or otherwise, all in accordance with and subject
to the provisions of Section 5.10 and the Superior Instrument Requirements; and
TOGETHER with all proceeds of every kind and nature, and all products of
every kind and nature, of any of the foregoing property, rights, title,
interests, privileges, franchises and other assets described in Granting Clauses
First through Seventh or in any of the other clauses thereafter.
The foregoing shall include, whether or not specifically identified in one
or more instances, all such property, rights, title, interests, privileges,
franchises and other assets now owned and/or hereafter existing.
EXCLUDING, with respect to all of the hereinabove granted property, rights,
title, interest, privileges and franchises described in Granting Clauses First
through Seventh or in the six immediately preceding paragraphs, all Excepted
Property now or hereafter existing.
TO HAVE AND TO HOLD all of said Premises, Leases, Facility Leases,
Operating Assets, properties, options, credits, deposits, rights, privileges and
franchises of every kind and description, real, personal or mixed, hereby and
hereafter granted, bargained, sold, aliened, assigned, transferred,
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hypothecated, pledged, released, conveyed, mortgaged, or confirmed as aforesaid,
or intended, agreed or covenanted so to be, together with all the appurtenances
thereto appertaining (said Premises, Leases, Facility Leases, Operating Assets,
properties, options, credits, deposits, rights, privileges and franchises, other
than Excepted Property now or hereafter existing, being herein collectively
called the "Trust Estate") unto Mortgagee and its successors and assigns
forever.
PROVIDED, HOWEVER, that the lien of this Credit Facility Mortgage upon the
Trust Estate shall rank pari passu with the lien of any Working Capital Facility
Mortgage.
BUT IN TRUST, NEVERTHELESS, for the ratable benefit and security of the
Lenders.
UPON CONDITION that, until the happening of an Event of Default, Mortgagor
shall be permitted to possess and use the Trust Estate, and to receive and use
the rents, issues, profits, revenues and other income of the Trust Estate.
AND IT IS HEREBY COVENANTED AND DECLARED that the Trust Estate is to be
held and applied by Mortgagee, subject to the further covenants, conditions and
trusts hereinafter set forth, and Mortgagor does hereby covenant and agree to
and with Mortgagee, for the ratable benefit of the Lenders, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Credit Facility Mortgage, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article One have the meanings
assigned to them in this Article One and include the plural as well as the
singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for shall
be made, in accordance with generally accepted accounting principles in
effect on the date hereof consistently applied; and
(c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Credit Facility Mortgage as a whole and not
to any particular Article, Section or other subdivision.
"Administrative Agent" means the Person named as the "Administrative Agent"
in the first paragraph of the Credit Agreement and any successor thereto.
"Affiliate" has the meaning set forth in Section 9 of the Credit Agreement.
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"Alterations" has the meaning set forth in Section 5.11.
"Appraised Value" means the fair market value of the Casino Hotel, and of
all other property now or hereafter owned or leased by Mortgagor and subject to
the lien of this Credit Facility Mortgage, as determined by an Independent
Appraiser on the basis of an appraisal in conformity with the criteria set forth
at 12 C.F.R. (S) 564.4 or such similar published policy or regulation as from
time to time governs real estate related transactions by institutions regulated
by the Office of Thrift Supervision; provided, that the value of the Casino
Hotel and such other property shall not include the value of (i) any furniture,
fixtures and equipment therein to the extent of the Outstanding Amount of any
Indebtedness secured by any FF&E Financing Agreements with respect thereto and
(ii) any Excepted Property.
"Appraiser" means a "state certified appraiser" as defined in 12 C.F.R. (S)
564.2(i) who is (i) of recognized standing among appraisers of properties
similar to the Casino Hotel and (ii) experienced in the appraisals of properties
of a similar size and scope to that of the Casino Hotel, selected by Mortgagor.
"Architect" means an Independent Person selected by Mortgagor and licensed
as an architect in the State of New Jersey.
"Capital Lease Obligations" has the meaning set forth in the Credit
Agreement.
"Casino" means that portion of the Casino Hotel used for gaming and related
activities.
"Casino Hotel" means the casino and hotel complex currently known as the
"Trump Marina Hotel Casino" in Atlantic City, New Jersey, and ancillary
structures and facilities located on the Premises (other than the property
covered by the Marina Lease) and all furniture, fixtures and equipment at any
time contained therein in each case owned by or leased to Mortgagor and covered
by the lien of this Credit Facility Mortgage.
"Casualty" means any act or occurrence of any kind or nature which results
in damage, loss or destruction to any buildings or improvements on the Premises
and/or Tangible Personal Property.
"Certificate of Appraised Value" means the certificate of an Independent
Appraiser stating the Appraised Value.
"Code" means the Federal Bankruptcy Code, Title 11 of the United States
Code, as amended.
"Comparable Provision" has the meaning set forth in Section 5.18.
"Credit Agreement" means that certain credit agreement of even date
herewith among Mortgagor, the lending institutions listed therein and the
Administrative Agent, which evidences a mortgage loan in the aggregate principal
amount of $70,000,000.00, as it may from time to time be supplemented, modified
or amended by one or more trust indentures or other instruments supplemental
thereto entered into pursuant to the applicable provisions thereof.
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"Default" means any event which is, or after notice or lapse of time or
both would be, an Event of Default. Without limiting the generality of the
previous provisions of this definition, the term "Default" shall include the
occurrence of an event as to which a notice of default has been given to
Mortgagor under any Facility Lease by a Lessor which has not yet been cured.
"Event of Default" has the meaning set forth in Section 3.1.
"Excepted Property" means:
(1) the personal property owned by lessees under Leases and the
personal property of any Hotel guests;
(2) trade names, intellectual property rights and other rights
and interests in and to the use of the terms "Trump's Castle,"
"Trump," "Trump's Castle Casino Resort," "Trump's Marina Hotel
Casino," "Trump Marina," "Donald J. Trump," "Donald Trump" or related
variations thereof;
(3) any property deemed to be Excepted Property pursuant to the
provisions of Section 2.3;
(4) counterchecks, cash and any other property to the extent that
the granting of a security interest therein is prohibited by the New
Jersey Casino Control Act and the regulations promulgated thereunder;
(5) any property acquired pursuant to secured purchase money
indebtedness permitted under clause "h" of the definition of
"Permitted Indebtedness" in the Credit Agreement;
(6) all equity interests in any Person now owned or hereafter
acquired by Mortgagor (including, without limitation, the capital
stock of Funding) which are required to be pledged under the indenture
(as the same may be amended, modified, supplemented or restated)
relating to the 15 1/2% senior secured notes due 2005 of Trump Hotels
& Casino Resorts Holdings, L.P. and Trump Hotels & Casino Resorts
Funding, Inc; and
(7) any property and assets which were not collateral (and any
after-acquired property and assets which would not have become
collateral) in favor of the trustees under the Existing Senior Note
Indentures and the Existing Senior Notes (each as defined in the
Credit Agreement).
"Existing Encumbrances" means the matters set forth in Schedule 3
hereto.
"Facility Leases" means, collectively:
(1) the Marina Lease;
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(2) Any leases other than Capital Lease Obligations and the
Marina Lease where the Mortgagor is tenant or sub-tenant; provided,
however, that the aggregate fixed rental payments paid or accrued for
any period of four consecutive fiscal quarters commencing after the
date hereof under all such leases (including payments required to be
made by the lessee in respect of taxes and insurance, whether or not
denominated as rent), shall not exceed $7,500,000 for such period;
provided, further, that the Mortgagor may designate certain such
leases which are not material to the operations of the Casino Hotel
and which have aggregate fixed rental payments (including payments
required to be made by the lessee in respect of taxes and insurance,
whether or not denominated as rent) not exceeding an aggregate of
$300,000 per year to be excluded from the leases covered by this
clause (2); and
(3) any and all modifications, extensions and renewals of the
leases described in clauses (1) and (2) above, to the extent the same
are permitted under Section 5.18.
"FF&E Financing Agreement" has the meaning set forth in Section 9 of
the Credit Agreement.
"Full Insurable Value" means the actual replacement cost (excluding the
costs of foundation, footing, excavation, paving, landscaping and other similar,
noninsurable improvements) of the insurable properties in question.
"Funding" means Trump's Castle Funding, Inc., a corporation
incorporated under the laws of the State of New Jersey, or any obligor on the
Credit Agreement (other than Mortgagor).
"Hotel" means that portion of the Casino Hotel not included within the
Casino.
"Impositions" has the meaning set forth in Section 5.7.
"Indebtedness" has the meaning set forth in Section 9 of the Credit
Agreement.
"Independent" when used with respect to any specified Person means such
a Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in Mortgagor or in any
other obligor under the Credit Agreement or in any Affiliate of Mortgagor or of
such other obligor and (iii) is not connected with Mortgagor or such other
obligor or any Affiliate of Mortgagor or such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to Mortgagee, such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning thereof. A Person who is performing or
who has performed services as an independent contractor to any specified Person
shall not be considered not Independent merely by reason of the fact that such
Person is performing or has performed such services.
"Insurance Amount" has the meaning set forth in Section 5.10(a)(i).
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"Insurance Requirements" means all terms of any insurance policy
covering or applicable to the Trust Estate or any part thereof, all requirements
of the issuer of any such policy, and all orders, rules, regulations and other
requirements of the National Board of Fire Underwriters (or any other body
exercising similar functions) applicable to or affecting the Trust Estate or any
part thereof or any use or condition of the Trust Estate or any part thereof.
"Insurer" means (i) an insurance company or companies selected by
Mortgagor authorized to issue insurance in the State of New Jersey with an A.M.
Best rating level of A minus or better and an A.M. Best financial size category
of VIII or better or (ii) Lloyds of London so long as its financial capacity is
not such that prudent owners of first-class casino and hotel complexes in
Atlantic City, New Jersey would be unwilling to accept Lloyds of London;
provided, that with respect to the insurance required to be maintained pursuant
to Section 5.10(a)(i), up to 1.0% of the total amount of such insurance in
excess of the first $10,000,000 thereof may be maintained with an insurance
company or companies not meeting the foregoing A.M. Best rating level and/or
A.M. Best financial size categories; and provided, further, that Mortgagor shall
in all events use commercially reasonable efforts to obtain insurance issued by
insurance companies having an A.M. Best rating level of better than A minus.
"Land" means, collectively, the Owned Land and the Leased Land.
"Lease" means each lease or sublease (made by Mortgagor, as lessor or
sublessor, as the case may be) of any space in any building or buildings, an
interest in which building or buildings constitutes a part of the Trust Estate,
including every agreement relating thereto or entered into in connection
therewith and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed by the lessee or sublessee
under any such lease or sublease. For purposes hereof, the term "Lease" shall
include any license agreement, concession agreement or other occupancy
agreement. Notwithstanding the foregoing, the term "Lease" shall not include any
transient room rentals.
"Leased Facilities" means, collectively, the Leased Land and any
buildings and improvements now or hereafter located thereon.
"Leased Land" means, collectively, the Marina Lease and any other land
that is now or hereafter subject to a Facility Lease.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including, without limitation, the
New Jersey Casino Control Act, the New Jersey Industrial Site Recovery Act and
the New Jersey Spill Compensation and Control Act of 1976) of all governments,
departments, commissions, boards, courts, authorities, agencies, officials and
officers, of governments, federal, state and municipal (including, without
limitation, the New Jersey Department of Environmental Protection, the Atlantic
City Bureau of Investigations, the Division of Gaming Enforcement of the State
of New Jersey, and the Casino Control Commission of the State of New Jersey),
foreseen or unforeseen, ordinary or extraordinary, which now are or at any time
hereafter become applicable to the Trust Estate or any part thereof, or any of
the adjoining sidewalks, or any use or condition of the
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Trust Estate or any part thereof, including, without limitation, the use of the
Casino Hotel as a gaming or gambling facility.
"Lender" has the meaning set forth in Section 9 of the Credit
Agreement.
"Lessors" means the lessors under the Facility Leases.
"Loans" has the meaning set forth in Section 1.01 of the Credit
Agreement.
"Marina Lease" means the lease agreement made September 1, 1990 between
the State of New Jersey, as Landlord, and Mortgagor, as tenant, respecting
property known as the Senator Frank S. Farley State Marina, Atlantic City, New
Jersey, being designated as a portion of Block B-4, Lot 11 on the tax map of the
City of Atlantic City, Atlantic County, New Jersey, as more particularly
described on Schedule 2 appended hereto and made a part hereof, together with
all amendments, restatements, extensions and renewals of said lease agreement, a
memorandum of which Lease was recorded June 1, 1992 in the Atlantic County
Registry of Deeds in Deed Book 5365, Page 211.
"Maturity" when used with respect to any Indebtedness means the date on
which the principal (or any portion thereof) of such Indebtedness becomes due
and payable as therein or herein provided, whether at the Stated Maturity, upon
acceleration, optional redemption, required repurchase, scheduled principal
payment or otherwise.
"Maturity Date" has the meaning set forth in Section 9 of the Credit
Agreement.
"Mortgagee" has the meaning set forth in the first paragraph of this
instrument and its successors and assigns.
"Mortgagor" means the Person named as "Mortgagor" in the first
paragraph of this instrument until a successor entity shall have become such
pursuant to the applicable provisions of this Credit Facility Mortgage, and
thereafter, except to the extent otherwise contemplated by Section 4.2,
"Mortgagor" shall mean such successor entity exclusively.
"Mortgagor Order" and "Mortgagor Request" mean respectively, a written
order or request signed with a Mortgagor Signature and delivered to Mortgagee.
"Mortgagor Signature" means the signature of the President or a Vice
President of a corporate general partner of Mortgagor or of a general partner of
Mortgagor.
"Mortgagor's Certificate" means a certificate signed with a Mortgagor
Signature and delivered to Mortgagee.
"Notices" has the meaning set forth in Section 1.2.
"Operating Assets" has the meaning set forth in Granting Clause Sixth.
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"Opinion of Counsel" means a written opinion of counsel who may (except
as otherwise expressly provided in this Credit Facility Mortgage) be an employee
of Mortgagor or of an Affiliate of Mortgagor.
"Original Policy" means the ALTA Loan Policy of Title Insurance issued
by Chicago Title Insurance Company and Commonwealth Land Title Insurance
Company, pursuant to Title Commitment No. L 020329, dated the date hereof.
"Outstanding Amount" has the meaning set forth in Section 9 of the
Credit Agreement.
"Owned Land" has the meaning set forth in Granting Clause First.
"Permits" means all licenses, franchises, authorizations, statements of
compliance, certificates of operation, certificates of occupancy and permits
required for the lawful ownership, occupancy, operation and use of all or a
material portion of the Premises whether held by Mortgagor or any other Person
(which may be temporary or permanent) (including, without limitation, those
required for the use of the Casino Hotel as a licensed casino facility), in
accordance with all applicable Legal Requirements.
"Permitted Encumbrances" means:
(1) liens for taxes, assessments, or governmental charges not yet
due and payable, or if due and payable not delinquent, to the extent
that any fine, penalty, interest or cost may be added for nonpayment
thereof;
(2) Existing Encumbrances;
(3) FF&E Financing Agreements permitted by the Credit Agreement;
(4) the liens of this Second Priority Note Documents;
(5) the liens of this Mortgage and any rights granted as provided
therein;
(6) the lien of the Administrative Agent provided for in Section
7.03 of the Credit Agreement and of the trustees under Section 6.6 of
each of the Second Priority Note Indenture and the PIK Note Indenture;
(7) any lien or encumbrance which, under the provisions of
Section 5.6, constitutes a Permitted Encumbrance;
(8) Restricted Encumbrances;
(9) any Working Capital Facility Mortgage;
(10) any lien or encumbrance permitted under Section 5.3 of this
Credit Facility Mortgage;
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(11) any lien or encumbrance securing purchase money indebtedness
permitted by the Credit Agreement;
(12) modifications, refinancing, extension, renewals or
replacements, in whole or in part, of the liens described in clauses
(2) through (11) of this definition to the extent permitted by the
Credit Agreement; and
(13) any Facility Lease now existing or hereafter entered into.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or any other entity or government or any agency or
political subdivision thereof.
"PIK Note Indenture" means that certain indenture dated as of December
28, 1993 among Funding, as issuer, the Mortgagor, as guarantor, and First Bank
National Association (now known as U.S. Bank National Association), as trustee,
as it may be amended from time to time, relating to the PIK Notes.
"PIK Notes" means Funding's 13 7/8% Pay-in-Kind Notes due 2005.
"Premises" has the meaning set forth in Granting Clause Fourth.
"Restoration" has the meaning set forth in Section 5.10(e)(iii).
"Restricted Encumbrances" means any Leases permitted by and made in
accordance with Section 5.12 of this Credit Facility Mortgage.
"Second Priority Note Documents" means the "Mortgage Documents" as
defined in Section 1.1 of the Second Priority Note Indenture.
"Second Priority Note Indenture" means that certain indenture dated as
of December 28, 1993 among Funding, as issuer, the Mortgagor, as guarantor, and
First Bank National Association (now known as U.S. Bank National Association),
as trustee, as it may be amended from time to time, relating to Funding's Second
Priority Notes.
"Second Priority Notes" means the 11 3/4% Mortgage Notes due 2003
issued by Funding pursuant to the Second Priority Note Indenture.
"Securities Act" has the meaning set forth in Section 9 of the Credit
Agreement.
"Senior Indebtedness" means the Indebtedness evidenced by the Credit
Agreement and any Working Capital Facility and any amendments, extensions,
renewals, replacements or restatements of any of the foregoing to the extent
permitted by the Credit Agreement.
"Settlement Costs" has the meaning set forth in Section 5.17.
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"Stated Maturity" when used with respect to any Indebtedness, means the
date specified in such Indebtedness as the fixed date on which the principal of
such Indebtedness is due and payable.
"Superior Instrument Requirements" means the applicable terms,
conditions and provisions of any documentation which constitutes, evidences,
secures or governs any Senior Indebtedness, together with the terms and
conditions of the Marina Lease.
"Taking" means the acquisition or condemnation by eminent domain of the
whole or any part of the Premises, by a competent authority, for any public or
quasi-public use or purpose.
"Tangible Personal Property" has the meaning set forth in subclause (f)
of Granting Clause Sixth.
"TCHI" means Trump's Castle Hotel & Casino, Inc., a corporation
incorporated under the laws of the State of New Jersey.
"Trust Estate" has the meaning stated in the addendum to the Granting
Clauses.
"Uniform Commercial Code" means the New Jersey Uniform Commercial Code
N.J.S.A.12A:1-101, et seq.
"Working Capital Facility" has the meaning set forth in Section 9 of
the Credit Agreement.
"Working Capital Facility Mortgage" means any mortgage or other
security interest or agreement which secures a Working Capital Facility and
which evidences a lien pari passu with the lien of this Credit Facility
Mortgage.
Section 1.2. Notices.
(a) Any request, demand, authorization, direction, notice (including,
without limitation, a notice of default), consent, waiver or other document
provided or permitted by this Credit Facility Mortgage to be made upon, given or
furnished to, or filed with, Mortgagor, Mortgagee or the Administrative Agent
(collectively, "Notices") shall be in writing and shall be deemed given either
(i) when delivered by hand (including by overnight courier) or (ii) two days
after sending by registered or certified mail, postage prepaid, addressed as
follows:
To Mortgagor:
Trump's Castle Associates, L.P.
Trump Marina Hotel Casino
Brigantine Boulevard and Huron Avenue
Atlantic City, New Jersey 08401
Attn: Chief Financial Officer
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and
Graham, Curtin & Sheridan, P.A.
4 Headquarters Plaza
6th Floor
Morristown, NJ 07962
Attn: Kenneth W. Vest, Esq.
[ ]
To Mortgagee:
[ ]
Attn: [ ]
(b) By Notice to Mortgagor or Mortgagee either party may designate
additional or substitute addresses for Notices which, notwithstanding Subsection
(a) above, shall be deemed given when received.
Section 1.3. Form and Contents of Documents Delivered to Mortgagee.
Whenever several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other such matters in one or several documents.
Any certificate or opinion of a general partner of Mortgagor may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such general partner knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, a general partner of Mortgagor stating that the
information with respect to such factual matters is in the possession of
Mortgagor, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous. If appropriate to
the matter being opined upon, conclusions stated in any Opinion of Counsel may
be subject to rights of creditors and the availability of equitable remedies.
Whenever any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Credit Facility Mortgage, they may, but need not, be
consolidated to form one instrument.
Whenever in this Credit Facility Mortgage, in connection with any
application or certificate or report to Mortgagee, it is provided that Mortgagor
shall deliver any document as a condition of the granting of such application,
or as evidence of Mortgagor's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective
<PAGE>
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date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of Mortgagor to have such application granted or to the sufficiency of
such certificate or report.
Every application, certificate, report, affidavit, opinion, consent,
statement or other instrument required to be delivered to Mortgagee under this
Credit Facility Mortgage or under any other Second Priority Note Document shall
be in writing and shall be prepared and delivered without cost or expense to
Mortgagee.
Section 1.4. Compliance Certificates and Opinions.
Upon any application or request by Mortgagor to Mortgagee to take any
action under any provision of this Credit Facility Mortgage, Mortgagor shall
furnish to Mortgagee a Mortgagor's Certificate stating that all conditions
precedent, if any, provided for in this Credit Facility Mortgage relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Credit Facility Mortgage relating to such particular application or
request, no additional certificate or opinion need be furnished. Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Credit Facility Mortgage shall include:
(a) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.5. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.6. Successors and Assigns; Amendments.
(a) Subject to the provisions of Sections 1.10 and 4.2 hereof and
Section 11.04 of the Credit Agreement, this Credit Facility Mortgage
shall be binding upon and inure to the benefit of the parties hereto
and of the respective successors and assigns of the parties hereto
<PAGE>
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to the same effect as if each such successor or assign were in each
case named as a party to this Credit Facility Mortgage.
(b) This Credit Facility Mortgage may not be modified, amended,
discharged, released nor any of its provisions waived except by
agreement in writing executed by Mortgagor and Mortgagee and in
accordance with the provisions of this Credit Facility Mortgage and
the Credit Agreement.
Section 1.7. Separability Clause.
In case any provision in this Credit Facility Mortgage shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.8. Benefits of Mortgage.
Without limiting the generality of Section 3.12, nothing in this Credit
Facility Mortgage, or in the Credit Agreement, express or implied, shall give to
any Person, other than the parties hereto and their successors and assigns, any
benefit or any legal or equitable right, remedy or claim under this Credit
Facility Mortgage.
Section 1.9. Governing Law.
This Credit Facility Mortgage shall be deemed to be a contract under
the laws of the State of New Jersey and shall be construed in accordance with
and governed by the laws of the State of New Jersey.
Section 1.10. Limitation on Liability.
Notwithstanding anything herein or in any other agreement, document,
certificate, instrument, statement or omission referred to below to the
contrary, Mortgagor is liable hereunder only to the extent of the assets of
Mortgagor and no other person or entity, including, without limitation, any
partner, officer, committee or committee member of Mortgagor or any partner
therein or in any partnership Affiliate of Mortgagor, or any incorporator,
officer, director or shareholder of any corporate partner of Mortgagor or of any
corporate Affiliate of Mortgagor, or any Affiliate or Controlling person or
entity of any of the foregoing, or any agent, employee, or lender of any of the
foregoing, or any successor, personal representative, heir or assign of any of
the foregoing, in each case past, present or as they may exist in the future,
shall be liable in any respect (including, without limitation, the breach of any
representation, warranty, covenant, agreement, condition or indemnification or
contribution undertaking contained herein or therein) under, in connection with,
arising out of or relating to this Credit Facility Mortgage, or any other
agreement, document, certificate, instrument or statement (oral or written)
related to, executed or to be executed, delivered or to be delivered, or made or
to be made, or any omission made or to be made, in connection with any of the
foregoing or any of the transactions contemplated in any such agreement,
document, certificate, instrument, or statement. Any agreement, document,
certificate, statement or other instrument to be executed simultaneously with,
in
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connection with, arising out of or relating to this Credit Facility Mortgage or
any other agreement, document, certificate, statement or instrument referred to
above, or any agreement, document, certificate, statement or instrument
contemplated hereby shall contain language mutatis mutandis to this Section 1.10
and, if such language is omitted, shall be deemed to contain such language.
Section 1.11. Provisions Required by Credit Agreement.
Whenever the provisions of this Credit Facility Mortgage and the
provisions of the Credit Agreement shall be inconsistent, the provisions of the
Credit Agreement shall govern.
Section 1.12. Rights of Administrative Agent as Mortgagee.
Except as otherwise provided in Section 10 of the Credit Agreement:
(1) Mortgagee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(2) any request or direction of Mortgagor mentioned herein shall
be sufficiently evidenced by a Mortgagor Request or Mortgagor Order;
(3) whenever in the administration of this Credit Facility
Mortgage, Mortgagee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, Mortgagee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon a
Mortgagor's Certificate;
(4) Mortgagee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by Mortgagee hereunder in good faith and in reliance
thereon;
(5) Mortgagee shall be under no obligation to exercise any of the
rights or powers vested in it by this Credit Facility Mortgage at the
request or direction of any of the Lenders pursuant to the Credit
Agreement, unless such Lenders shall have offered to Mortgagee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby in compliance
with such request or direction;
(6) Mortgagee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, approval, appraisal, bond, debenture, note, coupon, security or
other paper or document but Mortgagee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if Mortgagee shall determine to make such further
inquiry or investigation, it shall be entitled (subject to the express
<PAGE>
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limitations with respect thereto contained in this Credit Facility
Mortgage) to examine the books, records and premises of Mortgagor,
personally or by agent or attorney;
(7) Mortgagee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents or attorneys, and Mortgagee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(8) Mortgagee shall not be personally liable, in case of entry by
it upon the Trust Estate, for debts contracted or liabilities or
damages incurred in the management or operation of the Trust Estate;
(9) Mortgagor shall pay or cause to be paid to the Administrative
Agent all compensation and other amounts provided in the Credit
Agreement, including Section 11.01 thereof; and
(10) no provision of this Credit Facility Mortgage shall require
Mortgagee to expend or risk its own funds or otherwise incur any
financial liability in the performance of its obligations hereunder,
or in the exercise of any of its rights or powers.
Section 1.13. Mortgage Subject to Casino Control Act.
Each provision of this Credit Facility Mortgage is subject to and shall
be enforced in compliance with the provisions of the New Jersey Casino Control
Act.
Section 1.14. Discharge of Lien.
If Mortgagor shall pay or cause to be paid, or there shall otherwise be
paid, to Mortgagee all amounts required to be paid by Mortgagor pursuant to this
Credit Facility Mortgage, and the conditions precedent for the Credit Agreement
to cease, determine and become null and void (except for any surviving rights
under the Credit Agreement and for the obligation to pay the fees and expenses
provided in the Credit Agreement) in accordance with the Credit Agreement shall
have occurred, Mortgagee shall promptly cancel and discharge this Credit
Facility Mortgage, and any financing statements filed in connection herewith and
execute and deliver to Mortgagor all such instruments as may be necessary,
required or appropriate to evidence such discharge and satisfaction of said lien
or liens.
Section 1.15. General Application.
(a) The remedies of Mortgagee upon any default by Mortgagor in
the fulfillment of any of its obligations hereunder shall be limited
in each instance by the provisions of Section 1.10, whether or not the
provisions providing for such remedies explicitly refer to such
Section.
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(b) The assertion of any rights upon any Default shall be subject
in each instance to, if required, the giving of any notice and the
expiration of any grace period provided for in Section 3.1 as a
condition to such Default becoming an Event of Default.
(c) For the purposes of this Credit Facility Mortgage, it is
understood that an event which does not materially diminish the value
of Mortgagee's interest in the Trust Estate shall not be deemed an
"impairment of security," as that phrase is used in this Credit
Facility Mortgage.
Section 1.16. Credit Facility Mortgage Deemed to be Security Agreement.
To the extent that the grant of a security interest in any portion of
the Trust Estate is governed by the Uniform Commercial Code, this Credit
Facility Mortgage is hereby deemed to be as well a security agreement under the
Uniform Commercial Code for the purpose of creating hereby a security interest
in all of Mortgagor's right, title and interest in and to said property,
securing the obligations secured hereby, for the benefit of Mortgagee.
ARTICLE TWO
RELEASE; SUBORDINATION
Section 2.1. Possession by Mortgagor.
So long as there shall have been no acceleration of maturity of the
Credit Agreement, Mortgagor shall be suffered and permitted, with power freely
and without let or hindrance on the part of Mortgagee, subject to the provisions
of this Credit Facility Mortgage and the Credit Agreement, to possess, use,
manage, operate and enjoy the Trust Estate and every part thereof and to
collect, receive, use, invest and dispose of the rents, issues, tolls, profits,
revenues and other income from the Trust Estate or any part thereof, to use,
consume and dispose of any consumable, goods, wares and merchandise in the
ordinary course of business of operating the Casino Hotel and to adjust and
settle all matters relating to chooses in action, leases and contracts.
Section 2.2. Obsolete Property.
Mortgagor shall have the right, at any time and from time to time,
unless an Event of Default shall have occurred and be continuing, without any
release from or consent by Mortgagee:
(a) to sell or dispose of, free from the lien of this Credit
Facility Mortgage, any Tangible Personal Property which, in its
reasonable opinion, may have become obsolete or unfit for use or which
is no longer necessary in the conduct of its businesses or the
operation of the Trust Estate, and no purchaser of any such property
shall be bound to inquire into any question affecting Mortgagor's
right to sell or otherwise dispose of the same free from the lien of
this Credit Facility Mortgage;
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(b) to alter, repair, replace, change the location or position of
and add to any Tangible Personal Property; provided, however, that no
change shall be made in the location of any such property subject to
the lien of this Credit Facility Mortgage which would in any respect
impair the security of this Credit Facility Mortgage upon such
property; or
(c) to renew, extend, surrender, terminate, modify or amend any
leases of Tangible Personal Property, when, in Mortgagor's reasonable
opinion, it is prudent to do so.
Mortgagor shall retain any net cash proceeds received from the sale or
disposition of any Tangible Personal Property under Subsection (a) of this
Section 2.2, in the business of operating the Casino Hotel.
Mortgagee shall be under no responsibility or duty with respect to the
exercise of the rights of Mortgagor under this Section 2.2 or the application of
the proceeds of any sale or disposition of any Tangible Personal Property.
Mortgagee shall, from time to time, promptly execute any written
instrument in form satisfactory to Mortgagee to confirm the propriety of any
action taken by Mortgagor under this Section 2.2, upon receipt by Mortgagee of a
Mortgagor Request requesting the same, together with a Mortgagor's Certificate
stating that the action so to be confirmed was duly taken in conformity with
this Section 2.2, and that the execution of such written instrument is
appropriate to confirm the propriety of such action under this Section 2.2;
provided, that Mortgagee shall have no liability thereunder and all costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) shall be paid by Mortgagor.
Section 2.3. FF&E Financing Agreements.
Notwithstanding any provision contained in this Credit Facility
Mortgage or the Credit Agreement to the contrary, if Mortgagor acquires Tangible
Personal Property and/or other items constituting operating assets subject to
any FF&E Financing Agreement, or becomes the lessee under a lease for any of the
same and if the document evidencing such FF&E Financing Agreement prohibits
subordinate liens or the provisions of any such lease prohibits any assignment
thereof by the lessee, and if any such prohibition is customary with respect to
similar transactions of the lender or lessor (as evidenced by a Mortgagor's
Certificate delivered to Mortgagee, together with such other evidence as
Mortgagee may reasonably request), as the case may be, then the property so
purchased or the lessee's interest in the lease, as the case may be, shall be
deemed to be Excepted Property. If any such FF&E Financing Agreement permits
subordinate liens, then Mortgagee shall execute and deliver to Mortgagor, at
Mortgagor's expense, such documents as the holder of such FF&E Financing
Agreement may reasonably request to evidence the subordination of the lien of
this Credit Facility Mortgage and the Second Priority Note Documents to the lien
of such FF&E Financing Agreement; provided, however, that Mortgagee shall have
no obligation to execute and deliver such documents, and the lien of this Credit
Facility Mortgage shall not be subordinate to any such FF&E Financing Agreement,
unless (a) such FF&E Financing Agreement shall contain a provision binding upon
the holder of such FF&E Financing Agreement that (i) if the holder of such FF&E
Financing Agreement shall give to Mortgagor any notice of default thereunder,
such holder shall at the same time and in the same manner serve
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a copy of such notice on Mortgagee at the address designated herein
(or such other address as Mortgagee may designate by notice given to the holder
of such FF&E Financing Agreement in the manner provided for notices hereunder),
and that no such notice to Mortgagor shall be deemed to have been duly given
unless and until a copy thereof has been so provided to Mortgagee, and (ii)
promptly following the last date upon which Mortgagor may cure such default, if
Mortgagor shall fail to cure such default, the holder of such FF&E Financing
Agreement shall give notice to Mortgagee stating the manner in which Mortgagor
shall have failed to cure its said default, in which event Mortgagee shall be
permitted to cure the default and, with respect thereto, Mortgagee shall have
the same amount of time, after such notice, within which to cure the said
default, as is provided for under the provisions of such FF&E Financing
Agreement to be given to Mortgagor therefor after notice or (b) Mortgagor
delivers to Mortgagee a Mortgagor's Certificate certifying that (i) the
provision described in clause (a) is not customarily included by the lender or
lessor in its FF&E Financing Agreements in similar transactions and (ii)
although Mortgagor has used reasonable efforts to have included in such FF&E
Financing Agreement such a provision, Mortgagor has been unsuccessful in
obtaining such a provision.
ARTICLE THREE
REMEDIES
Section 3.1. Events of Default.
"Event of Default," whenever used herein, means any one of the
following events (including any applicable notice requirement and any period of
grace, as specified in this Section 3.1) (whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest required to be paid
under the Credit Agreement when such interest becomes due and payable
and continuance of such default for a period of Three Business Days
(as defined in the Credit Agreement); or
(b) default in the payment of all or any portion of the principal
of (or premium, if any, on) the Loans when the same becomes due and
payable at its Maturity and continuance of such default for a period
of Three Business Days (as defined in the Credit Agreement); or
(c) default in the payment of any other sum due under the Credit
Agreement or this Credit Facility Mortgage, and the continuance of
such default for a period of 30 days after there has been given to
Mortgagor a notice specifying such default and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(d) [Intentionally Omitted]; or
(e) default in the performance, or breach, of any covenant of
Mortgagor in this Credit Facility Mortgage (other than a covenant, a
default in the performance or breach of
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which is elsewhere in this Section 3.1 specifically dealt with), and
continuance of such default or breach for a period of 30 days after
there has been given to Mortgagor a notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder, unless (i) the default or breach is
of such a nature that is curable but not susceptible of being cured
with due diligence within such 30-day period (for reasons other than
the lack of funds), (ii) Mortgagor delivers a Mortgagor's Certificate
to Mortgagee within such 30-day period stating (A) the applicability
of the provisions of clause (i) to such default or breach, (B)
Mortgagor's intention to remedy such default or breach with reasonable
diligence and (C) the steps which Mortgagor has undertaken or intends
to undertake to remedy such default or breach and (iii) Mortgagor
delivers to Mortgagee additional Mortgagor's Certificates every 30
days thereafter updating the information contained in the certificate
described in clause (ii), in which case such 30-day period shall be
extended for such further period of time (but in no event more than 60
days after the last day of such 30-day period) as may reasonably be
required to cure the same, provided that Mortgagor is then proceeding
and thereafter continues to proceed to cure the same with reasonable
diligence; or
(f) an "Event of Default," as defined in Section 8 of the Credit
Agreement, shall occur and be continuing; or
(g) default by Mortgagor under any of the terms of any Facility
Lease which shall not be fully cured or waived prior to the expiration
of any grace period (as such grace period may be extended) contained
in such Facility Lease; or
(h) default in the performance, or breach, of any of the
provisions of Article Four hereof, or
(i) if any representation or warranty of Mortgagor set forth in
this Credit Facility Mortgage or in any notice, certificate, demand or
request delivered to Mortgagee pursuant to this Credit Facility
Mortgage shall prove to be incorrect in any material respect as of the
time when made; or
(j) an "Event of Default" as defined in Section 1.1 of the Second
Priority Note Documents shall occur and be continuing.
An Event of Default shall not be deemed to exist by reason of any event
which Mortgagor is contesting in compliance with the provisions of Section 5.8.
Section 3.2. Acceleration of Maturity; Recision and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 8.05 of the Credit Agreement) occurs and is continuing, then, and in
every such case, Mortgagee may declare the Outstanding Amount of the Loans to be
due and payable immediately, by a notice in writing to Mortgagor and upon any
such declaration such principal shall become immediately due and payable. If an
Event
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of Default specified in such Section 8.05 occurs, the Outstanding Amount of the
Loans shall ipso facto become due and payable without any declaration or other
act on the part of the Mortgagee.
If at any time after such declaration of acceleration has been made,
but before any judgment or decree for payment of money due on the Loans has been
obtained by the Mortgagee, such declaration of acceleration and its consequences
has been duly rescinded and annulled in accordance with the applicable
provisions of the Credit Agreement, then the declaration of acceleration
pursuant to this Section 3.2 shall automatically be rescinded and annulled.
No such rescission and annulment shall affect any subsequent default or
impair any right consequent thereon.
Section 3.3. Application of Moneys Received by Mortgagee.
Any moneys received by Mortgagee pursuant to the provisions of this
Article Three (including moneys received by the Administrative Agent after any
action or act by Mortgagee under Section 3.10) shall be applied by Mortgagee in
accordance with the applicable provisions of the Credit Agreement.
Section 3.4. Restoration of Rights and Remedies.
If Mortgagee has instituted any proceeding to enforce any right or
remedy under this Credit Facility Mortgage and such proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
Mortgagee, then and in every such case Mortgagor and Mortgagee shall, subject to
any determination in such proceeding, be restored to their respective former
positions hereunder, and thereafter all rights and remedies of Mortgagee shall
continue as though no such proceeding had been instituted.
Section 3.5. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to Mortgagee is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 3.6. Delay or Omission Not Waiver.
No delay or omission of Mortgagee to exercise any right or remedy
accruing upon an Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Three or by applicable law to
Mortgagee may be exercised, from time to time, and as often as may be deemed
expedient, by Mortgagee.
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Section 3.7. Undertaking for Costs.
If any action or proceeding shall be commenced (including, without
limitation, an action to foreclose this Credit Facility Mortgage or to collect
the indebtedness secured hereby) to which action or proceeding Mortgagee is made
or becomes a party, or in which it becomes necessary in the opinion of Mortgagee
to defend or uphold the lien of this Credit Facility Mortgage, Mortgagor shall
pay to Mortgagee all expenses, including, without limitation, reasonable
attorneys' fees, disbursements and court costs incurred by Mortgagee in
connection therewith, together with interest at the rate then payable on the
Loans, from the date of payment less the net amount received by Mortgagee, as
its interests may appear under any title insurance policy, and, until paid, all
such expenses, together with interest as aforesaid, shall be secured by the lien
of this Credit Facility Mortgage.
Section 3.8. Waiver of Appraisement and Other Laws.
To the full extent that it may lawfully so agree, Mortgagor will not at
any time insist upon, plead, claim or take the benefit or advantage of, any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force, in order to prevent or hinder the enforcement of this Credit Facility
Mortgage or the absolute sale of the Trust Estate, or any part thereof, or the
possession thereof by any purchaser at any sale under this Article Three; and
Mortgagor, for itself and all who may claim under Mortgagor, so far as Mortgagor
or they now or hereafter may lawfully do so, hereby waives the benefit of all
such laws. Mortgagor, for itself and all who may claim under Mortgagor, waives,
to the extent that Mortgagor may lawfully do so, all right to have the property
in the Trust Estate marshaled upon any foreclosure hereof, and agrees that any
court having jurisdiction to foreclose this Credit Facility Mortgage may order
the sale of the Trust Estate as an entirety.
If any law in this Section 3.8 referred to and now in force, of which
Mortgagor or its successor or successors might take advantage despite this
Section 3.8, shall hereafter be repealed or cease to be in force, such law shall
not thereafter be deemed to constitute any part of the contract herein contained
or to preclude the application of this Section 3.8.
Section 3.9. Entry.
Mortgagor agrees that upon the occurrence, and during the continuance,
of an Event of Default, Mortgagor, upon demand of Mortgagee, shall forthwith
surrender to Mortgagee the actual possession of, and it shall be lawful for
Mortgagee by such officers or agents as it may appoint to enter and take
possession of, the Trust Estate (and the books and papers of Mortgagor), and to
hold, operate and manage the Trust Estate, the making of all needful repairs,
and such alterations, additions and improvements as Mortgagee shall deem wise
and to receive the rents, issues, tolls, profits, revenues and other income
thereof, and, after deducting the costs and expenses of entering, taking
possession, holding, operating and managing the Trust Estate, as well as
payments for taxes, insurance and other proper charges upon the Trust Estate and
reasonable compensation to itself, its agents and counsel, to apply the same as
provided in Section 3.3; provided, however, that Mortgagee's rights under this
Section 3.9 shall be subject to the provisions of the New Jersey Casino Control
Act and Section 3.14. Whenever all that is then due under any of the terms of
the Credit Agreement and this Credit Facility
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Mortgage shall have been paid and all defaults hereunder shall have been cured,
Mortgagee shall surrender possession to Mortgagor.
Section 3.10. Power of Sale; Suits for Enforcement.
If an Event of Default shall occur and be continuing, Mortgagee, with
or without entry, in its discretion, may:
(a) sell, subject to any mandatory requirements of applicable
law, the Trust Estate as an entirety, or in such parcels as Mortgagee
may determine, to the highest bidder at public auction at such place
and at such time (which sale may be adjourned by Mortgagee from time
to time in its discretion by announcement at the time and place fixed
for such sale, without further notice) and upon such terms as
Mortgagee may fix and briefly specify in a notice of sale to be
published as required by law; or
(b) proceed to protect and enforce its rights under this Credit
Facility Mortgage by sale pursuant to judicial proceedings or by a
suit, action or proceeding in equity or at law or otherwise, whether
for the specific performance of any covenant or agreement contained in
this Credit Facility Mortgage or in aid of the execution of any power
granted in this Credit Facility Mortgage or for the foreclosure of
this Credit Facility Mortgage or for the enforcement of any other
legal, equitable or other remedy, as Mortgagee shall deem most
effectual to protect and enforce any of the rights of Mortgagee; the
failure to join tenants shall not be asserted as a defense to any
foreclosure or proceeding to enforce the rights of Mortgagee.
Section 3.11. Incidents of Sale.
Upon any sale of any of the Trust Estate, whether made under the power
of sale hereby given or pursuant to judicial proceedings, to the extent
permitted by law:
(a) the principal of and accrued interest on the Loans, if not
previously due, shall at once become and be immediately due and
payable,
(b) subject to the provisions of Section 3.14 and the receipt of
any required prior approvals of the New Jersey Casino Control
Commission, Mortgagee may bid for and purchase the property offered
for sale, and upon compliance with the terms of sale may hold, retain,
possess and dispose of such property, without further accountability,
and may, in paying the purchase money therefor, deliver the notes
evidencing the Loans or claims for interest thereon in lieu of cash to
the amount which shall, upon distribution of the net proceeds of such
sale, be payable thereon, and the notes evidencing the Loans, in case
the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to Mortgagee after being appropriately
stamped to show the partial payment;
(c) Mortgagee may make and deliver to the purchaser or purchasers
a good and sufficient deed, bill of sale and instrument of assignment
and transfer of the property sold;
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(d) Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment and transfer of the
property thus sold; and for that purpose it may execute all necessary
deeds, bills of sale and instruments of assignment and transfer, and
may substitute one or more persons, firms or corporations with like
power, Mortgagor hereby ratifying and confirming all that its said
attorney or such substitute or substitutes shall lawfully do by virtue
hereof, but if so requested by Mortgagee or by any purchaser,
Mortgagor shall ratify and confirm any such sale or transfer by
executing and delivering to Mortgagee or to such purchaser or
purchasers all proper deeds, bills of sale, instruments of assignment
and transfer and releases as may be designated in any such request;
(e) all right, title, interest, claim and demand whatsoever,
either at law or in equity or otherwise, of Mortgagor of, in and to
the property so sold shall be divested and such sale shall be a
perpetual bar both at law and in equity against Mortgagor, its
successors and assigns, and against any and all persons claiming or
who may claim the property sold or any part thereof from, through or
under Mortgagor, its successors and assigns; and
(f) the receipt of Mortgagee or of the officer making such sale
shall be a sufficient discharge to the purchaser or purchasers at such
sale for his or their purchase money and such purchaser or purchasers
and his or their assigns or personal representatives shall not, after
paying such purchase money and receiving such receipt, be obliged to
see to the application of such purchase money, or be in any way
answerable for any loss, misapplication or non-application thereof.
Section 3.12. Receiver.
Upon the occurrence of an Event of Default and commencement of judicial
proceedings by Mortgagee to enforce any right under this Credit Facility
Mortgage, Mortgagee shall be entitled, as against Mortgagor, without notice or
demand and without regard to the adequacy of the security for the Loans or the
solvency of Mortgagor, to the appointment of a receiver of the Trust Estate, and
of the rents, issues, profits, revenues and other income thereof; provided,
however, that Mortgagee's rights under this Section 3.12 shall be subject to the
provisions of the New Jersey Casino Control Act and Section 3.14 hereof.
Section 3.13. Suits to Protect the Trust Estate.
Mortgagor hereby acknowledges the right of Mortgagee, in the name and
on behalf of Mortgagor, (a) to appear in and defend any action or proceeding
brought with respect to the Trust Estate or any part thereof and (b) upon 5
days' prior notice to Mortgagor (or such shorter period or without notice if
deemed necessary and appropriate by Mortgagee), to institute and to maintain
such proceedings as Mortgagee may deem necessary and appropriate, but in the
case of (a) and (b) only to prevent any impairment of security or any impairment
of the Trust Estate by any acts which may be unlawful or in violation of this
Credit Facility Mortgage and to protect Mortgagee's interests in the Trust
Estate and in the rents, issues, profits, revenues and other income arising
therefrom, including the right to institute and maintain proceedings to restrain
the enforcement of or compliance with any governmental
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enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or order would impair
the security hereunder or be materially prejudicial to the interests of
Mortgagee.
Section 3.14. Management of the Premises.
Without limiting the generality of any other provision of this Article
Three, following an Event of Default and the taking of possession of the Trust
Estate or any part thereof by Mortgagee and/or the appointment of a receiver of
the Trust Estate or any part thereof, Mortgagee or any such receiver shall be
authorized, in addition to the rights and powers of Mortgagee and such receiver
set forth elsewhere in this Credit Facility Mortgage, to take any action
permitted under the applicable provisions of the Credit Agreement.
ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 4.1. Consolidation, Merger, Conveyance or Transfer only on Certain
Terms.
Mortgagor shall comply with all provisions applicable to Mortgagor in
Section 7.01 of the Credit Agreement.
Section 4.2. Successor Entity Substituted.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer or disposition of the Trust Estate or any portion thereof in accordance
with Section 7.01 of the Credit Agreement (other than a lease), the successor
Person formed by such consolidation or into which Mortgagor is merged or the
successor Person to which such sale, assignment, conveyance, transfer or
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, Mortgagor under this Credit Facility Mortgage with the
same effect as if such successor had been named as Mortgagor herein; and
thereafter, except in the case of a lease, the Person named as "Mortgagor" in
the first paragraph of this instrument or any successor Person which shall
theretofore have become such in the manner prescribed in this Article shall be
discharged from all obligations and covenants under this Credit Facility
Mortgage.
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
Section 5.1. Performance of Obligations.
Mortgagor shall duly and punctually pay and perform its obligations
under the Credit Agreement in accordance with the terms of the Credit Agreement.
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Section 5.2. FF&E Financing Agreements.
Mortgagor shall comply with all of the terms and conditions set forth
in any FF&E Financing Agreements before the expiration of any applicable notice
and cure periods contained in the FF&E Financing Agreements.
Section 5.3. Limitations on Liens and Transfers.
(a) Mortgagor shall not create, incur, suffer or permit to be created
or incurred or to exist any mortgage, lien, charge or encumbrance on or pledge
of any of the Trust Estate, other than (i) Permitted Encumbrances, (ii) a notice
of intention filed by a mechanic, materialman or laborer under the New Jersey
mechanic's lien law, and (iii) a building contract filed by a contractor or
subcontractor under the New Jersey mechanic's lien law. Without limiting the
generality of the foregoing sentence but notwithstanding the provisions of the
foregoing sentence, Mortgagor shall not be deemed to have breached the
provisions of the foregoing sentence by virtue of the existence of a lien for
Impositions or mechanics' liens so long as Mortgagor is in good faith contesting
the validity of the same in accordance with the provisions of Section 5.8.
(b) The lien of this Credit Facility Mortgage on the date hereof shall
be superior, and not subordinate to the lien of any Permitted Encumbrances
(except for items 1, 2, 3, 4 and 11 contained in the definition of Permitted
Encumbrances and any Working Capital Facility Mortgage) to the extent that each
thereof encumbers Mortgagor's interest in the Trust Estate or any part thereof,
Mortgagor shall from time to time after receipt of a request of Mortgagee or the
Administrative Agent obtain instruments in form and substance reasonably
satisfactory to Mortgagee or Administrative Agent, as the case may be,
confirming the senior lien priority of this Credit Facility Mortgage over the
lien of any such Permitted Encumbrances.
(c) Except as otherwise expressly permitted under this Credit Facility
Mortgage and the Credit Agreement (including, without limitation, Section 7.01
of the Credit Agreement), Mortgagor shall not sell, assign, lease or otherwise
transfer all or any portion of the Trust Estate or any interest therein.
Notwithstanding the foregoing, Mortgagor shall have the right, at any time and
from time to time, unless an Event of Default shall have occurred and be
continuing, without any release from or consent by Mortgagee, to grant interests
in the Owned Land in the nature of rights-of-way or easements, or other rights
or privileges in the nature of easements; provided, (i) that none of the same
will reduce or impair, in any material respect, (A) the value or usefulness of
the Trust Estate or any part thereof or (B) the normal operation of the Casino
Hotel in accordance with all Legal Requirements and all Permits, (ii) Mortgagor
has delivered to Mortgagee a Mortgagor's Certificate, dated not earlier than 10
days prior to the date of each such grant, certifying that (A) no Event of
Default has occurred and is continuing and (B) the conditions set forth in this
Section 5.3(c) for such grant have been fulfilled and (iii) Mortgagor has
delivered to Mortgagee a duplicate original of the instrument, if any, pursuant
to which such grant is to be made, and such other instruments, certificates and
opinions as Mortgagee may reasonably request. The foregoing provisions of this
Section 5.3(c) shall be self-operative and no further instrument shall be
required to evidence the consent of Mortgagee to the grant or other conveyance
of such rights-of-way or easements. Mortgagee shall, however, from time to time,
after receipt of a Mortgagor Request therefor (accompanied by a Mortgagor's
Certificate stat-
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ing that said conditions have been satisfied) execute instruments in form and
substance reasonably satisfactory to Mortgagee confirming the permissibility of
such grant or other conveyance.
Section 5.4. Environmental.
Without limiting the generality of any other provision of this Credit
Facility Mortgage, Mortgagor covenants, represents and warrants to Mortgagee as
follows:
(a) Mortgagor shall comply with any and all federal, state and
local environmental legislation, rules, and regulations in effect as
of the date of this Credit Facility Mortgage and subsequent thereto,
including, without limitation, the Spill Compensation and Control Act
(N.J.S.A. 58:10-23.11 et seq.) (the "Spill Act"); the Industrial Site
Recovery Act (N.J.S.A. 13:1K-6 et seq.) ("ISRA"); the Solid Waste
Management Act (N.J.S.A. 13:E-1 et seq.); The Resource, Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA"); the
Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. Section 9601 et seq.) ("CERCLA") and such other
environmental legislation, rules and regulations, as are in or may
come into effect and apply to (i) Mortgagor and/or Mortgagee with
respect to the Premises or (ii) the transactions contemplated hereby,
and as to any occupants or users of the collateral, whether as
lessees, tenants, licensees or otherwise, Mortgagor shall use its best
efforts to cause same to comply with said legislation, rules and
regulations. Mortgagor agrees to pay all costs required in connection
with compliance with the foregoing legislation, rules and regulations.
(b) Mortgagor has not used in the past, nor shall Mortgagor use
in the future, the Premises for the purpose of refining, producing,
storing, handling, transferring, processing or transporting "Hazardous
Substances", as such term is defined in ISRA, the Spill Act, CERCLA or
the regulations relating thereto, except that Mortgagor and its
subsidiaries have used, and Mortgagor may continue in the future to
use, substances in the operation and maintenance of the Premises,
including, without limitation, heating oil, gasoline and cleaning
chemicals which could be considered as "Hazardous Substances" under
the preceding definition.
(c) To the best of Mortgagor's knowledge, after due inquiry and
investigation, none of the real property owned, leased and/or occupied
by Mortgagor and located in the State of New Jersey, including,
without limitation, the Premises, has been or is now being used as a
"Major Facility" as such term is defined in N.J.S.A. 58:10-23.11b(l).
Mortgagor will not use the Premises in the future as a "Major
Facility".
(d) To the best of Mortgagor's knowledge, after due inquiry and
investigation, no lien has been attached to any revenues or any real
or personal property owned by Mortgagor or the Premises, as a result
of the Chief Executive of the New Jersey Spill Compensation Fund
expending monies from said fund to pay for "Cleanup Costs", as such
term is defined in N.J.S.A. 58:10-23.11 b(d), arising from an
intentional or unintentional action or omission of Mortgagor or any
previous owner and/or operator of such real property.
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(e) There is no asbestos or asbestos containing material on the
Premises. To the best of Mortgagor's knowledge, there are no
underground storage tanks located at the Premises, other than those
tanks previously disclosed to Mortgagee and which are maintained in
accordance with all material Legal Requirements. Mortgagor has not
installed or placed, or permitted to be installed or placed, any
underground storage tanks at or on the Premises, other than those
tanks previously disclosed to Mortgagee and which are maintained
accordance with all material Legal Requirements. Underground storage
tanks shall have the definition as set forth in N.J.S.A. 58:10A-22(p).
(f) Mortgagor has not received a summons, citation, directive,
letter, other written communication, or, to the best of its knowledge,
any oral communication, from the New Jersey Department of
Environmental Protection and Energy or from any other person, firm or
corporation concerning any intentional or unintentional action or
omission on Mortgagor's part resulting in the releasing, spilling,
leaking, pumping, pouring, emitting, emptying or dumping of "Hazardous
Substances", as such term is defined in N.J.S.A. 58:10-23.11b(k), into
the waters or onto the lands of the State of New Jersey, or into the
waters outside the jurisdiction of the State of New Jersey, in either
case resulting in damage to the lands, waters, fish, shellfish,
wildlife, biota, air and other resources owned, managed, held in trust
or otherwise controlled by the State of New Jersey.
(g) In connection with any purchase of the Premises or any
business or assets located thereon or any "closing, terminating or
transferring operations" of any "industrial establishment", as that
term is defined in ISRA, occurring on or after December 31, 1983,
Mortgagor required that the owner and or operator of the industrial
establishment comply with the provisions of ECRA and the owner and or
operator did comply therewith.
(h) Upon the occurrence of an Event (as hereinafter defined),
Mortgagee shall have the right to have its consultants perform a
comprehensive environmental audit of the Premises. Such audit shall be
conducted by an environmental consultant chosen by Mortgagee and may
include a visual survey, a record review, an area reconnaissance
assessing the presence of hazardous or toxic waste or substances, PCBs
or storage tanks at the Premises, an asbestos survey of the Premises,
which may include random sampling of the improvements and air quality
testing, and such further site assessments as Mortgagee may reasonably
require due to the results obtained from the foregoing. Mortgagor
grants Mortgagee, its agents, consultants and contractors the right to
enter the Premises for the purposes of performing such studies and the
cost of such studies shall be due and payable by Mortgagor to
Mortgagee upon demand and shall be secured by the lien of this Credit
Facility Mortgage. Mortgagee shall direct the environmental consultant
to use its best efforts not to hinder Mortgagor's or any tenant's
operations when conducting such audit, sampling or inspections. For
purposes of this paragraph, the term "Event" shall mean (i) the
occurrence of any Event of Default, (ii) the issuance of any summons,
citation, directive or similar written notice from the New Jersey
Department of Environmental Protection and Energy or from any other
local, state or federal entity or from any other person, firm or
corporation concerning any alleged material violation of any and all
federal, state and local environmental legislation, rules and
regulations in effect as of the date of this Credit Facility Mortgage
and subsequent thereto or (iii) the initiation of any
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legal action, suits or other legal or administrative proceedings
relating to or in connection with any alleged violation of any and all
federal, state and local environmental legislation, rules and
regulations in effect as of the date of this Credit Facility Mortgage
and subsequent thereto.
(i) If a lien shall be filed against the Premises by the New
Jersey Department of Environmental Protection and Energy, pursuant to
and in accordance with the provisions of N.J.S.A. 58:10-23.11f(f), as a
result of the Chief Executive of the New Jersey Spill Compensation Fund
having expended monies from said fund to pay for "Damages", as such
term is defined in N.J.S.A. 58:10-23.11g, and/or "Cleanup and
Removal-Costs", as such term is defined in N.J.S.A. 58:10-23(b),
arising from an intentional or unintentional action or omission of
Mortgagor resulting in the releasing, spilling, pumping, pouring,
emitting, emptying or dumping of "Hazardous Substances" as such term is
defined in N.J.S.A. 58:10-23.11(b)k into waters of the State of New
Jersey or onto lands from which it might flow or drain into said
waters, then, unless there is a good faith basis for contesting such
lien and Mortgagor is so contesting such lien in accordance with
Section 5.8, Mortgagor shall, within 30 days from the date that
Mortgagor is given notice that the lien has been placed against the
Premises or within such shorter period of time if the State of New
Jersey has commenced steps to cause the Premises to be sold pursuant to
the lien, either (i) pay the claim and remove the lien from the
Premises, or (ii) furnish (A) a bond satisfactory to a title company
selected by Mortgagee (the "Title Insurer") in the amount of the claim
out of which the lien arises, (B) to the Administrative Agent, a cash
deposit (which may be disbursed by the Administrative Agent in its sole
discretion) in the amount of the claim out of which the lien arises, or
(C) other security reasonably satisfactory to Mortgagee in an amount
sufficient to discharge the claim out of which the lien arises.
(j) Mortgagor shall use its best efforts to cause compliance
by all lessees with all applicable Legal Requirements relating to
environmental protection.
(k) Mortgagor shall promptly provide Mortgagee with copies of
all notices received by or prepared by Mortgagor in connection with
ISRA, CERCLA, the Spill Act, RCRA or any other environmental law, rule
or regulation relating to the Premises. For purposes of this paragraph,
the term "notice" shall mean any summons, citation, directive, order,
claim, pleading, letter, application, filing, report, findings,
declarations or other materials pertinent to compliance of the Trust
Estate and Mortgagor with such environmental laws, rules or
regulations.
(l) If this Credit Facility Mortgage is foreclosed, Mortgagor
shall deliver the Premises in compliance with all applicable federal,
state and local environmental laws, ordinances, rules and regulations,
including, without limitation, ISRA.
(m) Without limiting the generality of Section 5.19, Mortgagor
agrees to defend, indemnify and save Mortgagee harmless from and
against any loss or liability, cost or expense (including, without
limitation, reasonable attorneys' fees, consultants' fees,
disbursements and court costs) arising out of, or incurred in
connection with, Mortgagor's misrepresentation,
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or failure promptly (but in no event to exceed the time period
permitted by law) to comply with and perform its obligations, under
this Section 5.4. The provisions of this subsection (m) shall survive
any transfer of the Premises, including a transfer after a foreclosure
of this Credit Facility Mortgage.
Section 5.5. Warranty of Leasehold Estate and Title.
Mortgagor represents and warrants that as of the date hereof:
(a) Mortgagor is duly authorized under the laws of the State
of New Jersey and all other applicable laws to execute and deliver
this Credit Facility Mortgage, and all partnership action on
Mortgagor's part necessary for the valid execution and delivery of
this Credit Facility Mortgage has been duly and effectively taken;
(b) Mortgagor is the lawful owner and is lawfully seized and
possessed of the Owned Land and all buildings and improvements
thereon, free and clear of all liens, charges or encumbrances, other
than the Credit Facility Mortgage, the Second Priority Note Documents
and the Existing Encumbrances;
(c) Mortgagor is the holder of and has good and marketable
title to the leasehold interests and leasehold estates under all
existing Facility Leases, subject to no lien, encumbrance or charge
other than the Credit Facility Mortgage, the Second Priority Note
Documents and Existing Encumbrances;
(d) (i) each existing Facility Lease is a valid and subsisting
demise of the respective Leased Land for the term therein set forth,
(ii) there are no defaults under any Facility Lease by any lessor or
the lessee as to which written notice has been given to or by the
lessee, (iii) Mortgagor has delivered to Mortgagee and the
Administrative Agent a true and correct copy of each existing Facility
Lease, and all modifications, amendments and supplements thereto, and
(iv) each existing Facility Lease is in full force and effect and has
not been modified, amended or supplemented, except as described on
Schedule 3;
(e) Mortgagor has good title to the Operating Assets,
subject to no lien, encumbrance or charge, other than Existing
Encumbrances;
(f) Mortgagor has good and lawful right and authority to
execute this Credit Facility Mortgage and to grant, bargain, sell,
alien, convey, assign, transfer, hypothecate, pledge, mortgage and
confirm the Trust Estate as provided herein (including, without
limitation, with respect to the Operating Assets and Facility Leases),
without the consent of any third party, other than governmental
authorities and other secured Persons but any applicable or necessary
consent or approval of any such governmental authority and other such
Persons has been given or waived in accordance with applicable law at
or prior to the execution and delivery of this Credit Facility
Mortgage, and this Credit Facility Mortgage constitutes a valid first
mortgage lien and deed of trust and first priority interest in the
Trust Estate, subject only to Existing Encumbrances and the pari passu
liens of the Credit Facility Mortgage;
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(g) (i) all amounts due under the Second Priority Note
Documents and the instruments securing such amounts have been paid to
the extent they were due and payable to the date hereof, and (ii) there
is no existing default under said Second Priority Note Documents or
instruments, or in the performance of any of the terms, covenants,
conditions or warranties therein on the part of Mortgagor to be
performed and observed thereunder as to which written notice has been
given to Mortgagor; and
(h) Mortgagor hereby does and shall forever warrant and defend
(a) the title to the Trust Estate (including, without limitation,
Mortgagor's leasehold estate under, and the lessee's interests in, each
existing Facility Lease) (subject to the Existing Encumbrances) and (b)
the liens of the Credit Facility Mortgage thereon (subject to the
Existing Encumbrances), against the claims and demands of all persons
whomsoever, at Mortgagor's sole cost and expense.
Section 5.6. After-Acquired Property; Further Assurances; Recording.
All property, real, personal or mixed or any interest therein (other
than Excepted Property), of every kind and description and wheresoever situate,
which may be hereafter acquired by Mortgagor (including, without limitation, fee
title to any Leased Land) shall immediately upon the acquisition thereof by
Mortgagor, and without any further mortgage, conveyance or assignment, become
subject to the lien of this Credit Facility Mortgage as fully as though now
owned by Mortgagor and covered by the Granting Clauses. Nevertheless, Mortgagor
shall do, execute, acknowledge and deliver all and every such further acts,
conveyances, mortgages, financing statements and assurances as Mortgagee shall
require for accomplishing the express purposes of this Credit Facility Mortgage.
Mortgagor shall, as provided in Section 5.12, from time to time subject
to the lien of this Credit Facility Mortgage its right, title and interest under
all Leases.
Mortgagor shall use reasonable efforts to insure that all Operating
Assets (other than Excepted Property) or any interest therein hereafter acquired
by Mortgagor shall be assignable to Mortgagee, and to the extent such assignment
to Mortgagee requires the consent of any governmental authority or any other
Person, Mortgagor shall use reasonable efforts to obtain such consent or a
waiver thereof.
Mortgagor shall cause this instrument and all other instruments
of further assurance, including all financing statements and continuation
statements covering security interests in personal property, to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, and shall execute and file such financing statements and cause to be
issued and filed such continuation statements, all in such manner and in such
places as may be required by law or as requested by Mortgagee to fully preserve
and protect the rights of Mortgagee as a secured party under the Uniform
Commercial Code to all property comprising the Trust Estate (to the extent a
grant of a security interest therein is governed by the Uniform Commercial Code)
and to perfect, preserve and protect the lien of this Credit Facility Mortgage
as a valid direct first mortgage lien of record and a valid first priority
security interest on the Trust Estate, subject only to Permitted Encumbrances.
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Mortgagor shall pay all filing or recording fees, and all expenses
incident to the execution and delivery of this Credit Facility Mortgage, any
financing statement or continuation statement with respect to the personal
property constituting part of the Trust Estate, and any instrument of further
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of the evidence of Indebtedness under the Credit
Agreement, this Credit Facility Mortgage, any financing statement or
continuation statement with respect to the personal property constituting part
of the Trust Estate or any instrument of further assurance.
Mortgagor shall furnish to Mortgagee promptly after the acquisition
hereafter by Mortgagor of any fee interest or leasehold interest in real
property having a fair market value exceeding $500,000 (other than Excepted
Property), (a) a mortgagee policy of title insurance on the most recent form of
American Land Title Association standard loan policy, extended coverage, which
policy shall (i) contain all such endorsements and affirmative insurance, to the
extent reasonably applicable, as is contained in the Original Policy and (ii)
evidence that title to such real property is subject to no liens or encumbrances
(other than Permitted Encumbrances) which would (A) render title unmarketable or
(B) violate any other provision of this Credit Facility Mortgage or the Credit
Agreement, (b) an as-built survey meeting the "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys", certified within 60 days prior
to the acquisition date by a surveyor licensed in the State of New Jersey using
the same form of certification as that contained in the surveys of the Premises
delivered to the Administrative Agent on the date of this Credit Facility
Mortgage and (c) a Mortgagor's Certificate certifying that the mortgagee policy
of title insurance and survey delivered pursuant to clauses (a) and (b) comply,
respectively, with the provisions of such clauses (a) and (b). Upon delivery of
all of the items required under this paragraph, any liens or encumbrances on
such real property shall constitute Permitted Encumbrances hereunder.
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Section 5.7. Payment of Taxes and Certain Claims;
Maintenance of Properties; Compliance with
Legal Requirements and Insurance Requirements.
Mortgagor shall:
(a) subject to the provisions of Section 5.8, pay or cause to
be paid before the date on which any fine, penalty, interest or cost
may be added for nonpayment (but no later than when the same are
payable by Mortgagor pursuant to any Superior Instrument Requirement),
all taxes (including, without limitation, real estate taxes, personal
or other property taxes and all sales, value added, use and similar
taxes), assessments (including, without limitation, all assessments for
public improvements or benefits, whether or not commenced or completed
prior to the date hereof and whether or not to be completed prior to
the satisfaction of this Credit Facility Mortgage), water, sewer or
other rents, rates and charges, excises, levies, license fees, permit
fees, inspection fees and other authorization fees and other charges,
in each case whether general or special, ordinary or extraordinary,
foreseen or unforeseen, of every character (including, without
limitation, all interest, additions to tax and penalties thereon), that
may be assessed, levied, confirmed or imposed on or in respect of or be
a lien upon (i) the Trust Estate (including, without limitation, the
Leased Land) or any part thereof or any rent therefrom or any estate
right or interest therein, or (ii) any acquisition, occupancy, use,
leasing, or possession of or activity conducted on the real property or
any part thereof included in the Trust Estate or any gross receipts
thereof or of the rent therefrom (all of the foregoing being referred
to collectively as "Impositions"). Notwithstanding the foregoing or any
other provision of this Credit Facility Mortgage, Mortgagor shall not
be required to pay any income, profits or revenue tax upon the income
of Mortgagee, the Administrative Agent or the Lenders nor any
franchise, excise, corporate, estate, inheritance, succession, capital
levy or transfer tax of Mortgagee, the Administrative Agent or the
Lenders nor any interest, additions to tax or penalties in respect
thereof, unless such tax is imposed, levied or assessed in substitution
for any Imposition that Mortgagor is required to pay pursuant to this
Section 5.7. Mortgagor shall deliver to Mortgagee, at Mortgagee's
request, official receipts or other proof evidencing payments of any
Impositions in accordance with the requirements of this Section 5.7.
Mortgagor shall not be entitled to any credit for taxes or assessments
paid against the Loans:
(b) except for such obsolete property as Mortgagor may dispose
of or replace pursuant to Section 2.2, maintain and keep all of
Mortgagor's properties used or useful in the conduct of Mortgagor's
business, including, without limitation, the Casino Hotel and all
Tangible Personal Property, in such good repair, working order and
condition, except for reasonable wear and use, and make or cause to be
made all such needful and proper repairs, renewals and replacements
thereto consistent with the standards of first-class casino and hotel
complexes in Atlantic City, New Jersey;
(c) occupy and continuously operate the Casino Hotel and keep
the Casino Hotel supplied with Tangible Personal Property, all in a
manner consistent with the standards of first-class casino and hotel
complexes in Atlantic City, New Jersey;
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(d) subject to the provisions of Section 5.8, (i) comply with
all Legal Requirements and Insurance Requirements, whether or not
compliance therewith shall require structural changes in the buildings
and improvements included in the Trust Estate or interfere with the use
and enjoyment of the Trust Estate or any part thereof, (ii) procure,
maintain and comply with all Permits required for (1) the use of the
Casino as a gaming and gambling facility, (2) the on-premises
consumption of alcoholic beverages at the Casino Hotel and (3) any
other use of the Trust Estate or any part thereof then being made, and
for the proper erection, installation, operation and maintenance of the
improvements or any part thereof, (iii) comply with all obligations of
Mortgagor under, and keep in full force and effect, all easements which
in any respect inure to the benefit of, or otherwise affect, the Trust
Estate or any part thereof, if the failure to comply with the same
would impair Mortgagee's security hereunder, and (iv) without limiting
the generality of clause (iii), comply with any instruments of record
at the time in force affecting the Trust Estate or any part thereof, if
the failure to comply with the same would impair Mortgagee's security
hereunder. Without limiting the generality of the foregoing, Mortgagor
represents and warrants that at the time of the execution of this
Credit Facility Mortgage, Mortgagor is in compliance with the
requirements of clauses (i), (ii), (iii) and (v) above; and
(e) in the event of the passage after the date of this Credit
Facility Mortgage of any law of the State of New Jersey, or any other
governmental entity, changing in any way the laws now in force for the
taxation of mortgages, or debts secured thereby, for federal, state or
local purposes, or the manner of the operations of any such taxes, so
as to affect the interest of Mortgagee, pay the full amount of such new
or additional taxes.
Section 5.8. Permitted Contests.
Notwithstanding anything in this Credit Facility Mortgage to the contrary,
Mortgagor, at Mortgagor's expense, may contest (after prior notice to Mortgagee)
by appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition or
lien therefor or any Legal Requirement or Insurance Requirement or the
application of any instrument of record (including, without limitation, any
Superior Instrument Requirement) affecting the Trust Estate or any part thereof
or any claims of holders of FF&E Financing Agreements, mechanics, materialmen,
suppliers, or vendors or lien therefor, and may withhold payment of the same
pending such proceedings if permitted by law, or make payment under protest, or
defer compliance with any such Legal Requirement, any such Insurance Requirement
or the terms of any such instrument, and the same shall not be a Default
hereunder; provided, that (a) in the case of any Impositions or lien therefor or
any claims of mechanics, materialmen, suppliers or vendors or lien therefor,
such proceedings shall suspend the collection thereof from each of Mortgagor,
Mortgagee, the Administrative Agent, the Lenders and the Trust Estate, (b)
neither the Trust Estate nor any interest therein would be in any significant
danger of being sold, forfeited, or lost, (c) such action will not result in the
termination of any Facility Lease, (d) in the case of a Legal Requirement,
neither the Lenders nor Mortgagee shall be in any significant danger of any
civil liability or any danger of any criminal liability, and the failure of
Mortgagor to comply with such Legal Requirement shall not affect the continuance
in good standing of any Permit or result in the suspension, termination,
non-renewal or material adverse modification of any Permit, and (e) in the case
of an Insurance Require-
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ment, the failure ofMortgagor to comply therewith shall not affect the validity
of any insurance required to be maintained by Mortgagor hereunder.
Section 5.9. Mechanics' and Other Liens.
Mortgagor shall cause to be removed, either by payment, or bonding or
otherwise, all claims and demands of mechanics, materialmen, laborers, and
others which, if unpaid, might result in, or permit the creation of, a lien on
the Premises and/or Trust Estate or any part thereof, or on the revenues, rents,
issues, income and profits arising therefrom and in general shall do or cause to
be done everything necessary so that the lien hereof shall be fully preserved,
at the cost of Mortgagor, without expense to Mortgagee.
Section 5.10. To Insure.
(a) Mortgagor, at Mortgagor's expense, shall maintain with Insurers:
(i) insurance with respect to Mortgagor's insurable
properties constituting a part of the Trust Estate against loss or
damage by fire, lightning, and other risks from time to time included
under "all-risk" policies and against loss or damage by sprinkler
leakage, water damage, collapse, malicious mischief and explosion in
respect of any steam and