EXHIBIT 10.4
Tax Folio Nos. 19230 12 00100, 19230 12 00200, 19230 19 00200 & 19230 19 00300
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PREPARED BY/RECORD AND RETURN TO: Howard L. Friedberg, Esquire, Katz, Barron,
Squitero, Faust, Brecker, Terzo, Friedberg & Grady, P.A.; 2699 South Bayshore
Drive, 7th Floor Miami, Florida 33133; Telephone: (305) 856-2444.
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ASSIGNMENT OF RENTS, LEASES AND DEPOSITS
THIS ASSIGNMENT is made and entered into as of the AGU ENTERTAINMENT
CORP., a Delaware corporation ("Assignor"), whose address is 3200 West Oakland
Park Boulevard, Lauderdale Lakes, Florida 33311, and Mitchell Entertainment
Company, a Delaware limited liability company ("Assignee"), 7220 NW 36th Street,
Suite 100, Miami, Florida 33166, its successors and assigns.
W I T N E S S E T H:
WHEREAS, contemporaneously herewith, Assignor has executed and delivered
to Assignee a Secured Convertible Term Note in the principal amount of Three
Million and 00/100 Dollars ($3,000,000.00) (hereinafter referred to as the
"Note"), secured by a Mortgage Deed and Security Agreement dated of even date
herewith (hereinafter referred to as the "Mortgage"), on the property of
Assignor in Broward County, Florida, the legal description of which is set forth
as follows:
SEE LEGAL DESCRIPTION, ANNEXED HERETO AND MADE A PART
HEREOF AS EXHIBIT "A"
together with all buildings and improvements now or hereafter constructed
thereon (all of such property being hereinafter collectively referred to as the
"Property" or "Mortgaged Property"); and
WHEREAS, the Mortgage is a second mortgage, subject and subordinate only to that
certain mortgage of even date herewith in favor of Charley Zeches, in her
capacity as Trustee of Lakes Holding Trust U/A dated July 27, 2001, having an
outstanding balance of $7,000,000, and Assignment of Rents, Leases and Profits
(collectively, the "Zeches Mortgage"); and
WHEREAS, as additional security for the Note and the obligations of
Assignor thereunder, Assignor has executed and delivered to Assignee this
Assignment.
NOW, THEREFORE, for value received and as security for the payment of said
obligations of Assignor, Assignor, for itself and for its successors and
assigns, does hereby transfer, assign and deliver unto Assignee, its successors
and assigns, all of the right, title and interest of Assignor in and to (1) all
leases, subleases, tenancies and any other agreement affecting the use of the
Mortgaged Property, whether written or oral, now or hereafter existing with
respect to any portion or portions of the Mortgaged Property, together with any
renewals or extensions thereof and leases, subleases, tenancies, and such
agreements in substitution therefor (all of which are hereinafter collectively
referred to as the "Leases" or "Assigned Leases" and singularly as "Lease"), (2)
all rents, deposits, issues, profits and other payments of every kind due or
payable and to become due or payable to Assignor by virtue of the Assigned
Leases, or otherwise due or payable and to become due or payable to Assignor as
the result of any issue, possession or occupancy of any portion or portions of
the Mortgaged Property, (3) all right, title and interest of Assignor in and to
all guarantees of the Assigned Leases and (4) any award made in any court
proceeding involving any of the lessees in any bankruptcy, insolvency or
reorganization proceedings in any state or federal court.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
until such time as the indebtedness secured by the Mortgage shall have been paid
in full, for the purpose of further and collaterally securing: (1) payment of
the indebtedness evidenced by the Note together with the interest on said
indebtedness; (2) payment of all sums, with interest thereon, to become due and
payable to Assignee hereunder or under the provisions of the Mortgage, the Note,
or any other obligation of Assignor to Assignee now or hereafter existing; and
(3) performance and discharge of each and every obligation, covenant and
agreement of Assignor contained herein, or in the Note, the Mortgage, any
associated loan document or any other obligation of Assignor to Assignee now or
hereafter existing (hereinafter collectively referred to as the "Obligations").
This instrument of Assignment is delivered and accepted upon the following
terms and conditions:
1. Assignor's License to Operate if no Event of Default. This Assignment
shall be and constitute an absolute assignment effective upon execution,
however, so long as no event of default shall exist under the Obligations,
Assignor shall have a revocable license, revocable by Assignee upon the
occurrence of an event of default under the Obligations, and to collect, receive
and apply for its own account all rents, issues and profits (the "Rents")
accruing by virtue of the Assigned Leases, and to execute and deliver proper
receipts and acquittances therefor, provided, however, that without the written
consent of Assignee, Assignor shall not collect any installment of rent or other
required sums, in advance, other than a security deposit and rent for the first
and last month of any lease or sublease term (hereinafter referred to as
"Permitted Advance Rental Payments"). As to any security deposits and/or prepaid
rents, Assignor shall furnish to Assignee, upon Assignee's request, satisfactory
evidence that Assignor has maintained such security deposits and/or prepaid
rents in accordance with the requirements of Florida law.
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2. Assignee's Rights in Event of Default.
2.1 Immediately upon the occurrence of any event of default under the
Obligations, the revocable license described in paragraph 1 above shall cease
and terminate upon demand and notice made by Assignee, and, in such event,
Assignee, subject to the rights of the mortgagee under the Zeches Mortgage, is
hereby expressly and irrevocably authorized to enter and take possession of the
Rents, or by written notice served personally upon or sent by registered mail to
Assignor as Assignee may elect, without further authorization, notice or demand
and without the commencement of any action to foreclose the Mortgage or to
exercise its power of sale thereunder.
2.2 Assignor does hereby constitute and appoint Assignee, irrevocably,
with full power of substitution and revocation, its true and lawful attorney,
coupled with an interest, for it and in its name, place and stead, to do and
perform any or all of the following actions, as fully for all intents and
purposes, as it could do if personally present, hereby ratifying and confirming
all that its said attorney or its substitution shall lawfully do or cause to be
done by virtue hereof:
(a) manage and operate the Property or any part thereof;
(b) lease any part or parts thereof for such periods of time, and
upon such terms and conditions as Assignee may, in its sole discretion,
deem proper;
(c) enforce, cancel or modify any of the Leases;
(d) demand, collect, sue for, attach, levy, recover, receive,
compromise and adjust, and make, execute and deliver receipts and releases
for all rents, issues, profits and other amounts that may then be or may
thereafter become due, owing or payable with respect to the Property or
any part thereof from any present or future lessees, tenants, subtenants
or occupants thereof;
(e) institute, prosecute to completion or compromise and settle, all
summary proceedings, actions for rent or for removing any and all lessees,
tenants, subtenants or occupants of the Property or any part or parts
thereof;
(f) enforce or enjoin or restrain the violation of any of the terms,
provisions and conditions of any Lease or Leases, now or hereafter
affecting the Property or any part thereof;
(g) make such repairs and alterations to the Property as Assignee
may, in its reasonable discretion, deem proper;
(h) pay, from and out of rents, issues and profits collected in
respect of the Property or any part thereof, or from or out of any other
funds, the rent and all other charges required to be paid under any ground
leases on which the Mortgage may constitute a lien, any taxes,
assessments, water rates, sewer rates, or other government charges levied,
assessed or imposed against the Property, or any portion thereof, and also
any and all other charges, costs and expenses which it may be necessary or
advisable for Assignee to pay in the management or operation of the
Property, including without limiting the generality of any rights, powers,
privileges and authority hereinbefore or hereinafter conferred) the costs
of repairs and alterations, commissions for renting the Property or any
portions thereof, any legal expenses in enforcing claims, preparing papers
or for any other services that may be required; and
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(i) generally, do, execute and perform any other act, deed, matter
or thing whatsoever that ought to be done, executed and performed in and
about or with respect to the Property, as fully as Assignor might do,
provided, however, that any action, or failure or refusal to act, by
Assignee under this Assignment shall be at its election and without any
liability on its part.
2.3 Assignee shall apply the net amount of rents, issues and profits
received by it from the Property, after payment of all costs and charges
incurred by Assignee (including any liability, loss, expense or damage
hereinafter referred to in paragraph 5 hereof), first to the payment, when due,
of the installments of interest payable under the Note and thereafter to the
payment of principal thereunder. Any of such funds remaining after such
application shall be paid as soon as reasonably practicable by Assignee to such
persons as Assignor may designate to Assignee in writing.
2.4 Assignee shall be accountable to Assignor only for monies actually
received by Assignee pursuant to this Assignment and the acceptance of this
Assignment shall not constitute a satisfaction of any indebtedness, liability or
obligations, or any part thereof, now or hereafter owed by Assignor to Assignee,
except to the extent of amounts actually received and applied by Assignee on
account of the same.
2.5 The rights and powers of Assignee hereunder shall continue and remain
in full force and effect until all amounts secured hereby, including any
deficiency resulting from foreclosure sale, are paid in full, and shall continue
after commencement of foreclosure and after foreclosure sale and until
expiration of the equity of redemption, notwithstanding sale of the Property to
a purchaser other than Assignee. Assignee shall not be liable to Assignor or any
one claiming under or through Assignor by reason of anything done or left undone
by Assignee hereunder.
3. Attornment of Lessees in Event of Default. ASSIGNOR HEREBY IRREVOCABLY
DIRECTS EACH LESSEE AND/OR SUBLESSEE UNDER EACH OF THE LEASES UPON DEMAND AND
NOTICE FROM ASSIGNEE OF AN EVENT OF DEFAULT UNDER ANY OF THE OBLIGATIONS, TO PAY
ASSIGNEE ALL RENTS, DEPOSITS AND PROFITS ACCRUING OR DUE UNDER ITS LEASE FROM
AND AFTER THE RECEIPT OF SUCH DEMAND AND NOTICE. ANY LESSEE MAKING SUCH PAYMENT
TO ASSIGNEE SHALL BE UNDER NO OBLIGATION TO INQUIRE INTO OR DETERMINE THE ACTUAL
EXISTENCE OF ANY SUCH EVENT OF DEFAULT(S) CLAIMED BY ASSIGNEE.
4. Covenants of Assignor. Assignor, for itself and for its successors and
assigns, covenants and warrants as follows:
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(a) that each of the Leases now or hereafter in effect is and shall
be a valid and existing lease or sublease and that there are, to the
extent ascertainable by Assignor, no defaults on the part of any of the
parties thereto;
(b) that Assignor has not sold, assigned, transferred, mortgaged or
pledged any of the rents, issues or profits from the Property or any part
thereof, whether now or hereafter to become due, to any person, firm or
corporation other than Assignee;
(c) that no rents, issues, deposits or profits of the Property, or
any part thereof, becoming due subsequent to the date hereof have been
collected nor has payment of any of the sums been anticipated, waived,
released, discounted or otherwise discharged or compromised;
(d) that Assignor will not assign, pledge or otherwise encumber any
of the Leases or any of the rents thereunder unless the prior written
consent of Assignee shall have been obtained thereto and unless the
instrument creating such assignment, pledge or encumbrance shall expressly
state that the same is subject to this Assignment;
(e) that Assignor will not, without in each case having obtained the
prior written consent of Assignee, which shall not be unreasonably
withheld, enter into any new lease agreement, with respect to a 5,000
square foot or greater portion of the Property or with respect to a
portion of the Property which is less than 5,000 square feet, unless the
rent payable under such lease agreement represents the fair market value
for the lease of a space of similar size and character to the space rented
under such lease agreement, or amend, modify, terminate or accept any
surrender of any Lease;
(f) that Assignor will not waive or give any consent with respect to
any default or variation in the performance of any of the terms, covenants
and conditions on the part of any lessee, sublessee, tenant or other
occupant to be performed under any of the Leases without the written
consent of Assignee, but will at all times take proper steps to enforce
all of the provisions and conditions thereof;
(g) that Assignor will not collect or receive, without in each case
having obtained the prior written consent of Assignee thereto, from any
such lessee, sublessee, tenant or other occupant, any installment of rent
in advance of the respective dates prescribed in the Leases, except for
Permitted Advance Rental Payments;
(h) that Assignor will perform and observe, or cause to be performed
and observed, all of the terms, covenants and conditions on its part to be
performed and observed with respect to each of the Leases;
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(i) that at all times during which this Assignment shall be in
effect, Assignor will use its best efforts to keep the Property fully
rented at the highest possible rentals obtainable;
(j) that Assignor will notify Assignee promptly when any Lease is
hereafter executed, extended, renewed, amended or modified and that it
will furnish to Assignee, on demand, true copies of all Leases hereafter
executed and true copies of each agreement or letter effecting the
renewal, amendment or modification of any Assigned Lease;
(k) any Leases hereafter executed shall provide that within thirty
(30) days after written request from Assignee (i) the lessee shall agree
to furnish to Assignee a financial statement on a form reasonably
satisfactory to Assignee and such other documentation which would reflect
the status of the Lease and/or the financial condition of such lessee and
(ii) Assignor and such lessee shall agree to amend the Lease to make
reasonable changes required by Assignee provided, however, such changes do
not materially alter the terms and conditions of the Lease; and
(l) not to enter into any new lease agreement with any operating dry
cleaner or gasoline service station or any similar type or types of
establishment without first obtaining the written consent of Assignee,
which may be withheld by Assignee, in its sole and absolute discretion.
Assignor acknowledges and agrees that the approval (directly or
indirectly) of any Lease by Assignee shall not be construed in any manner to
create any liability or responsibility as to Assignee in the event that such
Lease or the tenant thereunder should default. The review of any Lease by
Assignee shall be solely for Assignee's own purposes, shall not constitute any
representation by Assignee as to the subject Lease or as to the tenant
thereunder and may not and shall not be relied upon by Assignor in any manner.
Assignee shall independently review and approve any Lease and the tenant
thereunder prior to execution thereof by Assignor.
5. Indemnification.
5.1 Assignor hereby agrees to indemnify, defend, and hold Assignee
harmless (except to the extent caused by the gross negligence or willful
misconduct of the Assignee) (a) against and from any and all liability, loss,
damage and expense, including reasonable attorneys' fees, which it may or shall
incur under or in connection with any of the Leases, or by reason of any of the
Obligations, or by reason of any action taken by Assignee under any of the
Obligations (including, without limitation, any action which Assignee in its
discretion may take to protect its interest in the Property, including, without
limitation, the making of advances and the entering into of any action or
proceeding arising out of or connected with the Leases or the Obligations), and
(b) against and from any and all claims and demand whatsoever which may be
asserted against Assignor by reason of any alleged obligations or undertakings
on its part to perform or discharge any of the terms, covenants and conditions
contained in any of the Leases.
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5.2 Should Assignee incur any such liability, loss, damage or expense, the
amount thereof, together with interest thereon at the highest rate permitted
under Florida law, shall be payable by Assignor to Assignee immediately upon
demand, or at the option of Assignee, Assignee may reimburse itself therefor out
of any rents, issues or profits of the Property collected by Assignee.
5.3 Nothing contained herein shall operate or be construed to obligate
Assignee to perform any of the terms, covenants or conditions contained in any
Lease, or to take any measures, legal or otherwise, to enforce collection of any
of said rents or other payments, or otherwise to impose any obligation upon
Assignee with respect to any of said Leases, including but not limited to, any
obligation arising out of any covenant of quiet enjoyment therein contained.
5.4 Prior to actual entry into any taking possession of the Property by
Assignee, this Assignment shall not operate to place upon Assignee any
responsibility for the operation, control, care, management or repair of the
Property, and the execution of this Assignment by Assignor shall constitute
conclusive evidence that all responsibility for the operation, control care,
management and repair of the Property is and shall be that of Assignor prior to
such actual entry and taking of possession.
6. Exercise of Remedies. Failure of Assignee to avail itself of any of the
terms, covenants and conditions of this Assignment for any period of time, or at
any time or times, 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 any other rights and
remedies which Assignee shall have under or by virtue of any other of the
Obligations. The rights and remedies of Assignee hereunder may be exercised from
time to time and as often as such exercise is deemed expedient.
7. Assignment by Assignee. Assignee shall have the right to assign to any
subsequent holder of the Mortgage, or to any person acquiring title to the
Property, Assignor's rights, title and interest in any Lease or sublease hereby
or hereafter assigned, subject, however, to the provisions of this Assignment.
After Assignor shall have been barred and foreclosed of all right, title and
interest and equity of redemption in said Property, no assignee of Assignor's
interest in said Leases shall be liable to account to Assignor for any rents,
income, revenue, issues or profits thereafter accruing.
8. Termination of this Agreement. Upon payment in full of all the
indebtedness secured by the Mortgage, as evidenced by a recorded satisfaction or
release of Mortgage, as well as any sums which may be payable hereunder, this
Assignment shall become and be void and of no further effect and, in that event,
upon the request of Assignor, Assignee covenants to execute and deliver to
Assignor instruments effective to evidence the termination of this Assignment
and/or the reassignment to Assignor of the rights, power and authority granted
herein.
9. No Merger of Assigned Leases. As against Assignee, at all times during
which this Assignment shall be in effect, there shall be no merger of the Leases
or the leasehold estate created thereby with the fee estate in the Property by
reason of the fact that the Leases or any interest therein may be held by or for
the account of any person, firm or corporation which may be or become the owner
of said fee estate, unless Assignee shall consent in writing to said merger.
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10. Notice. Any notice, demand, request or other communication given
hereunder or in connection herewith (hereinafter "Notices") shall be deemed
sufficient if in writing and sent by registered or certified mail, postage
prepaid, return receipt requested, addressed to the party to receive such Notice
at the addresses set forth in this Section, or at such other address as such
party may hereafter designate by Notice given in like fashion. Notice shall be
deemed given when mailed. Notwithstanding the foregoing, routine communications
such as ordinary distribution checks, copies of documents, etc. may be sent by
ordinary first-class mail. Notwithstanding anything in this instrument to the
contrary, all requirements of notice shall be deemed inapplicable if Assignee is
prevented from giving such notice by bankruptcy or any other applicable law. In
such event, the cure period, if any, shall then run from the occurrence of the
event or condition of default rather than from the date of notice. The initial
addresses are as follows:
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If to Assignor: AGU Entertainment Corp.
3200 West Oakland Park Boulevard
Lauderdale Lakes, Florida 33311
Attention: Chief Financial Officer
Facsimile:
with a copy to:
Bruce C. Rosetto, Esq.
Blank Rome LLP
1200 North Federal Highway, Suite 417
Boca Raton, Florida 33432
Facsimile: (561)417-8186
If to Assignee: Mitchell Entertainment Company
7220 NW 36th Street, Suite 100
Miami, Florida 33166
Attention: Jonathan E. Mitchell
Facsimile: (305) 591-9657
with a copy to:
Mitchell Entertainment Company
11601 Wilshire Boulevard, Suite 2400
Los Angeles, California 90025
Attention: Jonathan E. Mitchell
Facsimile: (310) 473-0076
Robert S. Barry, Jr., Esq.
Loeb & Loeb LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles, California 90067
Facsimile: (310) 282-2200
Howard L. Friedberg, Esq.
Katz, Barron etal
2699 South Bayshore Drive, 7th Floor
Miami, Florida 33133
Facsimile (305) 285-9227
11. Miscellaneous Provisions.
11.1 Whenever the context so requires, reference herein to the neuter
gender shall include the masculine and/or feminine gender, and the singular
number shall include the plural.
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11.2 All of the provisions of this Assignment shall be deemed and
construed to be "conditions" and "covenants" as though the words specifically
expressing or importing covenants and conditions were used in each separate
provision hereof.
11.3 This Assignment is being delivered and is intended to be performed in
the State of Florida and shall be construed and enforced in accordance with and
governed by the internal laws (and not the law of conflicts) of such state.
11.4 No change, amendment, modification, cancellation or discharge hereof,
or of any part hereof, shall be valid unless Assignee shall have consented
thereto in writing.
11.5 In the event there is any conflict between the terms and provisions
of the Mortgage and the terms and provisions of this Assignment, the terms and
provisions of this Assignment shall prevail.
11.6 The terms, covenants, and conditions contained herein shall inure to
the benefit of, and bind Assignee and Assignor and their respective successors
and assigns or executors, administrators, successors and assigns, as the case
may be.
11.7 The captions of this Assignment are for convenience and reference
only and neither in any way define, limit, or describe the scope or interest of
this Assignment nor in any way affect this Assignment.
11.8 In case any one or more of the provisions contained in this
Assignment are, or shall for any reason be held to be, invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof or thereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
11.9 The rights and remedies in favor of Assignee granted by this
Assignment shall be in addition to and shall not in any way constitute a
limitation upon the rights and remedies available to Assignee under applicable
law, including without limitation all rights under Chapter 697.07, Florida
Statutes, regarding assignment of rents and all rights under Chapter 702,
Florida Statutes, regarding foreclosure actions.
11.10 Assignee may take or release other security for the payment of the
Obligations, and, may release any party primarily or secondarily liable
therefore, and, may apply any other security held by it to the satisfaction of
the Obligations, without prejudice to any of its rights under this Assignment.
ASSIGNOR AND ASSIGNEE HEREBY MUTUALLY, KNOWINGLY, WILLINGLY, INTENTIONALLY
AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL BY JURY AND NO PARTY NOR ANY
ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE PARTIES (ALL OF WHOM
ARE HEREINAFTER COLLECTIVELY REFERRED TO AS THE "PARTIES") SHALL SEEK A JURY
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TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION
PROCEEDING BASED UPON OR ARISING OUT OF THIS ASSIGNMENT OR ANY ASSOCIATED LOAN
DOCUMENTS OR ANY INSTRUMENT EVIDENCING, SECURING OR RELATING TO THE INDEBTEDNESS
OR OTHER OBLIGATIONS SECURED HEREBY OR ANY RELATED AGREEMENT OR INSTRUMENT, ANY
OTHER COLLATERAL FOR THE INDEBTEDNESS SECURED HEREBY OR ANY COURSE OF ACTION,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS RELATING TO
THE LOAN EVIDENCED BY THE NOTE OR TO THIS ASSIGNMENT. THE PARTIES ALSO WAIVE ANY
RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS
PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES. THE WAIVER CONTAINED HEREIN
IS IRREVOCABLE, CONSTITUTES A KNOWING AND VOLUNTARY WAIVER, AND SHALL BE SUBJECT
TO NO EXCEPTIONS. ASSIGNEE HAS IN NO WAY AGREED WITH OR REPRESENTED TO ASSIGNOR
OR ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, Assignor has caused these presents to be signed as of
the day and year first above written.
Signed, sealed and delivered
in the presence of:
AGU ENTERTAINMENT CORP.,
a Delaware corporation
/s/ Bruce C. Rosetto
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Print name: Bruce C. Rosetto By: /s/ David Levy
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David Levy, President
/s/ Innocencia Ramos
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Print name: Innocencia Ramos
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(Corporate Seal)
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