**Exhibit 4.48**

 

[LOUISIANA]

 

 

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,SECURITY AGREEMENT AND FIXTURE FILING

 

BY

 

JALOU EUNICE, LLC

 

Mortgagor,

 

TO

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Trustee,

 

Mortgagee

 

Securing Principal Indebtedness of **$148,000,000**

** **

Dated as of March 2, 2005

 

 

Relating to Premises located in:

 

St. Landry Parish, Louisiana

 

 

After recording, please return to:

 

Milbank, Tweed, Hadley & McCloy, LLP601 South Figueroa Street, 30th FloorLos Angeles, California 90017Attn: Matthew S. Meza, Esq.

 

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TABLE OF CONTENTS

 
| PREAMBLE                                     |
|----------------------------------------------|
|                                         |   |   |   |   |
| RECITALS                                     |
|                                         |   |   |   |   |
| AGREEMENT                                    |
|                                         |   |   |   |   |
| ARTICLE I                               |
|                                         |   |   |   |   |
| DEFINITIONS AND  INTERPRETATION              |
|                                         |   |   |   |   |
| SECTION 1.1                             |   | Definitions |   |   |
| SECTION 1.2                             |   | Interpretation |   |   |
| SECTION 1.3                             |   | Resolution  of Drafting Ambiguities |   |   |
|                                         |   |   |   |   |
| ARTICLE II                              |
|                                         |   |   |   |   |
| GRANTS AND  SECURED OBLIGATIONS              |
|                                         |   |   |   |   |
| SECTION 2.1                             |   | Grant of  Mortgaged Property |   |   |
| SECTION 2.2                             |   | Assignment  of Leases and Rents |   |   |
| SECTION 2.3                             |   | Secured  Obligations |   |   |
| SECTION 2.4                             |   | Future  Advances |   |   |
| SECTION 2.5                             |   | No Release |   |   |
|                                         |   |   |   |   |
| ARTICLE III                             |
|                                         |   |   |   |   |
| REPRESENTATIONS  AND WARRANTIES OF MORTGAGOR |
|                                         |   |   |   |   |
| SECTION 3.1                             |   | Authority  and Validity |   |   |
| SECTION 3.2                             |   | Warranty of  Title |   |   |
| SECTION 3.3                             |   | Condition of  Mortgaged Property |   |   |
| SECTION 3.4                             |   | Leases |   |   |
| SECTION 3.5                             |   | Insurance |   |   |
| SECTION 3.6                             |   | Charges |   |   |
| SECTION 3.7                             |   | Environmental |   |   |
| SECTION 3.8                             |   | No  Conflicts, Consents, etc |   |   |
| SECTION 3.9                             |   | Benefit to  the Mortgagor |   |   |

 

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| ARTICLE IV                            |
|--------------------------------------------|
|                                       |   |   |   |   |
| CERTAIN  COVENANTS OF MORTGAGOR            |
|                                       |   |   |   |   |
| SECTION 4.1                           |   | Preservation  of Corporate Existence |   |   |
| SECTION 4.2                           |   | Title |   |   |
| SECTION 4.3                           |   | Maintenance  and Use of Mortgaged Property; Alterations |   |   |
| SECTION 4.4                           |   | Notices  Regarding Certain Defaults |   |   |
| SECTION 4.5                           |   | Access to  Mortgaged Property, Books and Records; Other Information |   |   |
| SECTION 4.6                           |   | Limitation  on Liens; Transfer Restrictions |   |   |
| SECTION 4.7                           |   | Environmental |   |   |
| SECTION 4.8                           |   | Estoppel  Certificates |   |   |
|                                       |   |   |   |   |
| ARTICLE V                             |
|                                       |   |   |   |   |
| LEASES                                     |
|                                       |   |   |   |   |
| SECTION 5.1                           |   | Mortgagor’s  Affirmative Covenants with Respect to Leases |   |   |
| SECTION 5.2                           |   | Mortgagor’s  Negative Covenants with Respect to Leases |   |   |
| SECTION 5.3                           |   | Additional  Requirements with Respect to New Leases |   |   |
|                                       |   |   |   |   |
| ARTICLE VI                            |
|                                       |   |   |   |   |
| CONCERNING  ASSIGNMENT OF LEASES AND RENTS |
|                                       |   |   |   |   |
| SECTION 6.1                           |   | Present  Assignment; License to the Mortgagor |   |   |
| SECTION 6.2                           |   | Collection  of Rents by the Mortgagee |   |   |
| SECTION 6.3                           |   | No Release |   |   |
| SECTION 6.4                           |   | Irrevocable  Interest |   |   |
| SECTION 6.5                           |   | Amendment to  Leases |   |   |
|                                       |   |   |   |   |
| ARTICLE VII                           |
|                                       |   |   |   |   |
| TAXES AND  CERTAIN STATUTORY LIENS         |
|                                       |   |   |   |   |
| SECTION 7.1                           |   | Payment of  Charges |   |   |
| SECTION 7.2                           |   | Escrow of  Taxes |   |   |
| SECTION 7.3                           |   | Certain  Statutory Liens |   |   |
| SECTION 7.4                           |   | Stamp and  Other Taxes |   |   |
| SECTION 7.5                           |   | Certain Tax  Law Changes |   |   |
| SECTION 7.6                           |   | Proceeds of  Tax Claim |   |   |

 

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| ARTICLE VIII                          |
|--------------------------------------------|
|                                       |   |   |   |   |
| INSURANCE                                  |
|                                       |   |   |   |   |
| SECTION 8.1                           |   | Required  Insurance Policies and Coverages |   |   |
| SECTION 8.2                           |   | Delivery  After Foreclosure |   |   |
|                                       |   |   |   |   |
| ARTICLE IX                            |
|                                       |   |   |   |   |
| CONTESTING OF  PAYMENTS                    |
|                                       |   |   |   |   |
| SECTION 9.1                           |   | Contesting  of Taxes and Certain Statutory Liens |   |   |
| SECTION 9.2                           |   | Contesting  of Insurance |   |   |
|                                       |   |   |   |   |
| ARTICLE X                             |
|                                       |   |   |   |   |
| DESTRUCTION,  CONDEMNATION AND RESTORATION |
|                                       |   |   |   |   |
| SECTION 10.1                          |   | Destruction |   |   |
| SECTION 10.2                          |   | Condemnation |   |   |
|                                       |   |   |   |   |
| ARTICLE XI                            |
|                                       |   |   |   |   |
| EVENTS  OF DEFAULT AND REMEDIES            |
|                                       |   |   |   |   |
| SECTION 11.1                          |   | Events  of Default |   |   |
| SECTION 11.2                          |   | Remedies  in Case of an Event of Default |   |   |
| SECTION 11.3                          |   | Sale  of Mortgaged Property if Event of Default Occurs; Proceeds of Sale |   |   |
| SECTION 11.4                          |   | Additional  Remedies in Case of an Event of Default |   |   |
| SECTION 11.5                          |   | Legal  Proceedings After an Event of Default |   |   |
| SECTION 11.6                          |   | Remedies  Not Exclusive |   |   |
| SECTION 11.7                          |   | Special  Louisiana Provisions |   |   |
|                                       |   |   |   |   |
| ARTICLE XII                           |
|                                       |   |   |   |   |
| SECURITY  AGREEMENT AND FIXTURE FILING     |
|                                       |   |   |   |   |
| SECTION 12.1                          |   | Security  Agreement |   |   |
| SECTION 12.2                          |   | Fixture  Filing |   |   |
|                                       |   |   |   |   |
| ARTICLE XIII                          |
|                                       |   |   |   |   |
| FURTHER  ASSURANCES                        |
|                                       |   |   |   |   |
| SECTION 13.1                          |   | Recording  Documentation To Assure Security |   |   |

 

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| SECTION 13.2             |   | Further  Acts                                                    |   |   |
|-------------------------------|--------|------------------------------------------------------------------|--------|--------|
| SECTION 13.3             |   | Additional  Security                                             |   |   |
|                          |   |                                                             |   |   |
| ARTICLE XIV              |
|                          |   |                                                             |   |   |
| MISCELLANEOUS                 |
|                          |   |                                                             |   |   |
| SECTION 14.1             |   | Covenants  To Run with the Land                                  |   |   |
| SECTION 14.2             |   | No  Merger                                                       |   |   |
| SECTION 14.3             |   | Concerning  Mortgagee                                            |   |   |
| SECTION 14.4             |   | Mortgagee  May Perform; Mortgagee Appointed Attorney-in-Fact     |   |   |
| SECTION 14.5             |   | Expenses                                                         |   |   |
| SECTION 14.6             |   | Indemnity                                                        |   |   |
| SECTION 14.7             |   | Continuing  Security Interest; Assignment                        |   |   |
| SECTION 14.8             |   | Termination;  Release                                            |   |   |
| SECTION 14.9             |   | Modification  in Writing                                         |   |   |
| SECTION 14.10            |   | Notices                                                          |   |   |
| SECTION 14.11            |   | GOVERNING LAW; SERVICE OF PROCESS;  WAIVER OF JURY TRIAL         |   |   |
| SECTION 14.12            |   | Severability of Provisions                                       |   |   |
| SECTION 14.13            |   | Limitation on Interest Payable                                   |   |   |
| SECTION 14.14            |   | Business Days                                                    |   |   |
| SECTION 14.15            |   | Relationship                                                     |   |   |
| SECTION 14.16            |   | Waiver of Stay                                                   |   |   |
| SECTION 14.17            |   | No Credit for Payment of Taxes or  Impositions                   |   |   |
| SECTION 14.18            |   | No Claims Against the Mortgagee                                  |   |   |
| SECTION 14.19            |   | Obligations Absolute                                             |   |   |
| SECTION 14.20            |   | Last Dollars Secured                                             |   |   |
|                          |   |                                                             |   |   |
| SIGNATURE  AND ACKNOWLEDGMENT |
|                          |   |                                                             |   |   |
| SCHEDULE A               |   | Legal  Description                                               |   |   |
| SCHEDULE B               |   | Prior  Liens                                                     |   |   |
| SCHEDULE C               |   | Leases  Affecting the Mortgaged Property                         |   |   |
|                          |   |                                                             |   |   |
| EXHIBIT  1                    |   | Form  of Subordination, Non-Disturbance and Attornment Agreement |   |   |

 

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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITYAGREEMENT AND FIXTURE FILING

 

MORTGAGE,ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (asamended, amended and restated, supplemented or otherwise modified from time totime, the “Mortgage”), dated as ofMarch       , 2005, made by JALOU EUNICE,LLC, a Louisiana limited liability company having an office at 3747 Highway190, Eunice, Louisiana 70535, as mortgagor, assignor and debtor (in suchcapacities and together with any successors in such capacities, the “Mortgagor”),in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking associationhaving an office at  213 Court Street,Suite 703, Middletown, CT 06457, in its capacity as trustee pursuant to theIndenture (as hereinafter defined), as mortgagee, assignee and secured party(in such capacities and together with any successors in such capacities, the “Mortgagee”).

 

R E C I T A L S:

 

###### A.  Gameco, Inc.n/k/a Jacobs Entertainment, Inc. (the “Issuer”), certain of its Subsidiaries(as hereinafter defined), the Mortgagor and the Mortgagee have, in connectionwith the execution and delivery of this Mortgage, entered into that certain Indenture,dated as of February 8, 2002, as supplemented by the First SupplementalIndenture, dated as of February 22, 2002, the Second SupplementalIndenture, dated as of June 14, 2002, the Third Supplemental Indenture,dated as of June 4, 2003, the Fourth Supplemental Indenture, dated as ofthe date hereof, and the Fifth Supplemental Indenture, dated as of the datehereof (collectively, as amended, amended and restated, supplemented, orotherwise modified from time to time, the “Indenture”), pursuant towhich the Issuer has issued, from time to time, its 117/8%Senior Secured Notes due 2009 (the “Senior Secured Notes”) in the aggregateprincipal amount of $148,000,000.  It iscontemplated that the Issuer may, after the date hereof, issue Additional Notes(as defined in the Indenture) and Exchange Notes (as defined in the Indenture);the Exchange Notes, together with the Additional Notes and the Senior SecuredNotes, the “Notes”), in each case, pursuant to the provisions of theIndenture.

######  

###### B.  The Issuerowns, directly or through its Subsidiaries, all of the issued and outstandingshares of the Mortgagor.

######  

###### C.  TheMortgagor has, pursuant to the Indenture, among other things, unconditionallyguaranteed (the “Guarantee”) the obligations of the Issuer under theIndenture and the Notes.

######  

###### D.  TheMortgagor will receive substantial benefits from the execution and delivery of,and the performance of the obligations under, the Indenture and the Notes, andis therefore willing to enter into this Mortgage.

######  

###### E.  TheMortgagor is or will be the legal owner of the Mortgaged Property (ashereinafter defined).

######  

###### F.  ThisMortgage is given by the Mortgagor in favor of the Mortgagee for its benefitand for the benefit of the Holders of the Notes (collectively, the “SecuredParties”) to secure the payment and performance of all of the SecuredObligations (as hereinafter defined).

 

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A G R E E M E N T:

 

NOW THEREFORE, in consideration of the foregoingpremises and other good and valuable consideration, the receipt and sufficiencyof which are hereby acknowledged, the Mortgagor hereby covenants and agreeswith the Mortgagee as follows:

 

# ARTICLE I

#  

# DEFINITIONSAND INTERPRETATION

#  

## SECTION 1.1  Definitions.  Capitalized terms used but not otherwisedefined herein shall have the meanings assigned to such terms in the Indenture. The following terms used in thisMortgage shall have the following meanings:

##  

“ACM” shall have the meaning assigned to suchterm in Section 4.7(ii) hereof.

 

“Affiliate” shall have the meaning assigned tosuch term in the Indenture.

 

“Alteration” shall mean any and allalterations, installations, improvements, additions, modifications or changesof a structural nature of or to the Premises.

 

“Business Day” shall have the meaning assignedto such term in the Indenture.

 

“Charges” shall mean any and all real estate,property and other taxes, assessments and special assessments, levies, fees,all water and sewer rents and charges and all other governmental charges orLiens imposed upon or assessed against, and all claims (including, withoutlimitation, landlords’, carriers’, mechanics’, workmen’s, repairmen’s,laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claimsarising by operation of law) against, all or any portion of the MortgagedProperty.

 

“Collateral Account” shall have the meaningassigned to such term in the Indenture.

 

“Collateral Documents” shall have the meaningassigned to such term in the Indenture.

 

“Contested Liens” shall mean, collectively, anyLiens incurred in respect of any Charges to the extent that the amounts owingin respect thereof are not yet delinquent or are being contested and otherwisecomply with the provisions of Section 9.1 hereof.

 

“Contracts” shall mean, collectively, any andall right, title and interest of the Mortgagor in and to any and all contracts,instruments, documents and other general intangibles, whether now existing orhereafter arising or entered into, relating to the Mortgaged Property(including, without limitation, all reciprocal easements and/or operatingagreements, covenants, conditions and restrictions and similar agreementsaffecting all or any portion of the Mortgaged Property and any and all presentor future options to sell or lease the Mortgaged Property or any interesttherein) and all reserves, deferred payments, deposits or other security oradvance payments (including, without limitation, those made by or on behalf ofthe Mortgagor to others with respect to (i) utility service regarding theMortgaged Property, (ii) cleaning, maintenance,

 

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repair or similarservices regarding the Mortgaged Property, (iii) refuse removal or sewageservice regarding the Mortgaged Property, (iv) rentals of equipment, if any,used in the operation by or on behalf of Mortgagor regarding the Mortgaged Property,and/or (v) parking or similar services or rights regarding the MortgagedProperty), refunds, liens, security interests, guarantees, remedies and claimsof every kind, nature or character relating thereto.

 

“Default Rate” shall mean the rate per annumequal to the highest rate then payable under the Indenture.

 

“Destruction” shall mean any and all damage to,or loss or destruction of, the Premises or any part thereof.

 

“Environmental Law” shall mean any applicablefederal, state, local or municipal statute, law, rule, regulation, ordinance,code, policy or rule of common law and any judicial or administrativeinterpretation thereof, including any judicial or administrative order, consentdecree or judgment binding on the Mortgagor, relating to pollution orprotection of the environment, or health or safety including, withoutlimitation, any relating to the release or threatened release of any HazardousMaterials.

 

“Event of Default” shall have the meaningassigned to such term in the Indenture.

 

“Fixture” shall mean all machinery, apparatus,equipment, fittings, fixtures, improvements and articles of personal propertyof every kind, description and nature whatsoever now or hereafter attached oraffixed to the Land or any other Improvement or used in connection with the useand enjoyment of the Land or any other Improvement or the maintenance orpreservation thereof, which by the nature of their location thereon orattachment thereto are fixtures under the UCC or any other applicable law including,without limitation, all utility systems, fire sprinkler and security systems,drainage facilities, lighting facilities, all water, sanitary and storm sewer,drainage, electricity, steam, gas, telephone and other utility equipment andfacilities, pipes, fittings and other items of every kind and description nowor hereafter attached to or located on the Land which by the nature of theirlocation thereon or attachment thereto are real property under applicable law,HVAC equipment, boilers, electronic data processing, telecommunications or computerequipment, refrigeration, electronic monitoring, water or lighting systems,power, sanitation, waste removal, elevators, maintenance or other systems orequipment and all additions thereto and betterments, renewals, substitutionsand replacements thereof.

 

 “GovernmentalAuthority” shall mean any federal, state, local, foreign or othergovernmental, quasi-governmental or administrative (including self-regulatory)body, instrumentality, department, agency, authority, board, bureau,commission, office of any nature whatsoever or other subdivision thereof, orany court, tribunal, administrative hearing body, arbitration panel or othersimilar dispute-resolving body, whether now or hereafter in existence, or anyofficer or official thereof, having jurisdiction over the Mortgagor or theMortgaged Property or any portion thereof.

 

“Guarantee” shall have the meaning assigned tosuch term in Recital C hereof.

 

“Guarantors” shall have the meaning assigned tosuch term in the Indenture.

 

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“Hazardous Materials” shall mean any substance,chemical, material, pollutant, waste, contaminant or constituent, which issubject to regulation under or could give rise to liability under any EnvironmentalLaw.

 

“Holder” shall have the meaning assigned tosuch term in the Indenture.

 

“Improvements” shall mean all buildings,structures and other improvements of every kind or description and any and allAlterations now or hereafter located, attached or erected on the Landincluding, without limitation, (i) all Fixtures, (ii) all attachments,railroad tracks, foundations, sidewalks, drives, roads, curbs, streets, ways,alleys, passages, passageways, sewer rights, parking areas, driveways, fencesand walls and (iii) all materials now or hereafter located on the Landintended for the construction, reconstruction, repair, replacement, alteration,addition or improvement of or to such buildings, Fixtures, structures andimprovements, all of which materials shall be deemed to be part of theImprovements immediately upon delivery thereof on the Land and to be part ofthe Improvements immediately upon their incorporation therein.

 

“Indemnified Liabilities” shall have themeaning assigned to such term in Section 14.6(i) hereof.

 

“Indemnitees” shall have the meaning assignedto such term in Section 14.6(i) hereof.

 

“Indenture” shall have the meaning assigned tosuch term in Recital A hereof.

 

“Insurance Policies” means the insurancepolicies and coverages required to be maintained by the Mortgagor with respectto the Mortgaged Property pursuant to Section 4.19(b) of the Indenture andall renewals and extensions thereof.

 

“Insurance Requirements” means, collectively,all provisions of the Insurance Policies, all requirements of the issuer of anyof the Insurance Policies and all orders, rules, regulations and any otherrequirements of the National Board of Fire Underwriters (or any other bodyexercising similar functions) binding upon the Mortgagor and applicable to the MortgagedProperty or any use or condition thereof.

 

“Issuer” shall have the meaning assigned tosuch term in Recital A hereof.

 

“Land” shall mean those certain tracts orparcels of land described in Schedule A annexed to this Mortgage,together with all of the Mortgagor’s reversionary rights therein and all of theMortgagor’s rights in and to any and all easements, rights-of-way, strips andgores of land, drives, roads, curbs, streets, ways, alleys, passages, passageways, sewer rights, waters, water courses, water rights, mineral, gas and oilrights, and all power, air, light and other rights, estates, titles, interests,privileges, liberties, servitudes, licenses, tenements, hereditaments andappurtenances whatsoever, in any way belonging, relating or appertainingthereto, or any part thereof, or which hereafter shall in any way belong,relate or be appurtenant thereto.

 

“Landlord” shall mean any landlord, lessor,franchisor, licensor or grantor, as applicable.

 

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“Leases” shall mean, collectively, any and allright, title and interests of the Mortgagor, as Landlord, in all leases andsubleases of space, tenancies, franchise agreements, licenses, occupancy,rental, access or concession agreements and any other agreements pursuant towhich any Person is granted a possessory interest in or right to use or occupyall or any portion of the Mortgaged Property (including, without limitation,all of the Mortgagor’s rights to enforce all such leases, subleases, tenanciesor other agreements and to receive and enforce any rights that the Mortgagormay have to collect Rents thereunder), in each case whether now existing orhereafter entered into, whether or not of record, relating in any manner to thePremises or the use or occupancy thereof and any and all amendments,modifications, supplements, replacements, extensions, renewals and/orguarantees, if any thereof, whether now in effect or hereafter coming intoeffect.

 

“Lien” shall have the meaning assigned to suchterm in the Indenture.

 

“Mortgage” shall have the meaning assigned tosuch term in the Preamble hereof.

 

“Mortgaged Property” shall have the meaningassigned to such term in Section 2.1 hereof.

 

“Mortgagee” shall have the meaning assigned tosuch term in the Preamble hereof.

 

“Mortgagor” shall have the meaning assigned tosuch term in the Preamble hereof.

 

“Mortgagor’s Interest” shall have the meaningassigned to such term in Section 2.2 hereof.

 

“Net Loss Proceeds” shall have the meaningassigned to such term in the Indenture.

 

“Notes” shall have the meaning assigned to suchterm in Recital A hereof.

 

“Officers’ Certificate” shall have the meaningassigned to such term in the Indenture.

 

“Permit” shall mean any and all permits,certificates, approvals, authorizations, consents, licenses, variances, franchisesor other instruments, however characterized, of any Governmental Authority (orany Person acting on behalf of a Governmental Authority) now or hereafteracquired or held, together with all amendments, modifications, extensions,renewals and replacements of any thereof issued or in any way furnished inconnection with the Mortgaged Property including, without limitation, buildingpermits, certificates of occupancy, environmental certificates, industrial permitsor licenses and certificates of operation.

 

“Permitted Collateral Liens” shall have themeaning assigned to such term in Section 4.6 hereof.

 

“Permitted Liens” shall have the meaningassigned to such term in the Indenture.

 

“Person” shall have the meaning assigned tosuch term in the Indenture.

 

“Premises” shall mean, collectively, the Landand the Improvements.

 

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“Prior Liens” shall mean, collectively, theLiens identified in Schedule B annexed to this Mortgage.

 

“Proceeds” shall mean, collectively, any andall cash proceeds and noncash proceeds derived or to be derived from theMortgaged Property and shall include, without limitation, all (i) proceedsof the sale, transfer or conveyance of the Mortgaged Property or theconversion, voluntary or involuntary, of any of the Mortgaged Property or anyportion thereof into cash or liquidated claims, (ii) proceeds of anyinsurance (except payments made to a Person, other than the Issuer or anySubsidiary thereof, that is not a party to this Mortgage), indemnity, warranty,guaranty or claim payable to the Mortgagee or to the Mortgagor from time totime with respect to any of the Mortgaged Property including, withoutlimitation, all Net Loss Proceeds relating thereto, (iii) payments (in anyform whatsoever) made or due and payable to the Mortgagor from time to time inconnection with any requisition, confiscation, condemnation, seizure orforfeiture of all or any portion of the Mortgaged Property by any GovernmentalAuthority (or any Person acting on behalf of a Governmental Authority)including, without limitation, all Net Loss Awards relating thereto,(iv) products of the Mortgaged Property, (v) other amounts from timeto time paid or payable under or in connection with any of the MortgagedProperty including, without limitation, refunds of real estate taxes andassessments, including interest thereon and any unearned insurance premiumsrelating thereto and (vi) the right to enforce any and all rights that theMortgagor has or may have to collect all such proceeds, including, withoutlimitation, the Mortgagor’s rights to commence any and all appropriate collectionor enforcement actions incident thereto.

 

“Property Material Adverse Effect” shall mean,as of any date of determination and whether individually or in the aggregate(a) any event, circumstance, occurrence or condition which has caused orresulted in (or would reasonably be expected to cause or result in) a materialadverse effect on the business or operations as presently conducted at theMortgaged Property; (b) any event, circumstance, occurrence or condition whichhas caused or resulted in (or would reasonably be expected to cause or resultin) a material adverse effect on the value or utility of the MortgagedProperty; and (c) any event, circumstance, occurrence or condition whichhas caused or resulted in (or would reasonably be expected to cause or resultin) a material adverse effect on the legality, priority or enforceability ofthe Lien created by this Mortgage or the rights and remedies of the Mortgageehereunder.

 

“Prudent Operator” shall mean the standard ofcare taken by a prudent operator of property similar in use and configurationto the Premises and located in the locality where the Premises are located.

 

 “Records”shall mean, collectively, any and all right, title and interest of theMortgagor in and to any and all drawings, plans, specifications, filematerials, operating and maintenance records, catalogues, tenant lists,correspondence, advertising materials, operating manuals, warranties,guarantees, appraisals, studies and data relating to the Mortgaged Property orthe construction of any Alteration or the maintenance of any Permit.

 

“Rents” shall mean, collectively, any and allrents, additional rents, royalties, issues, cash, guaranties, letters ofcredit, bonds, sureties or security deposited under any Lease to secureperformance of the Tenant’s obligations thereunder, revenues, earnings,profits, bonuses and income, advance rental payments, payments incident toassignment, sublease or surrender of a Lease, claims for forfeited deposits andclaims for damages, now due or hereafter to become due, with respect to anyLease, any indemnification

 

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against, or reimbursement for, sums paid and costs andexpenses incurred by the Mortgagor under any Lease or otherwise, and any awardin the event of the bankruptcy of any Tenant under or guarantor of a Lease.

 

“Requirements of Law” shall mean, collectively,any and all requirements of any Governmental Authority including, withoutlimitation, any and all orders, decrees, determinations, laws, treaties,ordinances, rules, regulations or similar statutes or case law.

 

“Secured Obligations” shall mean all obligations(whether or not constituting future advances, obligatory or otherwise) of theIssuer and any and all of the Guarantors from time to time arising under or inrespect of this Mortgage, the Indenture, the Notes and the other CollateralDocuments (including, without limitation, the obligations to pay principal,interest and all other charges, fees, expenses, commissions, reimbursements,premiums, indemnities and other payments related to or in respect of the obligationscontained in this Mortgage, the Indenture, the Notes and the other CollateralDocuments), in each case whether (i) such obligations are direct or indirect,secured or unsecured, joint or several, absolute or contingent, due or tobecome due whether at stated maturity, by acceleration or otherwise, (ii)arising in the regular course of business or otherwise, (iii) for payment orperformance and/or (iv) now existing or hereafter arising (including, withoutlimitation, interest and other obligations arising or accruing after the commencementof any bankruptcy, insolvency, reorganization or similar proceeding withrespect to the Issuer, any Guarantor or any other Person, or which would havearisen or accrued but for the commencement of such proceeding, even if suchobligation or the claim therefor is not enforceable or allowable in such proceeding).

 

“Secured Parties” shall have the meaningassigned to such term in Recital F hereof.

 

“Senior Secured Notes” shall have the meaningassigned to such term in Recital A hereof.

 

“Subordination Agreement” shall mean asubordination, nondisturbance and attornment agreement substantially in theform of Exhibit 1 annexed to this Mortgage.

 

“Subsidiaries” shall have the meaning assignedto such term in the Indenture.

 

“Taking” shall mean any taking of the MortgagedProperty or any part thereof, in or by condemnation or other eminent domainproceedings pursuant to any law, general or special, or by reason of thetemporary requisition of the use or occupancy of the Mortgaged Property or anypart thereof, by any Governmental Authority, civil or military.

 

“Tax Escrow Fund” shall have the meaningassigned to such term in Section 7.2 hereof.

 

“Tenant” shall mean any tenant, subtenant,lessee, sublessee, franchisee, licensee, grantee or obligee, as applicable.

 

“UCC” shall mean the Uniform Commercial Code asin effect on the date hereof in the jurisdiction in which the Premises arelocated; provided, however, that if by reason of mandatoryprovisions of law, the perfection or the effect of perfection or non-perfectionof the security interest in any item or portion of the Mortgaged Property isgoverned by the Uniform Commercial Code as in effect in a jurisdiction

 

7

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other than the jurisdiction in which the Premises arelocated, “UCC” shall mean the Uniform Commercial Code as in effect in suchother jurisdiction for purposes of the provisions hereof relating to suchperfection or effect of perfection or non-perfection.

 

## SECTION 1.2  Interpretation.  In this Mortgage, unless otherwise specified,(i) singular words include the plural and plural words include the singular,(ii) words importing any gender include the other gender, (iii) references toany Person include such Person’s successors and assigns and in the case of anindividual, the word “successors” includes such Person’s heirs, devisees, legatees,executors, administrators and personal representatives, (iv) references to anystatute or other law include all applicable rules, regulations and ordersadopted or made thereunder and all statutes or other laws amending,consolidating or replacing the statute or law referred to, (v) the words“consent,” “approve” and “agree,” and derivations thereof or words of similarimport, mean the prior written consent, approval or agreement of the Person inquestion not to be unreasonably withheld, (vi) the words “include” and “including,”and words of similar import, shall be deemed to be followed by the words“without limitation,” (vii) the words “hereto,” “herein,” “hereof” and “hereunder,”and words of similar import, refer to this Mortgage in its entirety, (viii)references to Articles, Sections, Schedules, Exhibits, subsections, paragraphsand clauses are to the Articles, Sections, Schedules, Exhibits, subsections,paragraphs and clauses hereof, (ix) the Schedules and Exhibits to thisMortgage, in each case as amended, amended and restated, supplemented orotherwise modified from time to time in accordance with the provisions hereof,are incorporated herein by reference, (x) the titles and headings of Articles,Sections, Schedules, Exhibits, subsections, paragraphs and clauses are insertedas a matter of convenience only and shall not affect the constructions of anyprovisions hereof and (xi) all obligations of the Mortgagor hereunder shall besatisfied by the Mortgagor at the Mortgagor’s sole cost and expense.

##  

## SECTION 1.3  Resolution of Drafting Ambiguities.  The Mortgagor acknowledges and agrees that itwas represented by counsel in connection with the execution and delivery hereof,that it and its counsel reviewed and participated in the preparation andnegotiation hereof and that any rule of construction to the effect thatambiguities are to be resolved against the drafting party (i.e.,Mortgagee) shall not be employed in the interpretation hereof.

##  

# ARTICLE II

#  

# GRANTSAND SECURED OBLIGATIONS

#  

## SECTION 2.1  Grant of Mortgaged Property.  The Mortgagor hereby grants, mortgages,bargains, sells, assigns and conveys to the Mortgagee (for its benefit and forthe benefit of the other Secured Parties), and hereby grants to the Mortgagee(for its benefit and for the benefit of the other Secured Parties), a securityinterest in and upon all of the Mortgagor’s estate, right, title and interestin, to and under the following property, whether now owned or held or hereafteracquired from time to time (collectively, the “Mortgaged Property”):

##  

##### (i)                                     Land;

#####  

##### (ii)                                  Improvements;

 

8

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##### (iii)                               Leases;

#####  

##### (iv)                              Rents;

#####  

##### (v)                                 Permits;

#####  

##### (vi)                              Contracts;

#####  

##### (vii)                           Records;and

#####  

##### (viii)                        Proceeds.

#####  

Notwithstanding the foregoing provisions of this Section 2.1,Mortgaged Property shall not include a grant of any of the Mortgagor’s right,title or interest in (i) any Contract to which the Mortgagor is a party or anyof its rights or interests thereunder (other than (x) the right to receive anypayment of money (including without limitation accounts, general intangiblesand payment intangibles (each as defined in the UCC) or any other rightsreferred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the UCC and (y) anyproceeds, substitutions or replacements thereof) to the extent, but only to theextent, that such a grant would, under the terms of such Contract, result in abreach or termination of the terms of, or constitute a default under ortermination of such Contract and (ii) any Permit to the extent, but only to theextent that, such grant shall constitute or result in abandonment, invalidationor rendering unenforceable any right, title or interest of the Mortgagortherein; provided, however, that at such time as any Contract orPermit described in clauses (i) and (ii) of this sentence is no longer subjectto such restriction, such applicable Contract or Permit shall (without any actor delivery by any Person) constitute Mortgaged Property hereunder.

 

TO HAVE AND TO HOLD the Mortgaged Property, togetherwith all estate, right, title and interest of the Mortgagor and anyone claimingby, through or under the Mortgagor in and to the Mortgaged Property and allrights and appurtenances relating thereto, unto the Mortgagee, its successorsand assigns, for the purpose of securing the payment and performance in full ofall the Secured Obligations.

 

SECTION 2.2  Collateral Assignment and Pledge ofMortgagor’s Interest as Additional Security.  As additional collateral security for theprompt and punctual payment and satisfaction of the Secured Obligations, andall additional advances that the Mortgagee may make on the Mortgagor’s behalfpursuant to this Mortgage, together with interest thereon as provided herein,the Mortgagor hereby assigns, pledges and grants to the Mortgagee (for itsbenefit and for the benefit of the other Secured Parties), a continuingsecurity interest in and to all of the Mortgagor’s estate, right, title,interest, claim and demand, as Landlord, under any and all of the Leasesincluding, without limitation, the following (such assigned rights, the “Mortgagor’sInterest”):

 

##### (i)                                     theimmediate and continuing right to receive and collect Rents payable by the Tenantspursuant to the Leases;

#####  

##### (ii)                                  allclaims, rights, powers, privileges and remedies of the Mortgagor, whether providedfor in the Leases or arising by statute or at law or in equity or otherwise,consequent on any failure on the part of the Tenants to perform or comply withany term of the Leases including damages or other amounts payable to theMortgagor as a result of such failure;

 

9

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##### (iii)                               allrights to take all actions upon the happening of a default under the Leases asshall be permitted by the Leases or by law including, without limitation, thecommencement, conduct and consummation of proceeding at law or in equity; and

#####  

##### (iv)                              thefull power and authority, in the name of the Mortgagor or otherwise, toenforce, collect, receive and receipt for any and all of the foregoing and totake all other actions whatsoever which the Mortgagor, as Landlord, is or maybe entitled to take under the Leases.

#####  

## SECTION 2.3  Secured Obligations.  This Mortgage secures, and the MortgagedProperty is collateral security for, the payment and performance in full whendue of the Secured Obligations.

##  

## SECTION 2.4  Mortgage Securing Future Indebtedness.  This Mortgage has been executed by Mortgagorpursuant to Article 3298 of the Louisiana Civil Code for the purpose ofsecuring the Mortgagor’s indebtedness (including, without limitation, theSecured Obligations) that may now be existing or that may arise in the futureas provided herein and in the Indenture, with the preferences and prioritiesprovided under applicable Louisiana law. This Mortgage shall be further entitled to the preferences andpriorities as provided under the Louisiana Private Works Act (La. R.S. 9:4801,et seq.).  However, nothing under thisMortgage shall be construed as limiting the duration of this Mortgage or thepurpose or purposes for which the Mortgagor’s indebtedness (including, withoutlimitation, the Secured Obligations) may be requested or extended.  The Mortgagor’s additional indebtedness willautomatically be secured by this Mortgage without the necessity that theMortgagor agrees or consents to such a result at the time additionalindebtedness is made and that the note or notes evidencing such additionalindebtedness reference the fact that such notes are secured by thisMortgage.  The Mortgagor understands thatthe Mortgagor may not subsequently have a change of mind and insist that theMortgagor’s additional indebtedness not be secured by this Mortgage unless theMortgagee specifically agrees to such a request in writing.

##  

## SECTION 2.5  No Release.  Nothing set forth in this Mortgage shallrelieve the Mortgagor from the performance of any term, covenant, condition oragreement on the Mortgagor’s part to be performed or observed under or inrespect of any of the Mortgaged Property or from any liability to any Personunder or in respect of any of the Mortgaged Property or shall impose any obligationon the Mortgagee or any other Secured Party to perform or observe any suchterm, covenant, condition or agreement on the Mortgagor’s part to be soperformed or observed or shall impose any liability on the Mortgagee or anyother Secured Party for any act or omission on the part of the Mortgagorrelating thereto or for any breach of any representation or warranty on thepart of the Mortgagor contained in this Mortgage, the Indenture, the Notes orthe Collateral Documents, or under or in respect of the Mortgaged Property ormade in connection herewith or therewith. The obligations of the Mortgagor contained in this Section 2.5shall survive the termination hereof and the discharge of the Mortgagor’s otherobligations under this Mortgage and the Indenture, the Notes and the CollateralDocuments.

 

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# ARTICLE III

#  

# REPRESENTATIONSAND WARRANTIES OF MORTGAGOR

#  

## SECTION 3.1  Authority and Validity.

##  

## The Mortgagor represents and warrants that as of the date hereof:

##  

##### (i)                                     itis duly organized or formed, validly existing and, if applicable, in goodstanding under the laws of the jurisdiction of its organization;

#####  

##### (ii)                                  itis duly qualified to transact business and is in good standing in the state inwhich the Mortgaged Property is located;

#####  

##### (iii)                               ithas full corporate or other organizational power and lawful authority toexecute and deliver this Mortgage and to mortgage and grant a Lien on andsecurity interest in the Mortgaged Property and otherwise assign theMortgagor’s Interest and otherwise perform its obligations as contemplatedherein, and all corporate and governmental actions, consents, authorizationsand approvals necessary or required therefor have been duly and effectivelytaken or obtained; and

#####  

##### (iv)                              thisMortgage is a legal, valid and binding obligation of the Mortgagor, enforceableagainst the Mortgagor in accordance with its terms, except as enforceabilitymay be limited by applicable bankruptcy, insolvency or similar laws affectingthe enforcement of creditors’ rights generally or by equitable principlesrelating to enforceability.

#####  

## SECTION 3.2  Warranty of Title.  The Mortgagor represents and warrants that:

##  

##### (i)                                     ithas good fee simple title to the Premises and the Landlord’s interest andestate under or in respect of the Leases and good title to the interest itpurports to own or hold in and to each of the Permits, the Contracts and theRecords, in each case subject to no Liens, except for Permitted CollateralLiens;

#####  

##### (ii)                                  ithas good title to the interest it purports to own or hold in and to all rightsand appurtenances to or that constitute a portion of the Mortgaged Property,except for Permitted Collateral Liens;

#####  

##### (iii)                               itis in compliance with each term, condition and provision of any obligation ofthe Mortgagor which is secured by the Mortgaged Property or the noncompliancewith which would result in a Property Material Adverse Effect; and

#####  

##### (iv)                              thisMortgage creates and constitutes a valid and enforceable first priority Lien onthe Mortgaged Property subject to Permitted Collateral Liens, and, to theextent any of the Mortgaged Property shall consist of Fixtures, a first prioritysecurity interest in the Fixtures, which first priority Lien and first prioritysecurity interest are subject only to Permitted Collateral Liens.

 

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## SECTION 3.3  Condition of Mortgaged Property.  The Mortgagor represents and warrants that:

##  

##### (i)                                     therehas been issued and there remains in full force and effect subject to norevocation, suspension, forfeiture or modification, each and every Permitnecessary for the present use, operation and occupancy of the Premises by theMortgagor and its Tenants and the conduct of their respective businesses andall required zoning, building code, land use, environmental and other similarPermits, except where the failure to be so issued and to be in full force andeffect would not result in a Property Material Adverse Effect;

#####  

##### (ii)                                  thePremises and the present and contemplated use and occupancy thereof comply withall applicable zoning ordinances, building codes, land use laws, setback orother development and/or use requirements of Governmental Authorities exceptwhere such noncompliance would not result in a Property Material AdverseEffect;

#####  

##### (iii)                               thePremises are served by all utilities (including, without limitation, water andsewer systems) necessary for the present use thereof, and all utility servicesare provided by public or private utilities and the Premises have accepted orare equipped to accept such utility services and the Mortgagor has not receivednotice of termination of such utility service, except where the failure to beso served would not result in a Property Material Adverse Effect;

#####  

##### (iv)                              theMortgagor has access to the Premises from roads sufficient to allow theMortgagor and its Tenants and invitees to conduct their respective businessesat the Premises in accordance with sound commercial practices and the Mortgagorhas not received notice of termination of such access, except where the failureto have such access would not result in a Property Material Adverse Effect;

#####  

##### (v)                                 theMortgagor has not received notice of any Taking or the commencement or pendencyof any action or proceeding therefor, other than such Takings as would notresult in a Property Material Adverse Effect;

#####  

##### (vi)                              therehas not occurred any Destruction of the Premises or any portion thereof as a resultof any fire or other casualty that, as of the date hereof, has not beenrepaired in all material respects, other than such Destruction as would nothave a Property Material Adverse Effect;

#####  

##### (vii)                           thereare no disputes regarding boundary lines, location, encroachments or possessionof any portions of the Mortgaged Property and no state of facts exists whichcould give rise to any such claim other than such disputes as would not resultin a Property Material Adverse Effect;

#####  

##### (viii)                        allliquid and solid waste disposal, septic and sewer systems located on thePremises are in a good and safe condition and repair and in compliance with allRequirements of Law, except where the failure to so comply would not result ina Property Material Adverse Effect;

#####  

##### (ix)                                noportion of the Premises is located in an area identified by the FederalEmergency Management Agency or any successor thereto as an area having specialflood hazards pursuant to

 

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##### the Flood Insurance Acts or, if any portion of thePremises is located within such area, the Mortgagor has obtained the insuranceprescribed in Article VIII hereof;

#####  

##### (x)                                   thePremises are assessed for real estate tax purposes as one or more wholly independenttax lot or lots, separate from any adjoining land or improvements notconstituting a portion of such lot or lots, and no other land or improvementsare assessed and taxed together with the Premises or any portion thereof, otherthan such cases where the failure to be so assessed would not result in aProperty Material Adverse Effect; and

#####  

##### (xi)                                thereare no options or rights of first refusal to purchase or acquire all or anyportion of the Mortgaged Property, other than such options or rights of firstrefusal as would not result in a Property Material Adverse Effect.

#####  

## SECTION 3.4  Leases.  The Mortgagor represents and warrants that asof the date hereof:

##  

##### (i)                                     theLeases identified in Schedule C attached hereto are the only Leases inexistence on the date hereof relating to the Premises;

#####  

##### (ii)                                  truecopies of such Leases have been previously delivered to the Mortgagee and thereare no agreements with any Tenant under such Leases other than those agreementsexpressly set forth therein;

#####  

##### (iii)                               theMortgagor is the sole owner of all of the Mortgagor’s Interest in such Leases;

#####  

##### (iv)                              eachof such Leases is in full force and effect, constitutes a legal, valid andbinding obligation of the Mortgagor and the applicable Tenant thereunder, andis enforceable against the Mortgagor and such Tenant in accordance with itsterms, except as enforceability may be limited by applicable bankruptcy,insolvency or similar laws affecting the enforcement of creditors’ rightsgenerally or by equitable principles relating to enforceability;

#####  

##### (v)                                 thereis no default under any of such Leases and there is existing no condition whichwith the giving of notice or passage of time or both would cause a defaultthereunder;

#####  

##### (vi)                              allRents due under such Leases have been paid in full;

#####  

##### (vii)                           noneof the Rents reserved under such Leases have been assigned or otherwise pledgedor hypothecated except in favor of the Mortgagee pursuant to the provisionshereof;

#####  

##### (viii)                        noneof the Rents (other than any security deposit collected in accordance with theprovisions of the applicable Lease) have been collected for more than one (1)month in advance;

#####  

##### (ix)                                thereexist no offsets or defenses to the payment of any portion of the Rents and theMortgagor owes no monetary obligation to any Tenant under any such Lease;

#####  

##### (x)                                   theMortgagor has received no notice from any Tenant challenging the validity orenforceability of any such Lease;

 

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##### (xi)                                nosuch Lease contains any option to purchase, right of first refusal to purchase,right of first refusal to relet, or any other similar provision; and

#####  

##### (xii)                             eachsuch Lease is subordinate to this Mortgage either pursuant to its terms or pursuantto a recordable Subordination Agreement.

#####  

## SECTION 3.5  Insurance.  The Mortgagor represents and warrants that,except where the failure of clauses (i), (ii) or (iii) hereof to be true wouldnot have a Property Material Adverse Effect, (i) the Premises and the use,occupancy and operation thereof comply with all Insurance Requirements andthere exists no default under any Insurance Requirement, (ii) all premiums dueand payable with respect to the Insurance Policies have been paid,(iii) all Insurance Policies are in full force and effect and the Mortgagorhas not received notice of violation or cancellation thereof and (iv) allinsurance certificates required pursuant to the Indenture have been deliveredto the Mortgagee.

##  

SECTION 3.6  Charges.  The Mortgagor represents and warrants thatall Charges imposed upon or assessed against the Mortgaged Property have beenpaid and discharged except to the extent such Charges constitute a Lien not yetdue and payable or to the extent such Charges are being contested in accordancewith Section 9.1 hereof.

 

SECTION 3.7  Environmental.  The Mortgagor represents and warrants that:

 

##### (i)                                     ithas obtained all Permits which are necessary with respect to the ownership andoperation of its business and the Mortgaged Property under any and allapplicable Environmental Laws and is in compliance with all terms and conditionsthereof, except where the failure so to obtain or to be in compliance would notresult in a Property Material Adverse Effect;

#####  

##### (ii)                                  itis in compliance with any and all applicable Environmental Laws including,without limitation, all other limitations, restrictions, conditions, standards,prohibitions, requirements, obligations, schedules and timetables contained inthe Environmental Laws, except where the failure so to be in compliance wouldnot result in a Property Material Adverse Effect;

#####  

##### (iii)                               thereis no civil, criminal or administrative action, suit, demand, claim, hearing,notice of violation, investigation, proceeding, notice of demand letter pendingor threatened against it or any Affiliate under the Environmental Laws whichwould result in a fine, penalty or other cost or expense other than suchinstances that would not result in a Property Material Adverse Effect; and

#####  

##### (iv)                              thereare no past or present events, conditions, circumstances, activities,practices, incidents, actions or plans which may interfere with or preventcompliance with the Environmental Laws, or which may give rise to any commonlaw or legal liability including, without limitation, liability under theComprehensive Environmental Response, Compensation and Liability Act of 1980,as amended, or any other Environmental Law or related common law theory orotherwise form the basis of any claim, action, demand, suit, proceeding,hearing or notice of violation, study or investigation, based on or related tothe manufacture, processing, distribution, use, generation, treatment, storage,disposal, transport or handling, or the emission, discharge, release orthreatened release into the environment, of any Hazardous Materials which wouldresult in a fine, penalty or

 

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##### other cost or expense other than such instances thatwould not result in a Property Material Adverse Effect .

#####  

## SECTION 3.8  No Conflicts, Consents, etc.  Neither the execution and delivery hereof bythe Mortgagor nor the consummation of the transactions herein contemplated northe fulfillment of the terms hereof (i) violates the terms of any agreement,indenture, mortgage, deed of trust, equipment lease, instrument or otherdocument to which the Mortgagor is a party, or by which it may be bound or towhich any of its properties or assets may be subject, (ii) conflicts with anyRequirement of Law applicable to the Mortgagor or its property or (iii) resultsin or requires the creation or imposition of any Lien (other than the Liencontemplated hereby) upon or with respect to any of the Mortgaged Property,except where such violation, conflict, creation or imposition would not have aProperty Material Adverse Effect.  Noconsent of any party (including, without limitation, equityholders or creditorsof the Mortgagor) and no consent, authorization, approval, license or otheraction by, and no notice to or filing with, any Governmental Authority orregulatory body or other Person (other than with respect to any required Permits)is required for (i) the granting of a mortgage Lien on and securityinterest in the Mortgaged Property by the Mortgagor granted by it pursuant tothis Mortgage or for the execution, delivery or performance hereof by theMortgagor except for the filing of this Mortgage and the other filingscontemplated hereby or (ii) the exercise by the Mortgagee of the remediesin respect of the Mortgaged Property pursuant to this Mortgage other than thoserequired by law in connection with the exercise of the applicable remedy.

##  

SECTION 3.9  Benefit to the Mortgagor.  The Mortgagor represents and warrants that itwill receive substantial benefit as a result of the execution, delivery, andperformance of the Indenture, the Notes and the Collateral Documents.

 

# ARTICLE IV

#  

# CERTAINCOVENANTS OF MORTGAGOR

#  

## SECTION 4.1  Preservation of Corporate Existence.  The Mortgagor shall:

##  

##### (i)                                     preserveand maintain in full force and effect its existence and good standing under thelaws of the jurisdiction of its organization;

#####  

##### (ii)                                  preserveand maintain in full force and effect its qualification to transact businessand good standing in the state in which the Mortgaged Property is located; and

#####  

##### (iii)                               preserveand maintain in full force and effect all consents, authorizations and approvalsnecessary or required of any Governmental Authority or any other Personrelating to the execution, delivery and performance hereof, except where thefailure to do so would not result in a Property Material Adverse Effect.

#####  

## SECTION 4.2  Title. The Mortgagor shall:

##  

##### (i)                                     (A)keep in effect all material rights and appurtenances to or that constitute apart of the Mortgaged Property and (B) protect, preserve and defend itsinterest in the Mortgaged Property

 

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##### and title thereto, except against Permitted CollateralLiens (other than the Lien created by this Mortgage);

#####  

##### (ii)                                  (A)comply, in all material respects, with each of the terms, conditions andprovisions of any obligation of the Mortgagor which is secured by the MortgagedProperty, except where the failure to so comply would not result in a PropertyMaterial Adverse Effect, or the noncompliance with which may result in theimposition of a Lien on the Mortgaged Property, (B) forever warrant anddefend to the Mortgagee the Lien and security interests created and evidencedhereby and the validity and priority hereof in any action or proceeding againstthe claims of any and all Persons whomsoever affecting or purporting to affectthe Mortgaged Property or any of the rights of the Mortgagee hereunder, exceptagainst Permitted Collateral Liens (other than the Lien of this Mortgage), and(C) maintain a valid and enforceable first priority Lien, except for PermittedCollateral Liens (other than the Lien of this Mortgage) on the MortgagedProperty and, to the extent any of the Mortgaged Property shall consist ofFixtures, a first priority security interest in the Mortgaged Property, whichfirst priority Lien and security interest shall be subject only to Permitted CollateralLiens; and

#####  

##### (iii)                               immediatelyupon obtaining knowledge of the pendency of any proceedings for the eviction ofthe Mortgagor from the Mortgaged Property or any part thereof by paramounttitle or otherwise questioning the Mortgagor’s right, title and interest in, toand under the Mortgaged Property as warranted in this Mortgage, or of anycondition that could give rise to any such proceedings, notify the Mortgageethereof.  The Mortgagee may participatein such proceedings and the Mortgagor will deliver or cause to be delivered tothe Mortgagee all instruments requested by the Mortgagee to permit suchparticipation.  In any such proceedings,the Mortgagee may be represented by counsel reasonably satisfactory to theMortgagee at the reasonable expense of the Mortgagor.  If, upon the resolution of such proceedings,the Mortgagor shall suffer a loss of the Mortgaged Property or any part thereofor interest therein and title insurance proceeds shall be payable in connectiontherewith, such proceeds are hereby assigned to and shall be paid to theMortgagee for deposit into the Collateral Account and shall be applied in themanner applicable to Net Loss Proceeds in accordance with the provisions ofSections 4.16, 10.05(c) and 11.02 of the Indenture.

#####  

## SECTION 4.3  Maintenance and Use of Mortgaged Property;Alterations.

##  

##### (i)                                     Maintenance.  The Mortgagor shall cause the representationsand warranties set forth in Section 3.3 hereof to continue to betrue in each and every respect and shall pay or cause to be paid when due allCharges, costs and expenses relating thereto, other than such Charges beingcontested in accordance with Section 9.1 hereof.

#####  

##### (ii)                                  Maintenanceof Premises.  The Mortgagor shall notcommit or suffer any waste on the Premises. The Mortgagor shall, at all times, maintain the Premises in good workingorder, condition and repair, reasonable wear and tear excepted, and shall usecommercially reasonable efforts to make or cause to be made all repairs,structural or nonstructural, which are necessary or appropriate in the conductof the Mortgagor’s business.  TheMortgagor shall not, except as permitted in Section 4.3(iii)hereof, alter the occupancy or use of all or any portion of the Premiseswithout the prior written consent of the Mortgagee, which consent shall not beunreasonably withheld.  Except to theextent permitted pursuant to the provisions of Section 4.3(iii)hereof, the Mortgagor shall not remove, demolish or alter the structural character

 

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##### of any Improvement now or hereafter erected upon allor any portion of the Premises, or permit any such removal, demolition or alteration,without the prior written consent of the Mortgagee, which consent shall not beunreasonably withheld.

#####  

##### (iii)                               Alterations.  The Mortgagor shall not, without the priorwritten consent of the Mortgagee, which consent shall not be unreasonablywithheld, make any Alteration to the Premises except as permitted by Sections10.04 and 10.06 of the Indenture. Whether or not the making of any Alteration shall require the consent ofthe Mortgagee pursuant to the immediately preceding sentence, the Mortgagorshall (A) complete each Alteration promptly, in a good and workmanlikemanner and in compliance, in all material respects, with all applicable locallaws, ordinances and requirements and (B) pay when due all claims forlabor performed and materials furnished in connection with such Alteration,unless contested in accordance with the provisions of Article IXhereof.

#####  

##### (iv)                              Permits.  The Mortgagor shall maintain, or cause to bemaintained, in full force and effect all Permits contemplated by and subject toSection 3.3(i) hereof. Unless and to the extent contested by the Mortgagor in accordance withthe provisions of Article IX hereof, the Mortgagor shall comply, inall material respects, with all requirements set forth in the Permits and allRequirements of Law applicable to all or any portion of the Mortgaged Propertyor the condition, use or occupancy of all or any portion thereof or anyrecorded deed of restriction, declaration, covenant running with the land orotherwise, now or hereafter in force, subject to the provisions of Section 3.3hereof.

#####  

##### (v)                                 Zoning.  The Mortgagor shall not initiate, join in, orconsent to any change in the zoning or any other permitted use classificationof the Premises without the prior written consent of the Mortgagee, whichconsent shall not be unreasonably withheld.

#####  

## SECTION 4.4  Notices Regarding Certain Defaults.  The Mortgagor shall, promptly upon receipt ofany written notice regarding (i) any default by the Mortgagor relating tothe Mortgaged Property or any portion thereof or (ii) the failure todischarge any of Mortgagor’s obligations with respect to the Mortgaged Propertyor any portion thereof described herein, furnish a copy of such notice to theMortgagee.

##  

## SECTION 4.5  Access to Mortgaged Property, Books andRecords; Other Information.  Uponrequest to the Mortgagor, the Mortgagee, its agents, accountants and attorneysshall have full and free access to visit and inspect, as applicable, duringnormal business hours and such other reasonable time as may be requested by theMortgagee, all of the Mortgaged Property including, without limitation, all ofthe books, correspondence and records of the Mortgagor relating thereto.  The Mortgagee and its representatives mayexamine the same, take extracts therefrom and make photocopies thereof.  The Mortgagor shall, at any and all times,within a reasonable time after written request by the Mortgagee, furnish orcause to be furnished to the Mortgagee, in such manner and in such detail asmay be reasonably requested by the Mortgagee, additional information withrespect to the Mortgaged Property.

##  

## SECTION 4.6  Limitation on Liens; Transfer Restrictions.  The Mortgagor may not, without the priorwritten consent of the Mortgagee, further mortgage, encumber, hypothecate,sell, convey or assign all or any part of the Mortgaged Property or suffer orallow any of the foregoing to occur by operation of law or otherwise; provided,however, that the Mortgagor shall have the right to (1) sell,convey or assign all or any portion of the Mortgaged Property in accordancewith the provisions of the Indenture and

 

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## (2) suffer to exist the following Liens inrespect of the Mortgaged Property: (i) Prior Liens (but not extensions,amendments, supplements or replacements of Prior Liens unless (A) extended,amended, supplemented or replaced in a manner permitted by the Indenture or (B)consented to by the Mortgagee which consent shall not be unreasonablywithheld), (ii) the Lien and security interest created by this Mortgage orany other Collateral Document, (iii) Contested Liens, (iv) Liens describedin clause (9) of the definition of Permitted Liens (provided, however,that such Liens shall not extend to or cover any Mortgaged Property other thanequipment subject to Capital Leases Obligations or Purchase Money Obligationsincurred in accordance with the provisions of the Indenture) or clause (4) ofthe definition of Permitted Liens, and (v) Leases to the extent permittedpursuant to the provisions of Article V hereof (the Liens describedin clauses (i) through (v) of this sentence, collectively, “PermittedCollateral Liens”).

##  

## SECTION 4.7  Environmental.

##  

##### (i)                                     HazardousMaterials.  Except where the failureto do so would not result in a Property Material Adverse Effect, the Mortgagorshall (A) comply with any and all present and future Environmental Lawsapplicable to the Mortgaged Property, (B) not release, store, treat,handle, generate, discharge or dispose of any Hazardous Materials at, on, underor from the Mortgaged Property in violation of or in a manner that could resultin any material liability under any present and future Environmental Law and(C) take all necessary steps to initiate and expeditiously complete allremedial, corrective and other action to eliminate any such effect.  In the event the Mortgagor fails to complywith the covenants in the preceding sentence, the Mortgagee may, in addition toany other remedies set forth herein, as agent for the Mortgagor and at theMortgagor’s sole cost and expense, cause any remediation, removal or responseaction relating to Hazardous Materials required by applicable EnvironmentalLaws to be taken and the Mortgagor shall provide to the Mortgagee and itsagents and employees access to the Mortgaged Property for such purpose.  Any reasonable costs or expenses incurred bythe Mortgagee for such purpose shall be immediately due and payable by theMortgagor and shall bear interest at the Default Rate. The Mortgagee shall havethe right at any time when an Event of Default shall have occurred and becontinuing and at such other times when a potential violation of any present orfuture Environmental Law exists which in the Mortgagee’s reasonable judgmentcould result in any material liability or obligation under such EnvironmentalLaw, at the sole cost and expense of the Mortgagor, to conduct an environmentalaudit of the Mortgaged Property by such persons or firms appointed by theMortgagee, and the Mortgagor shall cooperate in all respects in the conduct ofsuch environmental audit, including, without limitation, by providing access tothe Mortgaged Property and to all records relating thereto.  To the extent that any such environmentalaudit identifies conditions which in the Mortgagee’s reasonable judgment wouldresult in any material liability or obligation under any present or futureEnvironmental Law, the Mortgagor agrees to expeditiously correct any suchviolation or respond to conditions giving rise to such liability or obligationsin a manner which complies in all material respects with the Environmental Lawsand mitigates associated health and environmental risks.  The Mortgagor shall indemnify and hold theMortgagee and each of the other Secured Parties harmless from and against allloss, cost, damage or reasonable expense (including, without limitation,reasonable attorneys’ and consultants’ fees and disbursements) that theMortgagee or any other Secured Party may sustain by reason of the assertionagainst the Mortgagee or any Secured Party by any party of any claim relatingto such Hazardous Materials on, under or from the Mortgaged Property or actionstaken with respect thereto as authorized hereunder, except to the extentarising from the gross negligence or willful misconduct of the Mortgagee or anyother Secured Party.  The foregoingindemnification shall survive repayment of all Secured Obligations and anyrelease or assignment hereof; and

 

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##### (ii)                                  Asbestos.The Mortgagor shall not install nor permit to be installed in or removed fromthe Mortgaged Property, asbestos or any asbestos-containing material(collectively, “ACM”) except in compliance, in all material respects,with all applicable Environmental Laws, and with respect to any ACM currentlypresent in the Mortgaged Property, the Mortgagor shall promptly either(A) remove any ACM which such Environmental Laws require to be removed or(B) otherwise comply, in all material respects, with such EnvironmentalLaws with respect to such ACM, all at the Mortgagor’s sole cost andexpense.  If the Mortgagor shall fail soto remove any ACM or otherwise comply, in all material respects, with such lawsor regulations, the Mortgagee may, in addition to any other remedies set forthherein, take reasonable or necessary steps to eliminate any ACM from theMortgaged Property or otherwise comply, in all material respects, withapplicable law, regulations or orders and the Mortgagor shall provide to theMortgagee and its agents and employees access to the Mortgaged Property forsuch purpose.  Any reasonable costs or expensesincurred by the Mortgagee for such purpose shall be immediately due and payableby the Mortgagor and bear interest at the Default Rate.  The Mortgagor shall indemnify and hold theMortgagee and the other Secured Parties harmless from and against all loss,cost, damage and expense (including, without limitation, reasonable attorneys’and consultants’ fees and disbursements) that the Mortgagee or the otherSecured Parties may sustain, as a result of the presence of any ACM and anyremoval thereof or compliance with all applicable Environmental Laws, except tothe extent arising from the gross negligence or willful misconduct of theMortgagee or any other Secured Party. The foregoing indemnification shall survive repayment of all SecuredObligations and any release or assignment hereof.

#####  

## SECTION 4.8  Estoppel Certificates.  The Mortgagor shall, from time to time, uponthirty (30) days’ prior written reasonable request of the Mortgagee, execute,acknowledge and deliver to the Mortgagee an Officers’ Certificate stating thatthis Mortgage, the Indenture, the Notes and the Collateral Documents areunmodified and in full force and effect (or, if there have been modifications,that this Mortgage, the Indenture, the Notes and the Collateral Documents, asapplicable, is or are in full force and effect as modified and setting forthsuch modifications) and stating the date to which principal and interest havebeen paid on the Notes.

##  

# ARTICLE V

#  

# LEASES

#  

## SECTION 5.1  Mortgagor’s Affirmative Covenants withRespect to Leases.  With respect toeach Lease, the Mortgagor shall:

##  

##### (i)                                     observeand perform, in all material respects, all the obligations imposed upon theLandlord under such Lease;

#####  

##### (ii)                                  promptlysend copies to the Mortgagee of all notices of default which the Mortgagorshall send or receive thereunder; and

#####  

##### (iii)                               enforceall of the terms, covenants and conditions contained in such Lease upon thepart of the Tenant thereunder to be observed or performed to the extent itwould be commercially reasonable to do so.

 

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## SECTION 5.2  Mortgagor’s Negative Covenants withRespect to Leases.  With respect toeach Lease, the Mortgagor shall not, without the prior written consent of theMortgagee, which consent shall not be unreasonably withheld:

##  

##### (i)                                     receiveor collect, or permit the receipt or collection of, any Rent under such Leasemore than one (1) month in advance of the respective period in respect of whichsuch Rent is to accrue, except:

#####  

###### (A)                              inconnection with the execution and delivery of such Lease (or of any amendmentto such Lease), Rent thereunder may be collected and received in advance in anamount not in excess of one (1) month’s Rent;

######  

###### (B)                                theamount held by Landlord as a reasonable security deposit thereunder; and

######  

###### (C)                                anyamount received and collected for escalation and other charges in accordancewith the terms of such Lease;

######  

##### (ii)                                  assign,transfer or hypothecate (other than to the Mortgagee hereunder) any Rent undersuch Lease whether then due or to accrue in the future or the interest of theMortgagor as Landlord under such Lease;

#####  

##### (iii)                               enterinto any amendment or modification of such Lease which would materially decreasethe unexpired term thereof or decrease the amount of the Rents payablethereunder or materially impair the value or utility of the Mortgaged Propertyor the security provided by this Mortgage;

#####  

##### (iv)                              terminate(whether by exercising any contractual right of the Mortgagor to recaptureleased space or otherwise) or permit the termination of such Lease or acceptsurrender of all or any portion of the space demised under such Lease prior tothe end of the term thereof or accept assignment of such Lease to the Mortgagorunless:

#####  

###### (A)                              theTenant under such Lease has not paid the equivalent of two (2) months’ Rent andthe Mortgagor has made reasonable efforts to collect such Rent; and

######  

###### (B)                                itwould be commercially reasonable to terminate such Lease; or

######  

##### (v)                                 waive,excuse, condone or in any manner discharge or release any Tenants of or fromthe material obligations of such Tenants under their respective Leases orguarantors of Tenants from any material obligations under any guarantees of theLeases except as the same would be done by a Prudent Operator with due regardfor the security afforded the Mortgagee thereby.

#####  

## SECTION 5.3  Additional Requirements with Respect toNew Leases.  In addition to therequirements of Sections 5.1 and 5.2 hereof, the Mortgagor shallnot enter into any Lease after the date hereof unless the Tenant under suchLease has entered into a Subordination Agreement and has otherwise compliedwith the provisions of Section 10.06 of the Indenture.

 

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# ARTICLE VI

#  

# CONCERNINGASSIGNMENT OF LEASES AND RENTS

#  

## SECTION 6.1  Present Assignment; License to theMortgagor.  Section 2.2 of thisMortgage constitutes a present, absolute, effective, irrevocable and completeassignment by the Mortgagor to the Mortgagee of the Leases and Rents and theright, subject to applicable law, to collect all sums payable to the Mortgagorthereunder and apply the same as the Mortgagee may, in its sole discretion,determine to be appropriate (including the payment of reasonable costs andexpenses in connection with the maintenance, operation, improvement, insurance,taxes and upkeep of the Mortgaged Property), which is not conditioned upon theMortgagee being in possession of the Premises. The Mortgagee hereby grants to the Mortgagor, however, a license tocollect and apply the Rents and to enforce the obligations of Tenants under theLeases.  Immediately upon the occurrenceof and during the continuance of any Event of Default or a Default, the licensegranted in the immediately preceding sentence shall cease and terminate, withor without any notice, action or proceeding or the intervention of a receiverappointed by a court.

##  

## SECTION 6.2  Collection of Rents by the Mortgagee.

##  

##### (i)                                     Fromand after the occurrence and during the continuance of an Event of Default or aDefault, any Rents receivable by the Mortgagee hereunder, after payment of allproper costs and expenses as Mortgagee may, in its sole discretion, determineto be appropriate (including the payment of reasonable costs and expenses inconnection with the maintenance, operation, improvement, insurance, taxes andupkeep of the Mortgaged Property), shall be applied to the Secured Obligationsor, at the option of the Mortgagee, shall be held by the Mortgagee asadditional collateral to secure the performance by the Mortgagor of the SecuredObligations.  The Mortgagee shall beaccountable to the Mortgagor only for Rents actually received by theMortgagee.  The collection of such Rentsand the application thereof shall not cure or waive any Event of Default or aDefault or waive, modify or affect notice of Event of Default or a Default orinvalidate any act done pursuant to such notice.

#####  

##### (ii)                                  TheMortgagor hereby irrevocably authorizes and directs Tenant under each Lease torely upon and comply with any and all notices or demands from the Mortgagee forpayment of Rents to the Mortgagee and the Mortgagor shall have no claim againstTenant for Rents paid by Tenant to the Mortgagee pursuant to such notice ordemand.

#####  

## SECTION 6.3  No Release.  Neither this Mortgage nor any action orinaction on the part of the Mortgagee shall release any Tenant under any Lease,any guarantor of any Lease or the Mortgagor from any of their respectiveobligations under such Leases or constitute an assumption of any suchobligation on the part of the Mortgagee. No action or failure to act on the part of the Mortgagor shall adverselyaffect or limit the rights of the Mortgagee under this Mortgage or, throughthis Mortgage, under such Leases. Nothing contained herein shall operate or be construed to(i) obligate the Mortgagee to perform any of the terms, covenants or conditionscontained in any Lease or otherwise to impose any obligation upon the Mortgageewith respect to such Lease (including, without limitation, any obligationarising out of any covenant of quiet enjoyment contained in such Lease in theevent that Tenant under such Lease shall have been joined as a party defendantin any action by which the estate of such Tenant shall be terminated) or(ii) place upon the Mortgagee any obligation for the operation, control,care, management or repair of the Premises.

 

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## SECTION 6.4  Irrevocable Interest.  All rights, powers and privileges of theMortgagee herein set forth are coupled with an interest and are irrevocable,subject to the terms and conditions hereof, and the Mortgagor shall not takeany action under the Leases or otherwise which is inconsistent with thisMortgage or any of the terms hereof and any such action inconsistent herewithor therewith shall be void.

##  

## SECTION 6.5  Amendment to Leases.  Each Lease, including, without limitation,all amendments, modifications, supplements, replacements, extensions andrenewals thereof, shall continue to be subject to the provisions hereof withoutthe necessity of any further act by any of the parties hereto.

##  

# ARTICLE VII

#  

# TAXESAND CERTAIN STATUTORY LIENS

#  

## SECTION 7.1  Payment of Charges.  Unless and to the extent contested by theMortgagor in accordance with the provisions of Article IX hereof,the Mortgagor shall pay and discharge, or cause to be paid and discharged, fromtime to time when the same shall become due (or within any applicable graceperiod) , all Charges subject to this Article VII.  The Mortgagor shall, upon the Mortgagee’srequest, deliver to the Mortgagee receipts evidencing the payment of all suchCharges.

##  

## SECTION 7.2  Escrow of Taxes.  From and after the occurrence and during thecontinuance of an Event of Default or a Default, at the option and upon therequest of the Mortgagee, the Mortgagor shall deposit with the Mortgagee in anaccount maintained by the Mortgagee (the “Tax Escrow Fund”), on thefirst day of each month, an amount estimated by the Mortgagee to be equal toone-twelfth of the annual real property taxes and other annual Charges requiredto be discharged by the Mortgagor under Section 7.1 hereof.  Such amounts shall be held by the Mortgageewithout interest to the Mortgagor and applied to the payment of the obligationsin respect of which such amounts were deposited, in such priority as theMortgagee shall determine, on or before the respective dates on which suchobligations or any part thereof would become delinquent.  Nothing contained in this Article VIIshall (i) affect any right or remedy of the Mortgagee under any provisionhereof or of any statute or rule of law to pay any such amount as providedabove from its own funds and to add the amount so paid, together with interestat the Default Rate during such time that any amount remains outstanding, tothe Secured Obligations or (ii) relieve the Mortgagor of its obligationsto make or provide for the payment of the annual real property taxes and otherannual Charges required to be discharged by the Mortgagor under Section 7.1hereof.

##  

## SECTION 7.3  Certain Statutory Liens.  Unless and to the extent contested by theMortgagor in accordance with the provisions of Article IX hereof,the Mortgagor shall timely pay, or cause to be paid, all lawful claims anddemands of mechanics, materialmen, laborers, government agencies administeringworker’s compensation insurance, old age pensions and social security benefitsand all other claims, judgments, demands or amounts of any nature which, ifunpaid, would result in, or permit the creation of, a Lien on the MortgagedProperty or any part thereof, or which would result in forfeiture of all or anypart of the Mortgaged Property.

##  

## SECTION 7.4  Stamp and Other Taxes.  Unless and to the extent contested by theMortgagor in accordance with the provisions of Article IX hereof,the Mortgagor shall pay any United States documentary stamp taxes, withinterest and fines and penalties, and any mortgage recording taxes, with

 

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## interest and fines and penalties, that may hereafterbe levied, imposed or assessed under or upon or by reason hereof or the SecuredObligations or any instrument or transaction affecting or relating to eitherthereof and in default thereof the Mortgagee may advance the same and theamount so advanced shall be payable by the Mortgagor to the Mortgagee inaccordance with the provisions of Section 14.5 hereof.

##  

## SECTION 7.5  Certain Tax Law Changes.  In the event of the passage after the datehereof of any law deducting from the value of real property, for the purpose oftaxation, amounts in respect of any Lien thereon or changing in any way thelaws for the taxation of mortgages or debts secured by mortgages for state orlocal purposes or the manner of the collection of any Charges, and imposing anyCharges, either directly or indirectly, on this Mortgage, the Indenture or anyother Collateral Document, the Mortgagor shall promptly pay to the Mortgageesuch amount or amounts as may be necessary from time to time to pay any suchCharges.

##  

SECTION 7.6  Proceeds of Tax Claim.  In the event that the proceeds of any taxclaim are paid after the Mortgagee has exercised its right to foreclose theLien hereof, such proceeds shall be paid to the Mortgagee to satisfy anydeficiency remaining after such foreclosure. The Mortgagee shall retain its interest in the proceeds of any tax claimduring any redemption period.  The amountof any such proceeds in excess of any deficiency claim of the Mortgagee shallin a prompt manner be released to the Mortgagor.

 

# ARTICLE VIII

#  

# INSURANCE

#  

## SECTION 8.1  Required Insurance Policies and Coverages.  The Mortgagor shall maintain in respect ofthe Premises the insurance policies and coverages required underSection 4.19(b) of the Indenture.

##  

## SECTION 8.2  Delivery After Foreclosure.  In the event that the proceeds of anyinsurance claim are paid after the Mortgagee has exercised its right toforeclose the Lien hereof, such proceeds shall be paid to the Mortgagee tosatisfy any deficiency remaining after such foreclosure.  Mortgagee shall retain its interest in theInsurance Policies required to be maintained pursuant to this Mortgage duringany redemption period. The amount of any such proceeds in excess of anydeficiency claim of the Mortgagee shall be released to the Mortgagor.

##  

# ARTICLE IX

#  

# CONTESTINGOF PAYMENTS

#  

## SECTION 9.1  Contesting of Taxes and Certain StatutoryLiens.  The Mortgagor may at its ownexpense contest the validity, amount or applicability of any Charges as long asthe contest thereof shall be conducted in accordance with, and permittedpursuant to the provisions of, the Indenture. Notwithstanding the foregoing provisions of this Section 9.1,(i) no contest of any such obligations may be pursued by the Mortgagor (A)if such contest would expose the Mortgagee or any Holder to any possiblecriminal liability or (B) unless the Mortgagor shall have furnished a bondor other security therefor reasonably

 

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## satisfactory to the Mortgagee or such Holder, as thecase may be, including for any additional civil liability for failure to complywith such obligations and (ii) if at any time payment or performance ofany obligation contested by the Mortgagor pursuant to this Section 9.1shall become necessary to prevent the imminent imposition of remedies becauseof non-payment, the Mortgagor shall pay or perform the same in sufficient timeto prevent the imposition of remedies in respect of such default or prospectivedefault.

##  

## SECTION 9.2  Contesting of Insurance.  The Mortgagor shall not take any action thatwould reasonably be expected to cause the termination, revocation or denial ofany insurance coverage required to be maintained under this Mortgage or thatwould be the basis for a defense to any claim under any Insurance Policymaintained in respect of the Premises and the Mortgagor shall otherwise complyin all respects with all Insurance Requirements in respect of the Premises; provided,however, that the Mortgagor may, at its own expense and after writtennotice to the Mortgagee, (i) contest the applicability or enforceabilityof any such Insurance Requirements by appropriate legal proceedings,prosecution of which does not constitute a basis for cancellation or revocationof any insurance coverage required under Article VIII hereof or(ii) cause the Insurance Policy containing any such Insurance Requirementto be replaced by a new policy complying with the provisions of Article VIIIhereof.

##  

# ARTICLE X

#  

# DESTRUCTION,CONDEMNATION AND RESTORATION

#  

## SECTION 10.1  Destruction.  If there shall occur any Destruction,individually or in the aggregate, in excess of $100,000, the Mortgagor shallpromptly send to the Mortgagee a written notice setting forth the nature and extentof such Destruction.  The proceeds of anyinsurance payable in respect of such Destruction are hereby assigned and shallbe paid to the Mortgagee.  The Net LossProceeds arising out of such Destruction, shall be applied in accordance withthe provisions of Sections 4.16, 10.05(c) and 11.02 of the Indenture.

##  

## SECTION 10.2  Condemnation.  If there shall occur any Taking or thecommencement of any proceeding thereof, the Mortgagor shall immediately notifythe Mortgagee upon receiving notice of such Taking or commencement ofproceedings therefor.  The Mortgagee may,at its option, participate in any proceedings or negotiations which mightresult in any Taking, and the Mortgagor shall deliver or cause to be deliveredto the Mortgagee all instruments requested by it to permit suchparticipation.  The Mortgagee may berepresented by counsel reasonably satisfactory to it at the reasonable expenseof the Mortgagor in connection with any such participation.  The Mortgagor shall pay all reasonable fees,costs and expenses incurred by the Mortgagee in connection with any Taking andin seeking and obtaining any award or payment on account thereof.  Any proceeds, award or payment in respect ofany Taking are hereby assigned and shall be paid to the Mortgagee.  The Mortgagor shall take all steps necessaryto notify the condemning authority of such assignment.  The Net Loss Proceeds arising out of suchTaking shall be applied in accordance with the provisions of Sections 4.16, 10.05(c)and 11.02 of the Indenture.

 

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# ARTICLE XI

#  

# EVENTSOF DEFAULT AND REMEDIES

#  

## SECTION 11.1  Events of Default.  It shall be an Event of Default hereunder ifthere shall have occurred and be continuing an Event of Default under theIndenture.

##  

## SECTION 11.2  Remedies in Case of an Event of Default.  If any Event of Default shall have occurredand be continuing, the Mortgagee may at its option, in addition to any otheraction permitted under this Mortgage or the Indenture or by law, statute or inequity, take one or more of the following actions to the greatest extentpermitted by local law:

##  

##### (i)                                     bywritten notice to the Issuer and the Mortgagor, declare the entire unpaidamount of the Secured Obligations to be due and payable immediately;

#####  

##### (ii)                                  personally,or by its agents or attorneys, (A) enter into and upon and take possessionof all or any part of the Premises together with the books, records andaccounts of the Mortgagor relating thereto and, exclude the Mortgagor, itsagents and servants wholly therefrom, (B) use, operate, manage and controlthe Premises and conduct the business thereof, (C) maintain and restorethe Premises, (D) make all necessary or proper repairs, renewals andreplacements and such useful Alterations thereto and thereon as the Mortgageemay deem advisable, (E) manage, lease and operate the Premises and carryon the business thereof and exercise all rights and powers of the Mortgagorwith respect thereto either in the name of the Mortgagor or otherwise or(F) collect and receive all Rents. The Mortgagee shall be under no liability for or by reason of any suchtaking of possession, entry, removal or holding, operation or management exceptthat any amounts so received by the Mortgagee shall be applied in accordancewith the provisions of the Indenture;

#####  

##### (iii)                               withor without entry, personally or by its agents or attorneys, (A) sell theMortgaged Property and all estate, right, title and interest, claim and demandtherein at one or more sales in one or more parcels, in accordance with theprovisions of Section 11.3 or (B) institute and prosecuteproceedings for the complete or partial foreclosure of the Lien and securityinterests created and evidenced hereby; or

#####  

##### (iv)                              takesuch steps to protect and enforce its rights whether by action, suit orproceeding at law or in equity for the specific performance of any covenant,condition or agreement in the Indenture, the Notes and the CollateralDocuments, or in aid of the execution of any power granted in this Mortgage, orfor any foreclosure hereunder, or for the enforcement of any other appropriatelegal or equitable remedy or otherwise as the Mortgagee shall elect.

#####  

## SECTION 11.3  Sale of Mortgaged Property if Event ofDefault Occurs; Proceeds of Sale.

##  

##### (i)                                     Ifany Event of Default shall have occurred and be continuing, the Mortgagee mayinstitute an action to foreclose this Mortgage or take such other action as maybe permitted and available to the Mortgagee at law or in equity for theenforcement of the Indenture and the Notes and realization on the MortgagedProperty and proceeds thereon through power of sale or to final judgment andexecution thereof for the Secured Obligations, and in furtherance thereof theMortgagee may sell the Mortgaged Property at

 

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##### one or more sales, as an entirety or in parcels, atsuch time and place, upon such terms and after such notice thereof as may berequired or permitted by law or statute or in equity.  The Mortgagee may execute and deliver to thepurchaser at such sale a conveyance of the Mortgaged Property in fee simple andan assignment or conveyance of all the Mortgagor’s Interest in the Leases andthe Mortgaged Property, each of which conveyances and assignments shall containrecitals as to the Event of Default upon which the execution of the power ofsale herein granted depends, and the Mortgagor hereby constitutes and appointsthe Mortgagee the true and lawful attorney in fact of the Mortgagor to make anysuch recitals, sale, assignment and conveyance, and all of the acts of theMortgagee as such attorney in fact are hereby ratified and confirmed.  The Mortgagor agrees that such recitals shallbe binding and conclusive upon the Mortgagor and that any assignment orconveyance to be made by the Mortgagee shall divest the Mortgagor of all right,title, interest, equity and right of redemption, including any statutoryredemption, in and to the Mortgaged Property. The power and agency hereby granted are coupled with an interest and areirrevocable by death or dissolution, or otherwise, and are in addition to anyand all other remedies which the Mortgagee may have hereunder, at law or inequity.  So long as the SecuredObligations, or any part thereof, remain unpaid, the Mortgagor agrees thatpossession of the Mortgaged Property by the Mortgagor, or any person claimingunder the Mortgagor, shall be as tenant, and, in case of a sale under power orupon foreclosure as provided in this Mortgage, the Mortgagor and any person inpossession under the Mortgagor, as to whose interest such sale was not madesubject, shall, at the option of the purchaser at such sale, then become and betenants holding over, and shall forthwith deliver possession to such purchaser,or be summarily dispossessed in accordance with the laws applicable to tenantsholding over.  In case of any sale underthis Mortgage by virtue of the exercise of the powers herein granted, orpursuant to any order in any judicial proceeding or otherwise, the MortgagedProperty may be sold as an entirety or in separate parcels in such manner ororder as the Mortgagee in its sole discretion may elect.  One or more exercises of powers hereingranted shall not extinguish or exhaust such powers, until the entire MortgagedProperty is sold or all amounts secured hereby are paid in full.

#####  

##### (ii)                                  Inthe event of any sale made under or by virtue of this Article XI,the entire principal of, and interest in respect of the Secured Obligations, ifnot previously due and payable, shall, at the option of the Mortgagee, immediatelybecome due and payable, anything in this Mortgage to the contrarynotwithstanding.

#####  

##### (iii)                               Theproceeds of any sale made under or by virtue of this Article XI,together with any other sums which then may be held by the Mortgagee under thisMortgage, whether under the provisions of this Article XI orotherwise, shall be applied in accordance with the provisions of the Indenture;

#####  

##### (iv)                              TheMortgagee may bid for and acquire the Mortgaged Property or any part thereof atany sale made under or by virtue of this Article XI and, in lieu ofpaying cash therefor, may make settlement for the purchase price by creditingagainst the purchase price the unpaid amounts (whether or not then due andowing) in respect of the Secured Obligations, after deducting from the salesprice the expense of the sale and the reasonable costs of the action orproceedings and any other sums that the Mortgagee is authorized to deduct underthis Mortgage.

#####  

##### (v)                                 TheMortgagee may adjourn from time to time any sale by it to be made under or byvirtue hereof by announcement at the time and place appointed for such sale orfor such adjourned sale or sales, and, the Mortgagee, without further notice orpublication, may make such sale at the time and place to which the same shallbe so adjourned.

 

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##### (vi)                              Ifthe Premises is comprised of more than one parcel of land, the Mortgagee maytake any of the actions authorized by this Section 11.3 in respectof any or a number of individual parcels.

#####  

## SECTION 11.4  Additional Remedies in Case of an Event ofDefault.

##  

##### (i)                                     TheMortgagee shall be entitled to recover judgment as aforesaid either before,after or during the pendency of any proceedings for the enforcement of theprovisions hereof, and the right of the Mortgagee to recover such judgmentshall not be affected by any entry or sale hereunder, or by the exercise of anyother right, power or remedy for the enforcement of the provisions hereof, orthe foreclosure of, or absolute conveyance pursuant to, this Mortgage.  In case of proceedings against the Mortgagorin insolvency or bankruptcy or any proceedings for its reorganization orinvolving the liquidation of its assets, the Mortgagee shall be entitled toprove the whole amount of principal and interest and other payments, chargesand costs due in respect of the Secured Obligations to the full amount thereofwithout deducting therefrom any proceeds obtained from the sale of the whole orany part of the Mortgaged Property; provided, however, that in nocase shall the Mortgagee receive a greater amount than the aggregate of suchprincipal, interest and such other payments, charges and costs (with interestat the Default Rate) from the proceeds of the sale of the Mortgaged Propertyand the distribution from the estate of the Mortgagor.

#####  

##### (ii)                                  Anyrecovery of any judgment by the Mortgagee and any levy of any execution underany judgment upon the Mortgaged Property shall not affect in any manner or toany extent the Lien and security interests created and evidenced hereby uponthe Mortgaged Property or any part thereof, or any conveyances, powers, rightsand remedies of the Mortgagee hereunder, but such conveyances, powers, rightsand remedies shall continue unimpaired as before.

#####  

##### (iii)                               Anymonies collected by the Mortgagee under this Section 11.4 shall beapplied in accordance with the provisions of Section 11.3(iii).

#####  

## SECTION 11.5  Legal Proceedings After an Event ofDefault.

##  

##### (i)                                     Afterthe occurrence and during the continuance of any Event of Default and immediatelyupon the commencement of any action, suit or legal proceedings to obtainjudgment for the Secured Obligations or any part thereof, or of any proceedingsto foreclose the Lien and security interest created and evidenced hereby orotherwise enforce the provisions hereof or of any other proceedings in aid ofthe enforcement hereof, the Mortgagor shall enter its voluntary appearance insuch action, suit or proceeding.

#####  

##### (ii)                                  Uponthe occurrence and during the continuance of an Event of Default, the Mortgageeshall be entitled forthwith as a matter of right, concurrently or independentlyof any other right or remedy hereunder either before or after declaring theSecured Obligations or any part thereof to be due and payable, to theappointment of a receiver without giving notice to any party and without regardto the adequacy or inadequacy of any security for the Secured Obligations orthe solvency or insolvency of any person or entity then legally or equitablyliable for the Secured Obligations or any portion thereof.  The Mortgagor hereby consents to theappointment of such receiver. Notwithstanding the appointment of any receiver, the Mortgagee shall beentitled as pledgee to the possession and control of any cash, deposits orinstruments at the time held by or payable or deliverable under the terms ofthe Indenture to the Mortgagee.

 

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##### (iii)                               TheMortgagor shall not (A) at any time insist upon, or plead, or in anymanner whatsoever claim or take any benefit or advantage of any stay orextension or moratorium law, any exemption from execution or sale of theMortgaged Property or any part thereof, wherever enacted, now or at any timehereafter in force, which may affect the covenants and terms of performance hereof,(B) claim, take or insist on any benefit or advantage of any law now orhereafter in force providing for the valuation or appraisal of the MortgagedProperty, or any part thereof, prior to any sale or sales of the MortgagedProperty which may be made pursuant to this Mortgage, or pursuant to anydecree, judgment or order of any court of competent jurisdiction or(C) after any such sale or sales, claim or exercise any right under anystatute heretofore or hereafter enacted to redeem the property so sold or anypart thereof.  To the extent permitted byapplicable law, the Mortgagor hereby expressly (A) waives all benefit oradvantage of any such law or laws, including, without limitation, any statuteof limitations applicable to this Mortgage, (B) waives all rights to have theMortgaged Property marshalled on any foreclosure of this Mortgage, (C) waivesany and all rights to trial by jury in any action or proceeding related to theenforcement hereof, (D) waives any objection which it may now or hereafterhave to the laying of venue of any action, suit or proceeding brought inconnection with this Mortgage and further waives and agrees not to plead thatany such action, suit or proceeding brought in any such court has been broughtin an inconvenient forum and (E) covenants not to hinder, delay or impede theexecution of any power granted or delegated to the Mortgagee by this Mortgagebut to suffer and permit the execution of every such power as though no suchlaw or laws had been made or enacted. The Mortgagee shall not be liable for any incorrect or improper paymentmade pursuant to this Article XI in the absence of gross negligenceor willful misconduct.

#####  

## SECTION 11.6  Remedies Not Exclusive.  No remedy conferred upon or reserved to theMortgagee by this Mortgage is intended to be exclusive of any other remedy orremedies, and each and every such remedy shall be cumulative and shall be inaddition to every other remedy given under this Mortgage or now or hereafterexisting at law or in equity.  Any delayor omission of the Mortgagee to exercise any right or power accruing on anyEvent of Default shall not impair any such right or power and shall not beconstrued to be a waiver of or acquiescence in any such Event of Default.  Every power and remedy given by this Mortgagemay be exercised from time to time concurrently or independently, when and asoften as may be deemed expedient by the Mortgagee in such order and manner asthe Mortgagee, in its sole discretion, may elect.  If the Mortgagee accepts any monies requiredto be paid by the Mortgagor under this Mortgage after the same become due, suchacceptance shall not constitute a waiver of the right either to require promptpayment, when due, of all other sums secured by this Mortgage or to declare anEvent of Default with regard to subsequent defaults.  If the Mortgagee accepts any monies requiredto be paid by the Mortgagor under this Mortgage in an amount less than the sumthen due, such acceptance shall be deemed an acceptance on account only and onthe condition that it shall not constitute a waiver of the obligation of theMortgagor to pay the entire sum then due, and the Mortgagor’s failure to paythe entire sum then due shall be and continue to be a default hereundernotwithstanding acceptance of such amount on account.

##  

## SECTION 11.7  Special Louisiana Provisions.

##  

##### (i)                                     Withoutlimiting the generality of the foregoing, should one or more Events of Defaultoccur or exist and be continuing under this Mortgage, as provided above, theMortgagee, at its option, may exercise any one or more of the following rightsand remedies, in addition to any other rights and remedies provided by law andunder this Mortgage to the greatest extent permitted by applicable Louisianalaw.  Nothing contained herein shall beconstrued as constituting the Mortgagee as mortgagee in possession in absenceof the actual taking of possession of the Premises by the Mortgagee.

 

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##### (ii)                                  TheMortgagee shall have the right, at its sole option, to accelerate the maturityand demand immediate payment in full of any and all of the SecuredObligations.  The Mortgagee shall thenhave the right to commence appropriate foreclosure proceedings against theMortgaged Property and against the Mortgagor’s rights as provided in thisMortgage.

#####  

##### (iii)                               Inthe event that the Mortgagee elects to commence appropriate Louisianaforeclosure proceedings under this Mortgage, the Mortgagee may cause theMortgaged Property, or any part or parts thereof, to be immediately seized andsold, whether in term of court or in vacation, under ordinary or executoryprocess, in accordance with applicable Louisiana law, to the highest bidder forcash, with or without appraisement, and without the necessity of makingadditional demand upon or notifying the Mortgagor or placing the Mortgagor indefault, all of which are expressly waived.

#####  

##### (iv)                              Forpurposes of foreclosure under Louisiana executory process procedures, theMortgagor confesses judgment and acknowledges to be indebted to the Mortgagee,up to the full amount of the indebtedness in principal, interest, costs,expenses, reasonable attorney’s fees and other fees and charges and amountscontemplated hereunder.  The Mortgagorfurther confesses judgment and acknowledges to be indebted unto and in favor ofthe Mortgagee in the amount of all future advances that the Mortgagee may makeon the Mortgagor’s behalf pursuant to this Mortgage, together with interestthereon.  To the extent permitted underapplicable Louisiana law, the Mortgagor additionally waives:  (1) the benefit of appraisal as provided inArticles 2332, 2336, 2723, and 2724 of the Louisiana Code of Civil Procedure,and all other laws with regard to appraisal upon judicial sale; (2) the demandand three (3) days’ delay provided under Articles 22639 and 2721 of theLouisiana Code of Civil Procedure; (3) the notice of seizure as provided underArticles 2293 and 2721 of the Louisiana Code of Civil Procedure; (4) the three(3) days’ delay provided under Articles 2331, 2722 and 2723 of the LouisianaCode of Civil Procedure and all other Articles not specifically mentionedabove.  The Mortgagor further agrees thatany declaration of fact made by authentic act before a Notary Public and twowitnesses, by a Person declaring that such facts are within his or herknowledge, shall constitute authentic evidence of such facts for purposes offoreclosure under applicable Louisiana law and for purposes of La. R.S.9:3504(D)(6) and La. R.S. 10:9-508, to the extent applicable.

#####  

##### (v)                                 Shouldany or all of the Mortgaged Property be seized as an incident to an action forthe recognition or enforcement of this Mortgage, by executory process,sequestration, attachment, writ of fieri facias or otherwise, the Mortgagorhereby agrees that the court issuing any such order shall, if requested by theMortgagee, appoint the Mortgagee, or any agent designated by the Mortgagee orany Person named by the Mortgagee at the time such seizure is requested, or anytime thereafter, as Keeper of the Mortgaged Property as provided under La. R.S.9:5136, et seq.  Such a Keeper shall beentitled to reasonable compensation.  TheMortgagor agrees to pay the reasonable fees of such Keeper which compensationto the Keeper shall also be secured by this Mortgage in the form of any futureadvances as provided in this Mortgage.

#####  

##### (vi)                              Shouldit become necessary for the Mortgagee to foreclose under this Mortgage, alldeclarations of fact, which are made under an authentic act before a NotaryPublic in the presence of two witnesses, by a person declaring such facts tolie within his or her knowledge, shall constitute authentic evidence forpurposes of executory process and also for purposes of La. R.S. 9:3509.1, La.R.S. 9:3504(D)(6) and La. R.S. 10:9-508, where applicable.

 

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##### (vii)                           Shouldone or more Events of Default occur or exist under this Mortgage, the Mortgageeshall have the additional right, at its sole option, to separately sell theaforesaid rights, or any part of parts thereof, at private or publiccompensation, or on credit, or for future delivery, without the assumption ofany credit risk.  The sale of theaforesaid rights may be without appraisement, the benefit of which is alsoexpressly waived by the Mortgagor.  TheMortgagee may exercise any other remedies with regard to the Mortgagor’s rightsas may be authorized under the Louisiana Commercial Laws (La. R.S. 10:9-101, etseq.).

#####  

##### (viii)                        Tothe extent provided by law, and in the event of foreclosure under thisMortgage, or other transfer of title or assignment of the Mortgaged Property,or any part or parts thereof, in lieu of payment of the Secured Obligations,whether in whole or in part, all policies of insurance and other rightsapplicable to the foreclosed Mortgaged Property upon transfer of the MortgagedProperty shall automatically inure to the benefit of and shall pass to thepurchaser(s) or transferee(s) thereof, subject to the rights of thepurchaser(s) or transferee(s) to reject such insurance coverage and/or rightsat its or their sole option and election.

#####  

##### (ix)                                TheMortgagee may, in addition to or in lieu of the foregoing remedies, in theMortgagee’s sole discretion, commence an appropriate action against theMortgagor seeking specific performance of any covenant contained in thisMortgage or in aid of the execution or enforcement of any power in thisMortgage granted.

#####  

##### (x)                                   Exceptas may be prohibited by applicable law, all of the Mortgagee’s rights andremedies, whether evidenced by this Mortgage or by any other writing, shall becumulative and may be exercised singularly or concurrently.  Election by the Mortgagee to pursue anyremedy shall not exclude pursuit of any other remedy, and an election to makeexpenditures or to take action to perform an obligation of the Mortgagor underthis Mortgage, after the Mortgagor’s failure to perform shall not affect theMortgagee’s right to declare a default and exercise its remedies.  Nothing under this Mortgage or otherwiseshall be construed so as to limit or restrict the rights and remedies availableto the Mortgagee following an Event of Default, or in any way to limit orrestrict the rights and abilities of the Mortgagee to proceed directly againstMortgagor and/or against any other co-maker, guarantor, surety or endorser ofthe Secured Obligations, and/or to proceed against any other collateraldirectly or indirectly securing the Secured Obligations.

#####  

# ARTICLE XII

#  

# SECURITYAGREEMENT AND FIXTURE FILING

#  

## SECTION 12.1  Security Agreement.

##  

## (i) This Mortgage shall constitute a Security Agreement as defined inthe Louisiana Commercial Laws, La. R.S. § 10:101 et seg., and shall createand evidence a security interest in all the equipment and in all the otheritems of Mortgaged Property in which a security interest may be grantedpursuant to the Louisiana Commercial Laws (collectively, “Personal Property”).

##  

## (ii) The remedies for any violation of the covenants, terms andconditions of the agreements herein contained shall be as prescribed herein orby general Louisiana law or, as to such part of the

 

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## security which is also reflected in any financingstatement filed to perfect the security interest herein created, by thespecific statutory provisions now or hereinafter enacted and specified in theLouisiana Commercial Laws, all at Mortgagee’s sole election.  The mention in any financing statement of (1)the rights in or the proceeds of any fire or hazard insurance policy, or (2)any award in eminent domain proceedings for a taking or for loss of value, or(3) Mortgagor’s interest as lessor in any present or future lease or rights toincome growing out of the use or occupancy of the Mortgaged Property whetherpursuant to lease or otherwise, shall never be construed as in any way alteringany of the rights of Mortgagee under this Mortgage or impugning the priority ofthe Mortgagee’s lien granted hereby or by any other recorded document.  Rather, such mention in the financingstatement is declared to be for the protection of the Mortgagee in the eventany court or judge shall at any time hold with respect to (1), (2) and (3)above, that notice of Mortgagee’s priority of interest to be effective againsta particular class of persons, including, but not limited to, the FederalGovernment and any subdivisions or entity of the Federal Government, must befiled with the clerk of court of any parish (or St. Landry Parish Recorder ofMortgages) pursuant to Section 9-401 of the Louisiana Commercial Laws.

##  

## SECTION 12.2  Fixture Filing.  From the date of its recording, this Mortgageshall be effective as a fixture financing statement with respect to all goodsconstituting part of the Mortgaged Property which are to become fixturesrelated to the Land.  For this purpose,the following information is set forth:

##  

##### (a) Name andAddress of Debtor:

#####  

JalouEunice, LLC3747 Highway 190Eunice, Louisiana 70535

 

and

 

(b) Name and Address of Secured Party:

#####  

WellsFargo Bank, National AssociationCorporate Trust Services 213 Court Street, Suite 703Middletown, Connecticut 06457

 

##### (c) Thisdocument covers goods which are to become fixtures.  All items that are fixtures on the date ofthis Mortgage shall be subject to the mortgage Lien granted hereunder.

#####  

# ARTICLE XIII

#  

# FURTHERASSURANCES

#  

## SECTION 13.1  Recording Documentation To Assure Security.  The Mortgagor shall, forthwith after theexecution and delivery hereof and thereafter, from time to time, cause thisMortgage and any financing statement, continuation statement or similarinstrument relating to any thereof or to any property

 

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## intended to be subject to the Lien hereof to be filed,registered and recorded in such manner and in such places as may be required byany present or future law in order to publish notice of and fully to protectthe validity and priority thereof or the Lien hereof purported to be createdupon the Mortgaged Property and the interest and rights of the Mortgageetherein.  The Mortgagor shall pay orcause to be paid all taxes and fees incident to such filing, registration andrecording, and all reasonable expenses incident to the preparation, executionand acknowledgment thereof, and of any instrument of further assurance, and allFederal or state stamp taxes or other taxes, duties and charges arising out ofor in connection with the execution and delivery of such instruments.

##  

## SECTION 13.2  Further Acts.  The Mortgagor shall, at the sole cost andexpense of the Mortgagor, do, execute, acknowledge and deliver all and everysuch further acts, deeds, conveyances, mortgages, assignments, notices ofassignment, transfers, financing statements, continuation statements,instruments and assurances as the Mortgagee shall from time to time reasonablyrequest, which may be necessary in the judgment of the Mortgagee from time totime to assure, perfect, convey, assign, mortgage, transfer and confirm untothe Mortgagee, the property and rights hereby conveyed or assigned or which theMortgagor may be or may hereafter become bound to convey or assign to the Mortgageeor for carrying out the intention or facilitating the performance of the termshereof or the filing, registering or recording hereof.  Without limiting the generality of theforegoing, in the event that the Mortgagee desires to exercise any remedies,consensual rights or attorney-in-fact powers set forth in this Mortgage anddetermines it necessary to obtain any approvals or consents of any GovernmentalAuthority or any other Person therefor, then, upon the reasonable request ofthe Mortgagee, the Mortgagor agrees to use its reasonable efforts to assist andaid the Mortgagee to obtain as soon as practicable any necessary approvals orconsents for the exercise of any such remedies, rights and powers.  In the event the Mortgagor shall fail(i) within ten (10) Business Days after demand, to execute or take anyaction required to be executed or taken by the Mortgagor under this Section 13.2to the extent same is necessary to maintain perfection of the Lien granted toMortgagee hereunder or (ii) such failure shall constitute an Event of Default,to execute or take any action required to be executed or taken by the Mortgagorunder this Section 13.2 (other than the type described in clause(i) of this sentence) then, in each of the cases described in clauses (i) and(ii) of this sentence, the Mortgagee may execute or take the same as theattorney-in-fact for the Mortgagor, such power of attorney being coupled withan interest and is irrevocable.

##  

## SECTION 13.3  Additional Security.  Without notice to or consent of the Mortgagorand without impairment of the Lien and rights created by this Mortgage, theMortgagee may accept (but the Mortgagor shall not be obligated to furnish) fromthe Mortgagor or from any other Person, additional security for the Secured Obligations.  Neither the giving hereof nor the acceptanceof any such additional security shall prevent the Mortgagee from resorting,first, to such additional security, and, second, to the security created bythis Mortgage without affecting the Mortgagee’s Lien and rights under thisMortgage.

##  

# ARTICLE XIV

#  

# MISCELLANEOUS

#  

## SECTION 14.1  Covenants To Run with the Land.  All of the grants, covenants, terms,provisions and conditions in this Mortgage shall run with the Land and shallapply to, and bind the successors

 

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## and assigns of, the Mortgagor.  If there shall be more than one mortgagorwith respect to the Mortgaged Property, the covenants and warranties hereofshall be joint and several.

##  

## SECTION 14.2  No Merger.  The rights and estate created by thisMortgage shall not, under any circumstances, be held to have merged into anyother estate or interest now owned or hereafter acquired by the Mortgageeunless the Mortgagee shall have consented to such merger in writing, suchconsent not to be unreasonably withheld.

##  

## SECTION 14.3  Concerning Mortgagee.

##  

##### (i)                                     TheMortgagee has been appointed as trustee pursuant to the Indenture.  The actions of the Mortgagee hereunder aresubject to the provisions of the Indenture. The Mortgagee shall have the right hereunder to make demands, to givenotices, to exercise or refrain from exercising any rights, and to take orrefrain from taking action (including, without limitation, the release orsubstitution of the Mortgaged Property), in accordance with this Mortgage andthe Indenture.  The Mortgagee may employagents and attorneys-in-fact in connection herewith and shall not be liable forthe negligence or misconduct of any such agents or attorneys-in-fact selectedby it in good faith.  The Mortgagee mayresign and a successor Mortgagee may be appointed in the manner provided in theIndenture.  Upon the acceptance of anyappointment as the Mortgagee by a successor Mortgagee, that successor Mortgageeshall thereupon succeed to and become vested with all the rights, powers,privileges and duties of the retiring Mortgagee under this Mortgage, and theretiring Mortgagee shall thereupon be discharged from its duties andobligations under this Mortgage.  Afterany retiring Mortgagee’s resignation, the provisions hereof shall inure to itsbenefit as to any actions taken or omitted to be taken by it under thisMortgage while it was the Mortgagee.

#####  

##### (ii)                                  TheMortgagee shall be deemed to have exercised reasonable care in the custody andpreservation of the Mortgaged Property in its possession if such MortgagedProperty is accorded treatment substantially equivalent to that which theMortgagee, in its individual capacity, accords its own property consisting ofsimilar instruments or interests, it being understood that neither theMortgagee nor any of the Secured Parties shall have responsibility for takingany necessary steps to preserve rights against any Person with respect to anyMortgaged Property.

#####  

##### (iii)                               TheMortgagee shall be entitled to rely upon any written notice, statement,certificate, order or other document or any telephone message believed by it tobe genuine and correct and to have been signed, sent or made by the properperson, and, with respect to all matters pertaining to this Mortgage and itsduties hereunder, upon advice of counsel selected by it.

#####  

##### (iv)                              Ifany portion of the Mortgaged Property also constitutes collateral granted tothe Mortgagee under any other deed of trust, mortgage, security agreement,pledge or instrument of any type, in the event of any conflict between theprovisions hereof and the provisions of such other deed of trust, mortgage,security agreement, pledge or instrument of any type in respect of suchcollateral, the Mortgagee, in its sole discretion, shall select which provisionor provisions shall control.

#####  

## SECTION 14.4  Mortgagee May Perform; Mortgagee AppointedAttorney-in-Fact.  If the Mortgagorshall fail to perform any covenants contained in this Mortgage, subject to anyapplicable grace periods or contest rights permitted pursuant to Article IXhereof or as otherwise permitted by any Collateral Document (including, withoutlimitation, the Mortgagor’s covenants to (i) pay the premiums in respect of

 

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## all required insurance policies hereunder, (ii) payCharges, (iii) make repairs, (iv) discharge Liens or (v) pay or perform anyobligations of the Mortgagor under any Mortgaged Property) or if any warrantyon the part of the Mortgagor contained herein shall be breached, the Mortgageemay (but shall not be obligated to) do the same or cause it to be done orremedy any such breach, and may expend funds for such purpose; provided,however, that the Mortgagee shall in no event be bound to inquire intothe validity of any tax, Lien, imposition or other obligation which theMortgagor fails to pay or perform as and when required hereby and which theMortgagor does not contest in accordance with the provisions of Article IXhereof.  Any and all amounts reasonablyso expended by the Mortgagee shall be paid by the Mortgagor in accordance withthe provisions of Section 14.5 hereof.  Neither the provisions of this Section 14.4nor any action taken by the Mortgagee pursuant to the provisions of this Section 14.4shall prevent any such failure to observe any covenant contained in thisMortgage nor any breach of warranty from constituting an Event of Default.  Upon the occurrence and during thecontinuance of an Event of Default the Mortgagor hereby appoints the Mortgageeits attorney-in-fact, with full authority in the place and stead of theMortgagor and in the name of the Mortgagor to take any action and to executeany instrument consistent with the terms hereof and the other CollateralDocuments which the Mortgagee may deem necessary or advisable to accomplish thepurposes hereof.  The foregoing grant ofauthority is a power of attorney coupled with an interest and such appointmentshall be irrevocable for the term hereof. The Mortgagor hereby ratifies all that such attorney shall lawfully door cause to be done by virtue hereof.

 

## SECTION 14.5  Expenses  The Mortgagor will upon demand pay to theMortgagee the amount of any and all reasonable costs and expenses, includingthe reasonable fees and expenses of its counsel and the reasonable fees andexpenses of any experts and agents which the Mortgagee may incur in connectionwith (i) any action, suit or other proceeding affecting the Mortgaged Propertyor any part thereof commenced, in which action, suit or proceeding the Mortgageeis made a party or participates or in which the right to use the MortgagedProperty or any part thereof is threatened, or in which it becomes necessary inthe judgment of the Mortgagee to defend or uphold the Lien hereof (including,without limitation, any action, suit or proceeding to establish or uphold thecompliance of the Mortgaged Property with any Requirements of Law),(ii) the collection of the Secured Obligations, (iii) the enforcementand administration hereof, (iv) the custody or preservation of, or the sale of,collection from, or other realization upon, any of the Mortgaged Property, (v)the exercise or enforcement of any of the rights of the Mortgagee or anySecured Party hereunder or (vi) the failure by the Mortgagor to perform orobserve any of the provisions hereof. All amounts expended by the Mortgagee and payable by the Mortgagor underthis Section 14.5 shall be due upon demand therefor (together withinterest thereon accruing at the Default Rate during the period from andincluding the date on which such funds were so expended to the date ofrepayment) and shall be part of the Secured Obligations.  The Mortgagor’s obligations under this Section 14.5shall survive the termination hereof and the discharge of the Mortgagor’s otherobligations under this Mortgage.

##  

## SECTION 14.6  Indemnity.

##  

##### (i)                                     TheMortgagor agrees to indemnify, pay and hold harmless the Mortgagee and each ofthe other Secured Parties and the officers, directors, employees, agents andAffiliates of the Mortgagee and each of the other Secured Parties(collectively, the “Indemnitees”) from and against any and all otherliabilities, obligations, losses, damages, penalties, actions, judgments,suits, claims, costs (including, without limitation, settlement costs),expenses or disbursements of any kind or nature whatsoever (including, withoutlimitation, the reasonable fees and disbursements of counsel for suchIndemnitees in connection with any investigative, administrative or judicialproceeding, commenced or threatened, whether or not

 

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##### such Indemnitee shall be designated a party thereto),which may be imposed on, incurred by or asserted against that Indemnitee, inany manner relating to or arising out hereof, the Indenture, the Notes, anyother Collateral Document or any other document evidencing the SecuredObligations (including, without limitation, any misrepresentation by theMortgagor in this Mortgage, the Indenture, the Notes, any other CollateralDocument or any other document evidencing the Secured Obligations (the “IndemnifiedLiabilities”); provided, however, that the Mortgagor shallhave no obligation to an Indemnitee hereunder with respect to IndemnifiedLiabilities to the extent it has been determined by a final decision (after allappeals and the expiration of time to appeal) by a court of competentjurisdiction that such Indemnified Liabilities arose from the gross negligenceor willful misconduct of that Indemnitee. To the extent that the undertaking to indemnify, pay and hold harmlessset forth in the preceding sentence may be unenforceable because it isviolative of any law or public policy, the Mortgagor shall contribute themaximum portion which it is permitted to pay and satisfy under applicable law,to the payment and satisfaction of all Indemnified Liabilities incurred by theIndemnitees or any of them.

#####  

##### (ii)                                  Survival.  The obligations of the Mortgagor contained inthis Section 14.6 shall survive the termination hereof and thedischarge of the Mortgagor’s other obligations under this Mortgage, theIndenture and the other Collateral Documents.

#####  

##### (iii)                               Reimbursement.  Any amount paid by any Indemnitee as to whichsuch Indemnitee has the right to reimbursement shall constitute SecuredObligations secured by the Mortgaged Property.

#####  

## SECTION 14.7  Continuing Security Interest; Assignment.  This Mortgage shall create a continuing Lienon and security interest in the Mortgaged Property and shall (i) bebinding upon the Mortgagor, its respective successors and assigns and(ii) inure, together with the rights and remedies of the Mortgageehereunder, to the benefit of the Mortgagee and the other Secured Parties andeach of their respective successors, transferees and assigns.  No other Persons (including, withoutlimitation, any other creditor of Mortgagor) shall have any interest herein orany right or benefit with respect hereto. Without limiting the generality of the foregoing clause (ii), anyHolder of the Notes may assign or otherwise transfer any indebtedness held byit that is secured by this Mortgage to any other Person, and such other Personshall thereupon become vested with all the benefits in respect thereof grantedto such Holder, herein or otherwise, subject however, to the provisions of theIndenture.

##  

## SECTION 14.8  Termination; Release.  The Mortgaged Property shall be released fromthe Lien of this Mortgage in accordance with the provisions of Article 10of the Indenture.

##  

## SECTION 14.9  Modification in Writing.  No amendment, modification, supplement,termination or waiver of or to any provision hereof, nor consent to anydeparture by the Mortgagor therefrom, shall be effective unless the same shallbe done in accordance with the terms of the Indenture and unless in writing andsigned by the Mortgagee and Mortgagor. Any amendment, modification or supplement of or to any provision hereof,any waiver of any provision hereof and any consent to any departure by theMortgagor from the terms of any provision hereof shall be effective only in thespecific instance and for the specific purpose for which made or given.  Except where notice is specifically requiredby this Mortgage or any other Collateral Document, no notice to or demand onthe Mortgagor in any case shall entitle the Mortgagor to any other or furthernotice or demand in similar or other circumstances.

 

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## SECTION 14.10  Notices.  Unless otherwise provided herein or in theIndenture, any notice or other communication herein required or permitted to begiven shall be given in the manner and become effective as set forth in theIndenture, if to the Mortgagor, addressed to it at the address of the Issuerset forth in the Indenture, and as to the Mortgagee, addressed to it at itsaddress set forth in the Indenture, or in each case at such other address asshall be designated by such party in a written notice to the other partycomplying as to delivery with the terms of this Section 14.10.

##  

## SECTION 14.11  GOVERNING LAW; SERVICE OF PROCESS; WAIVEROF JURY TRIAL.  THIS MORTGAGE SHALLBE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THELAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED, WITHOUT REGARD TOPRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE VALIDITY ORPERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, INRESPECT OF ANY PARTICULAR ITEM OR TYPE OF MORTGAGED PROPERTY ARE GOVERNED BYTHE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.  THE MORTGAGOR AGREES THAT SERVICE OF PROCESSIN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED ORCERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TOTHE ISSUER AT ITS ADDRESS SET FORTH IN THE INDENTURE OR AT SUCH OTHER ADDRESSOF WHICH THE MORTGAGEE SHALL HAVE BEEN NOTIFIED PURSUANT THERETO.  IF ANY AGENT APPOINTED BY THE MORTGAGORREFUSES TO ACCEPT SERVICE, THE MORTGAGOR HEREBY AGREES THAT SERVICE UPON IT BYMAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHERMANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE MORTGAGEE TO BRINGPROCEEDINGS AGAINST THE MORTGAGOR IN THE COURTS OF ANY OTHER JURISDICTION.  THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ALLRIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUTOF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

##  

## SECTION 14.12  Severability of Provisions.  Any provision hereof which is prohibited orunenforceable in any jurisdiction shall, as to such jurisdiction, beineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof or affecting the validity orenforceability of such provision in any other jurisdiction.

##  

## SECTION 14.13  Limitation on Interest Payable.  It is the intention of the parties to conformstrictly to the usury laws, whether state or Federal, that are applicable tothe transaction of which this Mortgage is a part.  All agreements between the Mortgagor and theMortgagee, whether now existing or hereafter arising and whether oral orwritten, are hereby expressly limited so that in no contingency or eventwhatsoever shall the amount paid or agreed to be paid by the Mortgagor for theuse, forbearance or detention of the money to be loaned or advanced under the Indentureor any related document or for the payment or performance of any covenant orobligation contained herein or in the Indenture or any related document exceedthe maximum amount permissible under applicable Federal or state usury laws.  If under any circumstances whatsoever fulfillmentof any such provision, at the time performance of such provision shall be due,shall involve exceeding the limit of validity prescribed by law, then theobligation to be fulfilled shall be reduced to the limit of such validity.  If under any circumstances the Mortgagorshall have paid an amount deemed interest by applicable law, which would exceedthe highest lawful rate, such

 

36

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## amount that would be excessive interest underapplicable usury laws shall be applied to the reduction of the principal amountowing in respect of the Secured Obligations and not to the payment of interest,or if such excessive interest exceeds the unpaid balance of principal and anyother amounts due hereunder, the excess shall be refunded to theMortgagor.  All sums paid or agreed to bepaid for the use, forbearance or detention of the principal under any extensionof credit by the Mortgagee shall, to the extent permitted by applicable law,and to the extent necessary to preclude exceeding the limit of validityprescribed by law, be amortized, prorated, allocated and spread from the datehereof until payment in full of the Secured Obligations so that the actual rateof interest on account of such principal amounts is uniform throughout the termhereof.

##  

## SECTION 14.14  Business Days.  In the event any time period or any dateprovided in this Mortgage ends or falls on a day other than a Business Day,then such time period shall be deemed to end and such date shall be deemed tofall on the next succeeding Business Day, and performance herein may be made onsuch Business Day, with the same force and effect as if made on such other day.

##  

## SECTION 14.15  Relationship.  The relationship of the Mortgagee to theMortgagor hereunder is strictly and solely that of lender and borrower andmortgagor and mortgagee and nothing contained in the Indenture, the Notes, thisMortgage or any other document or instrument now existing and delivered inconnection therewith or otherwise in connection with the Secured Obligations isintended to create, or shall in any event or under any circumstance beconstrued as creating a partnership, joint venture, tenancy-in-common, jointtenancy or other relationship of any nature whatsoever between the Mortgageeand the Mortgagor other than as lender and borrower and mortgagor andmortgagee.

##  

## SECTION 14.16  Waiver of Stay.

##  

##### (i)                                     TheMortgagor agrees that in the event that the Mortgagor or any property or assetsof the Mortgagor shall hereafter become the subject of a voluntary orinvoluntary proceeding under the Bankruptcy Code or the Mortgagor shallotherwise be a party to any Federal or state bankruptcy, insolvency, moratoriumor similar proceeding to which the provisions relating to the automatic stayunder Section 362 of the Bankruptcy Code or any similar provision in anysuch law is applicable, then, in any such case, whether or not the Mortgageehas commenced foreclosure proceedings under this Mortgage, the Mortgagee shallbe entitled to relief from any such automatic stay as it relates to theexercise of any of the rights and remedies (including, without limitation, anyforeclosure proceedings) available to the Mortgagee as provided in thisMortgage, in any other Collateral Document or any other document evidencing theSecured Obligations.

#####  

##### (ii)                                  TheMortgagee shall have the right to petition or move any court havingjurisdiction over any proceeding described in Section 14.16(i)hereof for the purposes provided therein, and the Mortgagor agrees (i) not tooppose any such petition or motion and (ii) at the Mortgagor’s sole cost andexpense, to assist and cooperate with the Mortgagee, as may be requested by theMortgagee from time to time, in obtaining any relief requested by theMortgagee, including, without limitation, by filing any such petitions,supplemental petitions, requests for relief, documents, instruments or otheritems from time to time requested by the Mortgagee or any such court.

#####  

## SECTION 14.17  No Credit for Payment of Taxes orImpositions.  The Mortgagor shall notbe entitled to any credit against the principal, premium, if any, or interestpayable under the Indenture

 

37

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## or the Notes, and the Mortgagor shall not be entitledto any credit against any other sums which may become payable under the termsthereof or hereof, by reason of the payment of any Charge on the MortgagedProperty or any part thereof.

##  

## SECTION 14.18  No Claims Against the Mortgagee.  Nothing contained in this Mortgage shallconstitute any consent or request by the Mortgagee, express or implied, for theperformance of any labor or services or the furnishing of any materials orother property in respect of the Premises or any part thereof, nor as givingthe Mortgagor any right, power or authority to contract for or permit theperformance of any labor or services or the furnishing of any materials orother property in such fashion as would permit the making of any claim againstthe Mortgagee in respect thereof or any claim that any Lien based on theperformance of such labor or services or the furnishing of any such materialsor other property is prior to the Lien hereof.

##  

## SECTION 14.19  Obligations Absolute.  All obligations of the Mortgagor hereundershall be absolute and unconditional irrespective of:

##  

##### (i)                                     anybankruptcy, insolvency, reorganization, arrangement, readjustment, composition,liquidation or the like of the Mortgagor, the Issuer or any other Guarantor;

#####  

##### (ii)                                  anylack of validity or enforceability of the Indenture, the Notes or any otheragreement or instrument relating thereto;

#####  

##### (iii)                               anychange in the time, manner or place of payment of, or in any other term of, allor any of the Secured Obligations, or any other amendment or waiver of or anyconsent to any departure from the Indenture, the Notes or any other agreementor instrument relating thereto;

#####  

##### (iv)                              anyexchange, release or non-perfection of any other collateral, or any release oramendment or waiver of or consent to any departure from any guarantee, for allor any of the Secured Obligations;

#####  

##### (v)                                 anyexercise or non-exercise, or any waiver of any right, remedy, power orprivilege under or in respect hereof, the Indenture, the Notes or any agreementor instrument relating thereto except as specifically set forth in a waivergranted pursuant to the provisions of Section 14.9 hereof; or

#####  

##### (vi)                              anyother circumstances which might otherwise constitute a defense available to, ora discharge of, the Mortgagor.

#####  

## SECTION 14.20  Last Dollars Secured.  This Mortgage secures only a portion of theIndebtedness owing or which may become owing by the Mortgagor.  The parties agree that any payments orrepayments of such Indebtedness by the Mortgagor shall be and be deemed to beapplied first to the portion of the Indebtedness that is not secured hereby, itbeing the parties’ intent that the portion of the Indebtedness last remainingunpaid shall be secured hereby.

##  

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THUSDONE AND PASSED, on the day, month and year first written above, effective asof the Effective Date, in the State and Parish aforesaid, by the undersignedMortgagor in the presence of the undersigned Notary and the undersignedcompetent witnesses, who hereunto sign their names with Mortgagor after readingof the whole.

 

 
| WITNESSES:                           |                        | MORTGAGOR:                                                |
|--------------------------------------|-----------------------------|-----------------------------------------------------------|
|                                 |                        |                                                      |
|                                 |                        | JALOU EUNICE,  LLC  a Louisiana limited liability company |
|                                 |                        |
|                                 |                        |                                                      |
|                                 |                        |                                                      |
| /s/ Thomas E.  Hamilton              |                        |                                                      | By: | /s/ Ian M.  Stewart |   |
| Printed Name:  Thomas E. Hamilton    |                        |                                                      | Ian M. Stewart |
|                                 |                        |                                                      | Authorized  Officer |
|                                 |                        |                                                      |
|                                 |                        |                                                      |
| /s/ Sterling W.  Dale, Jr.           |                        |                                                      |   |
| Printed Name:  Sterling W. Dale, Jr. |                        |                                                      |
|                                 |                        |                                                      |
|                                 |                        |                                                      |
|                                 | /s/ Perryann P.  Whitehurst |                                                      |
| Notary  Public                       |
|                                      |                             |                                                           |  |  |  |  |  |  |

 

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Schedule A

 

Legal Description

 

A CERTAIN LOT OR PARCELOF GROUND, situated in Section 28, Township 6 South, Range 1 East, St.Landry Parish, Louisiana, being designated as LOT “B” on a map of subdivisionof the remaining portion of the Joseph Y. Nagata Property, a copy of which mapis of record in the official records of St. Landry Parish, Louisiana, said lotbeing more particularly described as follows:

 

COMMENCING AT THE SOUTHWEST CORNER OF SECTION 28,T6S-R1E THENCE RUN NORTH ALONG THE WEST LINE OF SECTION 28 A DISTANCE OF129.00’ TO THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF USHIGHWAY 190 AND THE WESTERLY RIGHT OF WAY LINE OF INDUSTRIAL PARK LANE; THENCEALONG THE NORTHERLY RIGHT-OF-WAY LINE OF US HIGHWAY 190 SOUTH 89°51’18” EAST ADISTANCE OF 60.30’ TO THE POINT OF BEGINNING ON THE EASTERLY RIGHT-OF-WAY LINEOF INDUSTRIAL PARK LANE; THENCE ALONG THE SAID EASTERLY RIGHT-OF-WAY LINE NORTH00°05’02” EAST A DISTANCE OF 478.58’ TO A POINT AND TURN; THENCE NORTH 89°58’42”EAST A DISTANCE OF 530.21’ TO A POINT AND TURN; THENCE SOUTH 27°14’14” EAST ADISTANCE OF 115.24’ TO A POINT AND TURN; THENCE NORTH 62°43’40” EAST A DISTANCE56.70’ TO A POINT AND TURN; THENCE SOUTH 25°44’02” EAST A DISTANCE OF 70.00’ TOA POINT AND TURN; THENCE SOUTH A DISTANCE OF 340.93’ TO A POINT AND TURN ON THENORTHERLY RIGHT-OF-WAY LINE OF US HIGHWAY 190; THENCE ALONG SAID NORTHERLYRIGHT-OF-WAY LINE NORTH 89°15’18” WEST A DISTANCE OF 664.45’ BACK TO THE POINTOF BEGINNING, CONTAINING WITHIN SAID BOUNDS 7.070 ACRES OR 307,969 SQ. FT. MOREOR LESS.

 

 

Schedule B

 

Prior Liens

 

1.               Eachof the liens and other encumbrances excepted as being prior to the Lien hereofas set forth in Schedule B to the marked title insurance commitment issuedby Lawyers Title Insurance Corporation, dated as of the date hereof anddelivered to the Trustee on the date hereof, bearing Lawyers Title InsuranceCorporation reference number 40888/ dd relating to the real property describedin Schedule A attached hereto.

 

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2.               Zoningand building ordinances and regulations, to the extent they constitutePermitted Liens of the type described in clause (4) of the definition thereof.

 

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Schedule C

 

Leases Affecting theMortgaged Property

 

None

 

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Exhibit 1

 

FORM OF SUBORDINATION,NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENTAGREEMENT (the “Agreement”) is made and entered into as of the       day of          ,                       byand between                                             ,as trustee, having an office at                                    (in such capacity, “Trustee”), and                                       ,having an office at                                        (“Tenant”).

 

RECITALS:

 

A.  Tenant isthe tenant under a certain lease dated                   ,            between                                            ,as landlord (“Landlord”), and Tenant, as tenant (as amended through the datehereof, the “Lease”), pursuant to which Tenant leased a portion (the “LeasedPremises”) of the property known as                                          ,located at                                              ,as more particularly described in Schedule A attached hereto (the “Property”).

 

B.  Landlord hasor will grant a mortgage lien on and security interest in the Property toTrustee (for its benefit and for the benefit of the holders of certain seniorsecured notes and notes issued in exchange therefor pursuant to that certainindenture dated as of [                               ,2002]) pursuant to one or more mortgages, deeds of trust, deeds to secure debtor similar security instruments (collectively, the “Security Instruments”).

 

C.  Tenant hasagreed to subordinate the Lease to the Security Instruments and to the lienthereof and Trustee has agreed not to disturb Tenant’s possessory rights in theLeased Premises under the Lease on the terms and conditions hereinafter setforth.

 

AGREEMENT:

 

NOW, THEREFORE, the parties hereto mutually agree asfollows:

 

1.  Subordination.  Notwithstanding anything to the contrary setforth in the Lease, the Lease and the leasehold estate created thereby and allof Tenant’s rights thereunder are and shall at all times be subject andsubordinate in all respects to the Security Instruments and the lien thereof,and to all rights of Trustee thereunder, and to any and all advances to be madethereunder, and to all renewals, modifications, consolidations, replacementsand extensions thereof.

 

### 2.  Nondisturbance.  So long as Tenant complies with theprovisions of this Agreement, pays all rents and other charges as specified inthe Lease and is not otherwise in default (beyond applicable notice and cureperiods) of any of its obligations and covenants pursuant to the Lease, Trusteeagrees for itself and its successors in interest and for any other personacquiring title to the Property through a foreclosure (an “Acquiring Party”),that Tenant’s possession of the Leased Premises as described in the Lease willnot be disturbed during the term of the Lease by reason of a foreclosure.  For purposes of this Agreement, a

 

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### “foreclosure” shall include (but not be limited to) asheriff’s or trustee’s sale under the power of sale contained in the SecurityInstruments, the termination of any superior lease of the Property and anyother transfer of the Landlord’s interest in the Property under peril offoreclosure, including, without limitation to the generality of the foregoing,an assignment or sale in lieu of foreclosure.

###  

### 3.  Attornment.  Tenant agrees to attorn to, accept andrecognize any Acquiring Party as the landlord under the Lease pursuant to theprovisions expressly set forth therein for the then remaining balance of theterm of the Lease, and any extensions thereof as made pursuant to theLease.  The foregoing provision shall beself-operative and shall not require the execution of any further instrument oragreement by Tenant as a condition to its effectiveness.

###  

### 4.  No Liability.Notwithstanding anything to the contrary contained herein or in the Lease, itis specifically understood and agreed that neither the Trustee, any receivernor any Acquiring Party shall be:

###  

(a)  liable for any act,omission, negligence or default of any prior landlord (including Landlord); or

 

(b)  liable for any failure ofany prior landlord (including Landlord) to construct any improvements or boundby any covenant to construct any improvement either at the commencement of theterm of the Lease or upon any renewal or extension thereof or upon the additionof additional space pursuant to any expansion right contained in the Lease; or

 

(c)  subject to any offsets,credits, claims or defenses which Tenant might have against any prior landlord(including Landlord); or

 

(d)  bound by any rent oradditional rent which is payable on a monthly basis and which Tenant might havepaid for more than one (1) month in advance to any prior landlord (includingLandlord) or by any security deposit or other prepaid charge which Tenant mighthave paid in advance to any prior landlord (including Landlord); or

 

(e)  liable to Tenant hereunderor under the terms of the Lease beyond its interest in the Property; or

 

(f)  bound by any assignment,subletting, renewal, extension or any other agreement or modification of theLease made without the written consent of Trustee; or

 

(g)  bound by any consensual ornegotiated surrender, cancellation or termination of the Lease, in whole or inpart, agreed upon between Landlord and Tenant unless effected unilaterally byTenant pursuant to the express terms of the Lease.

 

Notwithstanding the foregoing, Tenant reserves itsright to any and all claims or causes of action (i) against such priorlandlord for prior losses or damages and (ii) against the successorlandlord for all losses or damages arising from and after the date that suchsuccessor landlord takes title to the Property.

 

2

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### 5.  Certain Acknowledgmentsand Agreements by Tenant. (a) Tenant has notice that the Lease and the rents and all othersums due thereunder have been assigned to Trustee as security for the notessecured by the Security Instruments.  Inthe event Trustee notifies Tenant of the occurrence of a default under theSecurity Instruments and demands that Tenant pay its rents and all other sumsdue or to become due under the Lease directly to Trustee, Tenant shall honorsuch demand and pay its rent and all other sums due under the Lease directly toTrustee or as otherwise authorized in writing by Trustee.  Landlord irrevocably authorizes Tenant tomake the foregoing payments to Trustee upon such notice and demand.

###  

(b)  Tenantshall send a copy of any and all notices or statements under the Lease toTrustee at the same time such notices or statements are sent to Landlord.

 

(c)  ThisAgreement satisfies any and all conditions or requirements in the Leaserelating to the granting of a non-disturbance agreement.

 

### 6.  Trustee to Receive DefaultNotices.  Tenant shall notify Trusteeof any default by Landlord under the Lease which would entitle Tenant to cancelthe Lease, and agrees that, notwithstanding any provisions of the Lease to thecontrary, no notice of cancellation thereof shall be effective unless Trusteeshall have received notice of default giving rise to such cancellation andshall have failed within sixty (60) days after receipt of such notice to curesuch default or, if such default cannot be cured within sixty (60) days, shallhave failed within sixty (60) days after receipt of such notice to commence andthereafter diligently pursue any action necessary to cure such default.

###  

### 7.  Estoppel.  Tenant hereby certifies and represents toTrustee that as of the date of this Agreement:

###  

(a)  the Lease is in full forceand effect;

 

(b)  all requirements for thecommencement and validity of the Lease have been satisfied and there are nounfulfilled conditions to Tenant’s obligations under the Lease;

 

(c)  Tenant is not in defaultunder the Lease and has not received any uncured notice of any default byTenant under the Lease; to the best of Tenant’s knowledge, Landlord is not indefault under the Lease; no act, event or condition has occurred which withnotice or the lapse of time, or both, would constitute a default by Tenant orLandlord under the Lease; no claim by Tenant of any nature exists againstLandlord under the Lease; and all obligations of Landlord have been fullyperformed;

 

(d)  there are no defenses,counterclaims or setoffs against rents or charges due or which may become dueunder the Lease;

 

(e)  none of the rent whichTenant is required to pay under the Lease has been prepaid, or will in thefuture be prepaid, more than one (1) month in advance;

 

(f)  Tenant has no right oroption contained in the Lease or in any other document to purchase all or anyportion of the Leased Premises;

 

3

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(g)  the Lease has not beenmodified or amended and constitutes the entire agreement between Landlord andTenant relating to the Leased Premises;

 

(h)  Tenant has not assigned,mortgaged, sublet, encumbered, conveyed or otherwise transferred any or all ofits interest under the Lease; and

 

(i)  Tenant has full authority toenter into this Agreement, which has been duly authorized by all necessaryaction.

 

### 8.  Notices.  All notices or other written communicationshereunder shall be deemed to have been properly given (i) upon delivery, ifdelivered in person with receipt acknowledged by the recipient thereof, (ii)one (1) Business Day (hereinafter defined) after having been deposited forovernight delivery with any reputable overnight courier service, or (iii) three(3) Business Days after having been deposited in any post office or maildepository regularly maintained by the United States Postal Service and sent byregistered or certified mail, postage prepaid, return receipt requested,addressed to the receiving party at its address set forth above or addressed assuch party may from time to time designate by written notice to the otherparties.  For purposes of this Section 8,the term “Business Day” shall mean any day other than Saturday, Sunday or anyother day on which banks are required or authorized to close in New York, NewYork.  Either party by notice to theother may designate additional or different addresses for subsequent notices orcommunications.

###  

### 9.  Successors.  The obligations and rights of the partiespursuant to this Agreement shall bind and inure to the benefit of thesuccessors, assigns, heirs and legal representatives of the respective parties;provided, however, that in the event of the assignment ortransfer of the interest of Trustee, all obligations and liabilities of Trusteeunder this Agreement shall terminate, and thereupon all such obligations andliabilities shall be the responsibility of the party to whom Trustee’s interestis assigned or transferred; and provided, further, that theinterest of Tenant under this Agreement may not be assigned or transferredwithout the prior written consent of Trustee. In addition, Tenant acknowledges that all references herein to Landlordshall mean the owner of the landlord’s interest in the Lease, even if saidowner shall be different from the Landlord named in the Recitals.

###  

### 10.  Duplicate Original;Counterparts.  This Agreement may beexecuted in any number of duplicate originals and each duplicate original shallbe deemed to be an original.  ThisAgreement may be executed in several counterparts, each of which counterpartsshall be deemed an original instrument and all of which together shallconstitute a single Agreement.

###  

### 11.  Limitation of Trustee’sLiability.  (a)  Trusteeshall have no obligations nor incur any liability with respect to anywarranties of any nature whatsoever, whether pursuant to the Lease or otherwise,including, without limitation, any warranties respecting use, compliance withzoning, Landlord’s title, Landlord’s authority, habitability, fitness forpurpose or possession.

###  

(b)  In theevent that Trustee shall acquire title to the Leased Premises or the Property,Trustee shall have no obligation, nor incur any liability, beyond Trustee’sthen equity interest, if any, in the Leased Premises, and Tenant shall lookexclusively to such equity interest of Trustee, if any, in the Leased Premisesfor the payment and discharge of any obligations imposed upon Trustee hereunderor under the Lease, and Trustee is hereby released and relieved of any otherobligations hereunder and under the Lease.

 

4

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### 12.  Modification in Writing.  This Agreement may not be modified except byan agreement in writing signed by the parties hereto or their respectivesuccessors in interest.

###  

### 13.  Lien of SecurityInstruments.  Nothing contained inthis Agreement shall in any way impair or affect the lien created by theSecurity Instruments or the provisions thereof.

###  

### 14.  Compliance with Lease.  Tenant agrees that in the event there is anyinconsistency between the terms and provisions hereof and the terms andprovisions of the Lease, the terms and provisions hereof shall be controlling.

###  

### 15.  Governing Law;Severability.  This Agreement shallbe governed by the laws of the State of[            ].  If any term of this Agreement or theapplication thereof to any person or circumstances shall to any extent beinvalid or unenforceable, the remainder of this Agreement or the application ofsuch terms to any person or circumstances other than those as to which it isinvalid or unenforceable shall not be affected thereby, and each term of thisAgreement shall be valid and enforceable to the fullest extent permitted bylaw.

###  

### 16.  Further Actions.  Tenant agrees at its own expense to executeand deliver, at any time and from time to time upon the request of Trustee orany Acquiring Party, such documents and instruments (in recordable form, ifrequested) as may be necessary or appropriate, in the opinion of Trustee or anyAcquiring Party, to fully implement or to further evidence the understandingsand agreements contained in this Agreement. Moreover, Tenant hereby irrevocably appoints and constitutes Trustee orany Acquiring Party as its true and lawful attorney-in-fact to execute anddeliver any such documents or instruments which may be necessary orappropriate, in the opinion of Trustee or any Acquiring Party, to implement orfurther evidence such understandings and agreements and which Tenant, afterthirty (30) days’ notice from Trustee or any Acquiring Party, has failed toexecute and deliver.

 

5

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IN WITNESS WHEREOF, Trustee and Tenant have dulyexecuted this Agreement as of the date first above written.

 

 
|   |   |       | ,      |
|--------|--------|------------|--------|
|   |   | as Trustee |
|   |   |       |
|   |   |       |
|   |   | By:        |   |   |
|   |   |       | Name:  |
|   |   |       | Title: |
|   |   |       |
|   |   |       |
|   |   |       | ,      |
|   |   | as Tenant  |
|   |   |       |
|   |   |       |
|   |   | By:        |   |   |
|   |   |       | Name:  |
|   |   |       | Title: |

 

The undersigned, as the Landlord named in theRecitals, having duly executed this Agreement as of the date first written above,and as mortgagor, pledgor, assignor or debtor under the Security Instruments,hereby accepts and agrees for itself and its successors and assigns,(i) to be bound by the provisions of Section 5 hereof, (ii) thatnothing contained in the foregoing Agreement (x) shall in any way bedeemed to constitute a waiver by Trustee of any of its rights or remedies underthe Security Instruments or (y) shall in any way be deemed to releaseLandlord from its obligations to comply with the terms, provisions, conditions,covenants and agreements set forth in the Security Instruments and(iii) that the provisions of the Security Instruments remain in full forceand effect and must be complied with by Landlord.

 
|   |   |   | , a    |
|--------|--------|--------|--------|
|   |   |   |   |
|   |   |   |
|   |   |   |
|   |   | By:    |   |   |
|   |   |   | Name:  |
|   |   |   | Title: |
|        |        |        |        |  |  |

 

----

 

ACKNOWLEDGMENT

 
| State of  | )      |
|-----------|--------|
| ) ss.:    |   |
| County of | )      |

 

[Local counsel to provide appropriate acknowledgment]

 

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SCHEDULE A to EXHIBIT 1

 

Description of Real Property

 

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