Document:

EXHIBIT 4.45

 

JACOBS ENTERTAINMENT, INC

240 Main Street 

Black Hawk, Colorado 80422

March
2, 2005

 

Wells
Fargo Bank, National Association

Corporate
Trust Services

213
Court Street - Suite 703

Middletown,
CT 06457

 

Ladies
and Gentlemen:

 

Reference is made to that
certain security agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Security Agreement”;
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of February 8,
2002, among Gameco, Inc. (renamed Jacobs Entertainment, Inc., the “Issuer”),
each of the Guarantors listed on the signature pages thereto or from time to
time party thereto by execution of a joinder agreement, and Wells Fargo Bank,
National Association, as Trustee (in such capacity and together with any successors
in such capacity, the “Trustee”).

 

This letter supplements
the Security Agreement and is delivered by the undersigned, JALOU BREAUX BRIDGE, LLC, JALOU EUNICE, LLC and JALOU
OF JEFFERSON, LLC, each a Louisiana limited liability company
(collectively, the “New Pledgors” and each individually is a “New
Pledgor”), pursuant to Section 3.5 of the Security Agreement.  Each of the New Pledgors, jointly and severally,
hereby agrees to be bound as a Guarantor and as a Pledgor by all of the terms,
covenants and conditions set forth in the Security Agreement to the same extent
that it would have been bound if it had been a signatory to the Security
Agreement on the execution date of the Security Agreement and without limiting
the generality of the foregoing, hereby grants and pledges to the Trustee, for
its benefit and for the benefit of the Secured Parties, as collateral security
for the full, prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations, a
Lien on and security interest in, all of its right, title and interest in, to
and under the Pledged Collateral and expressly assumes all obligations and
liabilities of a Guarantor and Pledgor thereunder.  Each New Pledgor, individually, hereby makes
each of the representations and warranties and agrees to each of the covenants
applicable to the Pledgors contained in the Security Agreement.

 

Each New Pledgor,
individually, represents, warrants and agrees that in connection with its
obligations under Section 3.4(b) of the Security Agreement, with respect to
each Deposit Account described on Schedule 3.4(b) annexed hereto, each New
Pledgor shall, within thirty (30) days after the date hereof, either (1) enter
into a control agreement with the applicable depositary which form shall be in
form and substance reasonably acceptable to the Trustee and shall perfect the
Trustee’s security interest in such Deposit Account by control or (2) close
such Deposit Account.

 

 

Attached hereto are
supplements to each of the schedules to the Security Agreement with respect to
the New Pledgors.  Such supplements shall
be deemed to be part of the Security Agreement.

 

This agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same agreement.

 

THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, each
New Pledgor has caused this letter agreement to be executed and delivered by
its duly authorized officer as of the date first above written.

 

	
   

  	
  JALOU BREAUX BRIDGE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M. Stewart

  	
   

  
	
   

  	
    Name: 

  	
  Ian M. Stewart

  
	
   

  	
    Title:

  	
  President and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JALOU EUNICE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M. Stewart

  	
   

  
	
   

  	
    Name: 

  	
  Ian M. Stewart

  
	
   

  	
    Title:

  	
  President and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JALOU OF JEFFERSON, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M. Stewart

  	
   

  
	
   

  	
    Name: 

  	
  Ian M. Stewart

  
	
   

  	
    Title:

  	
  President and Manager

  
	
   

  	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
  as
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Joseph P. O’Donnell

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Joseph P. O’Donnell

  	
   

  	
   

  
	
   

  	
  Title:
  Assistant Vice President

  	
   

  	
   

  
							

 

2Exhibit
4.46

 

 

LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES 

AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

 

BY

 

JALOU OF JEFFERSON, 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 Leasehold Premises located in:

 

Jefferson Parish, Louisiana

 

 

After recording, please return to:

 

Milbank, Tweed, Hadley & McCloy, LLP

601 South Figueroa Street, 30th Floor

Los Angeles, California 90017

Attn:  Matthew S. Meza, Esq.

 

 

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]

  	
   

  

 

1

 

	
  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

  	
   

  

 

2

 

	
  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

  	
  Sale
  of Mortgaged Lease

  	
   

  
	
  SECTION 11.8

  	
  Special
  Louisiana Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  
	
   

  	
   

  	
   

  
	
  SECURITY
  AGREEMENT AND FIXTURE FILING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
  Security
  Agreement

  	
   

  

 

3

 

	
  ARTICLE XIII

  	
   

  
	
   

  	
   

  	
   

  
	
  FURTHER ASSURANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.1

  	
  Recording
  Documentation To Assure Security

  	
   

  
	
  SECTION 13.2

  	
  Further
  Acts

  	
   

  
	
  SECTION 13.3

  	
  Additional
  Security

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.1

  	
  Covenants
  To Run with the Leased Premises

  	
   

  
	
  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

  	
   

  
	
  SECTION 14.21

  	
  Mortgaged Lease

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE A

  	
  Legal
  Description

  	
   

  
	
  SCHEDULE B

  	
  Prior
  Liens

  	
   

  
	
  SCHEDULE C

  	
  Leases
  Affecting the Mortgaged Property

  	
   

  

 

4

 

LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES 

AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

 

LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Mortgage”),
dated as of March       , 2005, made by
JALOU OF JEFFERSON, LLC, a Louisiana limited liability company having an office
at 7340 Westbank Expressway, Suite 200, Marrero, Louisiana 70072, as mortgagor,
assignor and debtor (in such capacities and together with any successors in
such capacities, the “Mortgagor”), in favor of WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association having an office at 213
Court Street, Suite 703, Middletown, CT 06457, in its capacity as trustee
pursuant to the Indenture (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
connection with the execution and delivery of this Mortgage, entered into that
certain Indenture, dated as of February 8, 2002, supplemented by the First
Supplemental Indenture, dated as of February 22, 2002, the Second
Supplemental Indenture, dated as of June 14, 2002, the Third Supplemental
Indenture, dated as of June 4, 2003, the Fourth Supplemental Indenture
dated as of the date hereof and the Fifth Supplemental Indenture dated as of
the date hereof (collectively, as amended, amended and restated, supplemented,
or otherwise modified from time to time, the “Indenture”), pursuant to
which the Issuer has issued, from time to time, its 117/8%
Senior Secured Notes due 2009 (the “Senior Secured Notes”) in the
aggregate principal amount of $148,000,000. 
It is contemplated 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 Secured Notes, the “Notes”), in each case, pursuant to the
provisions of the Indenture.

 

B.  The Issuer
owns, directly or through its Subsidiaries, all of the issued and outstanding
shares of the Mortgagor.

 

C.  The
Mortgagor has, pursuant to the Indenture, among other things, unconditionally
guaranteed (the “Guarantee”) the obligations of the Issuer under the
Indenture and the Notes.

 

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

 

E.  The
Mortgagor is the legal owner and holder of the tenant’s interest under that
certain Property Lease Agreement, dated as of September 21, 2000  (as amended on November 27, 2002, November 18,
2003 and December 29, 2004, and as subsequently amended from time to time,
the “Mortgaged Lease”) between Al-Huda, Inc. and Al-Batool, Inc.,
collectively as landlords (together with

 

5

 

their successors
and assigns, collectively, the “Lessor”), and the Mortgagor, as tenant
by assignment, which affects the property described on Schedule A
annexed hereto.  A Memorandum of Lease
was recorded in the official records of Jefferson Parish, Louisiana as
Instrument Number 10438338, CB Book 3126, Page 209.  Mortgagor is the successor by assignment to
Jackpot Truck Stop, L.L.C. (“Jackpot”), by that certain Assignment of Lease
Agreement, dated June 23, 2004, by and between Jackpot, as Assignor, and
Mortgagor, as Assignee, recorded in the official records of Jefferson Parish,
Louisiana as Instrument Number 10438339, CB Book 3126, Page 210 (the “Assignment”).

 

F.   Mortgagor is
further a party to that certain Development Agreement, dated September 26,
2003, by and between Mortgagor and Jackpot (“Development Agreement”),
which grants to Jackpot certain rights in and to the Mortgaged Property.

 

G.  This Mortgage is given by the Mortgagor in
favor of the Mortgagee for its benefit and for the benefit of the Holders of
the Notes (collectively, the “Secured Parties”) to secure the payment
and performance of all of the Secured Obligations (as hereinafter defined).

 

A
G  R  E  E  M  E  N  T:

 

NOW THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Mortgagor hereby covenants and agrees
with the Mortgagee as follows:

 

ARTICLE I

 

DEFINITIONS AND
INTERPRETATION

 

SECTION 1.1  Definitions.  Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the
Indenture.  The following terms used in
this Mortgage shall have the following meanings:

 

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

 

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

 

“Alteration” shall mean any and all
alterations, installations, improvements, additions, modifications or changes
of a structural nature of or to the Leasehold Premises.

 

“Assignment” shall have the meaning assigned to
such term in Recital E hereof.

 

“Business Day” shall have the meaning assigned
to 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 or
Liens imposed upon or assessed against, and all claims (including, without
limitation, landlords’,

 

6

 

carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising
by operation of law) against, all or any portion of the Mortgaged Property.

 

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

 

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

 

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

 

“Contracts” shall mean, collectively, any and
all right, title and interest of the Mortgagor in and to any and all contracts,
instruments, documents and other general intangibles, whether now existing or
hereafter arising or entered into, relating to the Mortgaged Property
(including, without limitation, all reciprocal easements and/or operating
agreements, covenants, conditions and restrictions and similar agreements
affecting all or any portion of the Mortgaged Property and any and all present
or future options to sell or lease the Mortgaged Property or any interest therein)
and all reserves, deferred payments, deposits or other security or advance
payments (including, without limitation, those made by or on behalf of the
Mortgagor to others with respect to (i) utility service regarding the Mortgaged
Property, (ii) cleaning, maintenance, repair or similar services regarding the
Mortgaged Property, (iii) refuse removal or sewage service 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 Mortgaged Property), refunds,
liens, security interests, guarantees, remedies and claims of every kind,
nature or character relating thereto.

 

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

 

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

 

“Development Agreement” shall have the meaning
assigned to such term in Recital E hereof.

 

“Environmental Law” shall mean any applicable
federal, state, local or municipal statute, law, rule, regulation, ordinance,
code, policy or rule of common law and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment binding on the Mortgagor relating to pollution or protection
of the environment, or health or safety including, without limitation, any
relating to the release or threatened release of any Hazardous Materials.

 

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

 

“Fixture” shall mean all machinery, apparatus,
equipment, fittings, fixtures, improvements and articles of personal property
of every kind, description and nature whatsoever now or hereafter attached or
affixed to the Land or any other Improvement or used in connection with the use
and

 

7

 

enjoyment of the Land or any other Improvement or the
maintenance or preservation thereof, which by the nature of their location
thereon or attachment 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 and facilities, pipes, fittings and other items of
every kind and description now or hereafter attached to or located on the Land
which by the nature of their location thereon or attachment thereto are real
property under applicable law, HVAC equipment, boilers, electronic data
processing, telecommunications or computer equipment, refrigeration, electronic
monitoring, water or lighting systems, power, sanitation, waste removal,
elevators, maintenance or other systems or equipment and all additions thereto
and betterments, renewals, substitutions and replacements thereof.

 

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

 

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

 

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

 

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

 

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

 

“Improvements” shall mean all buildings,
structures and other improvements of every kind or description and any and all
Alterations now or hereafter located, attached or erected on the Land
including, 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, fences and walls and (iii) all materials now or hereafter
located on the Land intended for the construction, reconstruction, repair,
replacement, alteration, addition or improvement of or to such buildings,
Fixtures, structures and improvements, all of which materials shall be deemed
to be part of the Improvements immediately upon delivery thereof on the Land
and to be part of the Improvements immediately upon their incorporation
therein.

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

“Jackpot” shall have the meaning assigned to
such term in Recital E hereof.

 

“Land” shall mean those certain tracts or
parcels of land described in Schedule A annexed to this Mortgage
and all easements, rights-of-way, strips and gores of land, drives, roads,
curbs, streets, ways, alleys, passages, passage ways, sewer rights, waters,
water courses, water rights, mineral, gas and oil rights, and all power, air,
light and other rights, estates, titles, interests, privileges, liberties,
servitudes, licenses, tenements, hereditaments and appurtenances whatsoever, in
any way belonging, relating or appertaining thereto, or any part thereof, or
which hereafter shall in any way belong, relate or be appurtenant thereto.

 

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

 

“Leasehold Premises” shall mean, collectively,
the Mortgagor’s estate, right, title and interest in the Land and the
Improvements (subject in each case to the rights under the Development
Agreement).

 

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

 

“Lessor” shall have the meaning assigned to
such term in Recital E hereof.

 

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

 

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

 

9

 

“Mortgaged Lease” shall have the meaning
assigned to such term in Recital E hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Proceeds” shall mean, collectively, any and
all cash proceeds and noncash proceeds derived or to be derived from the
Mortgaged Property and shall include, without limitation, all (i) proceeds
of the sale, transfer or conveyance of the Mortgaged Property or the
conversion, voluntary or involuntary, of any of the Mortgaged Property or any
portion thereof into cash or liquidated claims, (ii) proceeds of any
insurance (except payments made to a Person, other than the Issuer or any
Subsidiary thereof, that is not a party to this Mortgage), indemnity, warranty,
guaranty or claim payable to the Mortgagee or to the Mortgagor from time to
time with respect to any of the Mortgaged Property including, without
limitation, all Net Loss Proceeds relating thereto, (iii) payments (in any
form whatsoever) made or due and payable to the Mortgagor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any portion of the Mortgaged Property by any Governmental
Authority (or any

 

10

 

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 time
to time paid or payable under or in connection with any of the Mortgaged
Property including, without limitation, refunds of real estate taxes and
assessments, including interest thereon and any unearned insurance premiums
relating thereto and (vi) the right to enforce any and all rights that the
Mortgagor has or may have to collect all such proceeds, including, without
limitation, the Mortgagor’s rights to commence any and all appropriate
collection or 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 or
resulted in (or would reasonably be expected to cause or result in) a material
adverse effect on the business or operations as presently conducted at the
Mortgaged Property; (b) any event, circumstance, occurrence or condition which
has caused or resulted in (or would reasonably be expected to cause or result
in) a material adverse effect on the value or utility of the Mortgaged
Property; and (c) any event, circumstance, occurrence or condition which
has caused or resulted in (or would reasonably be expected to cause or result
in) a material adverse effect on the legality, priority or enforceability of
the Lien created by this Mortgage or the rights and remedies of the Mortgagee
hereunder.

 

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

 

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

 

“Rents” shall mean, collectively, any and all
rents, additional rents, royalties, issues, cash, guaranties, letters of
credit, bonds, sureties or security deposited under any Lease to secure
performance of the Tenant’s obligations thereunder, revenues, earnings,
profits, bonuses and income, advance rental payments, payments incident to
assignment, sublease or surrender of a Lease, claims for forfeited deposits and
claims for damages, now due or hereafter to become due, with respect to any
Lease, any indemnification against, or reimbursement for, sums paid and costs
and expenses incurred by the Mortgagor under any Lease or otherwise, and any
award in 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, without
limitation, 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 the Issuer and any and all of the Guarantors from time to time
arising under or in respect of this Mortgage, the Indenture, the Notes and the
other Collateral Documents (including, without limitation, the obligations to
pay principal, interest and all other charges, fees,

 

11

 

expenses, commissions, reimbursements, premiums,
indemnities and other payments related to or in respect of the obligations contained
in this Mortgage, the Indenture, the Notes and the other Collateral Documents),
in each case whether (i) such obligations are direct or indirect, secured or
unsecured, joint or several, absolute or contingent, due or to become due
whether at stated maturity, by acceleration or otherwise, (ii) arising in the
regular course of business or otherwise, (iii) for payment or performance
and/or (iv) now existing or hereafter arising (including, without limitation,
interest and other obligations arising or accruing after the commencement of
any bankruptcy, insolvency, reorganization or similar proceeding with respect
to the Issuer, any Guarantor or any other Person, or which would have arisen or
accrued but for the commencement of such proceeding, even if such obligation or
the claim therefor is not enforceable or allowable in such proceeding).

 

“Secured Parties” shall have the meaning
assigned to such term in Recital G hereof.

 

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

 

“Subordination Agreement” shall mean a
subordination, nondisturbance and attornment agreement in a form reasonably
acceptable to the Mortgagee.

 

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

 

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

 

“Tax Escrow Fund” shall have the meaning
assigned 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 as
in effect on the date hereof in the jurisdiction in which the Leasehold
Premises are located; provided, however, that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any item or portion of the Mortgaged
Property is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the jurisdiction in which the Leasehold Premises are
located, “UCC” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection 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 to any Person include such Person’s successors and assigns and in
the case of an individual, the word “successors” includes such Person’s heirs,
devisees, legatees, executors, administrators and personal representatives,
(iv) references to any statute or other law include all applicable rules,
regulations and orders adopted or made thereunder and all statutes or other
laws

 

12

 

amending,
consolidating or replacing the statute or law referred to, (v) the words “consent,”
“approve” and “agree,” and derivations thereof or words of similar import, mean
the prior written consent, approval or agreement of the Person in question 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, paragraphs
and clauses are to the Articles, Sections, Schedules, Exhibits, subsections,
paragraphs and clauses hereof, (ix) the Schedules and Exhibits to this
Mortgage, in each case as amended, amended and restated, supplemented or
otherwise 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 inserted
as a matter of convenience only and shall not affect the constructions of any
provisions hereof and (xi) all obligations of the Mortgagor hereunder shall be
satisfied by the Mortgagor at the Mortgagor’s sole cost and expense.

 

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

 

ARTICLE II

 

GRANTS AND 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 for
the 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 security
interest in and upon all of the Mortgagor’s estate, right, title and interest
in, to and under the following property, whether now owned or held or hereafter
acquired from time to time (collectively, the “Mortgaged Property”):

 

(i)            Mortgaged Lease;

 

(ii)           Leasehold Premises;

 

(iii)          Leases;

 

(iiiv)        Rents;

 

(v)           Permits;

 

(ivi)         Contracts;

 

(vii)         Development Agreement;

 

13

 

(vii)         Records; and

 

(ix)           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 any
of its rights or interests thereunder (other than (x) the right to receive any
payment of money (including without limitation accounts, general intangibles
and payment intangibles (each as defined in the UCC) or any other rights
referred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the UCC and (y) any
proceeds, substitutions or replacements thereof) to the extent, but only to the
extent, that such a grant would, under the terms of such Contract, result in a
breach or termination of the terms of, or constitute a default under or
termination of, such Contract and (ii) any Permit to the extent, but only to
the extent, that such grant shall constitute or result in abandonment,
invalidation or rendering unenforceable any right, title or interest of the Mortgagor
therein; provided, however, that at such time as any Contract or
Permit described in clauses (i) and (ii) of this sentence is no longer subject
to such restriction, such applicable Contract or Permit shall (without any act
or delivery by any Person) constitute Mortgaged Property hereunder.

 

TO HAVE AND TO HOLD the Mortgaged Property, together
with all estate, right, title and interest of the Mortgagor and anyone claiming
by, through or under the Mortgagor in and to the Mortgaged Property and all
rights and appurtenances relating thereto, unto the Mortgagee, its successors
and assigns, for the purpose of securing the payment and performance in full of
all the Secured Obligations.

 

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

 

(i)            the
immediate and continuing right to receive and collect Rents payable by the
Tenants pursuant to the Leases;

 

(ii)           all
claims, rights, powers, privileges and remedies of the Mortgagor, whether
provided for 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 with any term of the Leases including damages or other amounts payable
to the Mortgagor as a result of such failure;

 

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

 

14

 

(iv)          the
full power and authority, in the name of the Mortgagor or otherwise, to
enforce, collect, receive and receipt for any and all of the foregoing and to
take all other actions whatsoever which the Mortgagor, as Landlord, is or may
be entitled to take under the Leases.

 

SECTION 2.3  Secured Obligations.  This Mortgage secures, and the Mortgaged
Property is collateral security for, the payment and performance in full when
due of the Secured Obligations.

 

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

 

SECTION 2.5  No Release.  Nothing set forth in this Mortgage shall
relieve the Mortgagor from the performance of any term, covenant, condition or
agreement on the Mortgagor’s part to be performed or observed under or in respect
of any of the Mortgaged Property or from any liability to any Person under or
in respect of any of the Mortgaged Property or shall impose any obligation on
the Mortgagee or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on the Mortgagor’s part to be so performed or
observed or shall impose any liability on the Mortgagee or any other Secured
Party for any act or omission on the part of the Mortgagor relating thereto or
for any breach of any representation or warranty on the part of the Mortgagor
contained in this Mortgage, the Indenture, the Notes or the Collateral
Documents, or under or in respect of the Mortgaged Property or made in
connection herewith or therewith.  The
obligations of the Mortgagor contained in this Section 2.5 shall
survive the termination hereof and the discharge of the Mortgagor’s other
obligations under this Mortgage and the Indenture, the Notes and the Collateral
Documents.

 

15

 

ARTICLE III

 

REPRESENTATIONS AND
WARRANTIES OF MORTGAGOR

 

SECTION 3.1  Authority and Validity.

 

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

 

(i)            it
is duly organized or formed, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its organization;

 

(ii)           it
is duly qualified to transact business and is in good standing in the state in
which the Mortgaged Property is located;

 

(iii)          it
has full corporate or other organizational power and lawful authority to execute
and deliver this Mortgage and to mortgage and grant a Lien on and security
interest in the Mortgaged Property and otherwise assign the Mortgagor’s
Interest and otherwise perform its obligations as contemplated herein, and all
corporate and governmental actions, consents, authorizations and approvals
necessary or required therefor have been duly and effectively taken or
obtained; and

 

(iv)          this
Mortgage is a legal, valid and binding obligation of the Mortgagor, enforceable
against the Mortgagor in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.

 

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

 

(i)            it
owns the tenant’s interest in the Mortgaged Lease and has a valid leasehold
interest in the Leasehold Premises and the Landlord’s interest and estate under
or in respect of the Leases and good title to the interest it purports to own
or hold in and to each of the Permits, the Contracts and the Records, in each
case subject to no Liens, except for Permitted Collateral Liens;

 

(ii)           the
Mortgaged Lease (a) is a valid and subsisting lease, superior and paramount to
all other leases respecting the Leasehold Premises, (b) is in full force and
effect and no default (nor any event which, with notice or lapse of time or
both, would constitute such a default) has occurred or is continuing under the
Mortgaged Lease and (c) is not subject to any defenses, offsets or
counterclaims;

 

(iii)          there
have been no renewals or extensions of or supplements, modifications or
amendments to the Mortgaged Lease not previously disclosed to the Mortgagee

 

(iiiv)        it
is in actual possession of the Leasehold Premises, subject to the rights of (i)
the Tenants under the Leases identified on Exhibit C and (ii) Jackpot under the
Development Agreement and the Assignment Agreement;

 

16

 

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

 

(ivi)         it
is in compliance with each term, condition and provision of any obligation of
the Mortgagor which is secured by the Mortgaged Property or the noncompliance
with which would result in a Property Material Adverse Effect;

 

(vi)          this
Mortgage creates and constitutes a valid and enforceable first priority Lien on
the Mortgaged Property subject to Permitted Collateral Liens, and, to the
extent any of the Mortgaged Property shall consist of Fixtures, a first
priority security interest in the Fixtures, which first priority Lien and first
priority security interest are subject only to Permitted Collateral Liens; and

 

(viii)        the
Assignment grants to Jackpot certain rights of reversion in the event of a
default under the Assignment, the Mortgaged Lease or the Development Agreement.

 

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

 

(i)            there
has been issued and there remains in full force and effect subject to no
revocation, suspension, forfeiture or modification, each and every Permit
necessary for the present use, operation and occupancy of the Leasehold
Premises by the Mortgagor and its Tenants and the conduct of their respective
businesses and all required zoning, building code, land use, environmental and
other similar Permits, except where the failure to be so issued and to be in
full force and effect would not result in a Property Material Adverse Effect;

 

(ii)           the
Leasehold Premises and the present and contemplated use and occupancy thereof
comply with all applicable zoning ordinances, building codes, land use laws, setback
or other development and/or use requirements of Governmental Authorities except
where such noncompliance would not result in a Property Material Adverse
Effect;

 

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

 

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

 

17

 

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

 

(vi)          there
has not occurred any Destruction of the Leasehold Premises or any portion
thereof as a result of any fire or other casualty that, as of the date hereof,
has not been repaired in all material respects, other than such Destruction as
would not have a Property Material Adverse Effect;

 

(vii)         there
are no disputes regarding boundary lines, location, encroachments or possession
of any portions of the Mortgaged Property and no state of facts exists which
could give rise to any such claim other than such disputes as would not result
in a Property Material Adverse Effect;

 

(viii)        all
liquid and solid waste disposal, septic and sewer systems located on the
Leasehold Premises are in a good and safe condition and repair and in
compliance with all Requirements of Law, except where the failure to so comply
would not result in a Property Material Adverse Effect;

 

(ix)           no
portion of the Leasehold Premises is located in an area identified by the
Federal Emergency Management Agency or any successor thereto as an area having
special flood hazards pursuant to the Flood Insurance Acts or, if any portion
of the Leasehold Premises is located within such area, the Mortgagor has
obtained the insurance prescribed in Article VIII hereof;

 

(x)            there
are no options or rights of first refusal to purchase or acquire all or any
portion of the Mortgaged Property, other than such options or rights of first
refusal as would not result in a Property Material Adverse Effect.

 

SECTION 3.4  Leases.  The Mortgagor represents and warrants that as
of the date hereof:

 

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

 

(ii)           true
copies of such Leases have been previously delivered to the Mortgagee and there
are no agreements with any Tenant under such Leases other than those agreements
expressly set forth therein;

 

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

 

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

 

18

 

(v)           there
is no default under any of such Leases and there is existing no condition which
with the giving of notice or passage of time or both would cause a default
thereunder;

 

(vi)          all
Rents due under such Leases have been paid in full;

 

(vii)         none
of the Rents reserved under such Leases have been assigned or otherwise pledged
or hypothecated except in favor of the Mortgagee pursuant to the provisions
hereof;

 

(viii)        none
of the Rents (other than any security deposit collected in accordance with the
provisions of the applicable Lease) have been collected for more than one (1)
month in advance;

 

(ix)           there
exist no offsets or defenses to the payment of any portion of the Rents and the
Mortgagor owes no monetary obligation to any Tenant under any such Lease,
excepting only obligations for the payment of utilities used by the Mortgagor
in any of the premises subject to the Leases identified in Exhibit C;

 

(x)            the
Mortgagor has received no notice from any Tenant challenging the validity or
enforceability of any such Lease;

 

(xi)           no
such 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)          each
such Lease is subordinate to this Mortgage either by law,  pursuant to its terms or pursuant to 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 would
not have a Property Material Adverse Effect, (i) the Leasehold Premises and the
use, occupancy and operation thereof comply with all Insurance Requirements and
there exists no default under any Insurance Requirement, (ii) all premiums due
and payable with respect to the Insurance Policies have been paid,
(iii) all Insurance Policies are in full force and effect and the
Mortgagor has not received notice of violation or cancellation thereof and
(iv) all insurance certificates required pursuant to the Indenture have
been delivered to the Mortgagee.

 

SECTION 3.6  Charges.  The Mortgagor represents and warrants that
all Charges imposed upon or assessed against the Mortgagor’s interest in the
Mortgaged Property in accordance with the terms of the Mortgaged Lease have
been paid and discharged by the Mortgagor except to the extent such Charges
constitute a Lien not yet due and payable or to the extent such Charges are
being contested in accordance with Section 9.1 hereof.

 

SECTION 3.7  Environmental.  The Mortgagor represents and warrants that:

 

(i)            it
has obtained all Permits which are necessary with respect to the ownership and
operation of its business and the Mortgaged Property under any and all
applicable Environmental Laws and is in compliance with all terms and
conditions thereof, except where the failure so to obtain or to be in
compliance would not result in a Property Material Adverse Effect;

 

19

 

(ii)           it
is 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 in
the Environmental Laws, except where the failure so to be in compliance would
not result in a Property Material Adverse Effect;

 

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

 

(iv)          there
are no past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
compliance with the Environmental Laws, or which may give rise to any common
law or legal liability including, without limitation, liability under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, or any other Environmental Law or related common law theory or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing or notice of violation, study or investigation, based on or related to
the manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Hazardous Materials which would
result in a fine, penalty or other cost or expense other than such instances
that would not result in a Property Material Adverse Effect .

 

SECTION 3.8  No Conflicts, Consents, etc.  Neither the execution and delivery hereof by
the Mortgagor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violates the terms of any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which the Mortgagor is a party, or by which it may be bound or to
which any of its properties or assets may be subject, (ii) conflicts with any
Requirement of Law applicable to the Mortgagor or its property or (iii) results
in or requires the creation or imposition of any Lien (other than the Lien
contemplated hereby) upon or with respect to any of the Mortgaged Property,
except where such violation, conflict, creation or imposition would not have a
Property Material Adverse Effect.  No
consent of any party (including, without limitation, equityholders or creditors
of the Mortgagor) and no consent, authorization, approval, license or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person (other than with respect to any required
Permits) is required for (i) the granting of a mortgage Lien on and
security interest in the Mortgaged Property by the Mortgagor granted by it
pursuant to this Mortgage or for the execution, delivery or performance hereof
by the Mortgagor except for the filing of this Mortgage and the other filings
contemplated hereby or (ii) the exercise by the Mortgagee of the remedies
in respect of the Mortgaged Property pursuant to this Mortgage other than those
required by law in connection with the exercise of the applicable remedy.

 

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

 

20

 

ARTICLE IV

 

CERTAIN COVENANTS OF
MORTGAGOR

 

SECTION 4.1  Preservation of Corporate Existence.  The Mortgagor shall:

 

(i)            preserve
and maintain in full force and effect its existence and good standing under the
laws of the jurisdiction of its organization;

 

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

 

(iii)          preserve
and maintain in full force and effect all consents, authorizations and approvals
necessary or required of any Governmental Authority or any other Person
relating to the execution, delivery and performance hereof, except where the
failure 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 a
part of the Mortgaged Property and (B) protect, preserve and defend its
interest in the Mortgaged Property and title thereto, except against Permitted
Collateral Liens (other than the Lien created by this Mortgage);

 

(ii)           (A)
comply, in all material respects, with each of the terms, conditions and
provisions of any obligation of the Mortgagor which is secured by the Mortgaged
Property, except where the failure to so comply would not result in a Property
Material Adverse Effect, or the noncompliance with which may result in the
imposition of a Lien on the Mortgaged Property, (B) forever warrant and
defend to the Mortgagee the Lien and security interests created and evidenced
hereby and the validity and priority hereof in any action or proceeding against
the claims of any and all Persons whomsoever affecting or purporting to affect
the Mortgaged Property or any of the rights of the Mortgagee hereunder, except
against Permitted Collateral Liens (other than the Lien of this Mortgage), and
(C) maintain a valid and enforceable first priority Lien, except for
Permitted Collateral Liens (other than the Lien of this Mortgage) on the
Mortgaged Property and, to the extent any of the Mortgaged Property shall
consist of Fixtures, a first priority security interest in the Mortgaged
Property, which first priority Lien and security interest shall be subject only
to Permitted Collateral Liens; and

 

(iii)          immediately
upon obtaining knowledge of the pendency of any proceedings for the eviction of
the Mortgagor from the Mortgaged Property or any part thereof by paramount
title or otherwise questioning the Mortgagor’s right, title and interest in, to
and under the Mortgaged Property as warranted in this Mortgage, or of any
condition that could give rise to any such proceedings, notify the Mortgagee
thereof.  The Mortgagee may participate
in such proceedings and the Mortgagor will deliver or cause to be delivered to
the Mortgagee all instruments requested by the Mortgagee to permit such
participation.  In any such proceedings,
the Mortgagee

 

21

 

may be represented by counsel reasonably satisfactory
to the Mortgagee 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 thereof
or interest therein and title insurance proceeds shall be payable in connection
therewith, such proceeds are hereby assigned to and shall be paid to the
Mortgagee for deposit into the Collateral Account and shall be applied in the
manner applicable to Net Loss Proceeds in accordance with the provisions of
Sections 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 representations
and warranties set forth in Section 3.3 hereof to continue to be
true in each and every respect and shall pay or cause to be paid when due all
Charges imposed upon or assessed against the Mortgagor’s interest in the
Mortgaged Property in accordance with the terms of the Mortgaged Lease, costs
and expenses relating thereto, other than such Charges being contested in
accordance with Section 9.1 hereof.

 

(ii)           Maintenance
of Leasehold Premises.  The Mortgagor
shall not commit or suffer any waste on the Leasehold Premises.  To the extent that the Mortgagor is permitted
to do so under the Mortgaged Lease, the Mortgagor shall, at all times, maintain
the Leasehold Premises in good working order, condition and repair, reasonable
wear and tear excepted, and shall use commercially reasonable efforts to make
or cause to be made all repairs, structural (to the extent permitted under the
Mortgaged Lease) or nonstructural, which are necessary or appropriate in the
conduct of the Mortgagor’s business.  The
Mortgagor shall not, except as permitted in Section 4.3(iii)
hereof, alter the occupancy or use of all or any portion of the Leasehold
Premises without the prior written consent of the Mortgagee, which consent
shall not be unreasonably withheld. 
Except to the extent permitted pursuant to the provisions of Section 4.3(iii)
hereof, the Mortgagor shall not remove, demolish or alter the structural character
of any Improvement now or hereafter erected upon all or any portion of the
Leasehold Premises, or permit any such removal, demolition or alteration,
without the prior written consent of the Mortgagee, which consent shall not be
unreasonably withheld.

 

(iii)          Alterations.  The Mortgagor shall not, without the prior
written consent of the Mortgagee (which consent shall not be unreasonably
withheld) and the Lessor (if required under the Mortgaged Lease) make any
Alteration to the Leasehold Premises except as permitted by Sections 10.04 and
10.06 of the Indenture.  Whether or not
the making of any Alteration shall require the consent of the Mortgagee
pursuant to the immediately preceding sentence, the Mortgagor shall
(A) complete each Alteration promptly, in a good and workmanlike manner
and in compliance, in all material respects, with all applicable local laws,
ordinances and requirements and (B) pay when due all claims for labor
performed and materials furnished in connection with such Alteration, unless
contested in accordance with the provisions of Article IX hereof.

 

(iv)          Permits.  To the extent that the Mortgagor is permitted
to do so under the Mortgaged Lease, the Mortgagor shall maintain, or cause to
be maintained, in full force and effect all Permits contemplated by and subject
to Section 3.3(i) hereof. 
Unless and to the extent contested by the Mortgagor in accordance with
the provisions of Article IX hereof, the Mortgagor shall comply, in
all material respects, with all requirements set forth in the Permits and all
Requirements of Law applicable to

 

22

 

all or any portion
of the Mortgaged Property or the condition, use or occupancy of all or any
portion thereof or any recorded deed of restriction, declaration, covenant
running with the land or otherwise, now or hereafter in force, subject to the
provisions of Section 3.3 hereof.

 

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

 

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

 

SECTION 4.5  Access to Mortgaged Property, Books and
Records; Other Information.  Upon request to the Mortgagor, the Mortgagee,
its agents, accountants and attorneys shall have full and free access to visit
and inspect, as applicable, during normal business hours and such other
reasonable time as may be requested by the Mortgagee, all of the Mortgaged
Property including, without limitation, all of the books, correspondence and
records of the Mortgagor relating thereto.  The Mortgagee and its representatives may
examine 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 or
cause to be furnished to the Mortgagee, in such manner and in such detail as
may be reasonably requested by the Mortgagee, additional information with
respect to the Mortgaged Property.

 

SECTION 4.6  Limitation on Liens; Transfer Restrictions.  The Mortgagor may not, without the prior
written consent of the Mortgagee, further mortgage, encumber, hypothecate,
sell, convey or assign all or any part of the Mortgaged Property or suffer or
allow 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 accordance with the
provisions of the Indenture and (2) suffer to exist the following Liens in
respect 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 unreasonably withheld),
(ii) the Lien and security interest created by this Mortgage or any other
Collateral Document, (iii) Contested Liens, (iv) Liens described in clause
(9) of the definition of Permitted Liens (provided, however, that
such Liens shall not extend to or cover any Mortgaged Property other than
equipment subject to Capital Leases, Obligations or Purchase Money Obligations
incurred in accordance with the provisions of the Indenture) or clause (4) of
the definition of Permitted Liens, (v) Leases to the extent permitted pursuant
to the provisions of Article V hereof and (vi) rights, title
and interest of the Lessor under the Mortgaged Lease and any Liens against the
Lessor’s interest in the Land and the Leasehold Premises (the Liens described
in clauses (i) through (vi) of this sentence, collectively, “Permitted
Collateral Liens”).

 

23

 

SECTION 4.7  Environmental.

 

(i)            Hazardous
Materials.  Except where the failure
to do so would not result in a Property Material Adverse Effect, the Mortgagor
shall (A) comply with any and all present and future Environmental Laws
applicable to the Mortgaged Property, (B) not release, store, treat,
handle, generate, discharge or dispose of any Hazardous Materials at, on, under
or from the Mortgaged Property in violation of or in a manner that could result
in any material liability under any present and future Environmental Law and
(C) take all necessary steps to initiate and expeditiously complete all
remedial, corrective and other action to eliminate any such effect.  In the event the Mortgagor fails to comply
with the covenants in the preceding sentence, the Mortgagee may, in addition to
any other remedies set forth herein, as agent for the Mortgagor and at the
Mortgagor’s sole cost and expense, cause any remediation, removal or response
action relating to Hazardous Materials required by applicable Environmental
Laws to be taken and the Mortgagor shall provide to the Mortgagee and its
agents and employees access to the Mortgaged Property for such purpose.  Any reasonable costs or expenses incurred by
the Mortgagee for such purpose shall be immediately due and payable by the
Mortgagor and shall bear interest at the Default Rate. The Mortgagee shall have
the right at any time when an Event of Default shall have occurred and be
continuing and at such other times when a potential violation of any present or
future Environmental Law exists which in the Mortgagee’s reasonable judgment
could result in any material liability or obligation under such Environmental
Law, at the sole cost and expense of the Mortgagor, upon the prior written
consent of the Lessor to the extent required under the Mortgaged Lease, to
conduct an environmental audit of the Mortgaged Property by such persons or
firms appointed by the Mortgagee, and the Mortgagor shall cooperate in all
respects in the conduct of such environmental audit, including, without
limitation, by providing access to the Mortgaged Property and to all records in
the Mortgagor’s or any of its agents’ possession relating thereto.  To the extent that any such environmental
audit identifies conditions which in the Mortgagee’s reasonable judgment would
result in any material liability or obligation under any present or future
Environmental Law, the Mortgagor agrees (to the extent caused by the Mortgagor)
to expeditiously correct, or cause the correction of, any such violation or
respond to conditions giving rise to such liability or obligations in a manner
which complies in all material respects with the Environmental Laws and
mitigates associated health and environmental risks.  The Mortgagor shall indemnify and hold the
Mortgagee and each of the other Secured Parties harmless from and against all
loss, cost, damage or reasonable expense (including, without limitation,
reasonable attorneys’ and consultants’ fees and disbursements) that the
Mortgagee or any other Secured Party may sustain by reason of the assertion
against the Mortgagee or any Secured Party by any party of any claim relating
to such Hazardous Materials on, under or from the Mortgaged Property or actions
taken with respect thereto as authorized hereunder, except to the extent
arising from the gross negligence or willful misconduct of the Mortgagee or any
other Secured Party.  The foregoing
indemnification shall survive repayment of all Secured Obligations and any
release or assignment hereof.

 

(ii)           Asbestos.
The Mortgagor shall not install nor permit to be installed in or removed from
the 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 currently
present in the Mortgaged Property, the Mortgagor shall promptly either
(A) to the extent permitted by the Mortgaged Lease, remove any ACM which
such Environmental Laws require to be removed or (B) otherwise comply, in
all material respects, with such Environmental Laws with respect to such ACM,
all at the Mortgagor’s sole cost and expense. 
If the Mortgagor shall fail so to remove any

 

24

 

ACM or otherwise
comply, in all material respects, with such laws or regulations, the Mortgagee
may, in addition to any other remedies set forth herein, take reasonable or necessary
steps to eliminate any ACM from the Mortgaged Property or otherwise comply, in
all material respects, with applicable law, regulations or orders and the
Mortgagor shall provide to the Mortgagee and its agents and employees access to
the Mortgaged Property for such purpose. 
Any reasonable costs or expenses incurred by the Mortgagee for such
purpose shall be immediately due and payable by the Mortgagor and bear interest
at the Default Rate.  The Mortgagor shall
indemnify and hold the Mortgagee 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 other Secured Parties may sustain, as a result of the presence
of any ACM and any removal thereof from the Leasehold Premises by the Mortgagee
or compliance with all applicable Environmental Laws, except to the extent
arising from the gross negligence or willful misconduct of the Mortgagee or any
other Secured Party.  The foregoing
indemnification shall survive repayment of all Secured Obligations and any
release or assignment hereof.

 

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

 

ARTICLE V

 

LEASES

 

SECTION 5.1  Mortgagor’s Affirmative Covenants with
Respect to Leases.  With respect to
each Lease, the Mortgagor shall:

 

(i)            observe
and perform, in all material respects, all the obligations imposed upon the
Landlord under such Lease;

 

(ii)           promptly
send copies to the Mortgagee of all notices of default which the Mortgagor
shall send or receive thereunder; and

 

(iii)          enforce
all of the terms, covenants and conditions contained in such Lease upon the
part of the Tenant thereunder to be observed or performed to the extent it
would be commercially reasonable to do so.

 

SECTION 5.2  Mortgagor’s Negative Covenants with
Respect to Leases.  With respect to
each Lease, the Mortgagor shall not, without the prior written consent of the
Mortgagee, which consent shall not be unreasonably withheld:

 

25

 

(i)            receive
or collect, or permit the receipt or collection of, any Rent under such Lease
more than one (1) month in advance of the respective period in respect of which
such Rent is to accrue, except:

 

(A)                              in connection with the
execution and delivery of such Lease (or of any amendment to such Lease), Rent
thereunder may be collected and received in advance in an amount not in excess
of one (1) month’s Rent;

 

(B)                                the amount held by
Landlord as a reasonable security deposit thereunder; and

 

(C)                                any amount received and
collected for escalation and other charges in accordance with the terms of such
Lease;

 

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

 

(iii)          enter
into any amendment or modification of such Lease which would materially
decrease the unexpired term thereof or decrease the amount of the Rents payable
thereunder or materially impair the value or utility of the Mortgaged Property
or the security provided by this Mortgage;

 

(iv)          terminate
(whether by exercising any contractual right of the Mortgagor to recapture
leased space or otherwise) or permit the termination of such Lease or accept
surrender of all or any portion of the space demised under such Lease prior to
the end of the term thereof or accept assignment of such Lease to the Mortgagor
unless:

 

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

 

(B)                                it would be
commercially reasonable to terminate such Lease; or

 

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

 

SECTION 5.3  Additional Requirements with Respect to
New Leases.  In addition to the
requirements of Sections 5.1 and 5.2 hereof, the Mortgagor shall
not enter into any Lease after the date hereof unless the Tenant under such
Lease has entered into a Subordination Agreement and has otherwise complied
with the provisions of Section 10.06 of the Indenture.

 

26

 

ARTICLE VI

 

CONCERNING ASSIGNMENT OF
LEASES AND RENTS

 

SECTION 6.1  Present Assignment; License to the
Mortgagor.  Section
2.2 of this Mortgage constitutes a present, absolute, effective,
irrevocable and complete assignment by the Mortgagor to the Mortgagee of the
Leases and Rents and the right, subject to applicable law, to collect all sums
payable to the Mortgagor thereunder and apply the same as the Mortgagee may, in
its sole discretion, determine to be appropriate (including the payment of
reasonable costs and expenses in connection with the maintenance, operation,
improvement, insurance, taxes and upkeep of the Mortgaged Property), which is
not conditioned upon the Mortgagee being in possession of the Leasehold
Premises.  The Mortgagee hereby grants to
the Mortgagor, however, a license to collect and apply the Rents and to enforce
the obligations of Tenants under the Leases. 
Immediately upon the occurrence of and during the continuance of any
Event of Default or a Default, the license granted in the immediately preceding
sentence shall cease and terminate, with or without any notice, action or
proceeding or the intervention of a receiver appointed by a court.

 

SECTION 6.2  Collection of Rents by the Mortgagee.

 

(i)            From
and after the occurrence and during the continuance of an Event of Default or a
Default, any Rents receivable by the Mortgagee hereunder, after payment of all
proper costs and expenses as Mortgagee may, in its sole discretion, determine
to be appropriate (including the payment of reasonable costs and expenses in
connection with the maintenance, operation, improvement, insurance, taxes and
upkeep of the Mortgaged Property), shall be applied to the Secured Obligations
or, at the option of the Mortgagee, shall be held by the Mortgagee as additional
collateral to secure the performance by the Mortgagor of the Secured
Obligations.  The Mortgagee shall be
accountable to the Mortgagor only for Rents actually received by the Mortgagee.  The collection of such Rents and the
application thereof shall not cure or waive any Event of Default or a Default
or waive, modify or affect notice of Event of Default or a Default or
invalidate any act done pursuant to such notice.

 

(ii)           The
Mortgagor hereby irrevocably authorizes and directs Tenant under each Lease to
rely upon and comply with any and all notices or demands from the Mortgagee for
payment of Rents to the Mortgagee and the Mortgagor shall have no claim against
Tenant for Rents paid by Tenant to the Mortgagee pursuant to such notice or
demand.

 

SECTION 6.3  No Release.  Neither this Mortgage nor any action or
inaction 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 respective
obligations under such Leases or constitute an assumption of any such
obligation on the part of the Mortgagee. 
No action or failure to act on the part of the Mortgagor shall adversely
affect or limit the rights of the Mortgagee under this Mortgage or, through
this 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 conditions contained in any
Lease or otherwise to impose any obligation upon the Mortgagee with respect to
such Lease (including, without limitation, any obligation arising out of any
covenant of quiet enjoyment contained in such Lease in the event that Tenant
under such Lease shall have been joined as a party defendant in any action by
which the estate of such Tenant

 

27

 

shall
be terminated) or (ii) place upon the Mortgagee any obligation for the
operation, control, care, management or repair of the Leasehold Premises.

 

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

 

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

 

ARTICLE VII

 

TAXES AND CERTAIN
STATUTORY LIENS

 

SECTION 7.1  Payment of Charges.  Unless and to the extent contested by the Mortgagor
in accordance with the provisions of Article IX hereof, the
Mortgagor shall pay and discharge, or cause to be paid and discharged, from
time to time when the same shall become due (or within any applicable grace
period), to the extent such payment and discharge shall be due from the
Mortgagor pursuant to the terms of the Mortgaged Lease, all Charges subject to
this Article VII.  The
Mortgagor shall, upon the Mortgagee’s request, deliver to the Mortgagee
evidence of the payment under the Mortgaged Lease of all such Charges.

 

SECTION 7.2  Escrow of Taxes.  From and after the occurrence and during the
continuance of an Event of Default or a Default, at the option and upon the
request of the Mortgagee, the Mortgagor shall deposit with the Mortgagee in an
account maintained by the Mortgagee (the “Tax Escrow Fund”), on the
first day of each month, an amount estimated by the Mortgagee to be equal to
one-twelfth of the annual real property taxes and other annual Charges required
to be discharged by the Mortgagor under Section 7.1 hereof.  Such amounts shall be held by the Mortgagee
without interest to the Mortgagor and applied to the payment of the obligations
in respect of which such amounts were deposited, in such priority as the
Mortgagee shall determine, on or before the respective dates on which such
obligations or any part thereof would become delinquent.  Nothing contained in this Article VII
shall (i) affect any right or remedy of the Mortgagee under any provision
hereof or of any statute or rule of law to pay any such amount as provided
above from its own funds and to add the amount so paid, together with interest
at the Default Rate during such time that any amount remains outstanding, to
the Secured Obligations or (ii) relieve the Mortgagor of its obligations
to make or provide for the payment of the annual real property taxes and other
annual Charges required to be discharged by the Mortgagor under Section 7.1
hereof.  Notwithstanding the provisions
of this Section 7.2,  no deposit
with the Mortgagee in respect of any Charge shall be required if and for so
long as deposits in respect of such Charge are made by the Mortgagor to the
Lessor (or by the Lessor itself) under the Mortgaged Leased; provided, however,
at the time of such payment, Mortgagor shall give written notice of the same to
the Mortgagee and; further provided, that such payment shall not be in
violation of any previous written instructions received by the Mortgagor from
the Mortgagee.

 

28

 

SECTION 7.3  Certain Statutory Liens.  Unless and to the extent contested by the
Mortgagor in accordance with the provisions of Article IX hereof,
the Mortgagor shall timely pay, or cause to be paid, all lawful claims and
demands of mechanics, materialmen, laborers, government agencies administering
worker’s compensation insurance, old age pensions and social security benefits
and all other claims, judgments, demands or amounts of any nature which relate
to the Mortgagor’s (or its successors’ or assigns’) actions at or affecting the
Mortgaged Property and, if unpaid, would result in, or permit the creation of,
a Lien on the Mortgaged Property or any part thereof, or which would result in
forfeiture of all or any part of the Mortgaged Property.

 

SECTION 7.4  Stamp and Other Taxes.  Unless and to the extent contested by the
Mortgagor in accordance with the provisions of Article IX hereof,
the Mortgagor shall pay any United States documentary stamp taxes, with
interest and fines and penalties, and any mortgage recording taxes, with
interest and fines and penalties, that may hereafter be levied, imposed or
assessed under or upon or by reason hereof or the Secured Obligations or any
instrument or transaction affecting or relating to either thereof and in
default thereof the Mortgagee may advance the same and the amount so advanced
shall be payable by the Mortgagor to the Mortgagee in accordance with the
provisions of Section 14.5 hereof.

 

SECTION 7.5  Certain Tax Law Changes.  In the event of the passage after the date
hereof of any law deducting from the value of real property, for the purpose of
taxation, amounts in respect of any Lien thereon or changing in any way the
laws for the taxation of mortgages or debts secured by mortgages for state or
local purposes or the manner of the collection of any Charges, and imposing any
Charges, either directly or indirectly, on this Mortgage, the Indenture or any
other Collateral Document, the Mortgagor shall promptly pay to the Mortgagee
such amount or amounts as may be necessary from time to time to pay any such
Charges.

 

SECTION 7.6  Proceeds of Tax Claim.  In the event that the proceeds of any tax
claim to which Mortgagor is entitled pursuant to the provisions of the
Mortgaged Lease are paid after the Mortgagee has exercised its right to
foreclose the Lien hereof, such proceeds shall be paid to the Mortgagee to
satisfy any deficiency remaining after such foreclosure.  The Mortgagee shall retain its interest in
the proceeds of any tax claim during any redemption period.  Subject to the terms of the Mortgaged Leased,
the amount of any such proceeds in excess of any deficiency claim of the
Mortgagee shall in 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 of
the Leasehold Premises the insurance policies and coverages required under
Section 4.19(b) of the Indenture.

 

SECTION 8.2  Delivery After Foreclosure.  In the event that the proceeds of any
insurance claim to which the Mortgagor is entitled pursuant to the provisions
of the Mortgaged Lease are paid after the Mortgagee has exercised its right to
foreclose the Lien hereof, such proceeds shall be paid to

 

29

 

the Mortgagee to satisfy
any deficiency remaining after such foreclosure.  Mortgagee shall retain its interest in the
Insurance Policies required to be maintained pursuant to this Mortgage during
any redemption period. The amount of any such proceeds in excess of any
deficiency claim of the Mortgagee shall be released to the Mortgagor.

 

ARTICLE IX

 

CONTESTING OF PAYMENTS

 

SECTION 9.1  Contesting of Taxes and Certain Statutory
Liens.  The Mortgagor may at its own
expense contest the validity, amount or applicability of any Charges as long as
the contest thereof shall be conducted in accordance with, and permitted
pursuant 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 possible
criminal liability or (B) unless the Mortgagor shall have furnished a bond
or other security therefor reasonably satisfactory to the Mortgagee or such Holder,
as the case may be, including for any additional civil liability for failure to
comply with such obligations and (ii) if at any time payment or
performance of any obligation contested by the Mortgagor pursuant to this Section
9.1 shall become necessary to prevent the imminent imposition of remedies
because of non-payment, the Mortgagor shall pay or perform the same in
sufficient time to prevent the imposition of remedies in respect of such
default or prospective default.

 

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

 

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 shall
promptly send to the Mortgagee a written notice setting forth the nature and
extent of such Destruction.  To the
extent permitted under the Mortgaged Lease, the proceeds of any insurance
payable in respect of such Destruction are hereby assigned and shall be paid to
the Mortgagee.  The Net Loss Proceeds
arising out of such Destruction, shall be applied in accordance with the
provisions of Sections 4.16, 10.05(c) and 11.02 of the Indenture.

 

30

 

SECTION 10.2  Condemnation.  If there shall occur any Taking or the
commencement of any proceeding thereof, the Mortgagor shall immediately notify
the Mortgagee upon receiving notice of such Taking or commencement of
proceedings therefor.  The Mortgagee may,
at its option, participate in any proceedings or negotiations which might
result in any Taking, and the Mortgagor shall deliver or cause to be delivered
to the Mortgagee all instruments requested by it to permit such
participation.  The Mortgagee may be
represented by counsel reasonably satisfactory to it at the reasonable expense
of 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 and
in seeking and obtaining any award or payment on account thereof.  To the extent permitted under the Mortgaged
Lease, any proceeds, award or payment in respect of any Taking are hereby
assigned and shall be paid to the Mortgagee. 
The Mortgagor shall take all steps necessary to notify the condemning
authority of such assignment.  The Net
Loss Proceeds arising out of such Taking, shall be applied in accordance with
the provisions of Sections 4.16, 10.05(c) and 11.02 of the Indenture.

 

ARTICLE XI

 

EVENTS OF DEFAULT AND
REMEDIES

 

SECTION 11.1  Events of Default.  It shall be an Event of Default hereunder if
there shall have occurred and be continuing an Event of Default under the
Indenture.

 

SECTION 11.2  Remedies in Case of an Event of Default.  If any Event of Default shall have occurred
and be continuing, the Mortgagee may at its option, in addition to any other
action permitted under this Mortgage or the Indenture or by law, statute or in
equity, take one or more of the following actions to the greatest extent
permitted by local law:

 

(i)            by
written notice to the Issuer and the Mortgagor, declare the entire unpaid
amount of the Secured Obligations to be due and payable immediately;

 

(ii)           personally,
or by its agents or attorneys, (A) give notice of such Event of Default to
the Lessor, (B) to the extent permitted by the Mortgaged Lease and the Landlords’ Estoppel
Certificate and Agreement Among Interested Parties dated as of even date
herewith, act in all respects as lessee under the Mortgaged Lease and
perform on behalf of and for the account of the Mortgagor any of the
obligations of lessee thereunder, (C) enter into and upon and take
possession of all or any part of the Leasehold Premises, together with the
books, records and accounts of the Mortgagor relating thereto, and exclude the
Mortgagor, its agents and servants wholly therefrom, (D) use, operate,
manage and control the Leasehold Premises and conduct the business thereof,
(E) maintain and restore the Leasehold Premises, (F) make all necessary or
proper repairs, renewals and replacements and such useful Alterations thereto
and thereon as the Mortgagee may deem advisable, (G) manage, lease and
operate the Leasehold Premises and carry on the business thereof and exercise
all rights and powers of the Mortgagor with respect thereto either in the name
of the Mortgagor or otherwise or (H) collect and receive all Rents.  The Mortgagee shall be under no liability for
or by reason of any such taking of possession, entry,

 

31

 

removal or holding, operation or management except
that any amounts so received by the Mortgagee shall be applied in accordance
with the provisions of the Indenture;

 

(iii)          with
or without entry, personally or by its agents or attorneys, (A) sell the
Mortgaged Property and all estate, right, title and interest, claim and demand
therein at one or more sales in one or more parcels, in accordance with the
provisions of Section 11.3 or (B) institute and prosecute
proceedings for the complete or partial foreclosure of the Lien and security
interests created and evidenced hereby; or

 

(iv)          take
such steps to protect and enforce its rights whether by action, suit or
proceeding at law or in equity for the specific performance of any covenant,
condition or agreement in the Indenture, the Notes and the Collateral
Documents, or in aid of the execution of any power granted in this Mortgage, or
for any foreclosure hereunder, or for the enforcement of any other appropriate
legal or equitable remedy or otherwise as the Mortgagee shall elect.

 

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

 

(i)            If
any Event of Default shall have occurred and be continuing, the Mortgagee may
institute an action to foreclose this Mortgage or take such other action as may
be permitted and available to the Mortgagee at law or in equity for the enforcement
of the Indenture and the Notes and realization on the Mortgaged Property and
proceeds thereon through power of sale or to final judgment and execution
thereof for the Secured Obligations, and in furtherance thereof the Mortgagee
may sell the Mortgaged Property, at such time and place, upon such terms and
after such notice thereof as may be required or permitted by law or statute or
in equity.  The Mortgagee may execute and
deliver to the purchaser at such sale a conveyance of all the Mortgagor’s
Interest in the Leases and the Mortgaged Property, each of which conveyances
and assignments shall contain recitals as to the Event of Default upon which
the execution of the power of sale herein granted depends, and the Mortgagor
hereby constitutes and appoints the Mortgagee the true and lawful attorney in
fact of the Mortgagor to make any such recitals, sale, assignment and
conveyance, and all of the acts of the Mortgagee as such attorney in fact are
hereby ratified and confirmed.  The
Mortgagor agrees that such recitals shall be binding and conclusive upon the
Mortgagor and that any assignment or conveyance to be made by the Mortgagee
shall divest the Mortgagor of all right, title, interest, equity and right of
redemption, including any statutory redemption, in and to the Mortgaged
Property.  The power and agency hereby
granted are coupled with an interest and are irrevocable by death or
dissolution, or otherwise, and are in addition to any and all other remedies
which the Mortgagee may have hereunder, at law or in equity.  So long as the Secured Obligations, or any
part thereof, remain unpaid, the Mortgagor agrees that possession of the
Mortgaged Property by the Mortgagor, or any person claiming under the
Mortgagor, shall be as tenant, and, in case of a sale under power or upon
foreclosure as provided in this Mortgage, the Mortgagor and any person in
possession under the Mortgagor, as to whose interest such sale was not made
subject, shall, at the option of the purchaser at such sale, then become and be
tenants holding over, and shall forthwith deliver possession to such purchaser,
or be summarily dispossessed in accordance with the laws applicable to tenants
holding over.  One or more exercises of
powers herein granted shall not extinguish or exhaust such powers, until the
entire Mortgaged Property is sold or all amounts secured hereby are paid in
full.

 

32

 

(ii)           In
the 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, if
not previously due and payable, shall, at the option of the Mortgagee,
immediately become due and payable, anything in this Mortgage to the contrary
notwithstanding.

 

(iii)          The
proceeds 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 this
Mortgage, whether under the provisions of this Article XI or
otherwise, shall be applied in accordance with the provisions of the Indenture.

 

(iv)          The
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof at
any sale made under or by virtue of this Article XI and, in lieu of
paying cash therefor, may make settlement for the purchase price by crediting
against the purchase price the unpaid amounts (whether or not then due and
owing) in respect of the Secured Obligations, after deducting from the sales
price the expense of the sale and the reasonable costs of the action or
proceedings and any other sums that the Mortgagee is authorized to deduct under
this Mortgage.

 

(v)           The
Mortgagee may adjourn from time to time any sale by it to be made under or by
virtue hereof by announcement at the time and place appointed for such sale or
for such adjourned sale or sales, and, the Mortgagee, without further notice or
publication, may make such sale at the time and place to which the same shall
be so adjourned.

 

(vi)          If
the Leasehold Premises is comprised of more than one parcel of land, the
Mortgagee may take any of the actions authorized by this Section 11.3 in
respect of any or a number of individual parcels.

 

SECTION 11.4  Additional Remedies in Case of an Event of
Default.

 

(i)            The
Mortgagee shall be entitled to recover judgment as aforesaid either before,
after or during the pendency of any proceedings for the enforcement of the
provisions hereof, and the right of the Mortgagee to recover such judgment
shall not be affected by any entry or sale hereunder, or by the exercise of any
other right, power or remedy for the enforcement of the provisions hereof, or
the foreclosure of, or absolute conveyance pursuant to, this Mortgage.  In case of proceedings against the Mortgagor
in insolvency or bankruptcy or any proceedings for its reorganization or involving
the liquidation of its assets, the Mortgagee shall be entitled to prove the
whole amount of principal and interest and other payments, charges and costs
due in respect of the Secured Obligations to the full amount thereof without deducting
therefrom any proceeds obtained from the sale of the whole or any part of the
Mortgaged Property; provided, however, that in no case shall the
Mortgagee receive a greater amount than the aggregate of such principal,
interest and such other payments, charges and costs (with interest at the
Default Rate) from the proceeds of the sale of the Mortgaged Property and the
distribution from the estate of the Mortgagor.

 

(ii)           Any
recovery of any judgment by the Mortgagee and any levy of any execution under
any judgment upon the Mortgaged Property shall not affect in any manner or to
any extent the Lien and security interests created and evidenced hereby upon
the Mortgaged Property or any part thereof, or

 

33

 

any conveyances,
powers, rights and remedies of the Mortgagee hereunder, but such conveyances,
powers, rights and remedies shall continue unimpaired as before.

 

(iii)          Any
monies collected by the Mortgagee under this Section 11.4 shall be
applied in accordance with the provisions of Section 11.3(iii).

 

SECTION 11.5  Legal Proceedings After an Event of
Default.

 

(i)            After
the occurrence and during the continuance of any Event of Default and
immediately upon the commencement of any action, suit or legal proceedings to
obtain judgment for the Secured Obligations or any part thereof, or of any
proceedings to foreclose the Lien and security interest created and evidenced
hereby or otherwise enforce the provisions hereof or of any other proceedings
in aid of the enforcement hereof, the Mortgagor shall enter its voluntary appearance
in such action, suit or proceeding.

 

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

 

(iii)          The
Mortgagor shall not (A) at any time insist upon, or plead, or in any
manner whatsoever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property or any part thereof, wherever enacted, now or at any time hereafter
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 or
hereafter in force providing for the valuation or appraisal of the Mortgaged
Property, or any part thereof, prior to any sale or sales of the Mortgaged
Property which may be made pursuant to this Mortgage, or pursuant to any
decree, judgment or order of any court of competent jurisdiction or
(C) after any such sale or sales, claim or exercise any right under any
statute heretofore or hereafter enacted to redeem the property so sold or any
part thereof.  To the extent permitted by
applicable law, the Mortgagor hereby expressly (A) waives all benefit or
advantage of any such law or laws, including, without limitation, any statute
of limitations applicable to this Mortgage, (B) waives all rights to have the
Mortgaged Property marshalled on any foreclosure of this Mortgage, (C) waives
any and all rights to trial by jury in any action or proceeding related to the
enforcement hereof, (D) waives any objection which it may now or hereafter
have to the laying of venue of any action, suit or proceeding brought in
connection with this Mortgage and further waives and agrees not to plead that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum and (E) covenants not to hinder, delay or impede the
execution of any power granted or delegated to the Mortgagee by this Mortgage
but to suffer and permit the execution of every such power as though no such
law or laws had been made or enacted. 
The Mortgagee shall not be liable for any

 

34

 

incorrect or
improper payment made pursuant to this Article XI in the absence of
gross negligence or willful misconduct.

 

SECTION 11.6  Remedies Not Exclusive.  No remedy conferred upon or reserved to the
Mortgagee by this Mortgage is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Mortgage or now or hereafter
existing at law or in equity.  Any delay
or omission of the Mortgagee to exercise any right or power accruing on any
Event of Default shall not impair any such right or power and shall not be
construed to be a waiver of or acquiescence in any such Event of Default.  Every power and remedy given by this Mortgage
may be exercised from time to time concurrently or independently, when and as
often as may be deemed expedient by the Mortgagee in such order and manner as
the Mortgagee, in its sole discretion, may elect.  If the Mortgagee accepts any monies required
to be paid by the Mortgagor under this Mortgage after the same become due, such
acceptance shall not constitute a waiver of the right either to require prompt
payment, when due, of all other sums secured by this Mortgage or to declare an
Event of Default with regard to subsequent defaults.  If the Mortgagee accepts any monies required
to be paid by the Mortgagor under this Mortgage in an amount less than the sum
then due, such acceptance shall be deemed an acceptance on account only and on
the condition that it shall not constitute a waiver of the obligation of the
Mortgagor to pay the entire sum then due, and the Mortgagor’s failure to pay
the entire sum then due shall be and continue to be a default hereunder
notwithstanding acceptance of such amount on account.

 

SECTION 11.7  Sale of Mortgaged Lease.  The word “sale” as used in this Article XI
with respect to the Mortgaged Lease shall mean the sale, transfer, assignment
or conveyance for value of the leasehold interest of the Mortgagor in the
Mortgaged Lease, together with all of the Mortgagor’s right, title and interest
in and to the other items comprising the Mortgaged Property.

 

SECTION 11.8  Special Louisiana Provisions.

 

(i)            Without
limiting the generality of the foregoing, should one or more Events of Default
occur or exist and be continuing under this Mortgage, as provided above, the
Mortgagee, at its option, may exercise any one or more of this following rights
and remedies, in addition to any other rights and remedies provided by law and
under this Mortgage to the greatest extent permitted by applicable Louisiana
law.  Nothing contained herein shall be
construed as constituting the Mortgagee as mortgagee in possession in absence
of the actual taking of possession of the Leasehold Premises by the Mortgagee.

 

(ii)           The
Mortgagee shall have the right, at its sole option, to accelerate the maturity
and demand immediate payment in full of any and all of the Secured
Obligations.  The Mortgagee shall then
have the right to commence appropriate foreclosure proceedings against the
Mortgaged Property and against the Mortgagor’s rights as provided in this
Mortgage.

 

(iii)          In
the event that the Mortgagee elects to commence appropriate Louisiana
foreclosure proceedings under this Mortgage, the Mortgagee may cause the
Mortgaged Property, or any part or parts thereof, to be immediately seized and
sold, whether in term of court or in vacation, under ordinary or executory
process, in accordance with applicable Louisiana law, to the highest bidder for
cash,

 

35

 

with or without
appraisement, and without the necessity of making additional demand upon or
notifying the Mortgagor or placing the Mortgagor in default, all of which are
expressly waived.

 

(iv)          For
purposes of foreclosure under Louisiana executory process procedures, the
Mortgagor 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 amounts
contemplated hereunder.  The Mortgagor
further confesses judgment and acknowledges to be indebted unto and in favor of
the Mortgagee in the amount of all future advances that the Mortgagee may make
on the Mortgagor’s behalf pursuant to this Mortgage, together with interest
thereon.  To the extent permitted under
applicable Louisiana law, the Mortgagor additionally waives:  (1) the benefit of appraisal as provided in
Articles 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 demand
and three (3) days’ delay provided under Articles 22639 and 2721 of the
Louisiana Code of Civil Procedure; (3) the notice of seizure as provided under
Articles 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 Louisiana
Code of Civil Procedure and all other Articles not specifically mentioned
above.  The Mortgagor further agrees that
any declaration of fact made by authentic act before a Notary Public and two
witnesses, by a Person declaring that such facts are within his or her
knowledge, shall constitute authentic evidence of such facts for purposes of
foreclosure 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)           Should any
or all of the Mortgaged Property be seized as an incident to an action for the
recognition or enforcement of this Mortgage, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, the Mortgagor
hereby agrees that the court issuing any such order shall, if requested by the
Mortgagee, appoint the Mortgagee, or any agent designated by the Mortgagee or
any Person named by the Mortgagee at the time such seizure is requested, or any
time thereafter, as Keeper of the Mortgaged Property as provided under La. R.S.
9:5136, et seq.  Such a Keeper shall be
entitled to reasonable compensation.  The
Mortgagor agrees to pay the reasonable fees of such Keeper which compensation
to the Keeper shall also be secured by this Mortgage in the form of any future
advances as provided in this Mortgage.

 

(vi)          Should it
become necessary for the Mortgagee to foreclose under this Mortgage, all
declarations of fact, which are made under an authentic act before a Notary
Public in the presence of two witnesses, by a person declaring such facts to
lie within his or her knowledge, shall constitute authentic evidence for
purposes 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.

 

(vii)         Should
one or more Events of Default occur or exist under this Mortgage, the Mortgagee
shall have the additional right, at its sole option, to separately sell the
aforesaid rights, or any part of parts thereof, at private or public
compensation, or on credit, or for future delivery, without the assumption of
any credit risk.  The sale of the
aforesaid rights may be without appraisement, the benefit of which is also
expressly waived by the Mortgagor.  The
Mortgagee may exercise any other remedies with regard to the Mortgagor’s rights
as may be authorized under the Louisiana Commercial Laws (La. R.S. 10:9-101, et
seq.).

 

36

 

(viii)        To
the extent provided by law, and in the event of foreclosure under this Mortgage,
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 rights applicable to the
foreclosed Mortgaged Property upon transfer of the Mortgaged Property shall
automatically inure to the benefit of and shall pass to the purchaser(s) or
transferee(s) thereof, subject to the rights of the purchaser(s) or
transferee(s) to reject such insurance coverage and/or rights at its or their
sole option and election.

 

(ix)           The
Mortgagee may, in addition to or in lieu of the foregoing remedies, in the
Mortgagee’s sole discretion, commence an appropriate action against the
Mortgagor seeking specific performance of any covenant contained in this
Mortgage or in aid of the execution or enforcement of any power in this
Mortgage granted.

 

(x)            Except as
may be prohibited by applicable law, all of the Mortgagee’s rights and
remedies, whether evidenced by this Mortgage or by any other writing, shall be
cumulative and may be exercised singularly or concurrently.  Election by the Mortgagee to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of the Mortgagor under
this Mortgage, after the Mortgagor’s failure to perform shall not affect the
Mortgagee’s right to declare a default and exercise its remedies.  Nothing under this Mortgage or otherwise
shall be construed so as to limit or restrict the rights and remedies available
to the Mortgagee following an Event of Default, or in any way to limit or
restrict the rights and abilities of the Mortgagee to proceed directly against
Mortgagor and/or against any other co-maker, guarantor, surety or endorser of
the Secured Obligations, and/or to proceed against any other collateral
directly or indirectly securing the Secured Obligations.

 

ARTICLE XII

 

SECURITY AGREEMENT AND
FIXTURE FILING

 

SECTION 12.1  Security Agreement.

 

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

 

(ii)           The remedies for any
violation of the covenants, terms and conditions of the agreements herein
contained shall be as prescribed herein or by general Louisiana law or, as to
such part of the security which is also reflected in any financing statement
filed to perfect the security interest herein created, by the specific
statutory provisions now or hereinafter enacted and specified in the Louisiana
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 to
income growing out of the use or occupancy of the Mortgaged Property whether
pursuant

 

37

 

to
lease or otherwise, shall never be construed as in any way altering any of the
rights of Mortgagee under this Mortgage or impugning the priority of the
Mortgagee’s lien granted hereby or by any other recorded document.  Rather, such mention in the financing statement
is declared to be for the protection of the Mortgagee in the event any 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 against a particular
class of persons, including, but not limited to, the Federal Government and any
subdivisions or entity of the Federal Government, must be filed with the clerk
of court of any parish (or Jefferson Parish Recorder of Mortgages) pursuant to
Section 9-401 of the Louisiana Commercial Laws.

 

SECTION 12.2 
Fixture Filing.  From the date of
its recording, this Mortgage shall be effective as a fixture financing
statement with respect to all goods constituting part of the Mortgaged Property
which are to become fixtures related to the Land.  For this purpose, the following information
is set forth:

 

(a)           Name
and Address of Debtor:

 

Jalou
of Jefferson, LLC

7340 Westbank Expressway

Marrero, Louisiana  70072

 

and

 

(b)           Name
and Address of Secured Party:

 

Wells
Fargo Bank, National Association

Corporate Trust Services 

213 Court Street, Suite 703

Middletown, Connecticut 06457

 

(c)           This
document covers goods which are to become fixtures.  All items that are fixtures on the date of
this Mortgage shall be subject to the mortgage Lien granted hereunder.

 

ARTICLE XIII

 

FURTHER ASSURANCES

 

SECTION 13.1  Recording Documentation To Assure Security.  The Mortgagor shall, forthwith after the
execution and delivery hereof and thereafter, from time to time, cause this
Mortgage and any financing statement, continuation statement or similar
instrument relating to any thereof or to any property 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 by any present or future law in order to publish
notice of and fully to protect the validity and priority thereof or the Lien
hereof purported to be created upon the Mortgaged Property and the interest and
rights of the Mortgagee therein.  The
Mortgagor shall (if it has not already done so), at its sole cost and expense,
properly, duly and validly record an appropriate memorandum of the Mortgaged
Lease and any amendments or supplements thereto in each jurisdiction in which
any of the

 

38

 

Leasehold
Premises may be situated.  The Mortgagor
shall pay or cause to be paid all taxes and fees incident to such filing,
registration and recording, and all reasonable expenses incident to the
preparation, execution and acknowledgment thereof, and of any instrument of
further assurance, and all Federal or state stamp taxes or other taxes, duties
and charges arising out of or in connection with the execution and delivery of
such instruments.

 

SECTION 13.2  Further Acts.  The Mortgagor shall, at the sole cost and
expense of the Mortgagor, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements,
instruments and assurances as the Mortgagee shall from time to time reasonably
request, which may be necessary in the judgment of the Mortgagee from time to
time to assure, perfect, convey, assign, mortgage, transfer and confirm unto
the Mortgagee, the property and rights hereby conveyed or assigned or which the
Mortgagor may be or may hereafter become bound to convey or assign to the
Mortgagee or for carrying out the intention or facilitating the performance of
the terms hereof or the filing, registering or recording hereof.  Without limiting the generality of the
foregoing, in the event that the Mortgagee desires to exercise any remedies,
consensual rights or attorney-in-fact powers set forth in this Mortgage and
determines it necessary to obtain any approvals or consents of any Governmental
Authority or any other Person therefor, then, upon the reasonable request of
the Mortgagee, the Mortgagor agrees to use its reasonable efforts to assist and
aid the Mortgagee to obtain as soon as practicable any necessary approvals or
consents 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 any
action required to be executed or taken by the Mortgagor under this Section
13.2 to the extent same is necessary to maintain perfection of the Lien
granted to Mortgagee 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 Mortgagor under 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
the attorney-in-fact for the Mortgagor, such power of attorney being coupled
with an interest and is irrevocable.

 

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

 

ARTICLE XIV

 

MISCELLANEOUS

 

SECTION 14.1  Covenants To Run with the Leasehold
Premises.  All of the grants,
covenants, terms, provisions and conditions in this Mortgage shall run with the
Leasehold Premises and shall apply to, and bind the successors and assigns of,
the Mortgagor.  If there shall be more
than one mortgagor with respect to the Mortgaged Property, the covenants and
warranties hereof shall be joint and several.

 

39

 

SECTION 14.2  No Merger.  The rights and estate created by this
Mortgage shall not, under any circumstances, be held to have merged into any
other estate or interest now owned or hereafter acquired by the Mortgagee
unless the Mortgagee shall have consented to such merger in writing, such
consent not to be unreasonably withheld.

 

SECTION 14.3  Concerning Mortgagee.

 

(i)            The
Mortgagee has been appointed as trustee pursuant to the Indenture.  The actions of the Mortgagee hereunder are
subject to the provisions of the Indenture. 
The Mortgagee shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking action (including, without limitation, the release or
substitution of the Mortgaged Property), in accordance with this Mortgage and
the Indenture.  The Mortgagee may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith.  The Mortgagee may
resign and a successor Mortgagee may be appointed in the manner provided in the
Indenture.  Upon the acceptance of any
appointment as the Mortgagee by a successor Mortgagee, that successor Mortgagee
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Mortgagee under this Mortgage, and the
retiring Mortgagee shall thereupon be discharged from its duties and obligations
under this Mortgage.  After any retiring
Mortgagee’s resignation, the provisions hereof shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Mortgage while it was
the Mortgagee.

 

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

 

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

 

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

 

SECTION 14.4  Mortgagee May Perform; Mortgagee Appointed
Attorney-in-Fact.  If the Mortgagor
shall fail to perform any covenants contained in this Mortgage, subject to any
applicable grace periods or contest rights permitted pursuant to Article IX
hereof or as otherwise permitted by any Collateral Document (including, without
limitation, the Mortgagor’s covenants to (i) pay the premiums in respect of all
required insurance policies hereunder, (ii) pay Charges, (iii) make repairs,
(iv) discharge

 

40

 

Liens
or (v) pay or perform any obligations of the Mortgagor under any Mortgaged
Property) or if any warranty on the part of the Mortgagor contained herein
shall be breached, the Mortgagee may (but shall not be obligated to) do the
same or cause it to be done or remedy any such breach, and may expend funds for
such purpose; provided, however, that the Mortgagee shall in no
event be bound to inquire into the validity of any tax, Lien, imposition or
other obligation which the Mortgagor fails to pay or perform as and when
required hereby and which the Mortgagor does not contest in accordance with the
provisions of Article IX hereof. 
Any and all amounts reasonably so expended by the Mortgagee shall be
paid by the Mortgagor in accordance with the provisions of Section 14.5
hereof.  Neither the provisions of this Section
14.4 nor any action taken by the Mortgagee pursuant to the provisions of
this Section 14.4 shall prevent any such failure to observe any covenant
contained in this Mortgage nor any breach of warranty from constituting an
Event of Default.  Upon the occurrence
and during the continuance of an Event of Default the Mortgagor hereby appoints
the Mortgagee its attorney-in-fact, with full authority in the place and stead
of the Mortgagor and in the name of the Mortgagor to take any action and to
execute any instrument consistent with the terms hereof and the other
Collateral Documents which the Mortgagee may deem necessary or advisable to
accomplish the purposes hereof.  The
foregoing grant of authority is a power of attorney coupled with an interest
and such appointment shall be irrevocable for the term hereof.  The Mortgagor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.

 

SECTION 14.5  Expenses  The Mortgagor will upon demand pay to the
Mortgagee the amount of any and all reasonable costs and expenses, including
the reasonable fees and expenses of its counsel and the reasonable fees and
expenses of any experts and agents which the Mortgagee may incur in connection
with (i) any action, suit or other proceeding affecting the Mortgaged Property
or any part thereof commenced, in which action, suit or proceeding the
Mortgagee is made a party or participates or in which the right to use the
Mortgaged Property or any part thereof is threatened, or in which it becomes
necessary in the judgment of the Mortgagee to defend or uphold the Lien hereof
(including, without limitation, any action, suit or proceeding to establish or
uphold the compliance of the Mortgaged Property with any Requirements of Law),
(ii) the collection of the Secured Obligations, (iii) the enforcement
and 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 any
Secured Party hereunder or (vi) the failure by the Mortgagor to perform or
observe any of the provisions hereof. 
All amounts expended by the Mortgagee and payable by the Mortgagor under
this Section 14.5 shall be due upon demand therefor (together with
interest thereon accruing at the Default Rate during the period from and
including the date on which such funds were so expended to the date of
repayment) and shall be part of the Secured Obligations.  The Mortgagor’s obligations under this Section 14.5
shall survive the termination hereof and the discharge of the Mortgagor’s other
obligations under this Mortgage.

 

SECTION 14.6  Indemnity.

 

(i)            The
Mortgagor agrees to indemnify, pay and hold harmless the Mortgagee and each of
the other Secured Parties and the officers, directors, employees, agents and
Affiliates of the Mortgagee and each of the other Secured Parties
(collectively, the “Indemnitees”) from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs (including, without limitation, settlement costs),
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in

 

41

 

connection with
any investigative, administrative or judicial proceeding, commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto), which may be imposed on, incurred by or asserted against that
Indemnitee, in any manner relating to or arising out hereof, the Indenture, the
Notes, any other Collateral Document or any other document evidencing the
Secured Obligations (including, without limitation, any misrepresentation by the
Mortgagor in this Mortgage, the Indenture, the Notes, any other Collateral
Document or any other document evidencing the Secured Obligations (the “Indemnified
Liabilities”); provided, however, that the Mortgagor shall
have no obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities to the extent it has been determined by a final decision (after all
appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liabilities arose from the gross negligence
or willful misconduct of that Indemnitee. 
To the extent that the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Mortgagor shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.

 

(ii)           Survival.  The obligations of the Mortgagor contained in
this Section 14.6 shall survive the termination hereof and the discharge
of the Mortgagor’s other obligations under this Mortgage, the Indenture and the
other Collateral Documents.

 

(iii)          Reimbursement.  Any amount paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Mortgaged Property.

 

SECTION 14.7  Continuing Security Interest; Assignment.  This Mortgage shall create a continuing Lien
on and security interest in the Mortgaged Property and shall (i) be
binding upon the Mortgagor, its respective successors and assigns and
(ii) inure, together with the rights and remedies of the Mortgagee
hereunder, to the benefit of the Mortgagee and the other Secured Parties and
each of their respective successors, transferees and assigns.  No other Persons (including, without
limitation, any other creditor of Mortgagor) shall have any interest herein or
any right or benefit with respect hereto. 
Without limiting the generality of the foregoing clause (ii), any
Holder of the Notes may assign or otherwise transfer any indebtedness held by
it that is secured by this Mortgage to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Holder, herein or otherwise, subject however, to the provisions of the
Indenture.

 

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

 

SECTION 14.9  Modification in Writing.  No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by the Mortgagor therefrom, shall be effective unless the same shall
be done in accordance with the terms of the Indenture and unless in writing and
signed 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 the
Mortgagor from the terms of any provision hereof shall be effective only in the
specific instance and for the specific purpose for which made or given.  Except where notice is specifically required
by this Mortgage or any other Collateral Document, no notice to or demand on
the Mortgagor in

 

42

 

any
case shall entitle the Mortgagor to any other or further notice or demand in
similar or other circumstances.

 

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

 

SECTION 14.11  GOVERNING LAW; SERVICE OF PROCESS; WAIVER
OF JURY TRIAL.  THIS MORTGAGE SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE IN WHICH THE LEASEHOLD PREMISES ARE LOCATED, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR ITEM OR TYPE OF MORTGAGED PROPERTY ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.  THE MORTGAGOR AGREES THAT SERVICE OF PROCESS
IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
THE ISSUER AT ITS ADDRESS SET FORTH IN THE INDENTURE OR AT SUCH OTHER ADDRESS
OF WHICH THE MORTGAGEE SHALL HAVE BEEN NOTIFIED PURSUANT THERETO.  IF ANY AGENT APPOINTED BY THE MORTGAGOR
REFUSES TO ACCEPT SERVICE, THE MORTGAGOR HEREBY AGREES THAT SERVICE UPON IT BY
MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. 
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE MORTGAGEE TO BRING
PROCEEDINGS AGAINST THE MORTGAGOR IN THE COURTS OF ANY OTHER JURISDICTION.  THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 14.12  Severability of Provisions.  Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

 

SECTION 14.13  Limitation on Interest Payable.  It is the intention of the parties to conform
strictly to the usury laws, whether state or Federal, that are applicable to
the transaction of which this Mortgage is a part.  All agreements between the Mortgagor and the
Mortgagee, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid by the Mortgagor for the use,
forbearance or detention of the money to be loaned or advanced under the
Indenture or any related document or for the payment or performance of any
covenant or obligation contained herein or in the Indenture or any related
document exceed the maximum amount permissible under applicable Federal or
state usury laws.  If under

 

43

 

any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity. 
If under any circumstances the Mortgagor shall have paid an amount
deemed interest by applicable law, which would exceed the highest lawful rate,
such amount that would be excessive interest under applicable usury laws shall
be applied to the reduction of the principal amount owing 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 any other amounts due
hereunder, the excess shall be refunded to the Mortgagor.  All sums paid or agreed to be paid for the
use, forbearance or detention of the principal under any extension of credit by
the Mortgagee shall, to the extent permitted by applicable law, and to the
extent necessary to preclude exceeding the limit of validity prescribed by law,
be amortized, prorated, allocated and spread from the date hereof until payment
in full of the Secured Obligations so that the actual rate of interest on
account of such principal amounts is uniform throughout the term hereof.

 

SECTION 14.14  Business Days.  In the event any time period or any date
provided 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 to
fall on the next succeeding Business Day, and performance herein may be made on
such 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 the
Mortgagor hereunder is strictly and solely that of lender and borrower and
mortgagor and mortgagee and nothing contained in the Indenture, the Notes, this
Mortgage or any other document or instrument now existing and delivered in
connection therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be
construed as creating a partnership, joint venture, tenancy-in-common, joint
tenancy or other relationship of any nature whatsoever between the Mortgagee
and the Mortgagor other than as lender and borrower and mortgagor and
mortgagee.

 

SECTION 14.16  Waiver of Stay.

 

(i)            The
Mortgagor agrees that in the event that the Mortgagor or any property or assets
of the Mortgagor shall hereafter become the subject of a voluntary or
involuntary proceeding under the Bankruptcy Code or the Mortgagor shall
otherwise be a party to any Federal or state bankruptcy, insolvency, moratorium
or similar proceeding to which the provisions relating to the automatic stay
under Section 362 of the Bankruptcy Code or any similar provision in any such
law is applicable, then, in any such case, whether or not the Mortgagee has
commenced foreclosure proceedings under this Mortgage, the Mortgagee shall be
entitled to relief from any such automatic stay as it relates to the exercise
of any of the rights and remedies (including, without limitation, any foreclosure
proceedings) available to the Mortgagee as provided in this Mortgage, in any
other Collateral Document or any other document evidencing the Secured
Obligations.

 

(ii)           The
Mortgagee shall have the right to petition or move any court having jurisdiction
over any proceeding described in Section 14.16(i) hereof for the
purposes provided therein, and the Mortgagor agrees (i) not to oppose any such
petition or motion and (ii) at the Mortgagor’s sole cost and expense, to assist
and cooperate with the Mortgagee, as may be requested by the Mortgagee from
time to time, in obtaining any relief requested by the Mortgagee, including,
without limitation, by filing any such

 

44

 

petitions,
supplemental petitions, requests for relief, documents, instruments or other
items from time to time requested by the Mortgagee or any such court.

 

SECTION 14.17  No Credit for Payment of Taxes or
Impositions.  The Mortgagor shall not
be entitled to any credit against the principal, premium, if any, or interest
payable under the Indenture or the Notes, and the Mortgagor shall not be
entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Charge on the Mortgaged
Property or any part thereof.

 

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

 

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

 

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

 

(ii)           any
lack of validity or enforceability of the Indenture, the Notes or any other
agreement or instrument relating thereto;

 

(iii)          any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture, the Notes or any other agreement
or instrument relating thereto;

 

(iv)          any
exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to any departure from any guarantee, for all
or any of the Secured Obligations;

 

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

 

(vi)          any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, the Mortgagor.

 

SECTION 14.20  Last Dollars Secured.  This Mortgage secures only a portion of the
Indebtedness owing or which may become owing by the Mortgagor.  The parties agree that any payments

 

45

 

or
repayments of such Indebtedness by the Mortgagor shall be and be deemed to be
applied first to the portion of the Indebtedness that is not secured hereby, it
being the parties’ intent that the portion of the Indebtedness last remaining
unpaid shall be secured hereby.

 

SECTION 14.21  Mortgaged Lease.

 

(i)            The
Mortgagor shall punctually and properly perform, observe and otherwise comply
in all material respects with each and every covenant, agreement, requirement
and condition set forth in the Mortgaged Lease and do or cause to be done all
things necessary or appropriate to keep the Mortgaged Lease in full force and
effect and to preserve and keep unimpaired the rights of the Mortgagor
thereunder.  Upon the reasonable request
of the Mortgagee at reasonable intervals, the Mortgagor shall, subject to the
terms of the Mortgaged Lease, request from the Lessor an estoppel certificate,
addressed to the Mortgagee, stating that there is no default under the
Mortgaged Lease, or any state of facts which, with the passage of time or
notice or both, would constitute a default thereunder, or if there be any
default under the Mortgaged Lease, giving the details thereof.

 

(ii)           In
the event the Mortgagor acquires the fee simple title or any other estate or
interest in the property subject to the Mortgaged Lease, such acquisition will
not merge with the leasehold estate created by the Mortgaged Lease, but such
other estate or interest will remain discrete and immediately become subject to
the Lien of this Mortgage, and the Mortgagor shall execute, acknowledge and
deliver any instruments requested by the Mortgagee to confirm the coverage of
the Lien evidenced hereby upon such other estate or interest.  The Mortgagor shall pay any and all
conveyance or mortgage taxes and filing or similar fees in connection with the
execution, delivery, filing or recording of any such instrument.

 

(iii)          The
Mortgagor shall promptly notify the Mortgagee in writing of the occurrence of
any default (or any event which, with the lapse of time or notice or both,
would constitute a default) on the part of or caused by any party to the
Mortgaged Lease.  If for any reason the
Mortgagor cannot timely make any payment under the Mortgaged Lease or perform
or comply with any of its obligations under the Mortgaged Lease, the Mortgagor
shall notify the Mortgagee in sufficient time to enable the Mortgagee (but the
Mortgagee shall not be obligated) timely to make such payments and/or to
perform or comply with such other obligations. 
On receipt by the Mortgagee from the Mortgagor pursuant to this Section
14.21(iii), or from the Lessor under the Mortgaged Lease, of any such
notice of default by, or inability to make any payment by, the Mortgagor
thereunder, the Mortgagee may rely thereon and, after reasonable notice to the
Mortgagor, take such action as the Mortgagee deems necessary or desirable to
cure such default, even though the existence of such default or the nature
thereof is denied by the Mortgagor or by any other Person.

 

(iv)          Except
as otherwise permitted under Section 10.6 of the Indenture, the Mortgagor
shall not, without the prior written consent of the Mortgagee which consent
shall not be unreasonably withheld, amend, modify, surrender, impair, forfeit,
cancel or terminate, or permit the amendment, modification, surrender,
impairment, forfeiture, cancellation or termination of, the Mortgaged Lease in
whole or in part, whether or not a default shall have occurred and shall be
continuing under either thereof.  Any
such termination, cancellation, modification, change, supplement, alteration,
amendment or extension

 

46

 

without the prior
written consent contemplated by this subsection 14.21(iv) shall be void and of
no force or effect.

 

(v)           The
leasehold estate of the Mortgagor created by the Mortgaged Lease and the estate
of the Lessor under the Mortgaged Lease shall each at all times remain separate
and apart and retain their separate identities, and no merger of the leasehold
or easement estate of the Mortgagor with the estate of the Lessor will result
with respect to the Mortgagee or with respect to any purchaser acquiring the
Mortgaged Property at any sale on foreclosure of the Lien of this Mortgage without
the written consent of the Mortgagee.

 

(vi)          The
Mortgagor covenants and agrees that if it shall be the subject of a proceeding
under the Federal Bankruptcy Code, it shall not elect to treat the Mortgaged
Lease as terminated (pursuant to Section 365 of the Federal Bankruptcy Code or
any similar statute or law) without the prior written consent of the Mortgagee
which consent shall not be unreasonably withheld.  The Mortgagor hereby irrevocably assigns to
the Mortgagee the right to exercise such election.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

47

 

THUS
DONE AND PASSED, on the day, month and year first written above, effective as
of the Effective Date, in the State and Parish aforesaid, by the undersigned
Mortgagor in the presence of the undersigned Notary and the undersigned
competent witnesses, who hereunto sign their names with Mortgagor after reading
of the whole.

 

 

	
  WITNESSES:

  	
  MORTGAGOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JALOU OF
  JEFFERSON, 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

  	
   

  
							

 

48

 

Schedule A

 

Legal Description

 

ONE CERTAIN LOT OF
GROUND, situated in the State of Louisiana, Parish of Jefferson, in that part
known as Ames Farms, which portion of ground is designated as LOT 25X2A on a
plat of survey and resubdivision by Dading, Marques and Associates, Inc., dated
October 22, 2002 last revised September 10, 2003 being composed of original Lot
24-A-1-A, and portions of Lots 25-X2 and 24-B-2-A Ames Farms and Lots P, O, Q,
and R Square 4 of Borne Subdivision, bounded by West Bank Expressway, Jung
Blvd., Rachel Street, Falcone Street, St. Rita Place, Fourth Street and Berger
Road and being more fully described as follows:

 

Commencing at the
northwest corner of Westbank Expressway and Berger Road, thence measure along
the north right of way line of West Bank Expressway in a westerly direction a
distance of 253.51 plan, 253.73 title to the point of beginning, thence measure
along said right of way in a westerly direction along the arc of a curve to the
right having a radius of 3785.02 a distance of 168.81’ to a point, thence
continue along said right of way line north 73 degrees 11’ 07” west a
distance of 344.16’ to a point, thence measure north 14 degrees 55’ 24” east a
distance of 304.24 plan, 307.76 actual to the south right of way line of
Rachel Street, thence measure along the south right of way line of Rachel
Street South 73 degrees 32’ 20” east a distance of 112.16’ to a point, thence
measure north 14 degrees 57’ 26” east a distance of 790.95’ to a point, thence
measure north 40 degrees 10’ 17” east a distance of 160.62’ to a point, thence
measure south 75 degrees 55’ 57” east a distance of 215.15 to a point,
thence measure south 14 degrees 04’ 03” west a distance of
256.20’ to a point, thence measure north 74 degrees 17’ 17” west a
distance of 97.78’ to a point, thence measure south 14 degrees 04’ 03” west a
distance of 300’ to a point, thence measure south 74 degrees 17’ 17” east a
distance of 195.56 to a point, thence measure south 14 degrees 04’ 03” west a
distance of 700’ to the point of beginning, and containing 10 acres.

 

49

 

Schedule B

 

Prior Liens

 

1.               Each
of the liens and other encumbrances excepted as being prior to the Lien hereof
as set forth in Schedule B to the marked title insurance commitment issued
by Lawyers Title Insurance Corporation, dated as of the date hereof and
delivered to the Trustee on the date hereof, bearing Lawyers Title Insurance
Corporation reference number 40887 /dd relating to the real property described
in Schedule A attached hereto.

 

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

 

Schedule C

 

Leases Affecting the Mortgaged Property

 

1.                                       Sublease
Agreement between Jalou of Jefferson, LLC, as Landlord, and Subway Real Estate
Corp., as Tenant, dated December 9, 2004.

 

2.                                       Sublease
Agreement between, Jalou of Jefferson, LLC, as Sub-lessor, and Point of Sale,
L.L.C. as Sub-lessee, dated July 1, 2004.

 

50

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]