Document:

exv10w5

 

Exhibit 10.5

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and
Assumption Agreement (“ Assignment Agreement”) is made as of the 20th
day of April, 2007, by and among the Shingle Springs Band of Miwok Indians (the
“ Tribe”), the Shingle Springs Tribal Gaming Authority, an unincorporated
instrumentality of the Tribe (the “ Authority”), and Lakes KAR-Shingle
Springs, LLC, a Delaware limited liability company (“LKAR”).

 

W I T N E S S E T H:

 

WHEREAS, the Tribe and LKAR entered into a First Amended and Restated Memorandum
of Agreement Regarding Gaming Development and Management Agreement dated October
13, 2003 (as amended by an Amendment dated June 16, 2004 and a Second Amendment
dated January 23, 2007, the “2003 Memorandum Agreement”);

 

WHEREAS, the
Tribe has provided for the orderly management of the Tribe’s gaming operations by
establishing the Authority as an unincorporated instrumentality of the Tribe’s tribal
government to conduct the Tribe’s gaming operations, to own the assets of such gaming
operations and to have segregated assets and liabilities from the rest of the Tribe’s tribal
government, assets and liabilities, and the Authority has now been activated (the “Authority
Activation”);

 

WHEREAS, in
connection with such Authority Activation and as part of the transfer by the Tribe to the Authority
of assets and liabilities as contemplated by such Authority Activation, the Tribe wishes to assign its
rights under the 2003 Memorandum Agreement and related documents to the Authority, and the
Authority wishes to accept such assignment and to assume the Tribe’s obligations
thereunder;

 

WHEREAS, it is the
intent of the parties that the Authority Activation not affect or impair the rights and remedies of
LKAR thereunder, other than as provided herein;

 

WHEREAS, in
connection with the Authority Activation and as part of the transfer by the Tribe to the Authority of
rights and obligations under this Assignment Agreement, the Tribe has requested that LKAR
consent to the assignment and assumption set forth in this Assignment Agreement;

 

WHEREAS, LKAR
wishes to acknowledge the Authority Activation and to consent to the assignment and assumption
set for in this Assignment Agreement; and

 

WHEREAS,
contemporaneously herewith, and giving effect to this Assignment Agreement, the Authority and
LKAR are amending the 2003 Memorandum Agreement pursuant to a Third Amendment as of
even date herewith;

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

 

 

NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.     Recitals True.  The above
recitals are true.

 

2.     Defined Terms.  For
purposes of this Assignment Agreement, the following terms shall have the following meanings:

 

“Agreements” means, collectively, the 2003 Memorandum
Agreement and all other Transaction Documents (as defined in the 2003 Memorandum
Agreement), as such may be further amended, restated, substituted or modified, but specifically
excluding the Tribal Agreement.

 

“Tribal
Agreement” means the Tribal Agreement to be dated as of April 20, 2007, between the
Tribe and LKAR, as the same may be amended, restated, substituted or modified.

 

“Uniform
Commercial Code” means the Uniform Commercial Code as in effect from time to time
in the relevant jurisdiction, including without limitation as the same may in part be adopted by the
Tribe as its secured transactions law.

 

3.     Assignment of the Tribe’s Rights and
Obligations Under the Agreements.  The Tribe grants, bargains, sells, conveys,
assigns and transfers to the Authority, without recourse, all of the Tribe’s obligations and
liabilities under, and all right, title and interest, legal and equitable, in, to and under, the
Agreements (collectively, the “Tribe Obligations”).

 

4.     Assumption of
Obligations.  The Authority hereby accepts the assignment of all Tribe
Obligations and hereby assumes and agrees to perform and discharge all of the obligations and
liabilities of the Tribe arising under or relating to the Tribe Obligations in accordance with the
terms thereof, as if the Authority had originally been a party thereto.  The liabilities so assumed by
the Authority include any obligations or liabilities of the Tribe which have accrued under the Tribe
Obligations as of the date hereof, as well as those subsequently accruing.  All references to the
Tribe in or with respect to the Tribe Obligations shall be deemed to refer to the Authority.

 

5.     Liens and Security
Interests.  The Tribe and the Authority hereby acknowledge and agree that all
security interests, collateral assignments and other liens or encumbrances (“Liens”)
granted by the Tribe in favor of LKAR (i) remain in full force and effect on the date hereof; (ii)
continue to secure all of the obligations referenced in the Agreements by which such Liens were
granted or are governed, whether such remain obligations of the Tribe or have been assumed by the
Authority;  and (iii) are binding upon the Authority as the transferee, in connection with the
Authority Activation or otherwise, of the assets subject thereto.  The Authority further
acknowledges and agrees that, in accordance with the provisions of this Assignment Agreement,
the Authority has become bound by the Agreements by which the Tribe granted such Liens; that
such Agreements accordingly are effective with respect to assets hereafter acquired by the
Authority as a “new debtor” (as such term is defined in the Uniform Commercial
Code); and that thereby the Authority has granted LKAR a Lien on such assets.

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

2

 

 

6.     Consent of LKAR.  Provided that the Tribe and LKAR shall have executed and delivered
the Tribal Agreement, LKAR consents to the assignments and assumptions made under this
Assignment Agreement, recognizes the Authority as a substituted party under and with respect to
the Tribe Obligations, and agrees that the Authority shall be a party to such Tribe Obligations to the
same extent as if the Authority had originally been a party thereto.

 

7.     Release of the
Tribe.  Provided that the Tribe and LKAR shall have executed and delivered the
Tribal Agreement, LKAR releases and forever discharges the Tribe of any and all liabilities or
obligations under the Tribe Obligations except as specifically set forth in this Section 7 below, and,
except as so provided, agrees to look solely to the Authority for performance of all obligations of
the Tribe under the Tribe Obligations.  The Tribe hereby acknowledges and agrees that,
notwithstanding the assumption by the Authority of the Tribe Obligations, the Tribe shall have
certain continuing obligations under the Agreements as provided and incorporated by reference in
the Tribal Agreement (such continuing obligations being referred to herein as the “Continuing Tribal Obligations”).

 

8.     Covenants and Representations of LKAR

	 	 	 
	 	 a.	This Assignment Agreement constitutes the
legal, valid and binding obligation of LKAR and is fully enforceable in
accordance with its terms.

	 	 	 
	 	 b.	Neither the execution or delivery of this
Assignment Agreement nor fulfillment of or compliance with the terms and
provisions hereof, will conflict with, or result in a breach of the terms,
conditions or provisions of, constitute a default under or, except as provided
in the Agreements, result in the creation of any lien, charge or encumbrance
upon any property or assets of LKAR under any agreement or instrument to which
it is now a party or by which it is bound.

	 	 	 
	 	 c.	The fulfillment of and compliance with the
terms and provisions of the LKAR Obligations will not conflict with, result in a
breach of the terms, conditions or provisions of, constitute a default under, or
result in the creation of any lien, charge or encumbrance upon any property or
assets of LKAR under any agreement or instrument to which it is now a party or
by which it is bound.

	 	 	 

 

9.     Covenants and Representations of the Tribe
and the Authority

	 	 	 
	 	a.	This Assignment Agreement constitutes the legal, valid and binding obligation of the Tribe and the Authority, and is fully enforceable in accordance with its terms.

	 	 	 
	 	 b.	All Tribe Obligations constitute the legal, valid and binding obligations of the Authority, and are fully enforceable in accordance with their terms, and all Continuing Tribal Obligations shall also constitute the legal, valid and binding obligations of the Tribe, fully enforceable in accordance with their terms.

	 	 	 

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

3

 

	 	 	 
	 	 c.	Neither the execution or delivery of this
Assignment Agreement nor fulfillment of or compliance with the terms and
provisions hereof, will conflict with, or result in a breach of the terms,
conditions or provisions of, constitute a default under or (except as
contemplated by the Agreements, as assumed by the Authority in accordance with
the provisions of this Assignment Agreement) result in the creation of any lien,
charge or encumbrance upon any property or assets of the Tribe or the Authority
under any agreement or instrument to which it is now a party or may in the
future be bound.

	 	 	 
	 	d.	The fulfillment of and compliance with the
terms and provisions of the Tribe Obligations will not conflict with, result in
a breach of the terms, conditions or provisions of, constitute a default under,
or (except as contemplated by the Agreements, as assumed by the Authority in
accordance with the provisions of this Assignment Agreement) result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Tribe or the Authority under any agreement or instrument to which either is now
a party or by which either is bound.

	 	 	 
	 	e.	Pursuant to the Agreements as assumed by the
Authority in accordance with the provisions of this Assignment Agreement, LKAR,
subject to the filing of any financing statement required by the Uniform
Commercial Code to be filed against the Authority to perfect any such security
interest, has a perfected security interest (i) in all personal property subject
to a security interest under such Agreements that, as a consequence of the
Authority Activation, is now owned by the Authority, to the extent a security
interest therein may be perfected by the filing of a financing statement under
the Uniform Commercial Code, and (ii) in all such personal property hereafter
acquired by the Authority, to the extent a security interest therein may be
perfected by the filing of a financing statement under the Uniform Commercial Code.

 

10.     Further
Assurances.  From time to time hereafter, LKAR, the Tribe and/or the Authority
will execute and deliver, or will cause to be executed and delivered, such additional instruments,
certificates or documents, and will take all such actions, as may reasonably be requested by the
other party or parties, for the purpose of implementing or effectuating the provisions of this
Assignment Agreement.  Without limiting the generality of the foregoing, LKAR is hereby
authorized to file one or more financing statements, and continuations thereof and amendments
thereto, relative to the personal property in which a security interest has been granted pursuant to
the Agreements, as assumed by the Authority in accordance with the provisions of this Assignment
Agreement.

 

11.     Governing Law;
Severability.  This Assignment Agreement shall be construed in accordance with
the applicable laws of the State of California, without regard to its conflict of laws provisions, and
applicable Tribe and federal laws.  Wherever possible each provision of this Assignment
Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provisions of this Assignment Agreement shall be prohibited by, unenforceable or invalid
under applicable law, such provision shall be ineffective to the extent of such prohibition,
unenforceability or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Assignment Agreement.

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

4

 

 

12.     Amendments, Assignments,
Etc.  Any provision of this Assignment Agreement may be amended if, but only
if, such amendment is in writing and is signed by each of the parties hereto.  No modification shall
be implied from course of conduct.

 

13.     Gender and Number;
Counterparts.  Whenever the context so requires the masculine gender shall
include the feminine and/or neuter and the singular number shall include the plural, and conversely
in each case.  This Assignment Agreement may be executed in separate counterparts and said
counterparts shall be deemed to constitute one binding document.

 

14.     Notices.  LKAR agrees
that any notice or demand upon it shall be deemed to be sufficiently given or served if it is in
writing and is personally served or in lieu of personal service is mailed by first class certified mail,
postage prepaid, or be overnight mail or courier service, addressed to LKAR at the address of
LKAR and with copies as set forth in Section 10.3 of the 2003 Memorandum Agreement.  Notice
to the Tribe and the Authority shall be given as provided in Section 10.3 of the 2003 Memorandum
Agreement.  Any notice or demand so mailed shall be deemed received on the date of actual
receipt, on the third business day following mailing as herein set forth or one day following
delivery to a courier service, whichever first occurs.

 

15.     Arbitration; Limited Waiver of Sovereign
Immunity.  Any disputes under this Assignment Agreement shall be subject to
the dispute resolution procedures contained in Section 11.3 of the 2003 Memorandum Agreement
and the limited waivers of sovereign immunity contained in each of Authority Resolution 2007-o1
and Tribal Resolution 2007-18 concerning approval of this Assignment Agreement

 

16.     Ratification of
Obligations.  LKAR, the Tribe, and the Authority each ratify and confirm their
respective obligations under the Agreements.

 

[Signature page follows]

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

5

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be
executed as of the day first above written.

 

	 	 	 	 
	 	 SHINGLE SPRINGS BAND OF MIWOK INDIANS 
	 	 	 	 
	 	By:	/S/ Richard  H. Fonseca 	 
	 	 	 	 
	 	 	Its Chairman 	 
	 	 	 	 
	 	By:	/S/ Jessica Godsey 	 
	 	 	 	 
	 	 	 Its Secretary 	 
	 	 	 	 
	 	 	 	 
	 	SHINGLE SPRINGS TRIBAL GAMING AUTHORITY 
	 	 	 	 
	 	By:	/S/ Richard Lawson 	 
	 	 	 	 
	 	 	Its Management Board Chairman 	 
	 	 	 	 
	 	By:	/S/ Beth Ann Bodi 	 
	 	 	 	 
	 	 	Its Secretary 	 
	 	 	 	 
	 	 	 	 
	 	 LAKES KAR-SHINGLE SPRINGS, LLC 
	 	 	 	 
	 	By:	/S/ Timothy J. Cope 	 
	 	 	 	 
	 	 	 Timothy J. Cope 	 
	 	 	 Its President	 
	 	 	 	 

 

Assignment & Assumption Agreement

October 13, 2003 Amended Memorandum Agreement

04/20/07 execution version

 

6exv4w2

 

Exhibit 4.2

THIS SUBORDINATED DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND ACCORDINGLY MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR PURSUANT TO AN EXEMPTION THEREFROM, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.

ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS, AS DEFINED HEREIN.

GULFSTREAM ACQUISITION GROUP, INC.

12% SUBORDINATED DEBENTURE

DUE MARCH 14, 2009

			
	$                    
	 	Issue Date: March 14, 2006

     THIS SUBORDINATED DEBENTURE (“Debenture”) is made as of the date stated above by GULFSTREAM
ACQUISITION GROUP, INC., a Delaware corporation (the “Company”), to the order of
                                         (together with his, her or its successors and permitted assigns, the
“Holder”).

     This Debenture is being issued by the Company pursuant to a Subscription Agreement by and
between the Company and Holder (the “Subscription Agreement”) in connection with the Company’s
offering of Units, each Unit consisting of: (1) a Debenture in the principal amount of $1,000; and
(2) a five-year warrant to purchase seven shares of the Company’s common stock at an exercise price
of $10.00 per share (the “Warrant”), all as further described in the Company’s Amended and Restated
Confidential Private Placement Memorandum, dated February 10, 2006, as the same may from time to
time be amended, supplemented or otherwise modified from time to time (the “Memorandum”). Holder’s
rights and the Company’s obligations hereunder are subject to the provisions of the Subscription
Agreement. Capitalized terms used herein without definition shall have the meaning ascribed to
such terms in the Subscription Agreement and the Memorandum.

ARTICLE I. PAYMENT

     FOR VALUE RECEIVED, the Company hereby promises to pay to the order of Holder, the principal
sum of                                          Dollars ($                    ), in lawful money of the United States of
America, together with interest thereon from the date hereof as follows:

1.01 Interest. Subject to the provisions of Section 1.03 hereof, commencing on the date hereof and
continuing until repayment in full of all Amounts Payable (defined below) hereunder, the unpaid
principal amount outstanding from time to time under this Debenture shall bear interest at a rate
of twelve percent (12.00%) per annum (the “Interest Rate”). All interest calculated hereunder
shall be computed on the basis of a [three hundred sixty (360) day year and calculated for the
actual number of days elapsed.]

1.02 Payment. The term “Amounts Payable” shall mean all principal, interest thereon, and fees,
costs, expenses or any other amounts due from the Company under this Debenture, and all claims
against or liabilities of the Company in respect of this Debenture. The principal amount, together with
the interest thereon at the Interest Rate, shall be payable as follows:

 

 

	 	(a)	 	Subject to Section 2.02 and Article III, interest only on the unpaid principal amount
shall be due and payable quarterly, in arrears, on each June 30, September 30, December 31
and March 31 of each year, beginning on June 30, 2006, until March ___, 2009 (the “Maturity
Date”) on which day all principal then remaining unpaid, all accrued but unpaid interest
and all other Amounts Payable shall be paid in full. If any payment of principal or
interest on this Debenture shall become due on a Saturday, Sunday or legal holiday under
the laws of the State of New York, such payment shall be made on the next succeeding
business day.
	 
	 	(b)	 	All payments received hereunder shall be applied first to the payment of any fees,
costs, expenses or charges payable hereunder, then to interest due and payable, with the
balance applied to principal.
	 
	 	(c)	 	All amounts of principal and interest payable hereunder shall be paid in lawful money
of the United States of America by check, wire or bank transfer of immediately available
funds to such address or account as is designated by Holder in writing from time to time.

1.03 Prepayments. Subject to Article III hereof, the Company reserves the right to prepay, without
premium or penalty, any unpaid principal of this Debenture, in whole or in part. Any payment of
principal of this Debenture shall be accompanied by the payments of all accrued and unpaid interest
and any other amounts then due hereunder. Any amounts received in connection with such prepayment
shall apply (a) first, to the payment of any fees, costs, expenses or charges payable hereunder,
(b) second, to accrued and unpaid interest, and (c) third, to principal.

ARTICLE II. DEFAULT AND REMEDIES

2.01 Events of Default. The occurrence of any one or more of the following events shall constitute
an “Event of Default”:

	 	(a)	 	failure to make payment on or before the date any payment of principal or interest is
due hereunder, and such default shall continue for a period of ten (10) days after written
notice from Holder to the Company thereof; or
	 
	 	(b)	 	failure to perform or observe any other covenant, promise or agreement contained herein
within thirty (30) days after written notice from Holder to the Company (or such longer
period as shall be reasonably necessary to cure such failure provided the Company promptly
commences such cure within said thirty (30) day period and thereafter diligently pursues
such cure to completion); or
	 
	 	(c)	 	the Company dissolves, adopts or carries out a plan of liquidation, sells in bulk any
of its assets pursuant to a plan of liquidating its business, or redeems or acquires any of
its outstanding stock (other than common stock or options acquired from employees or
directors upon the termination of their relationship with the Company); or
	 
	 	(d)	 	the Company becomes insolvent or makes an assignment for the benefit of its creditors;
or
	 
	 	(e)	 	the Company files (or consents to the filing) of any petition or complaint pursuant to
federal or state bankruptcy or insolvency laws seeking the appointment of a receiver or
trustee for any of its assets, seeking the adjudication of the Company as a bankrupt or
insolvent, seeking an “order for relief” under such statutes, or seeking a reorganization of or a plan of
arrangement

2

 

for the Company; or (b) any such petition is filed concerning the Company or
any of its assets and is not dismissed within thirty (30) days after the filing thereof.

2.02 Acceleration of Maturity. If an Event of Default occurs, then upon the written notice of
Holder in the case of an Event of Default under Sections 2.01(a), (b) or (c) above, and without any
action taken by Holder in the case of an Event of Default under Sections 2.01(d) or (e) above, the
entire principal balance under this Debenture, together with interest accrued thereon and all other
Amounts Payable (including all sums expended by Holder in connection with such Event of Default),
shall become immediately due and payable.

2.03 Default Interest Rate. While any Event of Default exists, interest on the unpaid principal
balance of the Debenture from time to time and any other amounts due hereunder shall accrue at a
rate per annum (“Default Interest Rate”) equal to fifteen percent (15%), and the Company shall pay
such interest upon demand, or if no such demand is made, then at the times payments of interest
and/or principal are due as provided herein. All unpaid interest that has accrued under this
Debenture, whether prior (at the Interest Rate) or subsequent (at the Default Interest Rate) to the
occurrence of the Event of Default, shall be paid at the time of, and as a condition precedent to,
the curing of the Event of Default.

2.04 Attorneys’ Fees. If any counsel is employed, retained or engaged (a) upon the occurrence of
an Event of Default, to collect the Amounts Payable or any part thereof, whether or not legal
proceedings are instituted by Holder, (b) to represent Holder in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors’ rights and involving the Company or a claim
under this Debenture, or (c) to represent Holder in any other proceedings in connection with this
Debenture, then the Company shall pay on demand to Holder all related reasonable attorneys’ fees
and expenses as a part of the Amounts Payable.

2.05 Holder’s Remedies. Upon the occurrence of an Event of Default, Holder, at its option, may
proceed to exercise any other rights and remedies available to Holder under this Debenture and to
exercise any other rights and remedies against the Company or with respect to this Debenture which
Holder may have at law, at equity or otherwise. Holder’s remedies under this Debenture shall be
cumulative and concurrent and may be pursued singly, successively, or together against the Company.
Holder may resort to every other right or remedy available at law or in equity without first
exhausting the rights and remedies contained herein, all in Holder’s sole discretion. Failure of
Holder, for any period of time or on more than one occasion, to exercise its option to accelerate
the Maturity Date shall not constitute a waiver of that right at any time during the Event of
Default or in the event of any subsequent Event of Default. Holder shall not by any other omission
or act be deemed to waive any of its rights or remedies unless such waiver is written and signed by
an officer of Holder, and then only to the extent specifically set forth. A waiver in connection
with one event shall not be construed as continuing or as a bar to or waiver of any right or remedy
in connection with a subsequent event.

ARTICLE III. SUBORDINATION

3.01 Amounts Payable Subordinated to Senior Indebtedness. Notwithstanding any provision of this
Debenture to the contrary, the Company covenants and agrees, and the Holder by acceptance of this
Debenture likewise covenants and agrees, that all Amounts Payable shall be subordinated to the
prior payment in full of the Senior Indebtedness (defined below), in cash or cash equivalents
satisfactory to the holders of such Senior Indebtedness, as those terms are defined below.

     3.02 “Senior Indebtedness” means the principal of, premium (if any), and interest on Indebtedness
of the Company outstanding at any time created, whether absolute or contingent, direct or indirect
and howsoever evidenced, including but not limited to all pre-petition and post-petition interest
thereon, fees,

3

 

expenses and all other sums for which the Company may now or at any time or times
hereafter be liable under any agreement, instrument or document which by its terms is superior in
right of payment to this Debenture.

3.03 “Indebtedness” means (a) any debt of the Company (i) for borrowed money, capitalized lease
obligations or purchase money obligations; or (ii) evidenced by a note, debenture, letter of credit
or similar instrument given in connection with the acquisition, other than in the ordinary course
of business, of any property or assets; (b) any debt of others described in the preceding clause
which the Company has guaranteed or for which it is otherwise liable; and (c) any amendment,
renewal, extension or refunding of any such debt.

3.04 Payments of Amounts Payable.

	 	(a)	 	So long as there is no event of default on any Senior Indebtedness of the Company (as
such default may be defined therein), the Company shall make payments of interest only on
the unpaid principal amount hereof to the Holder pursuant to Section 1.02 above.
	 
	 	(b)	 	Upon the happening of any default on any Senior Indebtedness, then, unless and until
such default shall have been cured or waived or shall have ceased to exist, the Company
shall not make any payment with respect to the principal of, premium, if any, or interest
on this Debenture nor shall the Company make any payment of any damages, fees, expenses or
any other amounts in respect of this Debenture. Nothing in this Section 3.04, however,
shall relieve the holders of such Senior Indebtedness or their representative(s) from any
notice requirements set forth in the instrument evidencing such Senior Indebtedness.
	 
	 	(c)	 	In the event that notwithstanding the provisions of this Section 3.04 the Company shall
make any payment to the Holder on account of the principal of or interest on this
Debenture, after the happening of a default on Senior Indebtedness, then, unless and until
such default shall have been cured or waived or shall have ceased to exist, such payment
shall be held by the Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered to, the holders of Senior Indebtedness (pro rata as to each of such holders
on the basis of the respective amounts of Senior Indebtedness held by them) or their
representative(s) or the trustee(s) under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective interest
may appear, for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
	 
	 	(d)	 	The Company shall give prompt written notice to the Holder of any default on any Senior
Indebtedness.

ARTICLE IV. OTHER MATTERS

4.01 Waivers. The Company waives presentment for payment, protest, demand (other than as provided
above), notice of protest, notice of dishonor and notice of nonpayment, and expressly agrees that
this Debenture, or any payment hereunder, may be extended from time to time by the Holder without
in any way affecting its liability hereunder.

4.02 Interpretation. The headings of sections and paragraphs in this Debenture are for convenience
of reference only and shall not be construed in any way to limit or define the content, scope, or
intent of the provisions. The use of singular and plural nouns, and masculine, feminine, and neuter
pronouns, shall

4

 

be fully interchangeable, where the context so requires. If any provision of this
Debenture, or any paragraph, sentence, clause, phrase, or word, or the application thereof, in any
circumstances, is adjudicated to be invalid or unenforceable, the validity or enforceability of the
remainder of this Debenture shall be construed as if such invalid or unenforceable part were never
included.

4.03 Notices. Any notice that Holder or the Company may desire or be required to give to the other
shall be in writing and shall be mailed or delivered to the intended recipient at its address set
forth below or at such other address as such party may in writing designate to the other:

	 	 	 	 	 
	 

	 	Holder:	 	 
	 

	 	 	 	Attention:                                         
	 
	 

	 	Company:
	 	Gulfstream Acquisition Group, Inc.
	 

	 	 	 	c/o Taglich Brothers, Inc.
	 

	 	 	 	405 Lexington Avenue, 51st Floor
	 

	 	 	 	New York, NY 10174
	 

	 	 	 	Attention: Douglas Hailey

     Except for any notice required under applicable law to be given in another manner, any notices
required or given under this Debenture shall be in writing and shall be deemed properly given and
shall be effective upon either: (i) five (5) days after their deposit in the United States mail
postage prepaid, (ii) the next business day after their deposit with a nationally recognized
overnight courier service, or (iii) on the day of their personal delivery if delivered to the
undersigned at the address designated above or at such other address as is specified in writing by
any party to the other pursuant to the notice provisions hereof. Personal delivery to a party or
to any officer, agent or employee at such address shall constitute receipt. Rejection or other
refusal to accept or inability to deliver because of changed address of which no notice has been
received shall also constitute receipt.

     Further, all payments to be made to Holder hereunder shall be made to the above address, or
such other address Holder may notify the Company of from time to time. Any party hereto may change
the address to which notices are given by notice as provided herein.

4.04 Interest Laws. Holder and the Company intend to comply with the laws of the State of Delaware
with regard to the rate of interest charged. Notwithstanding any provision to the contrary in this
Debenture, no such provision shall require the payment or permit the collection of any amount
(“Excess Interest”) in excess of the maximum amount of interest permitted by law to be charged for
the use or detention, or the forbearance in the collection, of all or any portion of the Amounts
Payable. If any Excess Interest is provided for, or is adjudicated to be provided for, in this
Debenture, then in such event (a) the provisions of this paragraph shall govern and control; (b)
the Company shall not be obligated to pay any Excess Interest; (c) any Excess Interest that Holder
may have received shall, at the option of Holder, be (i) applied as a credit against the then
outstanding principal balance of the Debenture, accrued and unpaid interest thereon not to exceed
the maximum amount permitted by law, or both, (ii) refunded to the payor, or (iii) so applied or
refunded in any combination of the foregoing; (d) the applicable interest rate shall be
automatically subject to reduction to the maximum lawful contract rate allowed under the applicable
usury laws of the State, and this Debenture shall be deemed to have been, and shall be, reformed
and modified to reflect such reduction in the applicable interest rate; and (e) the Company shall
not have any action against Holder for any damages whatsoever arising out of the payment or
collection of Excess Interest.

5

 

4.05 Transferability. This Debenture is transferable only by surrender at the principal office of
the Company, duly endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of this Debenture or its attorney duly authorized in writing. The Company may
treat the person in whose name this Debenture is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company shall not be affected by any notice
to the contrary.

4.06 Subsequent Holders. Upon any endorsement, assignment, or other transfer of this Debenture by
Holder or by operation of law, the term “Holder” shall mean such endorsee, assignee, or other
transferee or successor to Holder then becoming the holder of this Debenture.

4.07 Subsequent Obligors. This Debenture shall be binding on all persons claiming under or through
the Company. The term the “Company” as used herein, shall include the respective successors and
permitted assigns of the Company. This Debenture may not be sold, assigned or transferred, by
operation of law or otherwise, without the prior written consent of Holder.

4.08 Governing Law. This Debenture shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

4.09 Severability. Any term or provision of this Debenture that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

(Remainder of this page intentionally left blank.)

6

 

IN WITNESS WHEREOF, the Company has caused this Debenture to be executed as of the date first
stated above.

	 	 	 	 	 
	 	GULFSTREAM ACQUISITION GROUP, INC.

 	 
	 	By:  	 	 
	 	 	          Douglas Hailey, President 	 
	 	 	 	 
	 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]