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EXHIBIT 10.31
$1,500,000
LOAN AND SECURITY AGREEMENT
BETWEEN
GENERAL ELECTRIC CAPITAL CORPORATION,
the Lender,
AND
LEISURE BELLE CRUISE L.L.C.
the Borrower,
GUARANTEED BY
LEISURE TIME TECHNOLOGY, INC.,
LEISURE LADY CRUISE CORP.
AND
LEISURE TIME CASINOS & RESORTS, INC.
the Guarantors.
December 17, 1998
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms .............................1
Section l.02. Computation of Time Periods .......................8
ARTICLE II
AGREEMENT TO MAKE THE LOAN;
DRAWDOWN AND REPAYMENT PROVISIONS
Section 2.01. Agreement to Make Loan ............................9
Section 2.02. Drawdown Procedures................................9
Section 2.03. Advance of Amount in Escrow Account ...............9
Section 2.04. The Note .........................................10
Section 2.05. Interest Rate.....................................10
Section 2.06. Prepayments.......................................10
Section 2.07. [Intentionally Omitted]
Section 2.08. Payments and Computations ........................10
Section 2.09. Interest on Overdue Amounts, etc. ...............11
ARTICLE III
GUARANTY
Section 3.01. Guaranty, etc.....................................11
ARTICLE IV
SECURITY
Section 4.01. Vessel............................................11
Section 4.02. Other Personal Property...........................12
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent ............................13
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties...................14
ARTICLE VII
GENERAL COVENANTS OF BORROWER
Section 7.01. Affirmative Covenants............................18
Section 7.02. Negative Covenants...............................25
ARTICLE VIII
EVENTS OF DEFAULT; REMEDES
Section 8.01. Events of Default, Remedies, etc. ...............27
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, etc..................................31
Section 9.02. Notices, etc. ..................................31
Section 9.03. GOVERNING LAW. .................................32
Section 9.04. Service of Process and Consent to Jurisdiction;
Waiver of Immunity............................32
Section 9.05. No Remedy Exclusive..............................33
Section 9.06. Payment of Costs.................................33
Section 9.07. Further Assurances...............................33
Section 9.08. Counterparts.....................................34
Section 9.09. Headings.........................................34
Section 9.10. Severability.....................................34
Section 9.11. Survival.........................................34
EXHIBIT A - Form of Earnings Assignment
EXHIBIT B - Form of First Preferred Mortgage
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EXHIBIT C - Form of Guaranty Agreement
EXHIBIT D - Form of Insurances Assignment
EXHIBIT E - Form of Promissory Note
EXHIBIT F - Form of Trademark Security Agreement
Appendix A - Form of Drawdown Notice
Schedule 1 - Description of Additional Collateral
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made this 4th
day of December, 1998, by and between GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation ("GE Capital"), and LEISURE BELLE CRUISE L.L.C., a
Colorado limited liability company (the "Borrower").
RECITALS:
The Borrower has applied to GE Capital for a loan in the principal
amount of $1,500,000, the proceeds of which will be used (a) to finance a
portion of the cost to acquire and outfit the motor vessel named BILOX1 BELLE,
Official No. 985792 (the "Vessel") duly documented in the name of the Borrower,
and (b) to pay for certain additional renovations and improvements to the
Vessel, and for no other purposes.
As security for said loan, the Borrower proposes to grant to GE
Capital, among other things, a first preferred mortgage on the Vessel and a
first priority security interest in (a) all non-gaming equipment and other
personal property used in connection with the operation of the Vessel and (b)
all earnings, insurances and requisition compensation of the Vessel.
As inducement to GE Capital to make the loan to the Borrower, Leisure
Time Technology, Inc., Leisure Lady Cruise Corp., and Leisure Time Casinos &
Resorts, Inc., each have agreed unconditionally and irrevocably to guarantee
all obligations of the Borrower to GE Capital as set forth in this Agreement
and in each of the other documents now or hereafter executed, evidencing,
guaranteeing or securing the loan.
GE Capital is willing to make the requested loan to the Borrower, upon
the conditions and subject to the terms hereof.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. In this Agreement, unless the
context requires otherwise, the following terms shall have the following
meanings:
"Advances" means and collectively refers to any and all cash
dividends, loans, management fees, payments, advances or other distributions,
fees or compensation of any kind or character whatsoever, but shall not include
consideration paid for tangible and intangible assets in an arms length
exchange for fair market value, trade payments made and other payments for
liabilities incurred in the ordinary course of business or compensation to
officers, directors and employees of
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the Borrower in the ordinary course of business or compensation to consultants
and investment bankers paid in an arms length transaction for fair market value
for the purpose of pursuing or investigating prospective business opportunities
or business combinations.
"Agreement" means this Loan and Security Agreement.
"Auditors" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.C. or other
comparable first class independent certified public accountants.
"Borrower" means LEISUREBELLE CRUISE L.L.C., a Colorado limited
liability company.
"Business Day" means any day other than a day on which banks are
closed for business in the State of New York or Georgia.
"Cash" means, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with GAAP.
"Cash Equivalents" means, when used in connection with any Person,
that Person's Investments in:
(a) Government Securities maturing within one (1) year after
the date of the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America given on the date of such Investment a credit rating of
at least AA by ▇▇▇▇▇'▇ Investors Service, Inc. or AA by Standard & Poor's Rating
Group, a division of McGraw Hill, Inc., in each case maturing within one (1)
year from the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, any bank incorporated under the laws
of the United States of America or any State thereof and having on the date of
such Investment combined capital, surplus and undivided profits of at least Two
Hundred Fifty Million Dollars ($250,000,000), or total assets of at least Five
Billion Dollars ($5,000,000,000), in each case maturing within one (l) year
after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by, any branch or office located in the
United States of America of a bank incorporated under the laws of any
jurisdiction outside the United States of America having on the date of such
Investment combined capital surplus and undivided profits of at least Five
Hundred Million Dollars ($500,000,000), or total assets of at least Fifteen
Billion Dollars ($15,000,000,000) in each case maturing within one (1) year
after the date of the making of the Investment;
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(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section l5(b) of the Securities
Exchange Act of 1934 having on the date of the Investment capital of at least
One Hundred Million Dollars ($ 100,000,000), maturing within thirty (30) days
after the date of the making of the Investment; provided that the maker of the
Investment receives written confirmation of the transfer to it of record
ownership of the Government Securities on the books of a "primary dealer" in
such Government Securities on the books of such registered broker or dealer, as
soon as practicable after the making of the Investment;
(f) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of America or
any State thereof or of any corporation that is the holding company for a bank
described in clauses (c) or (d) above given on the date of such Investment a
credit rating of at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. or ▇- ▇ by
Standard & Poor' s Ratings Group, in each case maturing within three hundred
sixty-five (365) days after the date of the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the laws of the United States of America or any State thereof
given on the date of such Investment a credit rating of at least AA by ▇▇▇▇▇'▇
Investors Service, Inc. or AA by Standard & Poor's Ratings Group, in each case
having an investment period not to exceed fifty (50) days; provided that (i) the
amount of all such Investments issued by the same issuer does not exceed Five
Million Dollars ($5,000,000) and (ii) the aggregate amount of all such
Investments does not exceed Fifteen Million Dollars ($ 15,000,000); and
(h) a readily redeemable "money market mutual fund" advised by
a bank described in clauses (c) or (d) hereof, or an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, that has
and maintains an investment policy limiting its investments primarily to
instruments of the types described in clauses (a) through (g) hereof and having
on the date of such Investment total assets of at least One Billion Dollars
($1,000,000,000).
"Casino Gaming Operations" means the gaming operations conducted aboard
the Vessel as permitted under applicable law.
"Charter" means any demise charter, time charter, voyage charter,
contract of affreightment and other agreement for the use or hire of the Vessel
(including all extensions, modifications and renewals thereof).
"Collateral" has the meaning set forth in Section 4.02.
"Collateral Account" has-the meaning set forth in Section 7.01(k).
"Contingent Liabilities" shall mean, as to any Person, any obligation
of such Person guaranteeing or having the economic effect of guaranteeing any
indebtedness, leases or dividends ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such
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primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, (d) to make
payment in respect of any net liability arising in connection with any Interest
Rate ▇▇▇▇▇▇, foreign currency exchange agreement, commodity hedging agreement or
any similar agreement or arrangement in any such case if the purpose or intent
of such agreement is to provide assurance that such primary obligation will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such primary obligation will be protected (in whole
or in part) against loss in respect thereof or (e) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided. however. that the term Contingent Liability shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Liability shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Liability is made or, if not stated or determinable,
the reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Default" means any event that would constitute an Event of Default
but for the requirement that notice be given or time elapse, or both.
"Default Date" has the meaning set forth in Section 2.09.
"Default Rate" has the meaning set forth in Section 2.09.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Drawdown Date" means the date upon which the Borrower has requested
an advance of the Loan be advanced to it pursuant to Section 2.02 or (as the
context requires) the date on which such an advance of the Loan is actually
advanced to the Borrower hereunder.
"Drawdown Notice" means a Notice in the form set out in Appendix A (or
such other form as GE Capital may approve or require).
"Drawdown Period" means the period commencing on the date hereof, and
ending on May 4, 1999.
"Earnings Assignment" means the Earnings Assignment dated the date
hereof, given by the Borrower in favor of GE Capital, granting GE Capital a
security interest in all freights, hire and other earnings of the Vessel, in
the form attached hereto as Exhibit A.
"Escrow Agreement" means the Escrow Agreement dated the date hereof,
given by the Borrower in favor of GE Capital.
"Event of Default" and "Events of Default" means any one or more of
the events specified in Section 8.01.
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"First Preferred Mortgage" means the First Preferred Mortgage dated
the date hereof, given by the Borrower in favor of GE Capital over the Vessel,
in the form attached hereto as Exhibit B.
"Fiscal Quarter" means the consecutive three (3) month periods during
each Fiscal Year beginning on July 1, October 1, January 1 and April 1, and
ending on September 30, December 31, March 31 and June 30, respectively.
"Fiscal Year" means the fiscal year period beginning July 1 of each
calendar year and ending on the following June 30.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Gaming Authorities" means, without limitation, the applicable
governmental or administrative federal, state or local agency involved in the
regulation of gaming and gaming activities conducted by the Borrower.
"Gaming Devices" means slot machines and other devices which
constitute gaming devices and related equipment.
"Gaming Permits" means collectively every license, permit or other
authorization, if any, required to own, operate and otherwise conduct gaming
operations on board the Vessel.
"Government Securities" means readily marketable (a) direct full faith
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and (b)
obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the United
States of America
"Guarantors" means Leisure Time Technology, Inc., a Georgia
corporation, Leisure Lady Cruise Corp., a Colorado Corporation, and Leisure
Time Casinos & Resorts, Inc., a Colorado corporation, their successors and
permitted assigns.
"Guaranties" means the various Guaranty Agreements of even date
herewith, to be executed by the Guarantors in favor of GE Capital,
substantially in the form attached hereto as Exhibit C.
"Hazardous Materials" means and includes hazardous substances as
defined in CERCLA; oil of any kind, petroleum products and their by-products,
including, but not limited to, sludge or residue; asbestos containing
materials; polychlorinated biphenyls; any and all other hazardous or toxic
substances; hazardous waste, as defined in CERCLA, medical waste; infectious
waste; those substances listed in the United States Department of
Transportation Table (49 C.F.R ss.172.101); explosives; radioactive materials;
and all other pollutants, contaminants and other substances regulated or
controlled by the environmental laws and any other substance that requires
special handling in its collection, storage, treatment or disposal under the
environmental laws of any jurisdiction.
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"Insurances Assignment" means the Insurances Assignment dated the date
hereof, given by the Borrower in favor of GE Capital, granting GE Capital a
security interest in all insurances now or hereafter taken out with respect to
the Vessel, all premium rebates and all proceeds thereof and otherwise
substantially in the form attached hereto as Exhibit D.
"Interest Expense" means, with respect to any Person, as of the last
day of any fiscal period under review, the sum of (i) all interest, fees,
charges and related expenses paid or payable (without duplication but including
capitalized interest) for that fiscal period by such Person to a lender in
connection with borrowed money (including any obligations for fees, charges and
related expenses payable to the issuer of any letter of credit) or the deferred
purchase price of assets that are considered "interest expenses" under GAAP,
plus (ii) the portion of the up front costs and expenses for Interest Rate
▇▇▇▇▇▇ (to the extent not included in (i) fairly allocated to such Interest
Rate ▇▇▇▇▇▇ as expenses for such period, plus (iii) the portions of Capital
Leases Liabilities that should be treated as interest in accordance with GAAP.
"Interest Rate Hedge" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements, basis swap, forward rate agreement and interest collar or floor
agreements and all other agreements or arrangements designated to protect such
Person against fluctuations in interest rates or currency exchange rates.
"Investment" means when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of a
loan, advance creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person, including any partnership
and joint venture interests of such Person. The amount of any Investment shall
be the amount actually invested without adjustment for subsequent increases or
decreases in the value of such Investment.
"Loan" has the meaning given in Section 2.01.
"Loan Documents" mean collectively this Agreement, the Note, the
Guaranties, the First Preferred Mortgage, the Earnings Assignment, the
Insurances Assignment, and the UCC-1 Financing Statements.
"Note" means the Promissory Note dated the date hereof, issued by the
Borrower to the order of GE Capital, in the original principal amount of
$1,500,000, and otherwise in the form attached hereto as Exhibit E.
"Obligations" means collectively and includes all indebtedness,
liabilities and obligations of any kind and nature whatsoever of the Borrower
to GE Capital, both now existing and hereafter arising under, as a result of,
on account of, or in connection with, this Agreement, the Note, any of the
other Loan Documents or any amendments or modifications thereto, restrictions
thereof and supplements thereto made at any time and from time to time
hereafter, whether or not such obligation is reduced to judgment, liquidated or
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such obligation is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 8.01(j) or 8.01(k) hereof.
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"Permitted Liens" means (i) liens in favor of GE Capital, (ii) liens
for taxes not yet due or for taxes being contested in good faith and which do
not involve, in the reasonable judgment of Secured Party, any risk of the sale,
forfeiture or loss of any of the Collateral, (iii) inchoate materialmen's,
mechanic's, repairmen's and similar maritime liens arising by operation of law
in the normal course of business for amounts which are not delinquent, and (iv)
liens for crew's wages, general average and salvage.
"Person" means any individual, firm, corporation, trust, association,
partnership, joint venture, tribunal or other entity.
"Prepayment Premium" means an amount equal, at any time, to two
percent (2.0%) of the principal balance of the Loan being prepaid by the
Borrower.
"Total Loss" means the occurrence of: (i) the actual or constructive
total loss or compromised, agreed or arranged total loss of the Vessel; or (ii)
the loss, theft or destruction of the Vessel or damage thereto to such extent
as shall make repair thereof uneconomical or shall render the Vessel
permanently unfit for normal use for any reason whatsoever, or (iii) the
capture, seizure, arrest, detention, condemnation, confiscation or requisition
for more than thirty days, forfeiture or other taking of title to or use of the
Vessel by any government or by persons acting or purporting to act on behalf of
any government (as established to the reasonable satisfaction of GE Capital; or
(iv) the loss, suspension, material adverse modification or revocation by any
governmental authority of any the Borrower's authority to operate the Vessel;
or (v) the loss, suspension, revocation, or material adverse modification of
the Borrower's authority to operate its gaming operations on the Vessel, unless
the Borrower has the ability to move the Vessel to another jurisdiction where
such operations are permitted, and the Borrower moves the Vessel to such a
jurisdiction and takes all necessary steps to perfect GE Capital's first lien
upon the Vessel, within 10 days after such loss, suspension, revocation or
modification.
"Trademark Security Agreement" means the Trademark Security Agreement
in the form of Exhibit F hereof, to be executed and delivered by the Borrower
to GE Capital pursuant to Section 5.02 hereof.
"Vessel" means the 1983-built vessel known as the BILOXI BELLE,
Official No. 985792, duly documented in the name of the Borrower under the laws
and flag of the United States of America.
Section 1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and each of the words "to" and
"until" means "to but excluding."
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ARTICLE II
AGREEMENT TO MAKE THE LOAN;
DRAWDOWN AND REPAYMENT PROVISIONS
Section 2.01. Agreement to Make Loan. On and subject to the terms and
conditions of this Agreement, and in reliance upon each of the Borrower's
representations and warranties contained herein, GE Capital agrees to lend to
the Borrower up to ONE MILLION FTVE HUNDRED THOUSAND AND 00/100 DOLLARS
($1,500,000.00) (the "Loan") for the purposes set forth in the Recitals, and for
no other purpose. On the date hereof, GE Capital will advance the entire amount
of the Loan. A portion of the proceeds of the Loan in the amount of $125,000
will be deposited in an escrow account to be maintained in the name of GE
Capital at a financial institution (the "Escrow Account"), subject to the terms
and conditions hereinafter set forth, not more frequently than once per month
during the Drawdown Period, GE Capital shall, subject to the terms and
conditions hereinafter set forth make advances from the Escrow Account to
reimburse the Borrower for not more than 90% of the cost of non-gaming equipment
(acceptable to GE Capital in all respects) installed on the Vessel and
improvements to the Vessel satisfactory to GE Capital in all respects. Time is
of the essence.
Section 2.02. Drawdown Procedures. The Borrower may request GE Capital
to advance the proceeds of the Escrow Account by delivering to GE Capital a duly
completed Drawdown Notice (which shall be irrevocable) to be received by GE
Capital not later than 1 1:00 a.m. E.S.T. one (1) Business Day prior to the
applicable Drawdown Date. The Borrower's ability to request advances from the
Escrow Account hereunder shall expire upon the close of business, E.S.T. on May
22, 1999; provided, however, that such obligation shall terminate automatically
upon the occurrence of a Default or an Event of Default. With respect to any
advance of the Escrow Account, the Drawdown Notice shall be accompanied by (a)
an invoice for the item(s) of equipment covered by such draw request, (b) an
acceptance certificate signed by the Borrower, (c) where applicable, a ▇▇▇▇ of
sale, and (d) a receipt marked "paid.".
Section 2.03. Advance of Amount in Escrow Account. Subject to the terms
of this Agreement, GE Capital shall make advances to the Borrower from the
Escrow Account on each Drawdown Date by paying the proceeds thereof to the
Borrower to reimburse the Borrower for documented equipment costs previously
paid by the Borrower.
Section 2.04. The Note. The Loan shall be evidenced by a single
promissory note payable by the Borrower to the order of GE Capital, in the form
attached hereto as Exhibit A (the "Note"). The Note shall be dated as of the
date hereof and shall be in the original face amount of $1,500,000. GE Capital
shall maintain an escrow account with respect to all advances of the Escrow
Account and all payments on account thereof. Prior to any transfer of the Note,
GE Capital shall endorse on the schedules forming a part thereof appropriate
notations (or shall otherwise provide any transferee with appropriate written
notice) evidencing the date and the amount of each payment of principal made by
the Borrower with respect thereto. GE Capital is hereby irrevocably authorized
by the Borrower to so endorse the Note, and to attach and to make a part of the
Note, such schedules as and when required.
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Section 2.05. Interest Rate. The unpaid principal balance of the Note
shall bear interest from the date hereof until paid in full at the rate of 8.90%
per annum (in no event to exceed the maximum rate allowed by law).
Section 2.06. Prepayments.
(a) Optional Prepayment The Borrower shall have the right to
prepay the Note in whole but not in part at any time upon thirty (30) days'
prior written notice to GE Capital by paying to GE Capital the then unpaid
principal balance of the Note, together with all accrued interest thereon and
all other sums then due hereunder and under each of the other Loan Documents,
plus the Prepayment Premium.
(b) Mandatory Prepayments.
(i) In the event that the Vessel is sold, the
Borrower shall pay to GE Capital the then unpaid principal balance of the Note,
together with all accrued interest thereon and other sums then due hereunder and
under each any of the other Loan Documents.
(ii) In the event the Vessel sustains a Total Loss,
the Borrower shall pay to GE Capital the then unpaid principal balance of the
Note, together with all accrued interest thereon and all other sums then due
hereunder and under each of the other Loan Documents.
Section 2.07. [Intentionally Omitted]
Section 2.08. Payments and Computations.
(a) All payments to be made by the Borrower hereunder, under
the Loan Documents and/or under any instrument delivered in connection herewith
or therewith shall be made in lawful money of the United States of America, in
immediately available and freely transferable funds, to GE Capital at its
offices at 44 0ld Ridgebury Road, Danbury, Connecticut 06810-5105, free and
clear of and without deduction for any and all present and future taxes,
withholdings or other charges imposed on such payment. Should any such taxes,
withholdings or other charges be imposed on any such payment, the Borrower will
pay them and remit to GE Capital an amount equal to what should have been
received had such a tax, withholding or other charge not been imposed.
(b) All computations of interest shall be made by GE Capital
on the basis of a 360-day year, twelve 30-day months, for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest is payable.
(c) When ever any payment to be made hereunder or under any of
the other Loan Documents is due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest
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Section 2.09. Interest on Overdue Amounts, etc. In the event that any
payment of principal, interest or other sum due hereunder or under any of the
other Loan Documents is not made when due (whether by acceleration, at maturity
or otherwise) (each, a "Default Date"), the Borrower shall pay to GE Capital,
upon demand, interest thereon until such past due amount, together with all
accrued interest thereon, is paid in full, at the rate equal to 11.90% per
annum (the "Default Rate").
ARTICLE III
GUARANTY
Section 3.01. Guaranty, etc. In order to induce GE Capital to make the
Loan to the Borrower, the Guarantors shall unconditionally and irrevocably
guarantee the full and punctual payment and performance of the Obligations,
and, in furtherance thereof, each shall execute and deliver to GE Capital in
form and substance satisfactory to GE Capital, a Guaranty.
ARTICLE IV
SECURITY
Section 4.01. Vessel. The Borrower shall execute and deliver, or cause
the Guarantors to execute and deliver, to GE Capital, in form and substance
satisfactory to GE Capital, the following documents:
(i) the First Preferred Mortgage;
(ii) the Earnings Assignment;
(iii) the Insurances Assignment;
(iv) the Trademark Security Agreement; and
(v) the Escrow Agreement.
In addition to the foregoing, the Borrower shall also promptly deliver,
or cause to be delivered, to GE Capital: (i) a certified copy of the Certificate
of Documentation for the Vessel; (ii) the Letter to the Master of the Vessel and
Master's acknowledgment of his compliance with the terms thereof duly executed
by the Master or other authorized individual; (iii) the form of Notice of
Mortgage; (iv) upon filing, a copy of the certified extract of preferred
mortgage index and certificate of ownership, evidencing the recording of the
First Preferred Mortgage and showing the Vessel to be free and clear of all
recorded liens, mortgages and other encumbrances other than the First Preferred
Mortgage in favor of GE Capital; (v) originals or copies of all cover notes,
letters of undertaking and certificates of entry evidencing the insurances
covering the Vessel; (vi) written advice from the Borrower's insurance brokers
of the insurances currently in place and an opinion (to the extent the brokers
are willing to provide the same) of such insurance brokers, satisfactory to GE
Capital, to the effect that such insurances comply with the applicable
provisions of this Agreement; (vii) the agreement by the Borrower's insurance
brokers (to the extent the brokers are willing
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provide the same) in form and substance satisfactory to GE Capital, whereunder
the insurances of the Vessel and all claims there under will not be affected by
non-payment of premiums on any other insurances maintained by the Borrower,
(viii) appropriate Uniform Commercial Code financing statements executed by the
Borrower with respect to the security interests created pursuant hereto; (ix)
the certificates of good standing for each of the Borrower and the Guarantors;
and (x) the opinions of legal counsel to the Borrower and the Guarantors'
satisfactory to GE Capital.
Section 4.02. Other Personal Property. As additional security for the
full and punctual payment and performance of its Obligations, the Borrower does
hereby give, grant, and assign to GE Capital a security interest in and lien on
all property identified on Schedule 1 hereto, and in and to any and all
additions, substitutions, replacements and exchanges therefor and any and all
insurance and/or other proceeds thereof (all of the foregoing, together with the
Vessel, being hereinafter referred to as the "Collateral").
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent. GE Capital's agreement to enter
into this Agreement and to make the Loan to the Borrower is subject to the
condition precedent that GE Capital shall have received on or before the date
hereof the following, each in form and substance satisfactory to GE Capital:
(a) certified copies of the Articles of Organization of the
Borrower, and the resolutions of the members of the Borrower approving this
Agreement, the Note and each of the other Loan Documents and evidence of other
necessary limited liability company actions and governmental approvals if any,
which are required with respect to this Agreement, the Note and the other Loan
Documents, along with a certificate of incumbency for each person signing any of
the Loan Documents on behalf of the Borrower and evidence of the Borrower's
organization and good standing;
(b) certified copies of the certificate of incorporation and
bylaws of each of the Guarantors and the resolutions of the Board of Directors
of each of the Guarantors authorizing the execution and delivery of its Guaranty
and the performance by it of its obligations thereunder, along with a
certificate of incumbency for each person signing the Guaranty on its behalf and
evidence of each Guarantor's incorporation and good standing in the state of its
incorporation;
(c) this Agreement;
(d) the Note;
(e) the Guaranties;
(f) the First Preferred Mortgage;
(g) the Earnings Assignment;
(h) the Insurance Assignment
(i) the Escrow Agreement
(j) the Form UCC-1 Financing Statements;
(k) the opinions of counsel for the Borrower and each of the
Guarantors;
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(l) copies of all governmental or other consents or approvals
necessary in connection with the execution, delivery and performance of the Loan
Documents; and
(m) copies of all documentation relating to the sale of the
Vessel to the Borrower.
All filings and recordings to the extent permitted or required by
applicable law shall have been duly made by the Borrower or, at the option of GE
Capital, provided for and all other action shall have been taken as may be
required by GE Capital to perfect the security interests and mortgage liens
granted by the First Preferred Mortgage and any of the other Loan Documents, all
proceedings taken in connection with the Loan Documents shall be reasonably
satisfactory to GE Capital, and GE Capital shall have received copies of such
documents as GE Capital reasonably may request in connection therewith, all in
form and substance reasonably satisfactory to GE Capital.
Section 5.02. Conditions Subsequent. In consideration of GE Capital's
agreement to make the Loan to the Borrower, the Borrower further agrees that
within thirty (30) days of the date hereof, the Borrower will file an
application to register the trade name BILOXI BELLE, or the new name to be given
to the Vessel, with the United States Patent and Trademark Office in Washington,
D.C. The Borrower will diligently pursue registration of said trade name and
advise GE Capital once the trade name has been so registered. Contemporaneously
with its filing of its application for registration of the trade name BILOXI
BELLE (or such new name), the Borrower will file, or cause to be filed, with the
U.S. Patent and Trademark Office an original copy of the Trademark Security
Agreement, with instructions that once said Trademark Security Agreement has
been recorded, notification thereof should be sent to GE Capital at its address
provided herein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties. The Borrower hereby
represents and warrants as follows:
(a) Organization and Powers. It is, and will remain, a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Colorado and is, and will remain, duly qualified and
authorized to transact business as a foreign limited liability company in good
standing wherever failure to so qualify would have a material adverse affect on
the Borrower's business operations or financial condition.
(b) Power and Authority. It has the full power and authority
to enter into, and to perform its obligations, under this Agreement and each of
the other Loan Documents to which it is a party and to own and operate its
business as presently contemplated. Additionally, the Borrower has the full
power and authority to grant to GE Capital a security interest in and lien on
the Collateral described herein.
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(c) Authorization. It has duly authorized by all requisite
limited liability company action the execution, delivery and performance of
this Agreement and each of the other Loan Documents to which it is a party, and
the execution, delivery and performance by it of such Loan Documents will not
violate any provision of law, any order of any court or other agency of
government, its Articles of Organization or Operating Agreement, or any
indenture, agreement or other instrument to which it is a party, or by which it
or any of its property or assets is bound, or be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time, or both) a default
under any such indenture, agreement or other instrument, or result in the
creation or imposition of any lies, charge or encumbrance of any nature
whatsoever upon any property or assets of it other than as otherwise permitted,
required or contemplated by the Loan Documents.
(d) Enforceability. This Agreement and each of the other Loan
Documents to which it is a part constitutes the legal, valid and binding
agreements of the Borrower, enforceable under all applicable laws in accordance
with the terms thereof, except to the extent limited under the applicable
bankruptcy and insolvency laws.
(e) Litigation. Except as set forth in Schedule 6.01 (e), there are no actions,
suits or proceedings pending or, to its knowledge, threatened against or
affecting it or its property at law, in equity or in admiralty, or before or by
any governmental authority, department, commission, bureau, board, agency or
instrumentality, domestic or foreign, (i) which either individually or in the
aggregate might materially adversely affect (A) its financial condition,
operations or affairs, or (B) its ability to perform its obligations hereunder,
under the Note or under any of the other Loan Documents, or (ii) if any such
actions, suits or proceedings exist, in the opinion of independent nationally
recognized counsel and/or auditors (including its present Auditors) for the
Borrower (a copy of which opinion has been provided to GE Capital) such actions,
suits or proceedings are not likely to adversely affect the same. It is not in
default with respect to any material order, writ, injunction, decree or demand
of any court or governmental authority, department, commission, board, bureau,
agency or instrumentality, domestic or foreign.
(f) Financial Condition. Except as previously disclosed to GE
Capital in writing, there has been no material adverse change in the Guarantors'
financial condition, operations or affairs as reflected in its 1998 year-end
audited financial statements, or in the Guarantors' unaudited financial
statements for the period ending September 30, 1998, copies of which were
delivered by the Borrower and/or the Guarantors to GE Capital. Such financial
statements fairly represent the balance sheet of the Guarantors on the
respective dates thereof and were prepared in accordance with generally accepted
accounting principles consistently applied ("GAAP") and in the case of the 1997
year-end financial statements certified by the Auditors.
(g) No Sovereign Immunity. It is subject to private commercial
law and to suit in connection with matters relating to this Agreement, the Note
and the other Loan Documents, and neither it nor any of its property has any
right to immunity from suit or attachment on the grounds of sovereignty or on
any other grounds. The execution, delivery and performance of this Agreements
the Note and the other Loan Documents constitute commercial acts by it, in
connection with its commercial activities.
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(h) Tax Returns. It has filed or has caused to have been filed
all tax returns which, to its knowledge, are required to be filed, and has paid
or caused to have been paid all taxes as shown on such returns or on any
assessment received by it, to the extent that such taxes have become due, unless
and to the extent only that such taxes, assessments and governmental charges are
currently contested in good faith and by appropriate and diligent legal
proceedings and adequate reserves therefor have been established as required
under generally accepted accounting principles.
(i) Compliance with Law: Licenses and Permits. To the best of
its knowledge after due inquiry, it is not in violation of any material law,
ordinance, governmental rule or regulation to which it is subject, and it has
obtained all licenses, permits, franchises or other governmental authorizations
necessary for the ownership of its properties and the conduct of its business.
(j) Government Consents. Neither the execution and delivery by
it of this Agreement, the Note and any of the other Loan Documents, nor the
consummation by it of any of the transactions contemplated hereby or thereby,
requires the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any governmental
authority or agency, domestic or foreign, other than the filing and recording of
the First Preferred Mortgage with the United States Coast Guard, Office of
Vessel Documentation, in Falling Waters, West Virginia and of the UCC-1
financing statements with the appropriate filing officers in the States of
Colorado, ________________, and __________________.
(k) Ownership of Collateral. The Borrower has good and
marketable title to the Collateral free and clear of all liens and other
encumbrances other than Permitted Liens. Upon the filing and recording of the
First Preferred Mortgage with the United States Coast Guard, Office of Vessel
Documentation in Falling Waters, West Virginia (the only place where such filing
and recording is required to perfect such interest), GE Capital will have a
first preferred mortgage lien on the Vessel and her freights, all as more fully
provided for in the First Preferred Mortgage. Upon the filing of the Form UCC-1
Financing Statements with the Secretary of State of the States of Colorado,
_______________, and ________________ and the Clerk of the Circuit Court of
______________ County, ________________ (the only place where such filings are
required to perfect GE Capital's interest in the collateral covered thereby), GE
Capital will have a first priority interest in the property identified on
Schedule 1 attached hereto.
(l) Principal Place of Business: Tradenames. The address
stated in Section 9.02 hereof is the principal place of business and chief
executive office of the Borrower, and the Borrower does not conduct business
under a trade, assumed or fictitious name.
(m) Margin Stock. None of the proceeds from the Loan will be
used, directly or indirectly, by the Borrower for the purpose of purchasing or
carrying, or for the purpose of reducing or retiring any indebtedness that was
originally incurred to purchase or carry, any "margin security" within the
meaning of Regulation G (12 C.F.R Part 207), or "margin stock" within the
meaning of Regulation U (12 C.F.R Part22 1), of the Board of Governors of the
Federal Reserve System (herein called "margin security" and "margin stock") or
for any other purpose that might make the transactions contemplated herein a
"purpose credit" within the meaning of said Regulation G or Regulation U, or
cause this Agreement to violate any other regulation of the Board of Governors
of the Federal Reserve System or the Securities Exchange Act of 1934, as
amended, or the Small
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Business Investment Act of 1958, as amended, or any rules or regulations
promulgated under any of such statutes.
(n) ERISA. With respect to any "pension plan" as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA"), which plan, if any, is now or previously has been maintained or
contributed to by the Borrower and/or by any member ("Commonly Controlled
Entity") of a group of trades or businesses that includes the Borrower and that
is under common control within the meaning of Sections 41 4(b) and/or (c) of the
Code that: (a) no "accumulated funding deficiency" as defined in Code
ss.412OrERISA ss.302 has occurred, whether or not that accumulated funding
deficiency has been waived; (b) no "reportable event" as defined in ERISA
ss.4043 has occurred; (c) no termination of any plan subject to Title IV of
ERISA has occurred; (d) except as previously disclosed to GE Capital in writing,
neither the Borrower nor any Commonly Controlled Entity has incurred a "complete
withdrawal" within the meaning of ERISA ss.4203 from any multiemployer plan; (e)
except as previously disclosed to GE Capital in writing, neither the Borrower
nor any Commonly Controlled Entity has incurred a "partial withdrawal" within
the meaning of ERISA ss.4205 with respect to any multi employer plan; (f) no
multi employer plan to which the Borrower or any Commonly Controlled Entity has
an obligation to contribute is in "reorganization" within the meaning of ERISA
ss.4241 nor has notice been received by the Borrower or any Commonly Controlled
Entity that such a multi employer plan will be placed in "reorganization". The
Borrower represents and warrants to GE Capital with respect to any pension plan
which the Borrower and/or any Commonly Controlled Entity maintains or
contributes to, either now or in the future, that: (a) such bonding as is
required under ERISA ss.412 will be maintained; (b) as soon as practicable and
in any event within fifteen (15) days after the Borrower or any Commonly
Controlled Entity knows or has reason to know that a "reportable event" has
occurred or is likely to occur, the Borrower will deliver to GE Capital a
certificate signed by its chief financial officer setting forth the details of
such "reportable event"; (c) neither the Borrower nor any Commonly Controlled
Entity will: (i) engage in or permit any "prohibited transaction" (as defined in
ERISA ss.406 or Code ss.4975) to occur, (ii) cause any "accumulated funding
deficiency" as defined in ERISA ss.302 and/or Code ss.412, (iii) terminate any
pension plan in a manner that could result in the imposition of a lien on the
property of the Borrower or any Subsidiary pursuant to ERISA ss.4068, (iv)
terminate or consent to the termination of any multi employer plan, (v) incur a
complete or partial withdrawal with respect to any multi employer plan within
the meaning of ▇▇▇▇ ss.ss.4203 and 4205, and (d) within fifteen (15) days after
notice is received by the Borrower or any Commonly Controlled Entity that any
multi employer plan has been or will be placed in "reorganization" within the
meaning of ERISA ss.4241, the Borrower will notify GE Capital to that effect
Upon GE Capital's request, the Borrower will deliver to GE Capital a copy of the
most recent actuarial report, financial statements and annual report completed
with respect to any "'defined benefit plan", as defined in ERISA ss.3(35).
(o) Condition of Collateral. The Collateral is in good
condition and repair.
(p) Recitals. The Recitals to this Agreement are true and
accurate in each and every respect and are all incorporated by reference herein.
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ARTICLE VII
GENERAL COVENANTS OF BORROWER
Section 7.01. Affirmative Covenants. So long as this Agreement remains
in effect and until all the Borrower's Obligations have been satisfied in full,
the Borrower hereby covenants with GE Capital as follows:
(a) Financial Statements. It shall furnish, or cause to be
furnished, to GE Capital (i) as soon as possible and in no event more than one
hundred twenty (120) days after the end of each Fiscal Year of Leisure Time
Casinos & Resorts, Inc., a copy of Leisure Time Casinos & Resorts, Inc.'s and
its subsidiaries' consolidated and consolidating financial statements, prepared
in accordance with GAAP and certified by the Auditors as of the end of such
period, including a balance sheet and related profit and loss and surplus
statements, and reflecting any changes in working capital; (ii) as soon as
possible and in no event more than sixty (60) days after the close of each
Fiscal Quarter of Leisure Time Casinos & Resorts, Inc., similar financial
statements to those referred to in (i) above, unaudited but certified by Leisure
Time Casinos & Resorts, Inc.'s, chief financial officer, and (iii) as soon as
available, copies of all statements filed with the Securities and Exchange
Commission or any successor agency; and (iv) such other financial or other
information as GE Capital may from time to time reasonably request. Such
financial statements shall be prepared in accordance with generally accepted
accounting principles applied on a consistent basis.
(b) Limited Liability Company Existence. The Borrower shall at
all times maintain its limited liability company existence and shall not,
without GE Capital's prior written consent, dissolve or otherwise dispose of all
or substantially all of its assets, in one transaction or a series of
transactions, or consolidate with or merge into another entity.
(c) Capital Stock. Leisure Time Casinos & Resorts, Inc. shall
continue to own all of the Borrower's issued and outstanding capital stock.
(d) Reports. The Borrower shall promptly notify GE Capital in
writing of (i) any change in its name, (ii) the relocation of its chief
executive offices, (iii) any notices received by it and/or the Guarantors from
any other lender notifying it (them) of its (their) failure to comply with,
honor, abide by, or carry out any of the terms of any documentation executed and
delivered in connection with any indebtedness in excess of $250,000.
(e) Mortgage Supplements. The Borrower shall at any time, upon
request of GE Capital execute and deliver to GE Capital one or more amendments
or supplements to the First Preferred Mortgage, in form and substance
satisfactory to GE Capital, for the purpose of insuring that the amount and
other terms of the First Preferred Mortgage are adequate to provide GE Capital
with security for the Loan
(f) Use of Proceeds. The proceeds from the Loan will be used
solely for the purposes specified in the Recitals and for no other purpose.
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(g) Valuation of Vessel. At least once each year and at any
time following the occurrence of a Default hereunder, the Borrower shall provide
to GE Capital, upon request by GE Capital but at the sole cost and expense of
the Borrower, its certified written opinion of the Fair Market Sale Value of the
Vessel based upon Borrower' s consultation with one or more independent ship
brokers. "Fair Market Sale Value" shall mean the amount for which the Vessel
could be sold on a charter-free basis in an arm's length transaction.
(h) Notice of Mortgage. The Borrower shall cause a certified
copy of the First Preferred Mortgage, together with notice thereof, to be placed
on board the Vessel, and shall furnish GE Capital with copies of the Masters'
signed receipt therefor in form and substance satisfactory to GE Capital.
(i) Payment of Taxes. The Borrower shall pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attach thereto, except that the Borrower will not be required hereby to pay any
such tax, assessment, charge or levy, the payment of which is being contested in
good faith and by proper and diligent legal proceedings, so long as none of the
assets of the Borrower (including the Collateral) have been attached or arrested
or if attached or arrested, such attachment or arrest has been fully bonded and
fully lifted.
(j) Compliance with Laws Generally. The Borrower shall comply
with the requirements of all applicable laws, including, without limitation, 15
U.S.C. 1175 and all similar state laws regulating the possession, use and
operation of gaming devices on board the Vessel rules, regulations and orders of
any court; governmental body or regulatory agency having jurisdiction, a breach
of which could have a material adverse effect on its financial condition or its
business, except where contested in good faith and by proper and diligent legal
proceedings. At no time shall the Vessel operate out of jurisdictions under
which the gaming operations of the type engaged in by the Borrower have been
either prohibited or judicially challenged. At all times the Vessel shall carry
on board all Gaming Permits, if any, required by applicable law.
(k) Collateral Account. The Borrower shall maintain a separate
account (the "Collateral Account") with GE Capital or other financial
institution acceptable to GE Capital for the purpose of payment of all amounts
due under the Earnings Assignment and Insurances Assignment All funds on deposit
in the Collateral Account shall be available to the Borrower until a Default or
Event of Default shall have occurred and be continuing, in which case such funds
may, at the option of GE Capital, be applied in prepayment of the Borrower's
Obligations. If the Collateral Account is attached or levied upon by a third
party, all payments to be made to the Collateral Account shall be made directly
to GE Capital and not to the Collateral Account.
(l) Management Agreements. The commercial and technical
management of the Vessel shall be performed by either the Borrower, the
Guarantors, one or more of their subsidiaries or other companies acceptable to
GE Capital. Upon the occurrence of an Event of Default, GE Capital shall have
the right: (1) to require the Borrower to terminate any management agreement,
(2) to approve the terms of any subsequent management arrangement, (3) to
require the Borrower to withhold for a period not in excess of three (3) months
all management fees in respect of the Vessel (in which case such amounts so
withheld shall comprise a debt subordinate in all respects to the
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Borrower's obligations to GE Capital), and (4) to require each of the managers
of the Vessel to agree to the foregoing.
(n) Collateral Generally. The Borrower at all times and
without expenses to GE Capital shall (i) maintain and preserve, or cause to be
maintained and preserved, the Collateral in good condition and working order,
(ii) use and maintain the Collateral only in compliance with all applicable laws
and (iii) keep the Collateral free and clear of liens, claims and encumbrances
(except for Permitted Liens).
(o) Vessel. At all times and without cost or expense to GE
Capital, the Borrower shall maintain and preserve, or cause to be maintained and
preserved, the Vessel in good running order and repair, so that the Vessel shall
be, in so far as due diligence can make them so, tight, staunch, strong and
sufficiently well tackled, appareled, furnished, equipped and in every respect
seaworthy and in good operating condition. The Vessel shall, and the Borrower
covenants that it will, at all times comply with all applicable laws, treaties
and conventions of the United States of America and rules and regulations issued
thereunder, and shall have on board as and when required thereby valid
certificates showing compliance therewith. The Borrower will cause the Vessel to
be drydocked as per U.S. Coast Guard requirements, if and to the extent
applicable. The Borrower shall give GE Capital five (5) Business Days' prior
written notice of drydocking of the Vessel so as to afford GE Capital the
opportunity to be present and inspect the Vessel. The Borrower will not make, or
permit to be made, any substantial change in the structure, type and speed of
the Vessel, which might result in a decrease or reduction in the value or
utility of the Vessel.
(p) Inspections: Vessel's Logs and Records. The Borrower at
all times shall afford GE Capital or its authorized representatives full and
complete access to the Collateral for the purpose of inspecting the same and, at
the request of GE Capital, the Borrower will deliver for inspection copies of
any and all documents relating to the Collateral including copies of the
Vessel's logs and records. If GE Capital shall discover upon its inspection of
the Vessel that the Vessel is in a condition of disrepair that materially
affects its values, GE Capital shall have the immediate right to call for the
drydocking and repair of the Vessel within thirty (30) days thereafter, upon
notice to the Borrower and at the Borrower's sole cost and expense.
(q) Litigation. The Borrower shall promptly inform GE Capital
of any pending or threatened litigation involving the Borrower or the
Guarantors, where the amount claimed exceeds $250,000 (regardless of whether
covered by insurance), and of any other event, condition or occurrence which
might adversely affect or prejudice the timely repayment of all sums due under
the Note or hereunder.
(r) Insurance Generally. At all times during the term hereof,
the Borrower shall kept the Collateral insured against loss or damage by fire or
extended coverage perils, theft, burglary and where requested by GE Capital
against other risks as required thereby, for the full replacement value thereof,
with companies, in amounts and under policies reasonably acceptable to GE
Capital. The Borrower shall, if GE Capital so requires, deliver to GE Capital
policies or certificates of insurance evidencing such coverage. Each policy
shall name GE Capital as loss payee thereunder, shall not be subject to
co-insurance, and shall provide for fourteen (14) days' prior written notice to
GE Capital of the cancellation, non-renewal or material modification thereof.
The Borrower hereby
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appoints GE Capital as its attorney-in-fact to make proof of loss, claim for
insurance and adjustment with insurers, and to execute or endorse all documents,
checks or drafts in connection with any payment made as a result of such
insurance policies. Except as otherwise specifically provided for in
subparagraph (s) below with respect to the Vessel, all insurance proceeds shall
be made payable to the Borrower and GE Capital as their interests may appear and
all insurance proceeds received as a result of any loss or damage to the
Collateral (other than the Vessel) shall be applied, at GE Capital's option, to
repair or replace the Collateral or to reduce the Obligations secured hereby.
(s) Insurance on Vessel. At all times during the term hereof,
the Borrower shall obtain and keep the Vessel insured against the risks
indicated below:
(1) marine hull insurance insuring the Vessel against
the usual risks, including collision, with a limit of not less than 100% of the
Loan;
(2) protection and indemnity insurance (including
longshoreman and harbor worker's compensation insurance in form and amount
required by applicable law), in the broadest form available (or under such form
of policy as GE Capital may approve in writing) in an amount not less than
$3,000,000;
(3 ) insurance against liability arising out of
pollution, spillage or leakage in connection with the conduct of the Vessel, in
an amount not less than $3,000,000 per accident/occurrence; and
(4) mortgagee's interest insurance covering the risks
and in the amounts stated above.
The Vessel shall not carry any cargoes nor proceed into any area then
excluded by trading warranties under the above-referenced policies without first
obtaining any necessary additional coverage, satisfactory in form and substance,
and evidence of which shall be furnished, to GE Capital. All insurances shall be
in form and with companies reasonably satisfactory to GE Capital. All insurance
for loss or damage shall provide that losses, if any, shall be payable to GE
Capital for distribution by it to itself and the Borrower, as their respective
interests may appear. Notwithstanding the foregoing, unless otherwise required
by GE Capital by notice to the underwriters, (i) any loss under any insurance on
the Vessel with respect to protection and indemnity risks may be paid directly
to the Borrower to reimburse it for any loss, damage or expense incurred by it
and covered by such insurance or to the person to whom any liability covered by
such insurance has been incurred, and (ii) in the case of any loss (other than a
Total Loss as hereinafter defined) under any insurance with respect to the
Vessel involving any damage to the Vessel, the underwriters may, so long as no
Default or Event of Default, has occurred and upon receipt of evidence
satisfactory to them of the completion of such repairs or other charges, pay
directly for the repair, salvage or other charges involved or, if the Borrower
shall have first fully repaired the damage or paid all of the salvage or other
charges, may pay the Borrower as reimbursement therefor, provided, however, that
if such damage involves a loss in excess of $250,000, the underwriters shall not
make such payment without first obtaining the written consent thereto of GE
Capital. Any loss covered by this paragraph which is paid to GE Capital but
which might have been paid, in accordance with the provisions of this paragraph,
directly to the Borrower
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or others, shall be paid by GE Capital to, or as directed by, the Borrower and
all other payments to GE Capital of losses covered by this paragraph shall be
applied by GE Capital as it, in its sole discretion, sees fit. The Borrower
shall pay the premiums and calls, if any, therefor and deliver to GE Capital the
policies of insurance or duplicates thereof, or other evidence satisfactory to
GE Capital of such insurance coverages and of each rider and endorsement thereto
or renewal thereof. In addition, the Borrower shall use its best efforts to
furnish, or cause to be furnished, to GE Capital annually a detailed report
signed by a firm of marine insurance brokers reasonably satisfactory to GE
Capital as to the insurance maintained in respect of the Vessel, as to their
opinion as to the adequacy thereof and as to the Borrower's compliance with the
terms hereof. Each insurer shall agree, by endorsement upon the policy or
policies issued by it, or by independent instrument furnished to GE Capital,
that it will give GE Capital fourteen (14) days' prior written notice of the
effective date of any material alteration, cancellation or nonrenewal of such
policy or policies.
Upon the occurrence of Total Loss and provided any amount due
hereunder is still outstanding, the Borrower shall give prompt notice thereof
to GE Capital. After such notice that such a Total Loss has occurred, GE
Capital shall apply all insurance proceeds received by it as a result of such
Total Loss towards prepayment of the Note in accordance with Section 2.06
hereof, with the Borrower being liable for any deficiency.
(t) Financial Responsibility. The Borrower will comply with
and satisfy all of the provisions of any applicable law, regulation,
proclamation or order concerning financial responsibility for liabilities
imposed on the Borrower or the Vessel with respect to pollution including, to
the extent applicable, the International Convention of Maritime Pollution of
1973, the International Convention for the Safety of Life at Sea of 1974, the
U.S. Water Pollution Act as amended by the Water Pollution Control Act
Amendment of 1972, the U.S. Oil Pollution Act of 1990, as the same may be
amended from time to time, and will maintain all certificates or other evidence
of financial responsibility as may be required by any such law, regulation,
proclamation or order with respect to the trade which the Vessel from time to
time is engaged in.
(u) Insolvency. The Borrower shall provide GE Capital with
written notice of the commencement of proceedings by or against it or the
Guarantors under the applicable bankruptcy laws or other insolvency laws (as
now or hereafter in effect), involving it or the Guarantors, as a debtor.
(v) Request for Information. The Borrower shall (i) keep and
maintain accurate books and records, (ii) make entries on such books and
records in form reasonably satisfactory to GE Capital disclosing GE Capital 7
assignment of, and security interest in and lien on, the Collateral and all
proceeds thereof, (iii) furnish to GE Capital promptly upon request such other
information, reports, contracts, invoices as GE Capital may from time to time
request
(w) Bonding and Compliance with ERISA. To the extent
applicable, the Borrower shall maintain at all times such bonding as is
required by ERISA. As soon as practicable and in any event within fifteen (15)
days after it knows or has reason to know that, with respect to any plan, a
"reportable event" has occurred, the Borrower will deliver to GE Capital a
certificate signed by its chief financial officer setting forth the details of
such "reportable event".
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(x) Notice of Hazardous Materials. Within ten (10) days after
the Borrower obtains actual knowledge thereof, the Borrower shall immediately
advise GE Capital in writing and deliver a copy of(a) any and all enforcement,
clean-up, removal or other governmental or regulatory actions expected to cost
in excess of Two Hundred Fifty Thousand United States Dollars ($250,000)
instituted, completed or threatened pursuant to any applicable federal state or
local laws, ordinances or regulations relating to any Hazardous Materials
affecting the Collateral ("Hazardous Materials Laws"); and (b) all claims made
or threatened by any third party against the Borrower in excess of Two Hundred
Fifty Thousand United States Dollars ($250,000) relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a) and (b) above are
hereinafter referred to an "Hazardous Materials Claims").
(y) Possession. The Borrower shall continue to use the
Collateral solely in its trade or business and except as otherwise permitted
herein shall not part with possession thereof (except for maintenance and
repair).
(z) Place of Business. The Borrower shall give GE Capital at
least fifteen (15) Business Days' prior written notice of the change of its
principal place of business, giving the complete address of such new place of
business and execute and file Uniform Commercial Code financing statements,
amendments or continuation statements in form and substance satisfactory to GE
Capital, in such jurisdiction or jurisdictions as GE Capital shall request upon
demand by GE Capital.
Section 7.02. Negative Covenants. Until the Borrower's Obligations have
been satisfied in full, the Borrower shall not:
(a) Change of Business. Make or permit any material change in
the nature of its business.
(b) Liens. Create, incur, assume or suffer to exist any
mortgage, security interest, pledge, lien or other charge or encumbrance on the
Collateral (except for Permitted Liens).
(c) Assignments. Allow any insurances, charters, freights and
subfreights (if applicable), hire or other earnings in respect of the Vessel to
be assigned to any Person other than GE Capital.
(d) Flag; Etc. . Change the flag of the Vessel. In addition,
without the prior written consent of GE Capital (which consent shall not be
unreasonably withheld), the Borrower shall not change the name of the Vessel
without first registering such name with the United States Trademark and Patent
Office and granting GE Capital of a security interest therein, and any such
written consent to any one change of the name of the Vessel or the hailing port
or port of documentation shall not be construed to be a waiver of this
provision with respect to any subsequent proposed change of the name of the
Vessel or the hailing port or port of documentation.
(e) Sale or Transfer of Collateral. Except as otherwise
expressly permitted herein, sell or transfer the Collateral to any Person.
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(f) Investments and Advances. Other than Investments, Advances
and Contingent Liabilities made or incurred as of the date hereof, make any
further Investments or Advances or incur any further Contingent Liabilities
other than for:
(i) Investments in Cash Equivalents.
(ii) Investments received in settlement of
arms-length disputes with non-affiliates of the Borrower.
(iii) Investments received as consideration for
asset sales made in arms-length transactions for fair market consideration.
(g) Additional Indebtedness. Provide or incur any additional
indebtedness.
(h) Contingent Liabilities. Incur any Contingent Liabilities.
(i) Dividends. Pay or declare dividends or distributions on
capital stock if a Default or Event of Default has occurred and remains
continuing or if a Default or Event of Default would result from the
declaration and/or payment of such dividend or distribution on capital stock.
(j) Consolidation, Merger, Sale of Assets, etc.. Wind up its
affairs, liquidate its assets or dissolve or enter into any transaction of
merger or consolidation, or convey, sell, lease or Otherwise dispose of (or
agree to do any of the forgoing) all or any substantial part of its property or
assets.
(k) ERISA.
(i) At any time, permit any Pension Plan which is
maintained by it or to which it is obligated to contribute on behalf of its
respective employees, to:
(x) engage in any nonexempt "prohibited
transaction", as such term is defined in Section 4975 of the Code;
(y) incur any material "accumulated funding
deficiency", as that term is defined in Section 3 02 of ERISA, or
(z) suffer a termination event to occur
which may reasonably be expected to result in liability of such Borrower to the
Pension Plan or to the Pension Benefit Guaranty Corporation or the imposition of
a lien on the Collateral pursuant to Section 4068 of ERISA.
(ii) Fail, upon the Borrower becoming aware thereof, promptly
to notify GE Capital of the occurrence of any "reportable event" where
reporting requirements as to the same have not been waived by the Pension
Benefit Guaranty Corporation (as defined in Section 4043 of ERISA) or of any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code)
with respect
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to any Pension Plan which is maintained by such Borrower or to which such
Borrower is obligated to contribute on behalf of its employees or any trust
created thereunder.
(iii) At any time, permit any Pension Plan which is
maintained by it or to which it is obligated to contribute on behalf of its
employees to fail to comply with ERISA or other applicable laws in any respect
that would result in a Material Adverse Effect.
ARTICLE VIII
EVENTS OF DEFAULT: REMEDIES
Section 8.01. Events of Default Remedies, etc. If any of the following
events (each an "Event of Default" and collectively "Events of Default") shall
occur and be continuing:
(a) the Borrower shall fail to pay, within five days after
the date when the same becomes due, any installment of principal and/or
interest due on the Note or to pay when due any other sum payable hereunder or
under any of the other Loan Documents; or
(b) the Borrower shall sell, demise charter, mortgage, grant
a security interest in, otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral, in each instance without the prior written
consent of GE Capital; or
(c) the Borrower shall fail to procure, maintain in effect at
all times, all required insurances on the Collateral; or
(d) the anticipatory repudiation by the Guarantors of their
obligations under the Guaranty; or
(e) the Guarantors shall fail to perform or observe any of
their obligations under the Guaranty (within any applicable grace or cure
periods); or
(f) the Borrower or the Guarantors shall fail to perform or
observe, or cause to be performed or observed, any other term, covenant or
agreement contained herein or in any of the other Loan Documents or any
certificate delivered pursuant thereto and such failure shall continue
unremedied for a period of thirty (30) days after the giving of notice thereof;
provided, however, that if such default is capable of being remedied but cannot
be remedied within said thirty (30) day period, so long as the Borrower and/or
Guarantors undertake to remedy such default within said thirty (30) day period
and diligently pursues such cure, the Borrower and/or Guarantors shall have up
to a total of sixty (60) days to effectuate such cure; or
(g) any representation or warranty made or deemed to be made
by the Borrower hereunder or by the Borrower or the Guarantors in any of the
other Loan Documents shall prove to be false or misleading in any material
respect; or
(h) the Borrower or the Guarantors shall (i) fail to pay when
due any indebtedness for borrowed money or any interest or premium thereon when
due (whether by scheduled maturity,
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required prepayment, acceleration, demand or otherwise), and such failure shall
continue unremedied after the applicable grace period, if any, or (ii) fail to
timely perform or observe any term, covenant or condition to be performed or
observed by it under any agreement or instrument relating to any such
indebtedness for borrowed money and such failure shall continue unremedied after
the applicable grace period, if any, specified in such agreement or instrument;
or
(i) a final judgment or order in excess of $250,000 (not
otherwise covered by insurance) shall be rendered against the Borrower and/or
the Guarantors and such judgment or order shall continue unsatisfied, in effect
and unstayed or unbonded for a period of thirty (30) consecutive days; or
(j) the Borrower or the Guarantors shall (i) apply for or
consent to the appointment of or the taking possession by a receiver, trustee,
liquidator, assignee, custodian, sequestrator or the like of itself or of its
property, (ii) fail generally or admit its inability to pay its debts as they
mature, (iii) become insolvent, (iv) make a general assignment for the benefit
of creditors, (v) commence a voluntary case under the bankruptcy laws of any
jurisdiction, (vi) file a petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any insolvency law or an
answer admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding or (vii) take limited
liability company action or other action for the purpose of effecting any of
the foregoing; or
(k) an order, judgment, or decree shall be entered in any
voluntary or involuntary case with or without the application, approval or
consent of the Borrower or the Guarantors, by a court or governmental agency of
competent jurisdiction, granting relief under or approving a petition seeking
reorganization, or appointing a receiver, trustee, liquidator, assignee,
custodian, sequestrator or the like of the Borrower or the Guarantors or of the
property of either of them, and such order, judgment or decree shall continue
unstayed and in effect for a period of thirty (30) consecutive days; or
(l) any notice shall have been issued by the United States
Coast Guard to the effect that the Vessel is subject to deletion from registry
or the certificate of documentation of the Vessel is subject to revocation or
cancellation, for any reason whatsoever; or
(m) GE Capital fails to hold duly recorded first preferred
mortgage or security interest on the Vessel or a first priority security
interest in all other Collateral;
(n) the Borrower shall be in default under any other
obligation to GE Capital, or under any obligation to-any other person for the
payment of borrowed money, for the deferred purchase price of property, or for
the payment of any rent under any lease agreement covering real or personal
property, and the applicable grace period with respect thereto shall have
expired;
(o) a material adverse change in the financial condition of
either the Borrower or the Guarantors, which in the opinion of GE Capital may
adversely affect the ability of the Borrower or the Guarantors (as the case may
be) to perform their obligations hereunder, under the Note or under any of the
other Loan Documents, and such change is not cured to the satisfaction of GE
Capital within thirty days after written notice to the Borrower; or
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(p) a default or an event of default shall occur under any of
the other Loan Documents (after giving effect to any applicable grace or cure
period); or
(q) legislation is passed which (or any Gaming Authorities
act to) suspends, revokes or otherwise materially restricts the Borrower's
authority to engage in Casino Gaming Operations aboard the Vessel; or
(r) a change of ownership or dissolution, merger,
consolidation, liquidation or reorganization of the Borrower or Leisure Time
Technology, Inc., then, and in any such event, (A) GE Capital at its option,
may declare the Note to be in default and accelerate payment of all sums due
hereunder, whereupon all such amounts shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
the Borrower hereby waives, (B) GE Capital may terminate any charter or
management agreement (if any) relating to the Vessel, (C) may withhold for a
period of up to three (3) months all management fees due the managers of the
Vessel, (D) set-off against and debit any account maintained by Borrower with
GE Capital or its agent directly for any sums due GE Capital hereunder and
under the Note; (E) immediately proceed against the Guarantors under the
Guaranties; (F) immediately proceed against the Vessel under the First
Preferred Mortgage; (G) GE Capital may exercise any or all other remedies
available to it under any of the Loan Documents or any applicable law,
provided, however, if a default occurs under subparts (j) and (k) of this
Section 8.01, no such declaration shall be necessary and subpart (A), ( B),
(C), (D), (E), (F) and (G) hereof shall operate as if such declaration had been
made. The rights and remedies of GE Capital hereunder and under any documents
or instruments executed pursuant hereto are cumulative, and recourse to one or
more rights or remedies shall not constitute a waiver of the others or an
election of remedies. It is mutually agreed that commercial reasonableness and
good faith require the giving of no more than ten (10) days ' prior written
notice of the time and place of any public sale of any Collateral or of the
time after which any private sale or any other intended disposition thereof is
to be made, and at any such public or private sale, subject to limitations of
law, GE Capital, its agents and/or nominees, may purchase any or all of the
Collateral. If the net proceeds of any disposition of Collateral exceed the
amount then due and owing, whether by acceleration, normal maturity or
otherwise, such excess will be remitted to Borrower or whomsoever shall be
entitled thereto. Borrower shall remain liable for any deficiency remaining
after disposition of the Collateral.
If Borrower fails to perform or comply with any of its obligations
contained herein, GE Capital shall have the right, but shall not be obligated,
to effect such performance or compliance and Borrower shall, within ten (10)
days from the date of demand, immediately reimburse GE Capital for such sums so
expended, together with interest thereon at the late charge rate specified in
the Note for the actual number of days elapsed from date of payment by GE
Capital to the date on which Lender receives payment thereof from Borrower.
Failure of Borrower to pay and promptly discharge the aforesaid debts and
obligations shall constitute an Event of Default under this Agreement, but the
payment of the same by GE Capital pursuant to this Section shall not cure or
constitute a waiver of such Event of Default. Upon an Event of Default, all
payments received by GE Capital from or on behalf of Borrower may be applied by
GE Capital to any installment(s) due and payable under the Note as GE Capital
may determine in its sole discretion, without notice to or consent of Borrower,
Borrower hereby expressly waiving (to the extent permitted by law) all rights
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to make or manifest any binding instruction upon GE Capital as to application of
such payments other than as herein provided. Acceptance by GE Capital of partial
payment(s) or performance by the Borrower or the Guarantors or by any other
third party shall not be construed as a waiver of any Event of Default, nor
shall the same affect or in any way impair the rights and remedies of GE Capital
hereunder.
In the event this Agreement, the Note or any other Loan Documents are
placed in the hands of an attorney for collection of money due or to become due
or to obtain performance of any provision hereof, the Borrower agrees to pay all
reasonable attorneys' fees incurred by GE Capital, and further agrees that
payment of such fees is secured hereunder. The Borrower and GE Capital agree
that such fees to the extent not in excess of twenty percent (20%) of subject
amount owing after default (if permitted by law, or such lesser sum as may
otherwise be permitted by law) shall be deemed reasonable.
GE Capital's rights and remedies hereunder or otherwise arising are
cumulative and may be exercised singularly or concurrently. Neither the failure
nor any delay on the part of GE Capital to exercise any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. GE
Capital shall not be deemed to have waived any of its rights hereunder or under
any other agreement, instrument or paper signed by the Borrower unless such
waiver be in writing and signed by GE Capital. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be in writing and signed by GE
Capital and then such waiver or consent shall be effective only in the
specific-instance and for the specific purpose for which given.
Section 9.02. Notices, etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic
communications) and mailed telexed, telecopied, telegraphed or delivered as
follows:
To the Borrower:
Leisure Belle Cruise L.L.C.
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with copies to:
Leisure Time Technology, Inc.
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Leisure Time Casinos & Resorts, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. A. N. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
To GE Capital:
General Electric Capital Corporation
Commercial Equipment Financing
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Region Counsel
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as shall be designated by such part in a written
notice to the other party . All such notices and communications shall, when
mailed be sent by first class registered mail postage prepaid and be effective
5 days after being deposited in the US mails addressed as aforesaid. All
notices sent by telex shall be effective when sent, provided that (i) an
appropriate answer back has been received by the sending party and (ii) such
telex transmission is confirmed by mailing to the receiving party at its
address given above, a copy of such telex postage prepaid by first class mail
(air mail if international). All other forms of written notice or other
communication shall be effective upon receipt.
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Section 9.03. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 9.04. Service of Process and Consent to Jurisdiction: Waiver of
Immunity. The Borrower hereby irrevocably submit itself to the non-exclusive
jurisdiction of the Federal and State courts located in the State of New York,
in any action brought against the Borrower under this Agreement, the Note or any
other Loan Document and agrees that a summons and complaint commencing any
action or proceeding in such court shall be properly served if delivered
personally or by certified mail, postage prepaid, return receipt requested to
the Borrower at its address set forth in Section 9.02 above, or otherwise served
under the laws of the State of New York, and the Borrower hereby waives any
objection to venue and jurisdiction which the Borrower may now or hereafter
have. The Borrower shall promptly notify GE Capital of any change in such
address. Nothing herein shall affect the right of GE Capital to serve process in
any other matter prescribed by law or the right of GE Capital to bring legal
proceedings in any other competent jurisdiction.
Section 9.05. No Remedy Exclusive. Each and every right, power and
remedy given to GE Capital in this Agreement, the Note and the Loan Documents
shall be cumulative and shall be in addition to every other right, power and
remedy herein or therein given now or hereafter existing at law, in equity, in
admiralty, by statute or otherwise. Each and every right, power and remedy
whether given therein or otherwise existing may be exercised from time to time
as often and in such order as may be determined by GE Capital, and neither the
failure or delay in exercising any power or right nor the exercise or partial
exercise of any right, power or remedy shall be construed to be a waiver of or
acquiescence in any default therein; nor shall the acceptance of any security or
of any payment of or on account of any loan, any promissory note, Advances,
obligations, expenses, interest or fees maturing after a default or of any
payment on account of any past default be construed to be a waiver of any right
to take advantage of any future default or of any past default not completely
cured thereby.
Section 9.06. Payment of Costs. Whether or not the transactions
contemplated herein shall be consummated, the Borrower hereby agrees to pay (a)
all costs and expenses incurred by GE Capital (including the fees and expenses
of its counsel) in connection with the preparation, execution and delivery of
this Agreement and any other Loan Document or any amendment to any Loan
Document, and (b) all losses, costs and expenses (including, but not limited to,
attorneys' fees and expenses) in connection with (i) the preservation of any
rights of GE Capital under, or legal advice in respect of, the rights or
responsibilities of GE Capital under this Agreement and the other Loan Documents
or (ii) the enforcement of any of the Loan Documents. The Borrower further
agrees to indemnify and hold GE Capital harmless from and against any
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution, delivery, filing or recordation of this Agreement or
any of the other Loan Documents.
Section 9.07. Further Assurances. The Borrower agrees to execute such
other and further assurances and documents as in the opinion of GE Capital
reasonably may be required more effectively to carry out the terms of this
Agreement or of any of the other Loan Documents.
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Section 9.08. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall together constitute but one and the same instrument.
Section 9.09. Headings. The titles of the Articles and the Section
headings of this Agreement are for convenience only and shall not affect the
construction of this Agreement
Section 9.10. Severability. If any term or provision of this Agreement
or any of the other Loan Documents shall be determined to be invalid or
Unenforceable for any reason, such determination shall not adversely affect any
other term or provision of this Agreement or such other Loan Document which
shall remain in full force and effect and the effect of such determination shall
be limited to the territory or the jurisdiction in which made.
Section 9.11. Survival. The Borrower's agreements, representations,
warranties and conditions contained in this Agreement and made pursuant to the
provisions hereof shall survive the execution and delivery of this Agreement
until the Note and the interest thereon shall have been paid in full in
accordance with the terms of this Agreement and the Note and any and all other
moneys, payments, obligations and liabilities which the Borrower shall have
made, incurred or become liable for pursuant to the terms of this Agreement or
any of the other Loan Documents shall have been paid in full. All statements
contained in any certificate or other instrument delivered pursuant to the
provisions of this Agreement shall constitute representations and warranties by
the Borrower under this Agreement.
Section 9.12 WAIVER OF TRIAL BY JURY. THE BORROWER HEREBY
UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION, BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT,
ANY AMOUNTS SECURED HEREBY, ANY DEALINGS BETWEEN THE BORROWER AND GE CAPITAL
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY RELATED TRANSACTIONS.
The scope of this waiver is intended to be all encompassing of any and all
disputes that may be filed in any court (including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMISNTS OR MODIFICATIONS TO THIS AGREEMENT, OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
Section 9.13. Assignment. GE Capital may assign any or all of its
rights and obligations hereunder or under any of the other Loan Documents upon
notice to but without the consent of the Borrower and the Borrower hereby waives
any defense, counterclaim or cross-complaint by the Borrower against the
assignee, agreeing that GE Capital shall be solely responsible therefor.
Additionally, GE Capital may upon notice to but without the consent of the
Borrower sell to any other Person participations in the Loan. Upon its receipt
of notice thereof, the Borrower shall acknowledge the same in writing and, in
the case of any such assignment, shall agree to comply with all instructions
given to it by such assignee as to the interests thereby assigned. Without the
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prior written consent of GE Capital, the Borrower may not assign any of its
rights or obligations hereunder to any Person.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, as of the day and year first above written.
W1TNESS: GENERAL ELECTRIC CAPITAL CORPORATION
/s/ By: /s/ SEAL)
------------------------------ ----------------------------------------
WITNESS: LEISURE BELLE CRUISE L.L.C.
By: LEISURE TIME CRUISE CORPORATION,
Its sole member
/s/ By: /s/ SEAL)
------------------------------ ----------------------------------------
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Schedule 1
DESCRIPTION OF ADDITIONAL COLLATERAL
All non-gaming equipment and other personal property used in connection
with the operation of the Vessel and in all earnings, insurance and requisition
compensation of the Vessel.
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