EXHIBIT 4.3
FIRST PREFERRED MORTGAGE
dated as of October 29, 1999
GAMBLERS SUPPLY MANAGEMENT COMPANY
as Owner
and
ISLE OF CAPRI CASINOS, INC.
as Mortgagee
in respect of the United States flag vessel
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Amount of Mortgage - $16,300,000 together with interest, expenses, and fees
TABLE OF CONTENTS
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.1. Payment of Indebtedness and Performance by Owner . . . . . . . .3
SECTION 2.2. Authority of Owner . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.3. Ownership and Mortgaging of Vessel . . . . . . . . . . . . . . .4
SECTION 2.4. Compliance with Law; Citizenship . . . . . . . . . . . . . . . .4
SECTION 2.5. No Power to Create or Permit Liens . . . . . . . . . . . . . . .5
SECTION 2.6. Notice of Mortgage . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.7. Release of Liens . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.8. Maintaining the Vessel . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.9. Inspection by Mortgagee. . . . . . . . . . . . . . . . . . . . .6
SECTION 2.10. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 2.11. No Sale, Mortgage or Charter . . . . . . . . . . . . . . . . . .7
SECTION 2.12. Requisition. . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.13. Further Assurances . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.14. Mortgagee's Costs. . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.15. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 2.15.1. Basic Requirements . . . . . . . . . . . . . . . . . .8
SECTION 2.15.2. Lapse of Insurance and Liability for Premium . . . . .8
SECTION 2.15.3. Loss Payable Clause. . . . . . . . . . . . . . . . . .9
SECTION 2.15.4. Compliance with Policy and Pollution Requirements. . 10
SECTION 2.15.5. Total Loss . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.15.6. Broker's Report and Policies . . . . . . . . . . . . 10
SECTION 2.15.7. Furnishing of Security on Arrest, etc. of Vessel . . 10
SECTION 2.15.8. Compromise of Claim. . . . . . . . . . . . . . . . . 11
SECTION 2.16. Charter Parties. . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.1. Defaults and Effects . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.1.1. Events of Default and Related Remedies. . . . . . . . . . 11
SECTION 3.1.2. Effect of Sale. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.1.3. Mortgagee's Right to Receiver and Decree of Sale. . . . . 13
SECTION 3.1.4. Consent to Jurisdiction . . . . . . . . . . . . . . . . . 14
SECTION 3.2. Mortgagee Appointed Attorney-in-Fact of Owner. . . . . . . . . 14
SECTION 3.3. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.4. Return to Former Position. . . . . . . . . . . . . . . . . . . 16
SECTION 3.5. Application of Proceeds. . . . . . . . . . . . . . . . . . . . 16
SECTION 3.6. Performance by Mortgagee . . . . . . . . . . . . . . . . . . . 17
SECTION 3.7. Owner's Rights Before Event of Default . . . . . . . . . . . . 18
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.1. Endorsement. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Agents of Mortgagee. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3.2. Cross-References. . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.3.3. Loan Document Pursuant to Credit Agreement. . . . . . . . 19
SECTION 4.3.4. Survival of Representations and Warranties. . . . . . . . 19
SECTION 4.3.5. Severability. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.3.6. Successors and Assigns. . . . . . . . . . . . . . . . . . 19
SECTION 4.3.7. Effect of Credit Agreement. . . . . . . . . . . . . . . . 19
SECTION 4.3.8. Addresses for Notices. . . . . . . . . . . . . . . . 19
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FIRST PREFERRED MORTGAGE
This FIRST PREFERRED MORTGAGE, made as of October 29, 1999 by GAMBLERS
SUPPLY MANAGEMENT COMPANY, a South Dakota corporation having its principal
office at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (herein
called "Owner"), in favor of ISLE OF CAPRI CASINOS, INC., a Delaware corporation
having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(herein called "Mortgagee"),
W I T N E S S E T H
WHEREAS, Owner is the sole owner of the whole of the vessel ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
having Official No. 950558 of approximately 99.96 gross and 67 net tons and with
dimensions of approximately 228.4 feet by 55 feet, built in 1989 at Freeport,
Florida, by Freeport Ship Builders and Marine Repair, Inc. (herein called
"Builder"), which is duly documented in the name of Owner under the laws of the
United States at the National Vessel Documentation Center at Falling Waters,
West Virginia; and
WHEREAS, Owner is executing and delivering this First Preferred Mortgage
(as the same may from time to time be amended, modified, supplemented or
assigned, herein called the "Mortgage") pursuant to a Credit Agreement dated as
of October 29, 1999 (herein, together with all amendments, if any, called the
"Credit Agreement") by and among Owner (as Borrower) and Mortgagee under which
Mortgagee made a loan (the "Loan") to Owner in the principal amount of Sixteen
Million Three Hundred Thousand Dollars ($16,300,000); and
WHEREAS, in consideration of the Loan made to the Owner, the Owner is
willing to execute and deliver the Mortgage; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the due and punctual (a) payment of all sums that
may now or hereafter be or become secured by or payable under this Mortgage in
accordance herewith or with or under the Credit Agreement and other Loan
Documents or in accordance therewith (all such sums the "Indebtedness Secured
Hereby") and (b) performance and observance of and compliance with the
covenants, terms and conditions of this Mortgage and the other Loan Documents,
Owner for itself, its successors and assigns does by these presents:
1. GRANT, CONVEY, MORTGAGE, PLEDGE AND CONFIRM UNTO MORTGAGEE, its
successors and assigns, the whole of the said vessel ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
including, without being limited to, all of the boilers, engines,
machinery, masts, spars, rigging, boats, pumps, anchors, cables, chains,
tackle, apparel, furniture,
fittings, equipment and other appurtenances appertaining or
belonging thereto, whether now owned or hereafter acquired, and all
additions, improvements and replacements hereafter made in or to
such vessel, including any of the foregoing, or any part thereof
(such vessel, including all of the foregoing, herein called the
"Vessel");
TO HAVE AND TO HOLD the same unto and for the proper use and benefit
of Mortgagee, its successors and assigns, forever, upon the terms herein
set forth;
PROVIDED, HOWEVER, and these presents are upon the condition that, if
Owner or its successors or assigns shall duly and punctually (a) pay
finally and in full to Mortgagee (i) the Indebtedness Secured Hereby as and
when the same becomes due and payable according to the terms hereof and of
the Credit Agreement and other Loan Documents, and (b) perform, observe and
comply with the covenants, terms and conditions, express or implied, of
this Mortgage, the Credit Agreement and other Loan Documents, then this
Mortgage and the rights hereunder shall cease, terminate and be void, but
otherwise shall remain in full force and effect; and
2. FURTHER COVENANT, DECLARE AND AGREE with Mortgagee and its
successors and assigns that the Vessel is to be held subject to the further
covenants, terms and conditions hereinafter set forth.
Anything else in this Mortgage notwithstanding, the mortgage by the Owner
hereunder of the Vessel owned by the Owner shall secure the Indebtedness Secured
Hereby only for the maximum amount that can be incurred without rendering this
Mortgage, as it relates to the Owner, void or voidable under applicable law
relating to fraudulent obligations, fraudulent conveyance or fraudulent
transfer, and not any greater amount.
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Terms for which meanings are provided in
the Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Mortgage with such meanings.
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
Owner represents, warrants and covenants unto Mortgagee as follows:
SECTION 2.1. PAYMENT OF INDEBTEDNESS AND PERFORMANCE BY OWNER. Owner
will
(a) duly and punctually pay the Indebtedness Secured Hereby as and
when the same becomes due and payable according to the terms hereof and of
the Credit Agreement and other Loan Documents, and
(b) duly perform, observe and comply with the covenants, terms and
conditions, express or implied, of this Mortgage, the Credit Agreement and
other Loan Documents.
SECTION 2.2. AUTHORITY OF OWNER. Owner is a corporation duly
organized and validly existing under the laws of the State of South Dakota and
shall so remain during the life of this Mortgage, and has all requisite power,
authority and legal right to own, operate and charter the Vessel, to mortgage
the Vessel to Mortgagee pursuant to this Mortgage and to execute and deliver
this Mortgage. All corporate and other required action necessary for the
execution and delivery by Owner of this Mortgage have been duly and effectively
taken, and this Mortgage, the Credit Agreement and other Loan Documents
constitute and will continue to constitute the legal, valid and binding
obligations of Owner enforceable in accordance with their respective terms.
This Mortgage is given in good faith and with no intent to hinder or defraud any
existing or future creditor of the Owner or lienor of the Vessel. The
representations and warranties of Owner set forth in and made pursuant to
Article VI of the Credit Agreement are hereby made and repeated as of the date
hereof.
SECTION 2.3. OWNERSHIP AND MORTGAGING OF VESSEL. Owner lawfully owns
and is lawfully possessed of the Vessel, free from any Lien whatsoever, except
those Liens described in Exhibit I and except the Lien of this Mortgage, and it
will warrant and defend the title and such possession thereto and to every part
thereof for the benefit of Mortgagee and its successors and assigns against the
claims and demands of all persons whomsoever. The Vessel is duly documented in
the name of Owner under the laws and flag of the United States at the Port of
St. Louis, and Owner will at its own expense cause the Vessel to remain so
documented. Owner will cause this Mortgage immediately to be duly filed and
recorded in accordance with Chapter 313 of Title 46, United States Code (said
Chapter 313, as the same may from time to time be amended hereafter, or any
reenactment or recodification thereof, "Chapter 313"), and will comply with and
satisfy all of the other provisions of Chapter 313 and all other provisions and
requirements of law from time to time in force so as to establish
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and maintain this Mortgage as a first preferred ship mortgage lien under
Chapter 313 and such laws upon the Vessel and upon all additions,
improvements and replacements hereafter made on or to the Vessel or any part
thereof.
SECTION 2.4. COMPLIANCE WITH LAW; CITIZENSHIP. Owner will not cause
or permit the Vessel to:
(a) be operated in any manner contrary to applicable law;
(b) engage in any unlawful trade or any trade other than the Great
Lakes trade or coastwise trade; or
(c) violate any law or carry any cargo that would expose the Vessel
to penalties, forfeiture or capture.
Owner will not do, or suffer or permit to be done, anything which could or
might injuriously affect the documentation of the Vessel under the laws and
regulations of the United States. Owner is and will at all times remain during
the life of this Mortgage a citizen of the United States within the meaning of
Section 2 of the Shipping Act of 1916, as amended (46 United States Code Section
802), and of all rules and regulations promulgated thereunder, qualified to
engage in, and entitled to own and operate vessels engaged in, the Great Lakes
and coastwise trade.
SECTION 2.5. NO POWER TO CREATE OR PERMIT LIENS. Neither Owner, any
charterer, the master of the Vessel nor any other Person has or shall have any
right, power or authority to create, incur or permit to be placed or imposed
upon the Vessel any Liens whatsoever, other than the Lien of this Mortgage and
Liens for crew's wages and salvage without the consent of Mortgagee. Owner will
not permit to be continued any Lien whatsoever upon the Vessel (other than this
Mortgage) for a period in excess of thirty (30) days after the claim giving rise
to such lien or encumbrance shall become due and payable and, within fourteen
(14) days after being requested to do so by the Mortgagee, Owner will pay or
cause to be discharged all claims, or will cause the Vessel to be released or
discharged from any Lien.
SECTION 2.6. NOTICE OF MORTGAGE. A properly certified copy of this
Mortgage shall be carried on board the Vessel with its papers and shall be
exhibited, on demand, to any Person having business with the Vessel which might
give rise to a Lien on the Vessel, or to any representative of Mortgagee. A
notice, reading as follows, printed in plain type of such size that the
paragraph of reading matter shall be at least six inches wide by nine inches
high, shall be framed under glass, and kept prominently displayed in the chart
room and in the master's cabin of the Vessel:
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"NOTICE OF MORTGAGE
This Vessel, owned by Gamblers Supply Management Company, a South
Dakota corporation, is subject to a First Preferred Mortgage dated October
29, 1999, as the same may be amended, modified or supplemented, in favor of
Isle of Capri Casinos, Inc., Mortgagee, under authority of Chapter 313 of
Title 46, United States Code, and under the terms of said Mortgage neither
Owner, any charterer, the Master of this Vessel nor any other person has
the right, power or authority to create, incur or permit to exist upon this
Vessel any liens or encumbrances whatsoever other than liens for crew's
wages or salvage and the lien of said Mortgage."
SECTION 2.7. RELEASE OF LIENS. If a libel or complaint shall be filed
against the Vessel, or if the Vessel shall be otherwise attached, levied upon or
taken into custody or detained by any proceeding in any court or tribunal or by
any government or other authority whatsoever, Owner shall:
(a) within five (5) days thereafter cause the Vessel to be released
and any Lien thereon, other than this Mortgage, to be discharged; and
(b) forthwith notify Mortgagee thereof by telex or facsimile
transmission confirmed by letter.
SECTION 2.8. MAINTAINING THE VESSEL.
(a) The Vessel is, and Owner will at all times, without cost or expense to
Mortgagee, maintain and preserve it, tight, staunch, strong, in good seaworthy
condition, working order and repair and fit for its intended service. Owner
will keep the Vessel in such condition as would entitle it to the highest
classification and rating for vessels of the same age and type in the American
Bureau of Shipping, or another classification society of like standing approved
by the Mortgagee. The Vessel shall, and Owner covenants that the Vessel shall,
at all times comply with all laws, treaties and conventions, and rules and
regulations issued thereunder, applicable to the Vessel, its operation and
trade, and shall have on board as and when required thereby, valid certificates
showing compliance therewith.
(b) Owner will not make, or permit to be made, any substantial change in
the structure, type or speed of the Vessel or change its rig without the prior
written approval of Mortgagee, which shall not be unreasonably withheld or
delayed.
(c) Owner will notify Mortgagee within two (2) business days of any
casualty in excess of $500,000 or deemed a Total Loss (as defined in SECTION
2.15.5), average or salvage
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incurred by, or arrest of, the Vessel and shall thereafter provide to the
Mortgagee full information with respect thereto.
(d) Owner will not, without the prior written consent of Mortgagee, which
shall not be unreasonably withheld or delayed, put the Vessel into the
possession of any repair yard or dry-dock for the purpose of survey, dry-dock or
repairs if the costs of such survey, dry-dock or repairs shall be in an amount
exceeding or likely to exceed five hundred thousand dollars ($500,000).
SECTION 2.9. INSPECTION BY MORTGAGEE. Mortgagee or its authorized
representatives may at any reasonable time, on reasonable notice, which shall
not interfere with the Owner's business, and at the reasonable expense of Owner:
(a) inspect the Vessel's cargo, logs and papers and any and all
contracts and other documents relating to the Vessel, whether on board or
not; and
(b) inspect or survey the Vessel to ascertain its condition and to
satisfy itself that the Vessel is being properly repaired and maintained.
Owner shall cause to be made all such repairs, without expense to
Mortgagee, or its authorized representatives, as such inspection or survey may
show to be required, to the satisfaction of the Vessel's classification society,
salvage society and/or the United States Coast Guard.
SECTION 2.10. PAYMENT OF TAXES. Owner will pay and discharge, or cause
to be paid and discharged, when due and payable from time to time, all taxes,
assessments, governmental charges, fines and penalties lawfully imposed on the
Vessel or any income therefrom or upon Owner or any of its property, or upon
Mortgagee, as mortgagee of the Vessel hereunder, provided that Owner shall not
be required to pay any such tax, assessment or charge which is concurrently
contested in good faith by appropriate proceedings and in respect of which
adequate reserves are maintained in accordance with generally accepted
accounting principles in the United States consistently applied, and provided
further that the nonpayment thereof will not subject the Vessel to arrest,
detention, attachment, forfeiture or loss. In any event, Owner will pay or
cause to be paid all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any Lien which is attached as security
therefor.
SECTION 2.11. NO SALE, MORTGAGE OR CHARTER. Owner will not, without
the prior written consent of Mortgagee, in any manner sell, transfer, demise
charter, change the management of, or mortgage the Vessel, or agree to do any of
the foregoing. Any written consent given for any one of the foregoing
transactions shall not be construed to be a waiver of this provision in respect
of any subsequent such transaction. Any such transaction with
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respect to the Vessel shall be subject to the provisions of this Mortgage and
the Lien it creates.
SECTION 2.12. REQUISITION. If title to or ownership of the Vessel
shall be requisitioned, purchased or taken by any government of any nation or
any department, agency or representative thereof, or any authority acting or
purporting to act under color of government ("Requisition of Title") the Lien of
this Mortgage shall be deemed to attach to, and to Owner's claim for, any
compensation, purchase price, reimbursement or award therefor payable from any
source (including any insurance proceeds in respect thereof), and such
compensation, purchase price, reimbursement or award is hereby declared payable
to Mortgagee, who shall apply the same as provided in SECTION 3.5. Owner shall
promptly execute and deliver to Mortgagee such documents and do and perform such
acts as in the opinion of Mortgagee may be necessary or useful to facilitate or
expedite the collection by Mortgagee of such compensation, purchase price,
reimbursement or award.
SECTION 2.13. FURTHER ASSURANCES. If this Mortgage, or any provisions
hereof, shall be deemed invalid in whole or in part for any reason, or if the
documents at any time held by Mortgagee shall be deemed by Mortgagee for any
reason insufficient to carry out the true intent and spirit of this Mortgage,
then from time to time Owner will duly execute and deliver, on its own behalf,
any and all such other and further assurances and documents as in the judgment
of Mortgagee may be necessary, useful or desirable more effectually to subject
the Vessel to the Lien of this Mortgage or to obtain or maintain the full
benefits of this Mortgage. Upon the failure of Owner so to do, Mortgagee may
execute any and all such other and further assurances and documents for and in
the name and stead of Owner.
SECTION 2.14. MORTGAGEE'S COSTS.
(a) Owner shall promptly pay or reimburse to Mortgagee all costs,
fees and expenses ("Mortgagee's Costs") suffered, incurred or made by
Mortgagee after the occurrence of a Default in exercising, protecting or
pursuing its rights or remedies under the Mortgage, the Credit Agreement or
other Loan Documents (including, but not limited to, expenses of any sale
or taking of the Vessel, reasonable attorneys' fees and court costs) with
interest thereon at the rate provided in Section 3.2.1 of the Credit
Agreement.
(b) If Owner shall default in the observance or performance of any of
the covenants, conditions or agreements in this Mortgage on its part to be
performed or observed, Mortgagee may in its discretion do all acts and make
all expenditures necessary to remedy such default, including, but not
limited to, the procurement of insurance on the Vessel, making repairs,
discharge or purchase of Liens, and payment of taxes, dues, assessments,
governmental charges, fines, penalties and attorney's fees, provided that
Mortgagee shall be under no obligation to Owner to do such acts or make
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any such expenditures nor shall the doing or making thereof relieve
Owner of any default in that respect. All reasonable costs, fees
and expenses of such acts and the making of such expenditures shall
constitute Mortgagee's Costs and shall promptly be paid or
reimbursed to Mortgagee together with interest as provided in
CLAUSE (a) above.
(c) All Mortgagee's Costs and interest thereon shall be debts due
from Owner to Mortgagee payable on demand, and shall be secured by the Lien
of this Mortgage.
SECTION 2.15. INSURANCE.
SECTION 2.15.1. BASIC REQUIREMENTS. Owner shall, at its own expense,
cause insurance on and with respect to the Vessel to be carried, maintained and
renewed (at least fifteen (15) full business days prior to the expiration date
thereof), in such amounts (with such deductibles or franchises), payable in
United States dollars, with such named assureds (including, without limitation,
Mortgagee) against such risks (including, without limitation, hull and
machinery, protection and indemnity (both clauses), off-shore hire and pollution
(including spillage or leakage of cargo), in such form (including, without
limitation, the form of loss payable clause) and with such insurance companies,
underwriters, funds, clubs or associations, and through such brokers, if any, as
shall be acceptable to Mortgagee. For the purposes of insurance against total
loss, the Vessel shall at all times be insured for and valued at its full
commercial value.
SECTION 2.15.2. LAPSE OF INSURANCE AND LIABILITY FOR PREMIUM. Owner will
cause all insurance companies, underwriters, funds, clubs or associations to
agree promptly to advise Mortgagee:
(a) of any lapse of any insurance or insurance coverage, by
expiration, failure to renew or any other act or omission on the part of
Owner, of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance or insurance coverage on
the Vessel; and
(b) by telex, facsimile or cable, at least ten (10) full business
days prior to the expiration date of any insurance carried pursuant to this
SECTION 2.15, if such insurance has not been renewed or replaced with new
insurance which complies with the provisions of this SECTION 2.15.
Notwithstanding that Mortgagee may be named under any insurance as an
assured, assignee or loss payee thereunder, there shall be, and the relevant
policies or entries shall provide that there shall be, no recourse against it,
and it shall not be liable, for payment of premiums, calls or assessments.
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SECTION 2.15.3. LOSS PAYABLE CLAUSE. Unless otherwise required by
Mortgagee by notice to the relevant company, underwriter, fund, club or
association, all insurance shall be payable to Mortgagee for distribution by it
to itself and Owner as their interests may appear. Policies or certificates
shall provide, however, that:
(a) payments in respect of any loss under any insurance for
protection and indemnity risks may be paid directly to Owner to reimburse
it for any loss, damage or expense incurred by it and covered by such
insurance, or directly to the Person to whom any liability covered by such
insurance has been incurred; and
(b) payments in respect of any loss (other than a loss covered by
CLAUSE (A) or SECTION 2.15.5) under any insurance covering damage to the
Vessel may be paid directly for the repair, salvage or other charges, or as
reimbursement to Owner if it shall have first paid repair, salvage or other
charges, incurred as a result of such damage, provided that (i) if such
damage involves a loss in excess of five hundred thousand dollars
($500,000), no payment shall be made to Owner without the insurer first
obtaining the written consent of Mortgagee (which consent shall not be
unreasonably withheld or delayed), and (ii) no payment shall be made to
Owner if there has occurred an Event of Default (as defined in SECTION
3.1.1) or a Default.
Payments in respect of any loss covered by this SECTION 2.15.3 which:
(c) are paid to Mortgagee which might have been paid, in accordance
with the provisions of this SECTION 2.15.3, directly to Owner or others,
shall, provided no Event of Default or Unmatured Event of Default has
occurred, be paid by Mortgagee to, or as directed by, Owner; or
(d) are paid to Owner after Mortgagee gives notice as above provided
or after there has occurred an Event of Default or Unmatured Event of
Default, shall be deemed received by Owner, and held in trust by Owner, for
the benefit of Mortgagee, and shall be promptly paid over to Mortgagee for
application in accordance with SECTION 3.5.
SECTION 2.15.4. COMPLIANCE WITH POLICY AND POLLUTION REQUIREMENTS. Owner
shall:
(a) not do or permit to be done any act, or omit to take any action,
which might cause any insurance or insurance coverage on or in respect of
the Vessel to be suspended, impaired or cancelled, and shall not permit the
Vessel to undertake any voyage, run any risk or transport any cargo which
may not be permitted by the insurance in effect; and
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(b) comply with and satisfy all of the provisions of any applicable
law, regulation, proclamation or order concerning financial responsibility
for liabilities imposed on Owner or the Vessel with respect to pollution by
any applicable state or nation or political subdivision thereof, including,
without being limited to, the United States Water Pollution Control Act, as
at any time amended, or by any applicable international treaty or
convention, and will maintain all certificates or other evidence of
financial responsibility as may be required by any such applicable law,
regulation, proclamation, order, treaty or convention with respect to the
Vessel's cargo or the trade in which the Vessel is from time to time
engaged.
SECTION 2.15.5. TOTAL LOSS. All payments for an actual or constructive
total loss or a compromised, agreed or arranged constructive total loss of the
Vessel ("Total Loss") shall be paid to Mortgagee and shall be applied by
Mortgagee as provided in SECTION 3.5. Owner may not declare, or agree with
insurers, that the Vessel is a constructive or compromised, agreed or arranged
constructive total loss without the prior written consent of Mortgagee, which
shall not be unreasonably withheld or delayed.
SECTION 2.15.6. BROKER'S REPORT AND POLICIES. Owner shall:
(a) furnish Mortgagee concurrently with the execution hereof, and of
any supplement hereto adding a vessel to the Lien hereof, and thereafter at
intervals of not more than twelve (12) calendar months, a detailed report
signed by a firm of independent marine insurance brokers acceptable to
Mortgagee regarding the insurance coverage carried on the Vessel including,
as to each policy or entry in a club or association, the amount, insurer,
reinsurer (or club or association), type of risk covered and expiration
date; and
(b) deliver to Mortgagee all available, or if unavailable, certified
copies of, original cover notes, binders, evidences of insurance, policies
and certificates of entry in protection and indemnity clubs or
associations, and all endorsements and orders amendatory thereof in respect
of insurance maintained under this Mortgage.
SECTION 2.15.7. FURNISHING OF SECURITY ON ARREST, ETC. OF VESSEL. In the
event that any claim or Lien is asserted against the Vessel for loss, damage or
expense which is covered by insurance required hereunder and it is necessary for
Owner to obtain a bond or supply other security to prevent arrest of the Vessel
or to release the Vessel from arrest on account of such claim or Lien,
Mortgagee, on request of Owner, may, in the sole discretion of Mortgagee, assign
to any Person executing a surety or guarantee bond or other agreement to save or
release the Vessel from such arrest, all rights, title and interests of
Mortgagee in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.
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SECTION 2.15.8. COMPROMISE OF CLAIM. In case any underwriter proposes to
pay less on any claim than the amount thereof, the Owner shall forthwith inform
the Mortgagee and either (a) prior to the occurrence of a Default, (x) if the
claim relates to a loss that is less than or equal to $1,000,000 and does not
constitute a Total Loss, Owner shall have the right to negotiate and agree to
any compromise and (y) if the claim relates to a loss in excess of $1,000,000 or
a Total Loss, Owner shall have the right to negotiate and agree, with the prior
written consent of the Mortgagee which consent shall not be unreasonably
withheld or delayed, to any compromise, or (b) after the occurrence of a
Default, the Mortgagee shall have the sole right to negotiate and agree to any
compromise.
SECTION 2.16. CHARTER PARTIES. The Owner will fully perform any and
all charter parties which may, pursuant to the terms hereof, be entered into
with respect to the Vessel.
ARTICLE III
DEFAULTS AND REMEDIES
SECTION 3.1. DEFAULTS AND EFFECTS.
SECTION 3.1.1. EVENTS OF DEFAULT AND RELATED REMEDIES. If any one or
more of the following events (each an "Event of Default"), shall occur:
(a) an Event of Default as defined in the Credit Agreement shall
occur or default shall be made by Owner in the due and punctual performance
or observance of SECTION 2.1 (subject to any applicable cure period
provided in the Credit Agreement), 2.3, 2.5, 2.8(b), (c) or (d), or of any
other provision of ARTICLE II the default of which cannot be cured;
(b) default shall be made by Owner in the due and punctual
performance or observance of any other provision of this Mortgage and such
default shall continue for a period of thirty (30) days;
(c) any representation or warranty made in this Mortgage or in any
certificate of Owner furnished in connection herewith shall prove at any
time to have been incorrect in any material respect at the time of
execution hereof or shall prove at any time thereafter to be incorrect in
any material respect; or
(d) the Vessel shall become a Total Loss, and Mortgagee shall not
have received (i) within sixty (60) days after the date thereof (with
respect to an actual total loss) or (ii) within ninety (90) days after the
date thereof (with respect to a constructive
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total loss or a compromised, agreed or arranged constructive total
loss) (but in any event not later than two (2) days after the
receipt of insurance proceeds therefor), the outstanding principal
amount of all amounts otherwise due or owing by Owner to Mortgagee
under this Mortgage, the Credit Agreement, other Loan Documents or
otherwise to be immediately due and payable, together with accrued
interest thereon to the date of payment and payment in full of all
other Indebtedness Secured Hereby;
then at any time thereafter Mortgagee may do any one or more of the following:
(e) declare, by giving written, telex or facsimile notice to Owner,
the outstanding principal amount of all amounts otherwise due or owing by
Owner to Mortgagee under this Mortgage, the Credit Agreement, other Loan
Documents or otherwise to be immediately due and payable, whereupon the
same, together with interest thereon and all additional amounts as may be
necessary to compensate Mortgagee for Mortgagee's Costs, accrued to the
date of declaration, shall become and be immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which
are hereby waived by Owner, and Owner agrees that upon such declaration
Owner will immediately pay the same to Mortgagee, and thereafter such total
amount shall bear interest at the rate provided for in Section 3.2.1 of the
Credit Agreement;
(f) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the laws of the United States; and
exercise all of the rights and remedies in foreclosure and otherwise given
to mortgagees by the laws of any other jurisdiction;
(g) bring suit at law, in equity or in admiralty in any court of any
nation to foreclose, including foreclosure by seizure, arrest and sale of
the Vessel, this Mortgage, or to recover judgment for any or all amounts
due to Mortgagee from Owner, and collect the same out of any and all
property of Owner whether covered by this Mortgage or otherwise;
(h) take the Vessel, at any time, wherever the same may be, without
legal process and without being responsible for loss or damage; and Owner
or other person in possession thereof forthwith upon demand of Mortgagee
shall surrender possession of the Vessel to Mortgagee, and Mortgagee may
hold, lay up, manage, lease, charter, operate or otherwise use the Vessel,
for such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights, earnings,
issues, revenues, income, profits, return premiums, salvage awards or
recoveries, recoveries in general average, and all other sums due or to
become due in respect of such Vessel or in respect of any insurance thereon
from any Person whomsoever, accounting only for the net profits, if any,
arising from such use of the Vessel and
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charging upon all receipts from the use of the Vessel or from the
sale thereof, by court proceedings or pursuant to clause (i) below,
all costs, expenses, charges, damages or losses by reason of such
use; and if at any time the Mortgagee shall avail itself of the
right herein given it to take the Vessel, the Mortgagee shall have
the right to dock the Vessel, for a reasonable time, at any dock,
pier or other premises of the Owner without charge or to dock the
Vessel at any other place at the cost and expense of the Owner;
and/or
(i) sell the Vessel upon such terms and conditions as the Mortgagee
deems best, without being responsible for loss or damage, free from any
claim of or by Owner at law, in equity, in admiralty or by statute, public
or private sale, by sealed bids or otherwise; in the case of public sale,
notice thereof shall be published for ten (10) consecutive days in a
newspaper published in the City of Chicago, State of Illinois, and if the
place of sale should not be the City of Chicago, then also by publication
of similar notice in a daily newspaper, if any, published at the place of
sale; in the case of private sale, no newspaper publication of notice of
sale shall be required; in case of either a public or private sale, notice
thereof shall be mailed to Owner at its last known address fourteen (14)
days prior to the date fixed for entering into the contract of sale; any
sale may be held at such place and at such time as Mortgagee by notice may
specify, may be adjourned by Mortgagee from time to time by announcement at
the time and place appointed for such sale or for such adjourned sale, and
without further notice or publication Mortgagee may make any such sale at
the time and place to which the same shall be so adjourned; and any sale
may be conducted without bringing the Vessel to the place designated for
such sale and in such manner as Mortgagee may deem to be for its best
advantage.
SECTION 3.1.2. EFFECT OF SALE. Any sale of the Vessel made under this
Mortgage, whether under the power of sale hereby granted or any judicial
proceedings, shall operate to divest all right, title and interest of any nature
whatsoever of Owner therein and thereto, and shall forever bar Owner, its
successors or assigns, and all Persons claiming by, through or under them. No
purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. At any such sale, Mortgagee or any other
Person to whom other amounts secured by this Mortgage are otherwise due and
owing may bid for and purchase the Vessel and may make payment on account
thereof by applying all amounts remaining due and unpaid under the Credit
Agreement and such other amounts otherwise due or owing to it as a credit
against the net purchase price of the Vessel (after allowing for the costs and
expenses of sale and other charges).
SECTION 3.1.3. MORTGAGEE'S RIGHT TO RECEIVER AND DECREE OF SALE. Owner
covenants and agrees that in addition to any and all other rights, powers and
remedies elsewhere in this Mortgage granted to and conferred upon Mortgagee,
Mortgagee in any suit
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to enforce any of its rights, powers or remedies shall be entitled
as a matter of right and not as a matter of discretion to:
(a) the appointment of a receiver or receivers of Owner's interest in
the Vessel and Owner's interest in the hire, earnings, issues, revenues,
freights, incomes and profits due or to become due and arising from the
operation thereof; and
(b) a decree ordering and directing the sale and disposal of the
Vessel.
SECTION 3.1.4. CONSENT TO JURISDICTION. Owner hereby expressly and
irrevocably consents to the jurisdiction of any court in any nation whatsoever
wherein the Vessel may at any time be located for the foreclosure of this
Mortgage, the sale of Owner's interest in the Vessel or the enforcement of any
other remedy or right hereunder, and hereby expressly and irrevocably submits
the person of Owner and its interest in the Vessel to the jurisdiction of any
such court in any nation in any such action or proceeding.
SECTION 3.2. MORTGAGEE APPOINTED ATTORNEY-IN-FACT OF OWNER.
(a) Owner hereby authorizes and empowers Mortgagee and hereby
appoints Mortgagee the true and lawful attorney-in-fact of Owner:
(i) to make all necessary transfers of the Vessel permitted
under this Mortgage, and for that purpose Mortgagee may execute all
necessary instruments of assignment and transfer, Owner hereby
ratifying and confirming all that its said attorney shall lawfully do
by virtue hereof; nevertheless Owner shall, if so requested by
Mortgagee, ratify and confirm such sale by executing and delivering to
the purchaser of the Vessel such proper ▇▇▇▇ of sale, conveyance,
instrument of transfer and release as may be designated in such
request;
(ii) upon the happening of an Event of Default, to demand,
collect, receive, compromise and ▇▇▇ for, so far as may be permitted
by law, Owner's interest in all freights, hire, earnings, issues,
revenues, income and profits of the Vessel and Owner's interest in all
amounts due from insurers under any insurance or insurance coverage
thereon as payments of partial losses, actual or constructive, or
compromised, agreed or arranged constructive total losses, or as
return of premiums or otherwise, salvage awards and recoveries,
recoveries in general average or otherwise, and Owner's interest in
all other sums, due or to become due at or after the time of the
happening of any Event of Default, in respect of the Vessel, or in
respect of any insurance or insurance coverage thereon from any Person
whomsoever, and to make, give, and execute in the name of Owner
acquittances, receipts, releases, or other discharges for the
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same, whether under seal or otherwise, and to endorse and accept in
the name of Owner all checks, notes, drafts, warrants, agreements
and all other instruments in writing with respect to the foregoing;
(iii) if the Vessel shall be arrested or detained by a
▇▇▇▇▇▇▇▇ or other officer of any court of law, equity or admiralty
jurisdiction in any nation or by any government or other authority and
shall not be released from arrest or detention within fifteen (15)
days from the date of arrest or detention, to apply for and receive
possession of and to take possession of the Vessel with all the rights
and powers that Owner, or its successors or assigns, might have,
possess or exercise in any such event;
(iv) to appear in the name of Owner, its successors or
assigns, in any court of any nation where a suit is pending against
the Vessel because of or on account of any alleged lien against the
Vessel from which the Vessel has not been released and to take such
proceedings as to it may seem proper towards the defense of such suit
and the purchase or discharge of such lien; and
(v) to execute and deliver further assurances and documents in
the name and stead of Owner as provided in SECTION 2.13.
(b) Any and all reasonable costs or expenditures made, suffered or
incurred by Mortgagee after the occurrence of a Default pursuant to the
exercise by Mortgagee of any of the powers or remedies set forth in the
immediately preceding CLAUSE (a) shall be a debt due from Owner to
Mortgagee payable on demand, and shall be secured by the Lien of the
Mortgage.
(c) All authorizations, powers and powers of attorney granted under
this Mortgage shall empower Mortgagee to act in the name and stead of
Owner, its successors and assigns, shall be irrevocable and may be
exercised not only by Mortgagee and its successors and assigns but also by
an appointee or appointees, with full power of substitution, to the same
extent as if the said appointee or appointees had been named as one of the
attorneys by express designation.
(d) Upon exercising any of the powers or powers of attorney
authorized under this Section 3.2 (other than CLAUSE (ii) hereof), the
Mortgagee shall promptly notify Owner of such exercise, PROVIDED, HOWEVER,
that any delay or failure to provide such notice shall not impair the right
of the Mortgagee to exercise such power or power of attorney nor the
effectiveness of such exercise.
SECTION 3.3. REMEDIES CUMULATIVE. Each and every power and remedy
herein granted to Mortgagee shall be cumulative and shall be in addition to
every other power and
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remedy herein given or now or hereafter existing at law, in equity, in
admiralty or by statute, and each and every power and remedy, whether
specifically herein given or otherwise existing, may be exercised from time
to time and as often and in such order as may be deemed expedient by
Mortgagee and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other power or remedy. No notice to or demand on
Owner in any instance shall entitle Owner to any other or further notice or
demand in similar or other circumstances. No delay or omission by Mortgagee
in the exercise of any right or power or in the pursuance of any remedy
occurring upon an Event of Default shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of Owner or
to be an acquiescence therein, nor shall the acceptance by Mortgagee of any
security or of any payment of or on account of any past Event of Default or
any advances after any past Event of Default be construed to be a waiver of
any right to take advantage of any future Event of Default or of any past
Event of Default not completely cured thereby.
SECTION 3.4. RETURN TO FORMER POSITION.
(a) If, at any time after an Event of Default and prior to the actual
sale of the Vessel by Mortgagee or prior to any foreclosure proceedings,
Owner offers completely to cure all Events of Default and to pay all
expenses, advances and damages to Mortgagee as a consequence of and
subsequent to such Event of Default (including all Mortgagee's Costs) with
interest thereon from and including the date of such Event of Default up to
the date of actual payment at the rate provided in Section 3.2.1 of the
Credit Agreement, then Mortgagee shall accept such offer and payment and
restore Owner to its former position, but such action shall not affect any
subsequent Event of Default or impair any rights consequent thereon.
(b) If Mortgagee shall have proceeded to enforce any right, power or
remedy under this Mortgage by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to Mortgagee, then and in every such
case Owner and Mortgagee shall be restored to their former positions and
rights hereunder with respect to the property subject or intended to be
subject to this Mortgage, and all rights, remedies and powers of Mortgagee
shall continue as if no such proceedings had been taken.
SECTION 3.5. APPLICATION OF PROCEEDS. The proceeds of the sale of the
Vessel, the proceeds of any insurance received by Mortgagee hereunder (unless
otherwise specifically set forth herein), any moneys received by Mortgagee
hereunder as a result of Requisition of Title of the Vessel, the proceeds of any
judgment collected by Mortgagee for any default hereunder, and the net earnings
from any management, lease, charter, operation or other use of the Vessel by
Mortgagee under any of the powers above specified, including the proceeds of any
claims for damages in respect of the Vessel and of any proceeds of insurance
received
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by Mortgagee in respect of the Vessel while exercising any such powers, and
any and all other moneys received by Mortgagee pursuant to or under the terms
of this Mortgage the application of which has not elsewhere herein been
specifically provided for, shall be applied by Mortgagee as follows:
FIRST: To the payment of all Mortgagee's Costs, including but not
limited to the expenses of any sale or any taking of the Vessel, reasonable
attorneys' fees and court costs, together with interest as provided herein,
and to provide adequate indemnity to Mortgagee against Liens claiming
priority over or equality with the Liens created under this Mortgage;
SECOND: To the payment of accrued interest on, and then principal of,
any amounts owing under the Credit Agreement, whether due or not, and if
such principal cannot be paid in full then to the payment of principal then
due and thereafter to the prepayment of the remaining installments of
principal of any amounts owing under the Credit Agreement, such prepayment
to be applied to reduce pro-rata the remaining principal installments
unless an Event of Default or Unmatured Event of Default shall have
occurred and be continuing, in which event such prepayment shall be applied
to the remaining principal installments in inverse order of maturities;
THIRD: To the payment of the remaining Indebtedness Secured Hereby
and all other sums payable by Owner to Mortgagee hereunder whether then due
or not, together with interest thereon as provided herein or in the Credit
Agreement, and of all damages, liquidated or otherwise; and
FOURTH: To the payment of any surplus thereafter remaining to Owner
or to whomsoever may be entitled thereto.
In the event that such proceeds, net earnings or other monies are insufficient
to pay the amounts specified in paragraphs "FIRST", "SECOND", and "THIRD" above,
Mortgagee shall be entitled to collect the balance from Owner or from any other
Person liable therefor.
SECTION 3.6. PERFORMANCE BY MORTGAGEE. If Owner shall default in the
observance or performance of any of the conditions or agreements of this
Mortgage on its part to be performed or observed, Mortgagee may in its
discretion do all acts and make all reasonable expenditures reasonably necessary
to remedy such default, including, without limitation of the foregoing,
procurement of insurance on the Vessel, making of repairs, discharge or purchase
of Liens and payment of taxes, dues, assessments, governmental charges, fines,
penalties and attorneys' fees, and Owner shall promptly reimburse Mortgagee for
any and all expenditures so made or incurred, with interest thereon on a daily
basis for the period from and including the date of such Event of Default up to
the date of actual payment at the default rate specified in Section 3.2.1 of the
Credit Agreement, and until Owner has so
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reimbursed Mortgagee for such expenditures, the amount thereof shall be a
debt due from Owner to Mortgagee, payable on demand, and payment thereof
shall be secured by the Lien of this Mortgage in like manner and extent as if
the amount and description thereof were written herein, but Mortgagee, though
entitled so to do, shall be under no obligation to Owner to make any such
expenditures nor shall the making thereof relieve Owner of any default in
that respect. Owner shall also reimburse Mortgagee promptly with interest at
the rate provided above for any and all advances reasonably made or incurred
by Mortgagee at any time in taking the Vessel or otherwise protecting its
rights hereunder, and for any and all losses sustained by Mortgagee from or
by reason of any action or inaction taken by Owner hereunder.
SECTION 3.7. OWNER'S RIGHTS BEFORE EVENT OF DEFAULT. Until an Event
of Default shall occur, Owner shall:
(a) be suffered and permitted to retain actual possession and use of
the Vessel; and
(b) have the right, from time to time, in its discretion and without
application to Mortgagee and without obtaining a release thereof by
Mortgagee, to dispose of, free from the Lien hereof, its interest in any
boilers, engines, machinery, masts, spars, rigging, boats, pumps, anchors,
cables, chains, tackle, apparel, furniture, fittings, equipment, or
appurtenances appertaining or belonging to the Vessel that are no longer
useful, necessary, profitable or advantageous in the operation of the
Vessel, provided that Owner shall first or simultaneously replace the same
by such new items of substantially equal value, which shall forthwith
become subject to the Lien of this Mortgage as a first preferred mortgage
thereon.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. ENDORSEMENT. For the purpose of recording this Mortgage
as required by Chapter 313, (1) the total amount of this Mortgage is Sixteen
Million Three Hundred Thousand Dollars ($16,300,000), together with interest,
expenses, and fees and performance of Mortgage covenants, (2) the maturity date
is the earliest to occur of the following: (i) the Isle Merger Agreement shall,
in whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of Parent and (a) such termination or
cessation shall continue for two Business Days if resulting from the Parent's
acceptance of a Superior Proposal (as defined in the Isle Merger Agreement) to
be acquired by another Person other than the Lender or (b) such termination or
cessation shall continue for 180 days if resulting for any other reason under
the Isle Merger Agreement; (ii)
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the Parent or any Affilidate of the Parent shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability or (iii) consummation of the ▇▇▇▇▇ Merger and (3) the
discharge amount is the same as the total amount.
SECTION 4.2. AGENTS OF MORTGAGEE. Wherever and whenever herein any
right, power or authority is granted or given to Mortgagee, such right, power
and authority may be exercised in all cases by Mortgagee or such agent or agents
or official or officials as it may appoint or authorize, and the act or acts of
such agent or agents or official or officials when taken shall constitute the
act of Mortgagee.
SECTION 4.3. GENERAL.
SECTION 4.3.1. AMENDMENTS. This Mortgage may not be amended or
supplemented except in writing executed by Owner and Mortgagee.
SECTION 4.3.2. CROSS-REFERENCES. References in this Mortgage to any
Section or Article are, unless otherwise specified, to such Section or Article
of this Mortgage.
SECTION 4.3.3. LOAN DOCUMENT PURSUANT TO CREDIT AGREEMENT. This
Mortgage is a Loan Document executed pursuant to the Credit Agreement, and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.
SECTION 4.3.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in any certificate furnished in connection
herewith shall be considered representations and warranties by Owner and shall
survive the execution and delivery of this Mortgage.
SECTION 4.3.5. SEVERABILITY.
(a) If any terms or provisions of this Mortgage shall be determined to
be invalid or unenforceable for any reason by any court of competent
jurisdiction, governmental authority, statute or otherwise, such
determination shall not adversely affect any other term or provision of
this Mortgage which will otherwise remain in full force and effect, and the
effect of such determination shall be limited to the jurisdiction in which
made.
(b) If any term or provision of this Mortgage shall be determined to
affect adversely the preferred status of this Mortgage for any reason by
any court of competent jurisdiction, governmental authority, statute or
otherwise, such term or provision shall be void and of no effect and shall
cease to be a part of this Mortgage without affecting the remaining
provisions, which shall remain in full force and effect.
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SECTION 4.3.6. SUCCESSORS AND ASSIGNS. This Mortgage shall be binding
upon the Owner and its successors and assigns and shall inure to the benefit of
the Mortgagee and its successors and the assigns.
SECTION 4.3.7. EFFECT OF CREDIT AGREEMENT. In the event of any conflict
between the provisions of this Mortgage and any Loan Document, the provisions of
the Credit Agreement shall govern, but any such conflict will not invalidate any
provisions of this Mortgage other than those which are inconsistent.
SECTION 4.3.8. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
or facsimile communication) and, if to the Owner, mailed or telegraphed or faxed
or delivered by messenger or overnight courier to it, addressed to it at the
address set forth below its signature hereto (with a copy thereof to be sent to
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(fax: ▇▇▇-▇▇▇-▇▇▇▇), if to the Mortgagee, mailed or faxed or delivered by
messenger or overnight courier to it, addressed to it at the address set forth
in the preamble hereto, or as to either party at such other address as shall be
designated by such party in a written notice to each other party complying as to
delivery with the terms of this Section. All such notices and other
communications shall, when mailed, delivered by messenger or overnight courier
or telegraphed, respectively, be effective when deposited in the mails,
delivered to the courier service or delivered to the telegraph company,
respectively, or when faxed, be effective when confirmation thereof shall have
been received (but without regard to delivery of or confirmation of receipt, if
any, of the notice copied to ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇), in each case where such
notices are addressed as aforesaid.
SECTION 4.3.9. GOVERNING LAW. This Mortgage shall be construed in
accordance with and governed by the laws of the State of New York applicable to
contracts made and to be fully performed in such State, subject, however, to the
applicability of the Uniform Commercial Code of any jurisdiction in which any
Goods may be located at any given time. Whenever possible, each provision of
this Mortgage shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Mortgage 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 remainder of
such provision or the remaining provisions of this Mortgage.
SECTION 4.3.10. IOWA GAMING LICENSES. No interest of the Mortgagee
created or arising under this Mortgage shall attach to any gaming license issued
by the State of Iowa.
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IN WITNESS WHEREOF, Owner has caused this Mortgage to be executed by its
officers hereunto duly authorized the day and year first above written.
GAMBLERS SUPPLY MANAGEMENT COMPANY
[CORPORATE SEAL]
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Manager
---------------------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------
STATE OF )
) SS.
COUNTY OF )
On this __th day of [___________], before me personally appeared
[_______________], to me known, who, being by me duly sworn, did depose and say
that he resides at [____________________], [_____________], that he is
[________] of Gamblers Supply Management Company, the corporation described in
and which executed the foregoing instrument, and that he signed his name thereto
pursuant to authority granted to him by the Board of Directors of said
corporation.
______________________________
Notary Public
