ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment"), dated as
of the 2nd day of May 1996, given by GNOC, CORP. (successor by merger to
GNAC, Corp.), a New Jersey corporation ("Assignor"), having an office at
Boston and Pacific Avenues, P.O. Box 1737, Atlantic City, New Jersey 08404
to AMALGAMATED BANK OF CHICAGO, as trustee under the Indenture (as
hereinafter defined), having an address at 1 West Monroe Street, Chicago,
Illinois 60603 (the "Assignee").
W I T N E S S E T H :
Whereas, Assignor is the owner of certain real property situated
in Atlantic City, New Jersey, more particularly described on Exhibit A-1
annexed hereto and made a part hereof (the "Land"); and
Whereas, Assignor holds a leasehold interest under that certain
Amended and Restated Ground Lease (the "Ground Lease") of even date
herewith between Bally's Park Place, Inc., as lessor, and Assignor, as
lessee, covering the land described in Exhibit A-2 annexed hereto and made
a part hereof (the "Leasehold Estate"); and
Whereas, Assignor is the owner of the buildings and other
improvements now or hereafter erected on the Land and/or the Leasehold
Estate (such buildings and other improvements being hereinafter
collectively referred to as the "Buildings", the Land, the Leasehold Estate
and the Buildings being hereinafter collectively referred to as the
"Property"); and
Whereas, GNF, Corp. ("GNF") entered into an Indenture (the
"Indenture") dated as of March 10, 1993 between GNF as obligor, and
Assignee, as trustee, pursuant to which GNF executed and delivered its
10-5/8% First Mortgage Notes due 2003 (Series A) and 10-5/8% First Mortgage
Notes due 2003 (Series B) (together, the "Notes"), and Assignor executed
and delivered to
Assignee a Mortgage and Security Agreement with Assignment of Rents to
secure the Indenture and the Notes, covering the Property in the amount of
up to Two Hundred Seventy Five Million Dollars ($275,000,000); and
Whereas, to further secure the obligations of the Assignor under
the Indenture and the Notes, Assignor has executed and delivered to the
Assignee a Mortgage and Security Agreement with Assignment of Rents dated
as of May 2, 1996, covering the Property (the "Mortgage").
Now, Therefore, in consideration of the premises and in
consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration paid by Assignee to
Assignor, the receipt and sufficiency of which are hereby acknowledged, and
to better secure the payment to Assignee of (i) all monies that may be due
and payable under the Indenture, the Notes, and the Mortgage, and (ii) all
monies which may be advanced by Assignee on behalf of Assignor under the
terms of the Mortgage, Assignor and hereby agrees as follows:
32. Assignor hereby grants, transfers, bargains, sells,
assigns, conveys, and set over unto Assignee, its successors and assigns,
from and after the date hereof (including any period allowed by law for
redemption after any sale), all right, title and interest of the Assignor
in and to (i) all leases, subleases, licenses and other occupancy
agreements which now or hereafter affect the Property or any part or parts
thereof and all guarantees, modifications, renewals and extensions thereof
(collectively, the "Leases"), and (ii) all documents and instruments made
or hereafter made in respect of the Leases, together with all of the rents
and issues and profits, due and to become due or to which Assignor is now
or may hereafter become entitled, arising out of the Leases and any of the
Property covered by the Leases (the "Leased Property"), excluding, however,
any sums paid as "key money" in connection with the execution or renewal of
Leases or any sums paid in connection with the execution or renewal of a
Lease as advance rental ("Advance Rental") to the extent the same has been
paid prior to the occurrence of an Event of Default (as defined in the
Mortgage) (collectively, the "Rents"). This is a present and absolute
assignment and transfer of title and not merely additional security.
33. Assignor further gives and grants unto Assignee the power
and authority, but not the obligation, to:
A. enter upon and take possession of the Leased Property and
manage the same, subject to the rights of any and all parties
in possession thereof;
(ii) enforce, modify, cancel or accept a surrender
of any or all of the Leases;
(iii) (A) subject to and in accordance with the
terms of the Leases, demand collect, sue for, attach, levy, recover,
receive, compromise, and (B) adjust and make, execute, and deliver
receipts and releases for, Rents which may be or may hereafter become
due, owing or payable from any present or future lessees, sublessees,
licensees or other occupants of the Leased Property or any part
thereof (the "Lessees");
(iv) receive, endorse and deposit for collection
in the name of Assignor or Assignee any checks, promissory notes or
other evidences or indebtedness, whether made payable to Assignor or
Assignee, which are given in payment or on account of Rent for the
Leased Property or any part or parts thereof, or by way of compromise
or settlement of any indebtedness for such Rents;
E. give acquittances for Rents received;
(vi) institute, prosecute, settle or compromise
any summary or other proceedings for the recovery of Rents or for
removing any and all of the Lessees upon their default under their
respective Leases;
(vii) subject to and in accordance with the
Leases, institute, prosecute, intervene in, settle or compromise any
proceedings for the protection of the Leased Property, for the
recovery of any damage done to the Leased Property or for the
abatement of any nuisance, including Hazardous Waste (as defined in
the Mortgage), thereon or thereabouts;
(viii) defend, settle or compromise any legal
proceedings brought, or claims made against, Assignee or its agents,
employees or servants which may affect the Leased Property, and, at
the option of Assignee, defend, settle or compromise any claims made
or legal proceedings brought against Assignor which may affect the
Leased Property or any part thereof;
(ix) lease or rent the Leased Property or any part
thereof for such time and at such rentals as Assignee, in its
reasonable discretion, may deem advisable;
J. make any changes or improvements, structural or otherwise, on,
in or to the Leased Property or any part thereof which Assignee
may deem reasonable, necessary or expedient for the leasing,
renting or preservation thereof;
(xi) keep and maintain the Leased Property in
tenantable and rentable condition and in a good state of repair;
(xii) purchase such equipment and supplies as may
be reasonably necessary or desirable in the opinion of Assignee for
use in connection with the operation of the Leased Property;
(xiii) pay, from and out of the Rents collected by
Assignee hereunder, or from or out of any other funds, all taxes,
assessments water charges, sewer rents and other governmental charges
levied, assessed or imposed against the Leased Property or any part
thereof, and any and all other charges, costs and expenses which
Assignee may deem necessary or advisable to pay in connection with
the management and operation of the Leased Property (including,
without limitation, brokers' fees and any accrued and unpaid
interest, principal and other payments due on any and all loans
secured by mortgages or deeds of trust on the Property), it being
understood that the excess Rents, if any, remaining after all such
payments shall have been made shall be the property of and paid to
Assignor, provided there exists no Event of Default;
(xiv) contract for the purchase such insurance as
Assignee may deem advisable or necessary for the protection of
Assignee and the Leased Property and as required to be maintained
under the Mortgage, including, without limitation, fire, general
liability, boiler, plate glass, rent, demolition and workers'
compensation insurance;
(xv) execute and comply with all laws, rules,
orders, ordinances and requirements of the United States, the state
in which the Leased Property is located and any political subdivision
thereof, and any agency, department, bureau, board, commission or
instrumentality of any of them (collectively, "Governmental
Authorities"), and remove any and all violations which may be filed
against the Leased Property;
(xvi) enforce, enjoin or restrain the violation of
any of the terms, provisions and conditions of the Leases; and
(xvii) do or perform such other acts as may be
reasonably necessary to increase the Rents or to diminish the expense
of operating the Leased Property, whether herein expressly authorized
or not, and in all respects act in the place and stead of Assignor
and have all of the powers as owner as possessed by Assignor for the
purposes aforesaid.
All of the foregoing powers and rights may be executed by
Assignee or by its agents, servants or attorneys, in the name of Assignee
or in the name of Assignor, and in such manner as Assignee, its agents,
servants, or attorneys consider to be necessary, desirable, expedient, or
appropriate; provided, however, that under no circumstances shall Assignee
be under any obligation to exercise any of the foregoing powers or rights
and Assignee shall not, except in the case of negligence and/or wilful
misconduct of Assignee, be liable to Assignor or any other party for
failure to exercise such powers and rights.
34. Assignee shall have the unqualified right, subject to the
provisions of applicable law, to receive, use and apply the Rents collected
and received by it under this Agreement (a) for the payment of any and all
costs and expenses incurred in connection with (i) enforcing the terms of
this Assignment, (ii) upholding and defending the rights of Assignee
hereunder, and (iii) collecting Rents due under the Leases; and (b) for the
operation and maintenance of the Leased Property and the payment of all
costs and expenses in connection therewith, including, without limitation,
the payment of (i) accrued and unpaid interest and principal due on any and
all loans secured by mortgages or deeds of trust on the Leased Property,
(ii) taxes, assessments, water charges and sewer rents and other
governmental charges levied, assessed or imposed against the Property or
any part thereof, which may then be due and payable, (iii) insurance
premiums, (iv) costs and expenses in prosecuting or defending any
litigation referred to herein, and (v) wages and salaries of employees,
commissions of agents and attorney's fees. After the payment of all such
costs and expenses and after Assignee shall have set up such reserves
necessary for the proper management of the Leased Property, Assignee,
subject to the provisions of Paragraph 2 (xiii) hereof, shall apply all
remaining Rents and collected and received by it to the reduction of the
indebtedness secured by the Mortgage.
35. Assignor hereby irrevocably constitutes and appoints
Assignee its true and lawful attorney, to undertake and execute any or all
of the powers described herein with the same force and effect as if
undertaken or executed by Assignor, and Assignor, hereby ratifies and
confirms any and all things done or omitted to be done, other than those
things done or omitted to be done with negligence or wilful misconduct, by
Assignee, its agents, servants, employees or attorneys in, to or about the
Property. The appointment contained herein shall be effective only upon
the termination by Assignee of the license granted to Assignor pursuant to
Article 13 hereof.
36. Assignee shall not in any way be liable to Assignor for
any act done or anything omitted to be done by it in good faith in
connection with the management of the Property, except for the consequences
of its own gross negligence or wilful misconduct, nor shall Assignee be
liable for any act or omission of its agents, servants, employees or
attorneys, provided that due care is used by Assignee in the selection of
such agents, servants, employees and attorneys. Assignee shall be
accountable to Assignor only for monies actually received by it pursuant to
this Assignment.
37. Assignor hereby covenants and agrees:
A. to perform faithfully every obligation which Assignor is
required to perform under the Leases within the applicable
grace periods, if any set forth therein;
(ii) to exercise its reasonable business judgment
in determining whether to enforce, or to secure the performance of,
any material obligation to be performed by any Lessee under any Lease
requiring a "minimum" or "base" rent of $100,000 or more per annum (a
"Major Lease");
(iii) except in connection with the initial
execution or renewal of a Lease, not to collect any Rent under the
Leases for more than thirty (30) days in advance of the time when the
same shall be become due, or anticipate the rents thereunder, except
for security deposits, "key money" and Advance Rental;
(iv) subject to the right of Assignor to contest
and to not comply with a Legal Requirement (as defined in and as
provided in the Mortgage), to comply with, in all material respects,
all present and future laws, rules, orders, ordinances, restrictions
and requirements of all Governmental Authorities;
(v) to deliver to Assignee, upon request, copies
of all existing Leases and all Leases entered into after the date
hereof;
(vi) to appear in and defend, at Assignor's sole
cost and expense, any action or proceeding arising under, growing out
of, or in any manner connected with, the Leases or the obligations,
duties or liabilities of the lessor, Lessees or guarantors
thereunder; and
(vii) to comply with all of the provisions of the
Indenture, the Notes, the Mortgage, and any other Loan Documents (as
such term is defined in the Mortgage).
38. Assignor hereby represents and warrants the following to
Assignee:
(i) to the best of the Assignor's knowledge, the
Major Leases which now affect the Leased Property are valid,
subsisting and in full force and effect, and have been duly executed
and unconditionally delivered by Assignor and, to the best of
Assignor's knowledge, have been duly executed and unconditionally
delivered by the lessees under such Leases;
(ii) Assignor has not executed or granted any
modifications or amendments of the Major Leases;
(iii) to the best of Assignor's knowledge, there
are no material defaults now existing under any of the Major Leases
and no event has occurred which, with the delivery of notice or the
passage of time or both, would constitute a material default or which
could entitle the Assignor under the Major Leases or the Lessees of
the Major Leases to cancel the same or otherwise avoid their
obligations thereunder;
(iv) Assignor has not collected Rent under the
Major Leases for more than thirty (30) days in advance of the time
the same shall become due except for security deposits, "key money",
Advance Rental and such other sum payable in connection with the
execution or renewal of any Major Lease; and
(v) Assignor has not executed, and will not
execute, an assignment of any of the Leases or of its right, title
and interest therein or the Rents to accrue thereunder, except as
provided in the Mortgage.
39. It is understood and agreed that nothing contained in this
Agreement shall prejudice or be construed to prejudice the right of
Assignee under any of the other Loan Documents, without notice, to
institute, prosecute and compromise any action which it would deem
advisable to protect its interest in the Property, including any sale by
the Assignee, as trustee, pursuant to the power of sale contained in the
Mortgage or otherwise, and in such sale or action, to move for the
appointment of a receiver of the Rents, or prejudice any rights which
Assignee shall have by virtue of any default under the Indenture, the
Notes, or the Mortgage. Assignee, however, hereby agrees that it will use
reasonable efforts to promptly give notice (the "Informational Notice") to
Assignor and Assignor, provided that failure to give such notice or any
defects in the manner in which such notice is given shall not preclude
Assignee from exercising any of its rights hereunder. This Assignment
shall survive, however, the commencement of any such action or sale.
40. Assignor agrees to indemnify and hold Assignee harmless
from and against any all liability, loss, damage, cost and expense,
including reasonable attorneys' fees and disbursements, other than those
which arise as a result of the gross negligence or wilful misconduct of
Assignee, which Assignee may or shall incur under any of the Leases, or by
reason of this Assignment, or by reason of any action taken by Assignee
hereunder, and from and against any and all claims and demands whatsoever,
other than those arising from the gross negligence or wilful misconduct of
Assignee, which may be asserted against Assignee by reason of any alleged
obligation or undertaking on its part to perform or discharge any of the
terms, covenants and conditions contained in any of the Leases. Should
Assignee incur any such liability, loss, damage, cost or expense, the
amount thereof, together with interest thereon at the rate of interest then
payable under the Indenture, including, in calculating such rate of
interest, any additional interest which may be imposed under the Indenture
by reason of any default thereunder (such rate of interest being
hereinafter referred to as the "Interest Rate"), from the date such amount
was suffered or incurred by each Assignee until the same is paid by
Assignor or Assignor to Assignee, shall be jointly and severally payable by
each Assignor to Assignee immediately upon demand, or, at the option of
Assignee, Assignee may reimburse itself therefor out of any Rents collected
by Assignee. Nothing contained herein shall operate or be construed to
obligate Assignee to perform any of the terms, covenants or conditions
contained in the Leases or otherwise to impose any obligation upon Assignee
with respect to any of the Leases.
41. Upon request of Assignee, Assignor shall execute and
deliver to Assignee such further instruments as Assignee may deem
reasonably necessary to effect this Assignment and the covenants of
Assignor contained herein. Assignor, at its sole cost and expense, shall
cause such further instruments to be recorded in such manner and in such
places as may be required by Assignee. Notwithstanding the foregoing,
Assignee shall have no obligation to request any matters referred to herein
and shall request such matters in Assignee's sole discretion.
42. Assignor shall, upon thirty (30) days' notice thereof, pay
all required recording and filing fees in connection with this Assignment
and any agreements, instruments and documents made pursuant to the terms
hereof or ancillary hereto, as well as any and all taxes which may be due
and payable on the recording of this Assignment and any taxes hereafter
imposed on this Assignment. Should Assignor fail to pay the same within
said thirty (30) day notice period, all such recording and filing fees and
taxes may be paid by Assignee on behalf of Assignor and the amount thereof,
together with interest at the Interest Rate, shall be payable by Assignor
to Assignee immediately upon demand, or, at the option of Assignee,
Assignee may reimburse itself therefor out of the Rents collected by
Assignee.
43. Failure of Assignee to avail itself of any of the terms,
covenants and conditions of this Assignment shall not be construed or
deemed to be a waiver of any of its rights hereunder. The rights and
remedies of Assignee under this Assignment are cumulative and are not in
lieu of but are in addition to, and shall not be affected by the exercise
of, any other rights and remedies which Assignee shall have under or by
virtue of law or equity, the Indenture, the Notes, the Mortgage or the Loan
Documents (collectively, the "Other Rights"). The rights and remedies of
Assignee hereunder may be exercised concurrently with any of the Other
Rights.
44. Assignee hereby gives Assignor a license to collect all
the Rents, to retain, use and enjoy the same and to do all acts and perform
such obligations as Assignor is required to perform under the Leases,
including, without limitation, all items listed in Paragraph 2 hereof.
Assignor agrees to collect and receive said Rents and to use said Rents in
payment of principal and interest becoming due under the Indenture, the
Notes, the Mortgage and any Additional Mortgages (as defined in the
Mortgage). Subject to the provisions of Paragraph 2(xiii) hereof, the
balance of Rents, if any, remaining after all such payments shall have been
made shall belong to and be the property of Assignor. Such license hereby
granted to Assignor to collect and receive said Rents and to retain, use
and enjoy the same and to do all acts and perform such obligations as
Assignor is required to perform under the Leases shall be revoked
automatically upon the occurrence of any Event of Default (as such term is
defined under the Mortgage) without any required action by Assignee. This
Assignment shall continue in full force and effect until (a) all sums due
and payable under the Indenture, the Notes and the Mortgage shall have been
fully paid and satisfied, together with any and all other sums which may
become due and owing under this Assignment, and (b) all other obligations
of Assignor under the Indenture, the Notes, the Mortgage, this Assignment
and the Loan Documents are satisfied and the Commitments have been
permanently terminated. Upon termination of this Assignment as
hereinbefore provided, this Assignment and the authority and powers herein
granted by Assignor to Assignee shall cease and terminate, and, in that
event, Assignee shall (i) execute and deliver to Assignor such instrument
or instruments effective to evidence the termination of this Assignment and
reassignment to Assignor of the rights, powers and authorities granted
herein, and (ii) deliver to Assignor all monies held by Assignee for the
benefit of Assignor. Assignor agrees that upon termination of this
Assignment it shall assume payment of all reasonable unmatured or unpaid
charges, expenses or obligations (including reasonable attorney's fees)
incurred or undertaken by Assignee in connection with the management of the
Property.
45. All of the representations, warranties, covenants,
agreements and provisions in this Assignment by or for the benefit of
Assignee shall bind and inure to the benefit of its successors and assigns.
46. Nothing in this Assignment shall be construed to give to
any person other than Assignee and its successors and assigns any legal or
equitable right, remedy or claim under this Assignment and this Assignment
shall be held to be for the sole and exclusive benefit of Assignee and its
successors and assigns.
47. If there shall be any conflict between the terms,
covenants, conditions and provisions set forth herein and the terms,
covenants, conditions and provisions set forth in the Indenture, then,
unless this Assignment specifically provides otherwise by specific
reference to the Indenture, the terms, covenants, conditions and provisions
of the Indenture shall prevail.
48. All notices, demands or requests made pursuant to this
Assignment must be in writing and personally delivered or mailed to the
party to which the notice, demand or request is being given by certified or
registered mail, return receipt requested, as follows, and shall be deemed
given on the date of actual receipt or the date on which the same shall be
returned to the sender by the Post Office as unclaimed, or upon personal
delivery with receipt acknowledged:
if to Assignee: Amalgamated Bank of Chicago
1 West Monroe Street
Chicago, Illinois 60603
Attn: Corporate Trust Department
if to Assignor: GNOC Corp.
Boston & Pacific Avenues
P.O. Box 1737
Atlantic City, New Jersey 08041
Attn: President
With a copy to: Benesch, Friedlander, Coplan
& Aronoff P.L.L.
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Attn: Chairman, Real Estate Department
or at such different address as Assignor or Assignee shall hereafter
specify by written notice as provided herein.
49. This Assignment may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
50. Assignee acknowledges and agrees that it will not assign
this Assignment separate and apart from a sale or assignment of the
Revolving Credit Notes and the Mortgage.
51. No director, officer, employee, stockholder or
incorporator, as such, past, present or future, of Assignor or any
successor corporation, shall have any liability for any obligations of
Assignor under this Assignment or for any claim based on, in respect of or
by reason of such obligations or their creation. Assignee, by accepting
this Assignment, waives and releases all such liability.
52. This Assignment shall be construed, interpreted, enforced
and governed by and in accordance with the laws of the State of New Jersey.
Whenever possible, each provision of this Assignment shall be interpreted
in such manner as to be effective and valid under applicable law, but if
any provision of this Assignment shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remaining provisions of
this Assignment.
53. Each provision of this Assignment of Leases and Rents is
subject to the provisions of the New Jersey Casino Control Act and
regulations promulgated thereunder.
IN WITNESS WHEREOF, the Assignor has executed this Assignment as
of the day and year first above written.
GNOC, CORP.,
a New Jersey corporation
By:______________________
Name: Donna M. Graham
Title: Chief Financial
Officer, Treasurer
STATE OF NEW JERSEY )
) ss.:
COUNTY OF ESSEX )
On the 2nd day of May, 1996, before me personally came Donna M.
Graham, to me known, who, being by me duly sworn, did depose and say that
she is the Chief Financial Officer and Treasurer of GNOC, Corp., the
corporation described in and which executed the foregoing instrument, that
she knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation; and that she signed her name
thereto by like order.
______________________________
Notary Public
Exhibit A-1
Land
Exhibit A-2
Leasehold Estate