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EXHIBIT 10.44
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, is entered into as of April 22, 1999, between
FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a
place of business located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000-0000, and LEISURE EXPRESS CRUISE, L.L.C., a Colorado
limited liability company ("Borrower"), with its chief executive office located
at 0000 Xxxxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following
terms shall have the following definitions:
"Accounts" means all presently existing and hereafter
arising accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods or the rendition of services
by Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books relating to any of
the foregoing.
"Agreement" means this Security Agreement and any
extensions, riders, supplements, notes, amendments, or modifications to or in
connection with this Security Agreement.
"Amendment Documents" means the Amendment No. 1 to Loan
Documents, the Second Amendment to First Preferred Ship Mortgage, and all
related documents, agreements, and instruments executed by Cruise Corporation
in connection with the Cruise Corporation Obligations and the Amendments to the
Continuing Guaranties executed by Leisure Time Technology, Inc. and Leisure
Time Casinos and Resorts, Inc. with respect to the Cruise Corporation
Obligations.
"Borrower's Books" means all of Borrower's books and
records including: ledgers; records indicating, summarizing, or evidencing
Borrower's assets or liabilities, or the Collateral; all information relating
to Borrower's business operations or financial condition; and all computer
programs, disc or tape files, printouts, runs, or other computer prepared
information, and the equipment containing such information.
"Borrower's Guaranty" means the Continuing Guaranty
executed by Borrower in favor of Foothill, of even date herewith, pertaining to
the Cruise Corporation
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Obligations and the Florida Casino Obligations.
"Closing Date" means the date on which Foothill makes the
Term Loan to Borrower.
"Code" means the California Uniform Commercial Code.
"Collateral" means each of the following: the Accounts;
Borrower's Books; the Equipment; the Freights; the General Intangibles; the
Inventory; the Negotiable Collateral; the Investment Property, including the
Florida Casino Stock; the collateral described in the First Preferred Ship
Mortgages; any money, or other assets of Borrower which hereafter come into the
possession, custody, or control of Foothill; and the proceeds and products,
whether tangible or intangible, of any of the foregoing, including proceeds of
insurance covering any or all of the Collateral, and any and all Accounts,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Investment
Property, money, deposit accounts, or other tangible or intangible property
resulting from the sale or other disposition of the Collateral, or any portion
thereof or interest therein, and the proceeds thereof.
"Corporate Guarantors" means (i) Leisure Time Casinos and
Resorts, Inc., (ii) Leisure Time Technology, Inc., (iii) Cruise Corporation and
(iv) Florida Casino.
"Cruise Corporation" means Leisure Time Cruise
Corporation, a Colorado corporation.
"Cruise Corporation Obligations" means all "Obligations"
described in the Security Agreement executed by Cruise Corporation in favor of
Foothill, dated October 9, 1998, whether now owing or hereafter arising.
"Equipment" means all of Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts, dies,
jigs, goods, including, without limitation, all items of equipment and other
personal property located on the Vessels, and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever
located. Notwithstanding the foregoing, "Equipment" shall not include any
vessels acquired by Borrower after the Closing Date (except to the extent such
after-acquired vessel(s) constitute proceeds of the Leisure Lady or the Vegas
Express, or are vessels used in connection with the Leisure Lady or the Vegas
Express).
"Event of Default" has the meaning set forth in Section 8.
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"First Preferred Ship Mortgages" means the first preferred
ship mortgages executed by Florida Casino and Cruise Corporation, respectively,
in connection with the Florida Casino Obligations and the Cruise Corporation
Obligations, respectively, that encumber the Vegas Express and the Leisure Lady
and secure the Florida Casino Obligations, the Cruise Corporation Obligations,
and certain other obligations described in such mortgages, as amended.
"Florida Casino" means Florida Casino Cruises, Inc., a
Georgia corporation.
"Florida Casino Documents" means, collectively, the
Security Agreement, the Secured Promissory Note, and any other agreement or
instrument executed by Florida Casino in connection with the Florida Casino
Obligations, and the Continuing Guaranties of the Corporate Guarantors and
Borrower and the Limited Continuing Guaranty of Xxxx Xxxxxxx with respect to
the Florida Casino Obligations.
"Florida Casino Obligations" means all "Obligations"
described in the Security Agreement executed by Florida Casino in favor of
Foothill, dated April 22, 1999, whether now owing or hereafter arising.
"Florida Casino Stock" means the capital stock of Florida
Casino now or hereafter owned by Borrower.
"Foothill Expenses" means all: reasonable costs or
expenses (including taxes, photocopying, notarization, telecommunication, and
insurance premiums) required to be paid by Borrower under any of the Loan
Documents that are paid or advanced by Foothill; documentation, filing,
recording, publication, appraisal (including periodic Collateral appraisals),
and search fees assessed, paid, or incurred by Foothill in connection with
Foothill's transactions with Borrower; costs and expenses incurred by Foothill
in the disbursement of funds to Borrower (by wire transfer or otherwise);
charges paid or incurred by Foothill resulting from the dishonor of checks;
costs and expenses paid or incurred by Foothill to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, removing (including, but not limited to, all
costs and expenses incurred by Foothill with respect to any obligations of
Foothill under a landlord's or mortgagee's waiver and consent entered into in
connection with the Loan Documents), storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof, whether or
not a sale is consummated; costs and expenses paid or incurred by Foothill in
examining Borrower's Books; costs and expenses of third party claims or any
other suit paid or incurred by Foothill in enforcing or defending the Loan
Documents; and Foothill's reasonable attorneys' fees and expenses incurred in
advising, structuring, drafting, reviewing, administering, amending,
terminating, enforcing (including attorneys' fees and expenses incurred in
connection with a "workout", a "restructuring", or an Insolvency Proceeding
concerning Borrower or any guarantor of the Obligations), defending, or
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concerning the Loan Documents, whether or not suit is brought.
"Freights" means all presently existing and hereafter
arising (i) freights, hire and other monies earned and to be earned, due or to
become due, or paid or payable to, or for the account of, Borrower, of
whatsoever nature, arising out of or as a result of the ownership and operation
by Borrower or its agents of the Vessels, (ii) all monies and claims for moneys
due and to become due to Borrower and all claims for damages arising out of the
breach of any and all present and future charter parties, bills of lading,
contracts and other engagements of affreightment or for the carriage or
transportation of cargo, mail and/or passengers, and operations of every kind
whatsoever of the Vessels and in and to any and all claims and causes of action
for money, loss or damages that may accrue or belong to Borrower, its
successors and assigns, arising out of or in any way connected with the present
or future use, operation or management of the Vessels or arising out of or in
any way connected with any and all present and further requisitions, charter
parties, bills of lading, contracts and other engagements of affreightment or
the carriage or transportation of cargo, mail and/or passengers, and other
operations of the Vessels, (iii) all monies and claims for monies due and to
become due to Borrower, and all claims for damages in respect of the actual or
constructive total loss of or requisition of use of or title to the Vessels,
and (iv) any proceeds of the foregoing. Notwithstanding anything to the
contrary herein, and so long as no Event of Default has occurred and is
continuing, any gaming or other revenue generated in the normal and customary
operation of the Vessels may be retained and used by Borrower for general
working capital purposes.
"GAAP" means generally accepted accounting principles as
in effect from time to time in the United States, consistently applied.
"General Intangibles" means all of Borrower's present and
future general intangibles and other personal property (including choses or
things in action, goodwill, patents, trade names, trademarks, service marks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due
or recoverable from pension funds, route lists, monies due under any royalty or
licensing agreements, infringement claims, computer programs, computer discs,
computer tapes, literature, reports, catalogs, deposit accounts, insurance
premium rebates, tax refunds, and tax refund claims) other than goods and
Accounts, and Borrower's Books relating to any of the foregoing; excluding,
however, any general intangibles (including, without limitation, licenses)
which by their terms are not transferrable or assignable (or which attempted
transfer or assignment would be void).
"Guarantors" means, collectively, the Corporate Guarantors
and Xxxx Xxxxxxx, individually.
"Insolvency Proceeding" means any proceeding commenced by
or against any person or entity under any provision of the United States
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law,
including assignments for the
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benefit of creditors, formal or informal moratoria, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
"Inventory" means all present and future inventory in
which Borrower has any interest, including goods held for sale or lease or to
be furnished under a contract of service and all of Borrower's present and
future raw materials, work in process, finished goods, and packing and shipping
materials, wherever located, and any documents of title representing any of the
above, and Borrower's Books relating to any of the foregoing.
"Investment Property" means all Borrower's present and
hereafter acquired investment property, securities (certificated and
uncertificated), security entitlements, security accounts, and any interest in
any of the foregoing, and all replacements, substitutions, and additions to any
of the foregoing, wherever located.
"Judicial Officer or Assignee" means any trustee,
receiver, controller, custodian, assignee for the benefit of creditors, or any
other person or entity having powers or duties like or similar to the powers
and duties of a trustee, receiver, controller, custodian, or assignee for the
benefit of creditors.
"Leisure Lady" means the vessel known as the "Leisure
Lady", United States Coast Guard Official No. 671576, more fully described on
Schedule "1" attached hereto.
"Loan Documents" means, collectively, this Agreement, the
Term Note, the Continuing Guaranties of the Corporate Guarantors and the
Limited Continuing Guaranty of Xxxx Xxxxxxx, the Pledge Agreement, the
Borrower's Guaranty, and any other agreement entered into in connection with
this Agreement, together with all alterations, amendments, changes, extensions,
modifications, refinancings, refundings, renewals, replacements, restatements,
or supplements, of or to any of the foregoing.
"Negotiable Collateral" means all of Borrower's present
and future letters of credit, notes, drafts, instruments, documents, leases,
and chattel paper, and Borrower's Books relating to any of the foregoing.
"Obligations" means all loans, advances, debts, principal,
interest (including any interest that, but for the provisions of the United
States Bankruptcy Code, would have accrued), premiums, liabilities (including
all amounts charged to Borrower's loan account pursuant to any agreement
authorizing Foothill to charge Borrower's loan account), obligations, fees,
lease payments, guaranties (including the Borrower's Guaranty), covenants, and
duties owing by Borrower to Foothill of any kind and description (whether
pursuant to or evidenced by the Loan Documents, by any note or other
instrument, or by any other agreement between Foothill and Borrower, and
whether or not for the payment of money), whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
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and including any debt, liability, or obligation owing from Borrower to others
that Foothill may have obtained by assignment or otherwise, and further
including all interest not paid when due and all Foothill Expenses that
Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise. All Obligations shall accrue interest at the rate(s) set forth in
the Term Note from the date such Obligations arise, and such interest shall in
turn be deemed "Obligations" for all purposes under this Agreement and shall be
due and payable when interest is due and payable under the Term Note.
"Pay-Off Letters" means letters, in form and substance
reasonably satisfactory to Foothill, from other lenders, secured creditors, or
lessors respecting the amount necessary to (a) repay in full all of the
obligations of Borrower owing to such lenders, secured creditors, and/or
lessors and (b) obtain (i) terminations/releases of all of the security
interests or liens existing in favor of such lenders, secured creditors, and/or
lessors in and to the properties or assets of Borrower and (ii) good and
marketable title to such properties or assets (in the case of leased property).
"Permitted Liens" means: (a) liens and security interests
held by Foothill; (b) liens for unpaid taxes that are not yet due and payable;
(c) purchase money security interests and liens of lessors under capital
leases, and so long as the security interest or lien only secures the purchase
price of the asset and does not encumber any other assets of the Borrower; and
(d) any liens or encumbrances permitted under the terms and conditions of the
First Preferred Ship Mortgages.
"Permitted Protest" means the right of Borrower to protest
any lien, tax, rental payment, or other charge, other than any such lien or
charge that secures the Obligations, provided (i) a reserve with respect to
such obligation is established on the books of Borrower in an amount that is
reasonably satisfactory to Foothill, (ii) any such protest is instituted and
diligently prosecuted by Borrower in good faith, and (iii) Foothill is
satisfied that, while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the liens or security
interests of Foothill in and to the property or assets of Borrower.
"Pledge Agreement" means that certain Pledge Agreement, of
even date herewith, by Borrower in favor of Foothill, whereby Borrower grants
to Foothill a security interest in all outstanding shares of stock of Florida
Casino now or hereafter held by Borrower, and any extensions, renewals,
replacements, or substitutions therefor.
"Term Loan" means the loan made by Foothill to Borrower in
connection with this Agreement, which loan is further evidenced by the Term
Note.
"Term Note" means that certain Secured Promissory Note, of
even date herewith, by Borrower to the order of Foothill, in the original
principal amount of Two Million One Hundred Thousand Dollars ($2,100,000), and
any extensions, renewals,
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replacements, or substitutions therefor.
"Vegas Express" means the vessel known as the "Vegas
Express", United States Coast Guard Official No. 594643, more fully described
on Schedule "1" attached hereto.
"Vessels" means the vessels described on Schedule "1"
attached hereto and by this reference made a part hereof.
1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein,
the term "financial statements" shall include the notes and schedules thereto.
1.3 Code. Any terms used in this Agreement which are defined in
the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein.
1.4 Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, to the
singular include the plural, and the term "including" is not limiting. The
words "hereof," "herein," "hereby," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, subsection, clause, and exhibit
references are to this Agreement unless otherwise specified.
1.5 Schedules and Exhibits. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. FEES.
Borrower shall pay to Foothill the following fees:
2.1 Closing Fee. A one time closing fee of Twenty One Thousand
Dollars ($21,000) which is earned, in full, on the Closing Date and is due and
payable by Borrower to Foothill in connection with this Agreement on the
Closing Date;
2.2 Annual Fee. An annual fee equal to one percent (1%) of the
outstanding principal balance of the Obligations (as of April 1, 2000, and each
anniversary thereafter), which shall be due and payable by Borrower to Foothill
in connection with this Agreement on April 1, 2000, and on each anniversary of
such date occurring thereafter; and
2.3 Appraisal and Documentation Fees. Foothill's customary
appraisal fee of Seven Hundred Fifty Dollars ($750) per day per appraiser, plus
out-of-pocket expenses
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for each appraisal of the Collateral performed by Foothill or its agents.
3. CONDITIONS TO EFFECTIVENESS: TERM OF AGREEMENT.
3.1 Conditions Precedent. The obligation of Foothill to make
the loan evidenced by the Term Note is subject to the fulfillment, to the
satisfaction of Foothill and its counsel, of each of the following conditions
on or before the Closing Date:
(a) The Closing Date shall occur on or before April 30,
1999;
(b) Other than with respect to Permitted Liens (if any),
Borrower's existing lenders, creditors, and lessors shall have executed and
delivered Pay-Off Letters, UCC termination statements, bills of sale, and other
documentation evidencing the termination of their liens and security interests
in the assets of Borrower (and the transfer of title to such assets to
Borrower, in the case of leased property) or a subordination agreement in form
and substance satisfactory to Foothill in its sole discretion;
(c) Foothill shall have received copies of Borrower's and
each Corporate Guarantor's By-laws and Articles or Certificates of
Incorporation, as amended, modified, or supplemented to the Closing Date,
certified by the Secretaries of Borrower and the Corporate Guarantors;
(d) Foothill shall have received certificates of corporate
status with respect to Borrower and each Corporate Guarantor, dated within ten
(10) days of the Closing Date, by the Secretary(ies) of State of the states of
incorporation of Borrower and each Corporate Guarantor, which certificate shall
indicate that Borrower and each Corporate Guarantor is in good standing in such
state(s);
(e) Foothill shall have received a certificate from the
Secretaries of Borrower and each Corporate Guarantor attesting to the
resolutions of Borrower's and each Corporate Guarantor's Board of Directors
authorizing their execution and delivery of this Agreement and the other Loan
Documents to which each is a party and authorizing specific officers of
Borrower and each Corporate Guarantor to execute same;
(f) Foothill shall have received certificates of corporate
status with respect to Borrower, each dated within ten (10) days of the Closing
Date, such certificates to be issued by the Secretary of State of the states in
which its failure to be duly qualified or licensed would have a material
adverse effect on the financial condition or assets of Borrower, which
certificates shall indicate that Borrower is in good standing;
(g) Foothill shall have received the insurance
certificates, certified copies of policies, required by Section 6.8 hereof and
as required by the First Preferred Ship Mortgages, along with a 438BFU Lender's
Loss Payable Endorsement naming Foothill as sole loss payee, all in form and
substance satisfactory to Foothill and its counsel;
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(h) Foothill shall have received each of the following
documents and agreements, in form and substance satisfactory to Foothill and
its counsel, duly executed, and each such document and agreement shall be in
full force and effect:
(1) This Agreement;
(2) The Term Note;
(3) The Borrower's Guaranty;
(4) Continuing Guaranties from Xxxx Xxxxxxx, individually,
Leisure Time Casinos and Resorts, Inc., Leisure Time
Technology, Inc., Cruise Corporation and Florida
Casino;
(5) The Pledge Agreement;
(6) Assignment of Insurances;
(7) The Amendment Documents;
(8) The Florida Casino Documents; and
(9) Such other documents and instruments as Foothill shall
deem necessary or desirable to ensure that Foothill
has a first priority perfected security interest in
and lien on the Collateral;
(i) Foothill shall have received searches reflecting the
filing of its financing statements and fixture filing;
(j) Foothill shall have received evidence that the First
Preferred Ship Mortgage encumbering the Vegas Express has been duly filed with
and recorded by the United States Coast Guard, and that all other steps deemed
necessary or desirable by Foothill have been duly completed in order for
Foothill to have obtained a first priority perfected security interest in and
lien on the Vegas Express;
(k) Foothill shall have received evidence that the Second
Amendment to First Preferred Ship Mortgage encumbering the Leisure Lady has
been duly filed with and recorded by the United States Coast Guard, and that
all other steps deemed necessary or desirable by Foothill have been duly
completed in order for Foothill to have obtained a first priority perfected
security interest in and lien on the Leisure Lady;
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(l) Foothill shall have received landlord and mortgagee
waivers from the lessors and mortgagees of the locations where the Equipment
is located;
(m) Foothill shall have received a written opinion of
Borrower's legal counsel in form and substance satisfactory to Foothill with
respect to the transactions governed by the Loan Documents, the Florida Casino
Documents and the Amendment Documents;
(n) Foothill shall have received the Closing Fee
referenced in Section 2.1, all of Foothill Expenses incurred as of the Closing
Date, and all other costs and expenses incurred by Foothill in connection
herewith, including without limitation, audit fees, search fees, appraisal
fees, documentation, recording and filing fees, and the fees and costs of
Xxxxxx, Xxxxx and Xxxxxxx LLP, for the negotiation, preparation and
documentation of the Loan Documents;
(o) All representations and warranties set forth in this
Agreement and the other Loan Documents are true and correct as of the Closing
Date, no "Event of Default" has occurred under this Agreement or any of the
other Loan Documents, and all of the Loan Documents are in full force and
effect;
(p) The closing of the (i) loan contemplated by the
Florida Casino Documents and (ii) the amendment contemplated by the Amendment
Documents shall have occurred (or shall occur concurrently with the closing of
the loan represented by the Term Note);
(q) Borrower shall have acquired, or will acquire
concurrently the closing contemplated by this Agreement, the Florida Casino
Stock on terms and conditions satisfactory to Foothill (in Foothill's sole
discretion); and
(r) All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered
or executed or recorded and shall be in form and substance satisfactory to
Foothill and its counsel.
3.2 Term. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and Foothill, and shall continue in
full force and effect until all Obligations, all Cruise Corporation Obligations
and all Florida Casino Obligations have been indefeasibly paid in full.
4. CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest. Borrower hereby grants to
Foothill a continuing security interest in all currently existing and hereafter
acquired or arising Collateral in order to secure (i) prompt repayment of any
and all Obligations and (ii) prompt performance
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by Borrower of each of its covenants and duties under the Loan Documents.
Foothill's security interest in the Collateral shall attach to all Collateral
without further act on the part of Foothill or Borrower.
4.2 Delivery of Additional Documentation Required. Borrower
shall execute and deliver to Foothill, prior to or concurrently with Borrower's
execution and delivery of this Agreement and at any time thereafter at the
request of Foothill, all financing statements, continuation financing
statements, fixture filings, security agreements, chattel mortgages, pledges,
assignments, endorsements of certificates of title, applications for title,
affidavits, reports, notices, letters of authority, and all other documents
that Foothill may reasonably request, in form satisfactory to Foothill, to
perfect and continue perfected Foothill's security interests in the Collateral
and in order to fully consummate all of the transactions contemplated under the
Loan Documents.
4.3 Power of Attorney. Borrower hereby irrevocably makes,
constitutes, and appoints Foothill (and any of Foothill's officers, employees,
or agents designated by Foothill) as Borrower's true and lawful attorney, with
power to: (a) sign the name of Borrower on any of the documents described in
Section 4.2 or on any other similar documents to be executed, recorded, or
filed in order to perfect or continue perfected Foothill's security interest in
the Collateral; (b) at any time that an Event of Default has occurred or
Foothill deems itself insecure, endorse Borrower's name on any checks, notices,
acceptances, money orders, drafts, or other item of payment or security that
may come into Foothill's possession; (c) at any time that an Event of Default
has occurred or Foothill deems itself insecure, make, settle, and adjust all
claims under Borrower's policies of insurance in respect of the Collateral and
make all determinations and decisions with respect to such policies of
insurance. The appointment of Foothill as Borrower's attorney, and each and
every one of Foothill's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations, the Cruise Corporation Obligations
and Florida Casino Obligations have been fully repaid and performed and
Foothill's obligation to provide advances hereunder is terminated.
4.4 Right to Inspect. Foothill (through any of its officers,
employees, or agents) shall have the right, from time to time hereafter, to
inspect Borrower's Books and to check, test, and appraise the Collateral in
order to verify Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants as follows:
5.1 Prior Encumbrances. Borrower has good and indefeasible
title to the Collateral, free and clear of liens, claims, security interests,
or encumbrances except for
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Permitted Liens. None of the Collateral has been purchased by Borrower within
the six (6) months period preceding the Closing Date, except for (i) sales to
Borrower in the ordinary course of the seller's business, and (ii) the
acquisition of the Florida Casino Stock by Borrower.
5.2 Location of Equipment. The Equipment is not now and shall
not at any time hereafter be stored with a bailee, warehouseman, or similar
party without Foothill's prior written consent. Borrower shall keep the
Equipment only on the Leisure Lady or the Vegas Express or at the following
location: 0000 Xxxxxx Xxxx, Xxxx, Xxxx 00000.
None of the Equipment has been located, during the six (6) month
period prior to the Closing Date, in any jurisdiction other than the
county(ies) and state(s) set forth in this Section.
5.3 Location of Chief Executive Office. The chief executive
office of Borrower is located at the address indicated in the first paragraph
of this Agreement and Borrower covenants and agrees that it will not, without
thirty (30) days prior written notification to Foothill, relocate such chief
executive office.
5.4 Fictitious Business Name(s). Borrower uses only the
following Fictitious Business Names and none other: [none].
5.5 Due Organization and Qualification. Borrower is and shall
at all times hereafter be duly organized and existing and in good standing
under the laws of the state of its incorporation and qualified and licensed to
do business in, and in good standing in, any state in which the conduct of its
business or its ownership of the Collateral requires that it be so qualified.
5.6 Due Authorization; No Conflict. The execution, delivery,
and performance of the Loan Documents are within Borrower's corporate powers,
have been duly authorized, and are not in conflict with nor constitute a breach
of any provision contained in Borrower's Articles or Certificate of
Incorporation, or By-laws, nor will they constitute an event of default under
any material agreement to which Borrower is a party.
5.7 Litigation. There are no actions or proceedings pending by
or against Borrower before any court or administrative agency and Borrower does
not have knowledge or belief of any pending, threatened, or imminent
litigation, governmental investigations, or claims, complaints, actions, or
prosecutions involving Borrower or any guarantor of the Obligations, except for
ongoing collection matters in which the Borrower is the plaintiff.
5.8 No Material Adverse Change in Financial Condition. All
financial statements relating to Borrower or any guarantor of the Obligations
that have been or
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may hereafter be delivered by Borrower to Foothill have been prepared in
accordance with GAAP and fairly present Borrower's and such guarantor's
financial condition as of the date thereof and Borrower's and such guarantor's
results of operations for the period then ended. There has not been a material
adverse change in the financial condition of Borrower or any guarantor since
the date of the latest financial statements submitted to Foothill on or before
the Closing Date.
5.9 Solvency. Borrower's assets at a fair valuation exceed the
amount of all of its debts at a fair valuation and Borrower is able to pay all
of its debts (including trade debts and contingent liabilities) as they become
due.
5.10 Environmental Condition. None of Borrower's properties or
assets has ever been used by Borrower or, to the best of Borrower's knowledge,
by previous owners or operators in the disposal of, or to produce, store,
handle, treat, release, or transport, any hazardous waste or hazardous
substance in violation of any law, statute, rule, regulation, or policy of any
federal or state governmental agency. None of Borrower's properties or assets
has ever been designated or identified in any manner pursuant to any
environmental protection statute as a hazardous waste or hazardous substance
disposal site, or a candidate for closure pursuant to any environmental
protection statute. No lien arising under any environmental protection statute
has attached to any revenues or to any real or personal property owned or
operated by Borrower. Borrower has not received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by Borrower
resulting in the releasing or disposing of hazardous waste or hazardous
substances into the environment.
5.11 Reliance by Foothill; Cumulative. Each warranty and
representation contained in this Agreement shall be conclusively presumed to
have been relied on by Foothill regardless of any investigation made or
information possessed by Foothill. The warranties and representations set forth
herein shall be cumulative and in addition to any and all other warranties and
representations that Borrower shall now or hereinafter give, or cause to be
given, to Foothill.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the Obligations, the
Cruise Corporation Obligations and the Florida Casino Obligations, and unless
Foothill shall otherwise consent in writing, Borrower shall do all of the
following:
6.1 Financial Statements, Reports, Certificates. Borrower
agrees to deliver to Foothill: (a) as soon as available, but in any event
within thirty (30) days after the end of each month during each of Borrower's
fiscal years, a company prepared balance sheet, income statement, and cash flow
statement covering Borrower's operations during such period;
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and (b) as soon as available, but in any event within ninety (90) days after
the end of each of Borrower's fiscal years, financial statements of Borrower
for each such fiscal year, reviewed by independent certified public accountants
acceptable to Foothill and certified, without any qualifications, by such
accountants to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Foothill stating that such
accountants do not have knowledge of the existence of any event or condition
constituting an Event of Default, or that would, with the passage of time or
the giving of notice, constitute an Event of Default. Such reviewed financial
statements shall include a balance sheet, profit and loss statement, and cash
flow statement, and such accountants' letter to management. Borrower shall have
issued written instructions to its independent certified public accountants
authorizing them to communicate with Foothill and to release to Foothill
whatever financial information concerning Borrower that Foothill may request.
If Borrower is a parent company of one or more subsidiaries, or affiliates, or
is a subsidiary or affiliate of another company, then, in addition to the
financial statements referred to above, Borrower agrees to deliver financial
statements prepared on a consolidating basis so as to present Borrower and each
such related entity separately, and on a consolidated basis.
Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to Foothill, at Borrower's
expense, copies of Borrower's financial statements, papers related thereto, and
other accounting records of any nature in their possession, and to disclose to
Foothill any information they may have regarding Borrower's business affairs
and financial conditions.
6.2 Other Reports. Borrower agrees to deliver to Foothill by
no later than the fifteenth (15th) day of each month, an accounts receivable
and accounts payable aging report as of the end of the prior calendar month.
Borrower agrees to deliver to Foothill within three (3) business days after
Borrower's payroll taxes are due, evidence that such payroll taxes have been
timely and fully paid.
6.3 Tax Returns. Borrower agrees to deliver to Foothill copies
of each of Borrower's future federal income tax returns, and any amendments
thereto, within thirty (30) days of the filing thereof with the Internal
Revenue Service.
6.4 Guarantor Reports. Borrower agrees to cause any guarantor
of any of the Obligations to deliver its annual financial statements at the
time when Borrower provides its reviewed financial statements to Foothill and
copies of all federal income tax returns as soon as the same are available and
in any event no later than thirty (30) days after the same are required to be
filed by law.
6.5 Title to Equipment. Upon Foothill's request, Borrower
shall immediately deliver to Foothill, properly endorsed, any and all evidences
of ownership of, certificates of title, or applications for title to any items
of Equipment.
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6.6 Maintenance of Equipment. Borrower shall keep and maintain
the Equipment in good operating condition and repair, and make all necessary
replacements thereto so that the value and operating efficiency thereof shall
at all times be maintained and preserved. Borrower shall not permit any item of
Equipment to become a fixture to real estate or an accession to other property,
and the Equipment is now and shall at all times remain personal property.
6.7 Taxes. All assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against
Borrower or any of its property have been paid, and shall hereafter be paid in
full, before delinquency or before the expiration of any extension period.
Borrower shall make due and timely payment or deposit of all federal, state,
and local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Foothill, on demand, appropriate certificates attesting
to the payment or deposit thereof. Borrower shall make timely payment or
deposit of all tax payments and withholding taxes required of it by applicable
laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and
local, state, and federal income taxes, and shall, upon request, furnish
Foothill with proof satisfactory to Foothill indicating that Borrower has made
such payments or deposits.
6.8 Insurance.
(a) Borrower, at its expense, shall keep the Collateral
insured against "all risks" including loss or damage by fire, theft, explosion,
sprinklers, and all other hazards and risks, and in the full insurable value
thereof. Borrower also shall maintain public liability, product liability, and
property damage insurance relating to Borrower's ownership and use of the
Collateral, as well as insurance against larceny, embezzlement, and criminal
misappropriation.
(b) All such policies of insurance shall be in such form,
with such companies, and in such amounts as may be satisfactory to Foothill.
All such policies of insurance (except those of public liability and property
damage) shall contain a 438BFU lender's loss payable endorsement, or an
equivalent endorsement in a form satisfactory to Foothill, showing Foothill as
loss payee thereof, and shall contain a waiver of warranties, and shall specify
that the insurer must give at least ten (10) days prior written notice to
Foothill before canceling its policy for any reason. Borrower shall deliver to
Foothill certified copies of such policies of insurance and evidence of the
payment of all premiums therefor. All proceeds payable under any such policy
shall be payable to Foothill to be applied on account of the Obligations.
6.9 Foothill Expenses. Borrower shall immediately and without
demand reimburse Foothill for all sums expended by Foothill which constitute
Foothill Expenses and Borrower hereby authorizes and approves all advances and
payments by Foothill for items constituting Foothill Expenses. Any Foothill
Expenses not paid promptly by
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Borrower shall constitute Obligations and shall accrue interest at the rate and
in the manner of Obligations existing under the Term Note.
6.10 No Setoffs or Counterclaims. All payments hereunder and
under the other Loan Documents made by or on behalf of Borrower shall be made
without setoff or counterclaim and free and clear of, and without deduction or
withholding for or on account of, any federal, state or local taxes.
6.11 Compliance with Laws. Borrower shall comply with all
applicable laws, rules, and regulations. Without limiting the generality of the
foregoing, Borrower shall (i) at all times operate the Vessels in accordance
with all applicable laws, rules and regulations, and (ii) not be permitted to
place, or maintain, any slot machines, similar gaming equipment, or other
gaming equipment on the Leisure Lady or the Vegas Express unless Foothill
determines in Foothill's discretion that it would not violate any applicable
law.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the Obligations, the
Cruise Corporation Obligations and the Florida Casino Obligations, Borrower
will not do any of the following without Foothill's prior written consent:
7.1 Liens. Create, incur, assume, or permit to exist, directly
or indirectly, any lien on or with respect to any of the Collateral, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens.
7.2 Restrictions on Fundamental Changes. Enter into any
acquisition, merger, consolidation, reorganization, or recapitalization, or
reclassify its capital stock, or liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, assign, lease,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business, property, or assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise
all or substantially all the assets, stock, or other evidence of beneficial
ownership of any person or entity.
7.3 Extraordinary Transactions and Disposal of Collateral.
Sell, lease, or otherwise dispose of, move, relocate, or transfer, whether by
sale or otherwise, any of the Collateral.
7.4 Change Name. Change Borrower's name, business structure,
or identity, or add any new fictitious name.
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8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the United
States Bankruptcy Code, would have accrued on such amounts), fees and charges
due Foothill, taxes, reimbursement of Foothill Expenses, or otherwise);
8.2 If Borrower fails or neglects to perform, keep, or observe
any term, provision, condition, covenant, or agreement contained in this
Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Foothill;
8.3 If any "default" or "Event of Default" occurs under or in
connection with the loan documents evidencing, or pertaining to, the Cruise
Corporation Obligations or the Florida Casino Obligations;
8.4 If there is a material impairment of the prospect of
repayment of any portion of the Obligations owing to Foothill or a material
impairment of the value or priority of Foothill's security interests in the
Collateral;
8.5 Except as (and only to the extent) expressly permitted in
the First Preferred Ship Mortgages (given in favor of Foothill) with respect to
the Vegas Express or the Leisure Lady, if any material portion of Borrower's
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any Judicial Officer or Assignee;
8.6 If an Insolvency Proceeding is commenced by Borrower;
8.7 If an Insolvency Proceeding is commenced against Borrower;
8.8 If Borrower is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of
its business affairs;
8.9 Except as (and only to the extent) expressly permitted in
the First Preferred Ship Mortgages with respect to the Vegas Express or the
Leisure Lady, if a notice of lien, levy, or assessment is filed of record with
respect to any of Borrower's assets by the United States Government, or any
department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a lien, whether xxxxxx or
otherwise, upon any of Borrower's assets and the same is not paid on the
payment date thereof;
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8.10 If a judgment or other claim becomes a lien or encumbrance
upon any material portion of Borrower's assets;
8.11 If there is a default in any material agreement to which
Borrower is a party with third parties resulting in a right by such third
parties, whether or not exercised, to accelerate the maturity of Borrower's
indebtedness thereunder;
8.12 If any misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report made to
Foothill by Borrower or any officer, employee, agent, or director of Borrower,
or if any such warranty or representation is withdrawn by any officer or
director; or
8.13 If the obligation of any guarantor or other third party
under any Loan Document is limited or terminated by operation of law or by the
guarantor or other third party thereunder, or any such guarantor or other third
party becomes the subject of an Insolvency Proceeding.
9. FOOTHILL'S RIGHTS AND REMEDIES
9.1 Rights and Remedies. Upon the occurrence of an Event of
Default Foothill may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are
authorized by Borrower:
(a) Declare all Obligations, the Cruise Corporation
Obligations and/or the Florida Casino Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due
and payable;
(b) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Foothill, but without
affecting Foothill's rights and security interest in the Collateral and without
affecting the Obligations, the Cruise Corporation Obligations or the Florida
Casino Obligations;
(c) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as Foothill considers necessary
or reasonable to protect its security interest in the Collateral. Borrower
agrees to assemble the Collateral if Foothill so requires, and to make the
Collateral available to Foothill as Foothill may designate. Borrower authorizes
Foothill to enter the premises where the Collateral is located, to take and
maintain possession of the Collateral, or any part of it, and to pay, purchase,
contest, or compromise any encumbrance, charge, or lien that in Foothill's
determination appears to be prior or superior to its security interest and to
pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned premises, Borrower hereby grants Foothill a license to enter
into possession of such premises and to occupy the same, without charge, for up
to one hundred twenty (120) days in order to exercise any of Foothill's rights
or
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remedies provided herein, at law, in equity, or otherwise;
(d) Without notice to Borrower (such notice being
expressly waived) set off and apply to the Obligations, the Cruise Corporation
Obligations and/or the Florida Casino Obligations any and all (i) balances and
deposits of Borrower held by Foothill, or (ii) indebtedness at any time owing
to or for the credit or the account of Borrower held by Foothill;
(e) Store, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Collateral. Foothill
is hereby granted a license or other right to use, without charge, Borrower's
labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, advertising for sale and
selling any Collateral and Borrower's rights under all licenses and all
franchise agreements shall inure to Foothill's benefit;
(f) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as
Foothill determines is commercially reasonable. It is not necessary that the
Collateral be present at any such sale;
(g) Foothill may credit bid and purchase at any public
sale.
Foothill shall give notice of the disposition of the Collateral as follows:
(i) Foothill shall give Borrower and each holder of a
security interest in the Collateral who has filed with Foothill a
written request for notice, a notice in writing of the time and place
of public sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the Collateral,
then the time on or after which the private sale or other disposition
is to be made;
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in Section 12, at
least five (5) calendar days before the date fixed for the sale, or at
least five (5) calendar days before the date on or after which the
private sale or other disposition is to be made, unless the Collateral
is perishable or threatens to decline speedily in value. Notice to
persons other than Borrower claiming an interest in the Collateral
shall be sent to such addresses as they have furnished to Foothill;
and
(iii) If the sale is to be a public sale, Foothill
also shall give notice of the time and place by publishing a notice
one time at least five (5) calendar days before the date of the sale
in a newspaper of general circulation in
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the county in which the sale is to be held.
9.2 Deficiency; Excess Proceeds. Any deficiency that exists
after disposition of the Collateral as provided above will be paid immediately
by Borrower. Any excess will be returned, without interest and subject to the
rights of third parties, by Foothill to Borrower.
9.3 Remedies Cumulative. Foothill's rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Foothill shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by
Foothill of one right or remedy shall be deemed an election, and no waiver by
Foothill of any Event of Default shall be deemed a continuing waiver. No delay
by Foothill shall constitute a waiver, election, or acquiescence by it.
100 TAXES AND EXPENSES REGARDING THE COLLATERAL
Except with respect to Permitted Protests, if Borrower fails to
pay any monies (whether taxes, rents, assessments, insurance premiums, or
otherwise) due to third persons or entities, or fails to make any deposits or
furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, to the extent that Foothill determines that such
failure by Borrower could have a material adverse effect on Foothill's
interests in the Collateral, in its discretion and without prior notice to
Borrower, Foothill may do any or all of the following: (a) make payment of the
same or any part thereof; or (b) obtain and maintain insurance policies of the
type described in Section 6.8, and take any action with respect to such
policies as Foothill deems prudent. Any amounts paid or deposited by Foothill
shall constitute Foothill Expenses, shall be immediately charged to Borrower
and become additional Obligations, shall bear interest at the then applicable
rate set forth in the Term Note, and shall be secured by the Collateral. Any
payments made by Foothill shall not constitute an agreement by Foothill to make
similar payments in the future or a waiver by Foothill of any Event of Default
under this Agreement. Foothill need not inquire as to, or contest the validity
of, any such expense, tax, security interest, encumbrance, or lien and the
receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
110 WAIVERS; INDEMNIFICATION
11.1 Demand; Protest; etc. Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Foothill on
which Borrower may in any way be liable.
11.2 Foothill's Liability for Collateral. So long as
Foothill complies
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with its obligations, if any, under Section 9207 of the Code, Foothill shall
not in any way or manner be liable or responsible for: (a) the safekeeping of
the Collateral; (b) any loss or damage thereto occurring or arising in any
manner or fashion from any cause; (c) any diminution in the value thereof; or
(d) any act or default of any carrier, warehouseman, bailee, forwarding agency,
or other person. All risk of loss, damage, or destruction of the Collateral
shall be borne by Borrower.
11.3 Indemnification. Borrower agrees to indemnify
Foothill and its officers, employees, and agents and hold Foothill harmless
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party, and (b) all losses in any way suffered, incurred,
or paid by Foothill as a result of or in any way arising out of, following, or
consequential to transactions with Borrower whether under this Agreement, or
otherwise. This provision shall survive the termination of this Agreement.
120 NOTICES
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection therewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or by prepaid telex,
TWX, telefacsimile, or telegram (with messenger delivery specified) to Borrower
or to Foothill, as the case may be, at its addresses set forth below:
If to Borrower: LEISURE EXPRESS CRUISE, L.L.C.
0000 Xxxxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Mr. ________________
Telecopy No.: ________________________
If to Foothill: FOOTHILL CAPITAL CORPORATION
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn.: Small Business Lending Division Manager
Telecopy No.: 000-000-0000
The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other. All
notices or demands sent in accordance with this Section 12, other than notices
by Foothill in connection with Sections 9504 or 9505 of the Code, shall be
deemed received on the earlier of the date of actual receipt or three (3)
calendar days after the deposit thereof in the mail. Borrower acknowledges and
agrees that notices sent by Foothill in connection with Sections 9504 or 9505
of the Code shall
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be deemed sent when deposited in the mail or transmitted by telefacsimile or
other similar method set forth above.
130 DESTRUCTION OF BORROWER'S DOCUMENTS
All documents, agings, or other papers delivered to Foothill may
be destroyed or otherwise disposed of by Foothill four (4) months after they
are delivered to or received by Foothill, unless Borrower requests, in writing,
the return of said documents, schedules, or other papers and makes
arrangements, at Borrower's expense, for their return.
140 GENERAL PROVISIONS
14.1 Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Foothill.
14.2 Successors and Assigns. This Agreement shall bind and inure
to the benefit of the respective successors and assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights or
duties hereunder without Foothill's prior written consent and any prohibited
assignment shall be absolutely void. No consent to an assignment by Foothill
shall release Borrower from its Obligations. Foothill may assign this Agreement
and its rights and duties hereunder. Foothill reserves the right to sell,
assign, transfer, negotiate, or grant participation in all or any part of, or
any interest in Foothill's rights and benefits hereunder. In connection
therewith, Foothill may disclose all documents and information which Foothill
now or hereafter may have relating to Borrower or Borrower's business. To the
extent that Foothill assigns its rights and obligations hereunder to a third
party, Foothill shall thereafter be released from such assigned obligations to
Borrower and such assignment shall effect a novation between Borrower and such
third party.
14.3 Section Headings. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each paragraph applies equally to this entire
Agreement.
14.4 Interpretation. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against Foothill or
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
14.5 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
14.6 Amendments in Writing. This Agreement cannot be changed or
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terminated orally. All prior agreements, understandings, representations,
warranties, and negotiations, if any, are merged into this Agreement.
14.7 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.
14.8 Revival and Reinstatement of Obligations. If the
incurrence or payment of the Obligations by Borrower or any guarantor of the
Obligations or the transfer by either or both of such parties to Foothill of
any property of either or both of such parties should for any reason
subsequently be declared to be improper under any state or federal law relating
to creditors' rights, including, without limitation, provisions of the United
States Bankruptcy Code relating to fraudulent conveyances, preferences, and
other voidable or recoverable payments of money or transfers of property
(collectively, a "Voidable Transfer"), and if Foothill is required to repay or
restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that Foothill is required to repay or restore,
and as to all reasonable costs, expenses and attorneys' fees of Foothill
related thereto, the liability of Borrower or such guarantor shall
automatically be revived, reinstated, and restored and shall exist as though
such Voidable Transfer had never been made.
14.9 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted, modified, or
qualified by any other agreement, oral or written, whether before or after the
date hereof.
14.10 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY
OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER
COURT IN WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
BORROWER AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 15.10.
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BORROWER AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER AND FOOTHILL REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY
OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed at Los Angeles, California.
"Borrower"
LEISURE EXPRESS CRUISE, L.L.C.,
a Colorado limited liability company
By: /s/
---------------------------------
Print Name:
Title:
Accepted and effective this 22nd day of April, 1999.
"Foothill"
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/
--------------------------------
Print Name:
Its:
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SCHEDULE "1"
VESSELS
1. Name: LEISURE LADY
Official No.: 671576
Hailing Port: NEW YORK, NEW YORK
Gross Tons: 88
Net Tons: 88
Built: 1984 (Chesapeake Shipbuilding, Maryland)
Length Overall: 137 feet
Depth: 7.5 feet
2. Name: VEGAS EXPRESS
Official No.: 594643
Gross Tons: 432
Net Tons: 293
Built: 1978 (RYSCO Shipyard, Blountstown, Florida)
Length Overall: 173.5 feet
Depth: 14 feet
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