Exhibit 4.8(1)
=========================
FIRST PREFERRED FLEET MORTGAGE
ON THE WHOLE OF THE
EMPRESS OFFICIAL NUMBER 984286
AND THE
EMPRESS II OFFICIAL NUMBER 998517
$100,000,000.00
=========================
Empress Casino Joliet Corporation
[address]
Owner and Mortgagor
In Favor of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, AGENT BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Mortgagee
=========================
Dated as of June 30, 1998
=========================
Discharge Amount: $100,000,000.00 Together
With Interest and Performance
of Mortgage Covenants
INDEX
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Page
----
PARTIES........................................................................1
WHEREAS CLAUSES................................................................1
GRANTING CLAUSE................................................................2
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Definition of Terms.............................................4
Section 1.02. Rules of Construction...........................................5
ARTICLE II
GENERAL MORTGAGE PROVISIONS
Section 2.01. General.........................................................5
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR
Section 3.01. Corporate Status of Mortgagor...................................6
Section 3.02. Outstanding Liens...............................................6
Section 3.03. Compliance With Law.............................................6
Section 3.04. Operation of Vessels............................................7
Section 3.05. Payment of Taxes, etc...........................................7
Section 3.06. Notice of Mortgage..............................................7
Section 3.07. Release From Arrest.............................................7
Section 3.08. Maintenance of Vessels..........................................7
Section 3.09. Access to Vessels...............................................8
Section 3.10. Documentation of Vessels........................................8
Section 3.11. Sale, Charter or Mortgage of Vessels............................8
Section 3.12. Insurance.......................................................8
Section 3.13. Requisition of Title to Vessels.................................8
Section 3.14. Requisition of Vessels but not Title............................9
Section 3.15. Execution of Additional Documents...............................9
I
INDEX
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(Continued)
Page
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ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
Section 4.01.................................................................. 9
A. Events of Default......................................................... 9
B. Remedies..................................................................10
Section 4.02. Sale of Vessels by Mortgagee....................................12
Section 4.03. Mortgagee to Sign for Mortgagor.................................12
Section 4.04. Mortgagee to Collect Hire, etc..................................12
Section 4.05. Mortgagee's Right to Possession.................................13
Section 4.06. Appearance by Mortgagee on Behalf of Mortgagor..................13
Section 4.07. Acceleration of Indebtedness Secured Hereby.....................13
Section 4.08. Right of Mortgagee..............................................13
Section 4.09. Cure of Defaults................................................14
Section 4.10. Restoration of Position.........................................14
Section 4.11. Proceeds of Sale................................................14
Section 4.12. Repairs to Vessels and Sale of Equipment........................15
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Addresses.......................................................15
Section 5.02. Counterparts....................................................16
Section 5.03. Interest of Mortgagor...........................................16
Section 5.04. Survivorship of Covenants.......................................16
Section 5.05. Amendments......................................................17
Section 5.06. Discharge of Lien...............................................17
Section 5.07. Incorporation into Mortgage.....................................17
Section 5.08. Governing Law...................................................17
SIGNATURE PAGE................................................................17
ACKNOWLEDGMENT................................................................18
ii
FIRST PREFERRED FLEET MORTGAGE
THIS FIRST PREFERRED FLEET MORTGAGE dated as of June 3O, 1998 is
granted by:
Empress Casino Joliet Corporation
[address]
a corporation organized and existing under and by virtue of the laws of the
State of Illinois (the "Mortgagor") in favor of:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, AGENT BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
a national banking association organized and existing under and by virtue of the
laws of the United States (the "Mortgagee"), as administrative and collateral
agent for the Lenders, the Swingline Lender and the L/C Issuer.
WHEREAS:
A. The Mortgagor is the sole owner of the whole of the Vessels
(collectively the "Vessels" and individually a "Vessel") identified and
described in the Granting Clause of this First Preferred Fleet Mortgage (the
"Mortgage").
B. Under the terms of that certain Credit Agreement (the "Credit
Agreement") executed concurrently herewith by and among Mortgagor, Empress
Entertainment, Inc., a Delaware corporation ("EEI"), and Empress Casino Hammond
Corporation, an Indiana corporation ("ECHC" and together with Mortgagor and EEI
collectively referred to as the "Borrowers"), each of the Lenders, as therein
defined, ▇▇▇▇▇ Fargo Bank, National Association, as the swingline lender
(therein in such capacity, together with its successors and assigns, the
"Swingline Lender"), and ▇▇▇▇▇ Fargo Bank, National Association, as
administrative and collateral agent for the Lenders, Swingline Lender and L/C
Issuer (therein, in such capacity, called the "Agent Bank" and, together with
the Lenders, Swingline Lender and L/C Issuer collectively referred to as the
"Banks"), have agreed to establish a Credit Facility, a Swingline Facility and a
L/C facility (collectively the "Bank Facilities") in favor of Mortgagor and the
Borrowers in the aggregate principal amount of One Hundred Million Dollars
($100,000,000) in accordance with the terms and conditions set forth in the
Credit Agreement and as evidenced by that certain Revolving Credit Note (the
"Note") dated June 17, 1998
1
payable to the order of Agent Bank in the principal sum of One Hundred Million
Dollars ($100,000,000.00), including the Swingline Note as a subfacility
thereof in the principal sum of Five Million Dollars ($5,000,000.00), (together
with the Revolving Credit Note, collectively referred to as the "Notes").
Mortgagor is thus or will be truly and justly indebted unto the Mortgagee in an
amount up to the full and true principal sum of $100,000,000.00, plus interest
and the performance of mortgage covenants.
C. In order to secure the due and punctual payment of the principal
of and interest on the Notes, together with the payment of all other sums and
the performance of all other obligations now or hereafter owing by the Mortgagor
to the Mortgagee as described in the Granting Clause below, the Mortgagor has
agreed to execute and deliver this Mortgage to Mortgagee, individually and as
administrative and collateral agent for the Lenders, Swingline Lender and L/C
Issuer:
GRANTING CLAUSE
---------------
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
THAT, in consideration of the premises and of the additional covenants
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and for the purpose of securing as a
first priority lien in favor of the Mortgagee (1) the due and punctual payment
of the indebtedness evidenced by the Notes, (2) the performance of each covenant
and agreement of the Mortgagor contained herein, in the Credit Agreement and in
the Loan Documents (as hereinafter defined), (3) the satisfaction of those terms
and conditions contained herein applicable to the Mortgagor or within the
Mortgagor's control, (4) the payment of such additional loans or advances as
hereafter may be made to the Mortgagor or its successors or assigns, when
evidenced by a note or notes reciting that they are secured by this Mortgage,
provided, however, that any and all future advances to or on behalf of the
Mortgagor made for the improvement, protection or preservation of the Vessels,
together with interest at the Default Rate (as hereinafter defined), shall be
automatically secured hereby unless such a note or instrument evidencing such
advances specifically recites that it is not intended to be secured hereby, and
(5) the payment of all sums expended or advanced by the Mortgagee under or
pursuant to the terms hereof or to protect the security hereof, together with
interest thereon as herein provided, whether any of the foregoing obligations
now exist or are hereafter created or incurred, and whether they are or may be
direct or indirect, due or to become due, absolute or contingent, primary or
secondary, liquidated or unliquidated, or sole, joint, several or joint and
several (collectively, the "Obligations"), THE MORTGAGOR HAS granted, mortgaged,
pledged, hypothecated, set over and confirmed AND THE MORTGAGOR DOES BY THESE
PRESENTS grant, mortgage, pledge, hypothecate, set over and confirm UNTO AND IN
FAVOR OF THE MORTGAGEE the whole of the following named and described Vessels to
wit:
2
================================================================================
NAME OFFICIAL NO. HOME PORT
---- ------------ ---------
--------------------------------------------------------------------------------
EMPRESS 984286 National Vessel
Documentation Center
998517 National Vessel
EMPRESS II Documentation Center
================================================================================
================================================================================
TOGETHER WITH all of their boilers, engines, machinery, masts, spars, boats,
cables, motors, tools, anchors, chains, booms, cranes, rigs, pumps, pipe, tanks,
tackle, apparel, furniture, fixtures, rigging, supplies, fittings and gaming
machinery, equipment and accessories relating to the gaming operations,
including but not limited to communication systems, visual and electronic
surveillance systems and transportation systems, tools, utensils, food and
beverage, liquor, uniforms, linens, housekeeping and maintenance supplies, fuel,
all gaming equipment and devices, gaming and financial equipment, computer
equipment, calculators, adding machines, video game and slot machines, and any
other electronic equipment of every nature used in connection with the operation
of the Vessel, all machinery, equipment, engines, appliances and fixtures for
generating or distributing air, water, heat, electricity, light, fuel or
refrigeration, or for ventilating or sanitary purposes, or for the exclusion of
vermin or insects, or for the removal of dust, refuse or garbage, all wall-beds,
wall-safes, built-in furniture and installations, shelving, lockers, partitions,
doorstops, vaults, motors, elevators, dumb-waiters, awnings, window shades,
venetian blinds, light fixtures, fire hoses and brackets and boxes for the same,
fire sprinklers, alarm, surveillance and security systems, computers, drapes,
drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and
carpeting, plumbing, bathtubs, sinks, basins, pipes, faucets, water closets,
laundry equipment, washers, dryers, ice-boxes and heating units, all kitchen and
restaurant equipment, including but not limited to silverware, dishes, menus,
cooking utensils, stoves, refrigerators, ovens, ranges, dishwashers, disposals,
water heaters, incinerators, furniture, fixtures and furnishings, all cocktail
lounge supplies, including but not limited to bars, glassware, bottles and
tables used in connection with the Vessels, all chaise lounges, hot tubs,
swimming pool heaters and equipment, and all other recreational equipment
(computerized and otherwise), beauty and ▇▇▇▇▇▇ equipment, and maintenance
supplies used in connection with the Vessels, all specifically designed
installations and furnishings, and all furniture, furnishings and personal
property of every nature whatsoever now or hereafter owned or leased by
Mortgagor, to the extent of Mortgagor's interest in such personal property, or
in which Mortgagor has any rights or interest and located in or on, or attached
to, or used or intended to be used or which are now or may hereafter be
appropriated for use on or in connection with the operation of the Vessels, or
in connection with any construction being conducted or which may be conducted
thereon, and all extensions, additions, accessions, improvements, betterments,
renewals, substitutions, and replacements to any of the foregoing, all of which
(to the
3
fullest extent permitted by law) shall be conclusively deemed appurtenances of
the Vessels, and all other appurtenances to the Vessels appertaining or
belonging, whether now owned or hereafter acquired, whether on board or not, and
all additions, improvements and replacements hereafter made in or to the
Vessels. Mortgagor and Mortgagee acknowledge that significant structures,
improvements, additions, equipment and other appurtenances may be added to the
Vessels after the execution of this Mortgage, and the Mortgagor specifically
affirms and agrees that all such appurtenances to the Vessels shall be subject
to this Mortgage.
TO HAVE AND HOLD the same unto Mortgagee, its successors and assigns,
forever upon the terms herein set forth to secure the performance and observance
of and compliance with the covenants, terms and conditions in the Notes and the
Credit Agreement.
PROVIDED, only, and the condition of these presents is such, that if
the Mortgagor, its successors or assigns, shall pay or cause to be paid to the
holder of the Notes and shall perform, observe and comply with the covenants,
terms and conditions in the Notes, the Credit Agreement and the other Loan
Documents contained, expressed or implied, to be performed, observed or complied
with by and on the part of the Mortgagor, then these presents and the rights
hereunder shall cease, terminate and be void; otherwise to be and remain in full
force and effect.
AND NOW, THE PARTIES HEREBY FURTHER AGREE, COVENANT AND DECLARE that
the Vessels are to be held subject to the following covenants, conditions,
provisions, terms and uses:
ARTICLE I
---------
DEFINITIONS AND RULES OF CONSTRUCTION
-------------------------------------
For all purposes of this Mortgage, unless the context otherwise
requires:
SECTION 1.01. Definition of Terms.
--------------------
(a) Act shall mean Chapter 313 of Title 46 of the United States Code.
(b) Office of the Documentation Officer shall mean the Office of the
Documentation Officer of the United States Coast Guard at New Orleans, Louisiana
or the National Vessel Documentation Center, or such other documentation office
at which the Certificates of Documentation of the Vessels may hereinafter be
kept.
(c) Loan Documents shall have the meaning as set forth in Section
1.01 of the Credit Agreement, and any and all pledges, security agreements,
guaranties, financing statements,
4
filings, instruments, documents or other agreements or assignments executed by
the Mortgagor or any other party in order to evidence, secure or perfect the
Notes and/or any other Loan Document.
(d) Default Rate shall have the meaning as set forth in Section
2.11(b) of the Credit Agreement.
SECTION 1.02. Rules of Construction. Unless the context otherwise
requires:
(a) A term has the meaning assigned to it;
(b) "Or" is not exclusive;
(c) Words in the singular include the plural, and in the plural
include the singular;
(d) All references herein to particular articles or sections, unless
otherwise provided, are references to articles or sections of this Mortgage.
(e) The headings herein are solely for convenience of reference and
shall not constitute a part of this Mortgage nor shall they affect its meaning,
construction or effect.
(f) References to the Notes, Credit Agreement and other instruments
shall be deemed to refer to such Notes, Credit Agreement or other instruments as
the same may from time to time be amended, supplemented or modified by the
parties hereto in accordance with the terms thereof.
(g) Unless defined herein, capitalized terms have the meaning given
to them in the Credit Agreement.
ARTICLE II
----------
GENERAL MORTGAGE PROVISIONS
---------------------------
SECTION 2.01. General. For purposes of this Mortgage and in order to
comply with Title 46, Section 31321(b)(3), of the United States Code, the
parties to this Mortgage hereby declare that the indebtedness which is now or
will in the future be owed under the Notes and the Credit Agreement is an amount
up to the sum of $100,000,000.00, as the total of all possible advances that may
be made, together with interest and performance of the covenants of the
Mortgage, the Notes and the Credit Agreement. The discharge amount is the same
as the total amount, together with interest and performance of the covenants of
the Mortgage, the Notes and the Credit Agreement. The Bank Facilities secured by
this Mortgage consist of a revolving line of credit ("Revolving Credit
Facility") in the aggregate principal amount of One Hundred Million Dollars
5
($100,000,000.00), including the Swingline Note as a subfacility thereof in the
principal sum of Five Million Dollars ($5,000,000.00).
ARTICLE III
-----------
REPRESENTATIONS. WARRANTIES AND COVENANTS OF THE MORTGAGOR
----------------------------------------------------------
The Mortgagor represents, warrants, covenants and agrees with
Mortgagee as follows:
SECTION 3.01. Corporate Status of Mortgagor. The Mortgagor is a
corporation organized and existing under and by virtue of the laws of the State
of Illinois and is and will remain a citizen of the United States of America
within the meaning of Title 46, ▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, entitled
to own and document the Vessels and to operate them in the trade in which they
are then engaged.
SECTION 3.02. Outstanding Liens. The Mortgagor lawfully owns and is
lawfully possessed of the Vessels free and clear of all liens, mortgages, taxes
and encumbrances, and the Mortgagor will and does hereby warrant and defend the
title and possession thereto and to every part thereof for the benefit of
Mortgagee against the claims and demands of all persons whomsoever.
SECTION 3.03. Compliance With Law. The Mortgagor will comply with and
satisfy all applicable formalities end provisions of the laws, rules and
regulations of the United States of America in order to perfect, establish and
maintain this Mortgage, any supplement or amendment thereto and any assignment
thereof by the Mortgagee as a first preferred mortgage upon the Vessels and upon
all additions, improvements and replacements made in or to the same. Mortgagor
does not warrant that any such laws, rules and regulations apply to the Vessels
as a matter of law, but does warrant that it will not render such laws, rules
and regulations inapplicable by its own acts or failure to act. The Mortgagor
shall furnish to Mortgagee, from time to time, such proofs as Mortgagee may
reasonably request with respect to the Mortgagor's compliance with the foregoing
covenant. The Mortgagor shall promptly pay and discharge all United States Coast
Guard fees and expenses in connection with the recordation of this Mortgage, any
supplement or amendment thereto and any assignment thereof by the Mortgagee. In
the event that the Notes or the other Loan Documents secured hereby, or any
provisions hereto or thereof, shall be deemed invalidated in whole or in part by
reason of any present or future law or any decision of any court, the Mortgagor
will execute, on its behalf, such other and further assurances and documents as
in the opinion of Mortgagee may be required to more effectually subject the
Vessels to the payment and performance of the terms and provisions of the Notes
and the other Loan Documents. In addition, the Mortgagor will furnish to
Mortgagee such additional information as Mortgagee may reasonably require.
6
SECTION 3.04. Operation of Vessels. The Mortgagor will not cause or
permit the Vessels to be operated in any manner contrary to law and the
Mortgagor will not engage in any unlawful trade or violate any law or expose the
Vessels to penalty or forfeiture, and will not do, or suffer or permit to be
done, anything which can or may injuriously affect the registration or flag of
the Vessels under the laws and regulations of the United States of America.
Mortgagor will never operate the Vessels outside the navigation limits of the
insurance carried pursuant to Section 3.12 of Article III of this Mortgage.
SECTION 3.05. Payment of Taxes, etc. The Mortgagor will pay or cause
to be paid prior to delinquency, all taxes, assessments, governmental levies,
fines and penalties lawfully imposed on the Mortgagor or on the Vessels;
provided, however, that the Mortgagor shall not be required to pay or discharge
any such tax, assessment, charge, fine or penalty so long as the legality
thereof shall be contested in good faith and by appropriate proceedings and the
failure to pay would not have a material adverse effect on the Mortgagor or this
Mortgage unless and until foreclosure, distraint, sale or other similar
proceedings shall have been commenced with respect to the property which is
subject to any such tax, assessment, charge, fine or penalty.
SECTION 3.06. Notice of Mortgage. The Mortgagor will place, and at all
times will retain, properly certified copies of this Mortgage and a Notice of
this Mortgage with the Certificate of Documentation of the Vessels on board the
Vessels, in substantially the following form:
Neither Mortgagor nor the Master nor any employee or member of the
crew of this vessel has any right, power or authority to create, incur
or permit to be imposed upon this vessel any liens whatsoever, except
for crew wages and salvage.
SECTION 3.07. Release From Arrest. If a complaint be filed against the
Vessels, or any one of them, or if a Vessel is otherwise attached, arrested,
levied upon or taken into custody by virtue of any legal proceeding in any
court, the Mortgagor will promptly notify Mortgagee thereof by telephone
facsimile, confirmed by letter, and within three (3) Banking Business Days will
cause the Vessel to be released by posting security in the form of a Letter of
Undertaking or a Release Bond, and will promptly notify Mortgagee thereof in the
manner aforesaid.
SECTION 3.08. Maintenance of Vessels. The Mortgagor will at its own
expense at all times maintain, preserve and keep the Vessels in good condition,
working order and repair and will from time to time make all needed and proper
repairs, renewals, replacements, betterments and improvements, including without
limitation those replacements required by Section 4.12 of Article IV. The
Vessels shall, and the Mortgagor covenants that they will, at all times comply
with all applicable laws, treaties and covenants and rules and regulations
issued thereunder.
7
SECTION 3.09. Access to Vessels. The Mortgagor at all reasonable
times will afford Mortgagee or its authorized representatives full and complete
access to the Vessels for the purpose of inspecting the same and their papers
and records.
SECTION 3.10. Documentation of Vessels. The Mortgagor will keep the
Vessels duly documented as Vessels of the United States of America, under the
flag of the United States of America, entitled to engage in the operations
conducted by the Mortgagor and eligible for the trade in which the Vessels are
operating.
SECTION 3.11. Sale, Charter or Mortgage of Vessels. The Mortgagor will
not mortgage, transfer, or demise charter the Vessels, or any one of them,
without the written consent of Mortgagee first had and obtained. Any such
written consent to any one mortgage, transfer, or demise charter shall not be
construed to be a waiver of this provision in respect of any subsequent proposed
mortgage, transfer, or demise charter. Any such mortgage, transfer, or demise
charter of the Vessels shall be subject to the provisions of this Mortgage and
the lien it creates, unless released therefrom by the Mortgagee.
SECTION 3.12. Insurance. Mortgagor shall at its own expense keep the
Vessels insured to their full replacement value and shall maintain at a minimum
those insurance coverages and limits required of it in Section 5.09 of the
Credit Agreement. Mortgagor agrees, nonetheless, that it will adjust the amounts
and nature of coverages if so advised in writing by its insurance broker that
such increased amounts are necessary or advisable, and such increased amount is
reasonable, in light of the nature of business conducted thereon. If Mortgagor
shall at any time fail to comply with the foregoing, Mortgagee may, but shall
not be obligated to, procure such insurance and pay any unpaid premiums or
calls, the costs and expenses of said procurement and payment, together with
interest at the Default Rate from the date of such expenditure, shall become an
additional indebtedness due from Mortgagor to Mortgagee and part of the
Obligations secured by this Mortgage and which shall be paid by Mortgagor on
demand. In the case of an insured loss, all insurance monies, awards or other
payments shall be paid over to the Mortgagee and the Mortgagee shall pay such
amounts over to the Mortgagor subject to any applicable conditions set forth in
the Credit Agreement, provided, however, that if at the time of such proposed
payment an Event of Default shall then exist, the Mortgagee shall apply all such
amounts in the manner provided in Section 4.11 hereof.
SECTION 3.13. Requisition of Title to Vessels. In the event that the
title or ownership of the Vessels shall be requisitioned, purchased or taken by
the United States of America or any government of any State of the United States
or any other country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, decree, order or otherwise,
the lien of this Mortgage shall be deemed to attach to the claim for
compensation, and the compensation, purchase price, reimbursement or award for
such requisition, purchase or other taking of such title or ownership is hereby
declared payable to Mortgagee, who shall be entitled to receive
8
the same and shall apply all such amounts in the manner provided in Section 4.11
hereof. In the event of any such requisition, purchase or taking, the
Mortgagor shall promptly execute and deliver to Mortgagee such documents, if
any, as in the opinion of counsel for Mortgagee may be necessary or useful to
facilitate or expedite the collection by Mortgagee of such compensation,
purchase price, reimbursement or award.
SECTION 3.14. Requisition of Vessels but not Title. In the event that
the United States of America or any government of any other country or any
department, agency or representative thereof shall not take the title or
ownership of the Vessels but shall requisition, charter, or in any manner take
over the use of the Vessels pursuant to any present or future law, proclamation,
decree, order or otherwise, and in the event Mortgagor is in default of the
terms of this Mortgage, all charter hire and compensation resulting therefrom
shall be payable to Mortgagee, and if, as a result of such requisitioning,
chartering or taking of the use of the Vessels such government, department,
agency or representative thereof shall pay or become liable to pay any sum by
reason of the loss of or injury to or depreciation of the Vessels any such sum
is hereby made payable to Mortgagee, who shall be entitled to receive the same
and shall apply any such sums referred to in this Section as provided in Section
4.11 hereof. In the event of any such requisitioning, chartering or taking of
the use of the Vessels, or any one of them, the Mortgagor shall promptly execute
and deliver to Mortgagee such documents, if any, and shall promptly do and
perform such acts, if any, as in the opinion of counsel for Mortgagee may be
necessary or useful to facilitate or expedite the collection by Mortgagee of
such claims arising out of the requisitioning, chartering or taking of the use
of the Vessels.
SECTION 3.15. Execution of Additional Documents. Mortgagor agrees to
execute all additional documents, instruments, UCC Financing Statements and
other agreements that Mortgagee may deem necessary and appropriate, within its
sole discretion, in form and substance satisfactory to Mortgagee, to keep this
Mortgage in effect, to better reflect the true intent of this Mortgage, and to
consummate fully all of the transactions contemplated by the Notes and the other
Loan Documents.
ARTICLE IV
----------
EVENTS OF DEFAULT AND REMEDIES
SECTION 4.01.
a. Events of Default. The term "Event of Default," wherever used in
this Mortgage, shall mean any one or more of the following events (whether any
such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulations of any administrative or
governmental body):
9
i. The occurrence of an Event of Default as defined in Section
7.01 of the Credit Agreement; or
ii. Default in the due observance or performance of any of the
covenants and conditions herein required to be kept and performed and
continuance of such default for sixty (60) days after notice by Mortgagee,
provided, however, that the Mortgagor shall not be deemed to be in default for
failure to keep the Vessels in good condition, working order and repair pursuant
to Section 3.08 of Article III if the Mortgagor shall be diligently taking steps
to comply with the requirements of said Section; or
iii. Any representations and warranties made in this Mortgage are
untrue in any material respect as of the time when the same shall have been
made; or
iv. The Mortgagor shall (i) abandon a Vessel without due cause; or
(ii) cease to be a citizen of the United States of America within the meaning of
Title 46, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code entitled to engage in the trade
in which a Vessel is operating; or
v. The title or ownership of a Vessel shall be requisitioned,
purchased or taken by the government of any country or by any department, agency
or representative thereof and there shall not have been paid to Mortgagee an
amount in cash in United States dollars equal to the fair value of that Vessel
within ninety (90) days after such event occurs.
b. Remedies. Then and in each and every such case Mortgagee shall
have the right to:
(1) Declare all the then unpaid principal sum of the Notes, or
either of them, with the interest accrued thereon, and all other indebtedness or
sums secured hereby, to be due and payable immediately, and upon such
declaration such principal and with interest and other sums shall immediately
become due and payable without demand, presentment, notice or other requirements
of any kind (all of which the Mortgagor waives) notwithstanding anything in this
Mortgage or any Loan Document or applicable law to the contrary;
(2) Exercise all the rights and remedies in foreclosure and
otherwise given to Mortgagee by the laws and regulations of the United States of
America or of the country wherein the Vessels, or either one of them, shall then
be found or of any country or state of the United States wherein the Vessels, or
either one of them, may thereafter be found or of any other applicable
jurisdiction;
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(3) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for any and all amounts due under the Notes, the
Credit Agreement, the other Loan Documents and this Mortgage, and collect the
same from the Mortgagor and/or out of any and all property of the Mortgagor
whether covered by this Mortgage or otherwise;
(4) Take the Vessels, or either one of them, without legal
process, but in a commercially reasonable manner, wherever the same may be, and
the Mortgagor or other person in possession, forthwith upon demand of Mortgagee
shall surrender to Mortgagee possession of the Vessels and Mortgagee may,
without being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use the Vessels for such time and upon such terms as it may
deem to be for its best advantage, accounting only for the net profits, if any,
arising from such use of the Vessels and charging upon all receipts from the use
of the Vessels or from the sale thereof by court proceedings or pursuant to
Subsection (5) of Section 4.01 next following, all costs, expenses, charges,
damages or losses by reason of such use; and if at any time Mortgagee shall
avail itself of the right herein given it to take the Vessels, or either one of
them, Mortgagee shall have the right to dock the Vessels for a reasonable time
at any dock, pier, or other premises of the Mortgagor or leased by the Mortgagor
without charge, or to dock it at any other place at the reasonable cost and
expense of the Mortgagor;
(5) Without being responsible for loss or damage, except in the
event of Mortgagee's willful misconduct or gross negligence, sell the Vessels at
any place and at such time as Mortgagee may specify and in such manner as
Mortgagee may deem advisable free from any claim by the Mortgagor in admiralty,
in equity, at law or by statute, after first giving notice of the time and place
of sale with a general description of the property in the following manner:
(a) By publishing such notice for three (3) times a week
for two consecutive weeks, with the last date of publication not more than
twenty (20) nor less than five (5) days immediately preceding the sale, in a
daily newspaper of general circulation published in the place where the Vessel
or Vessels are then located and in the Journal of Commerce;
(b) By mailing a similar notice to the Mortgagor on the
day of first publication.
Mortgagee may adjourn any such sale from time to time by announcement
at the time and place appointed for such sale or for such adjourned sale, and
without further notice or publication Mortgagee may make any such sale at the
time and place to which the same shall be so adjourned. Any such sale may be
conducted without bringing the Vessels to be sold to the place designated for
such sale and in such manner as Mortgagee may deem to be for its best advantage,
provided such sale is conducted in a commercially reasonable manner.
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(6) Mortgagor hereby consents to the appointment of a consent
keeper or substitute custodian by Mortgagee with the costs thereof to be a cost
of the sale to be paid from the proceeds of the sale or by Mortgagor.
SECTION 4.02. Sale of Vessels by Mortgagee. Any sale of the Vessels
made in pursuance of this Mortgage, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Mortgagor therein and thereto, and
shall bar the Mortgagor, its successors and assigns, and all persons claiming
by, through or under them. At any such sale Mortgagee or any other holder of the
Notes (the "Holder") may bid for and purchase the Vessels and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor. In case of any such sale the Holder shall be
entitled, for the purpose of making settlement or payment for the property
purchased, to use and apply the Notes or any portion thereof in order that there
may be credited against the amount remaining due and unpaid thereon the sums
payable to the Holder out of the net proceeds of such sale after allowing for
the costs and expense of sale and other charges; and thereupon the Mortgagor
shall be credited, on account of such purchase price, with the net proceeds that
shall have been so credited upon the Notes. No purchaser shall be bound to
inquire whether notice has been given, or whether any default has occurred, or
as to the propriety of the sale or as to the application of the proceeds
thereof.
SECTION 4.03. Mortgagee to Sign for Mortgagor. For purposes of any
sale of the Vessels made in pursuance of this Mortgage, whether under the power
of sale hereby granted or any judicial proceedings, Mortgagee is hereby
appointed attorney-in-fact of the Mortgagor to execute and deliver to any
purchaser aforesaid and is hereby vested with full power and authority to make,
in the name and in behalf of the Mortgagor, a good conveyance of the title to
the Vessel or Vessels so sold. In the event of any sale of a Vessel, under any
power herein contained, the Mortgagor will, if and when required by Mortgagee,
execute such form of conveyance of the Vessel or Vessels as Mortgagee may direct
or approve.
SECTION 4.04. Mortgagee to Collect Hire, etc. Mortgagee is hereby
appointed attorney-in-fact of the Mortgagor upon the happening of any Event of
Default, in the name of the Mortgagor to demand, collect, receive, compromise
and ▇▇▇ for, so far as may be permitted by law, all earnings, tolls, rents,
issues, revenues, income and profits of the Vessels and all amounts due from
underwriters under any insurance thereon as payment of losses or as return
premiums or otherwise, and all other sums, due or to become due at the time of
the happening of any Event of Default in respect of the Vessels, or in respect
of any insurance thereof from any person whomsoever, and to make, give and
execute in the name of the Mortgagor acquittances, receipts, releases, or other
discharges for the same, whether under seal or otherwise, and to endorse and
accept in the name of the Mortgagor all checks, Notes, drafts, warrants,
agreements and all other instruments in writing with respect to the foregoing.
All amounts so received shall first be applied
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to operating expenses and then to unpaid Obligations under the Notes and the
other Loan Documents.
SECTION 4.05. Mortgagee's Right to Possession. Whenever any right to
enter and take possession of the Vessels accrues to Mortgagee, it may require
the Mortgagor to deliver, and the Mortgagor shall on demand, at its own cost and
expense, deliver the Vessels to Mortgagee as demanded. If any legal proceedings
shall be taken to enforce any right under this Mortgage, Mortgagee shall be
entitled as a matter of right to the appointment of a receiver of the Vessels
and the earnings, tolls, rents, issues, revenues, income and profits due or to
become due and arising from the operation thereof
SECTION 4.06. Appearance by Mortgagee on Behalf of Mortgagor. The
Mortgagor authorizes and empowers Mortgagee or its appointees or any of them to
appear in the name of the Mortgagor, its successors and assigns, in any court
where a suit is pending against a Vessel because of or on account of any alleged
lien against a Vessel from which the Vessel has not been released and to take
such proceedings as it or any of them may deem proper towards the defense of
such suit and the discharge of such lien, in the event that the Mortgagor shall
not be taking proceedings reasonably satisfactory to Mortgagee, and in such case
all reasonable expenditures made or incurred by Mortgagee or his appointees for
the purpose of such defense or discharge shall be a debt due from the Mortgagor,
its successors and assigns, to Mortgagee, and shall be secured by the lien of
this Mortgage in like manner and extent as if the amount and description thereof
were written herein.
SECTION 4.07. Acceleration of Indebtedness Secured Hereby. The
Mortgagor covenants that upon the happening of any one or more of the Events of
Default, then upon written demand of Mortgagee, the Mortgagor will pay to
Mortgagee the whole of the sum due under the Notes and perform its obligations
to Mortgagee under the other Loan Documents and this Mortgage, and in case the
Mortgagor shall fail to pay the same forthwith upon such demand, Mortgagee shall
be entitled to recover judgment for the whole amount so due and unpaid, together
with such further amounts as shall be sufficient to cover the reasonable costs
and expenses of collection, including a reasonable compensation to Mortgagee's
agents, attorneys and counsel and any necessary advances, expenses and
liabilities made or incurred by them hereunder. All moneys collected by
Mortgagee under this Section shall be applied by Mortgagee in accordance with
the provisions of Section 4.11 of this Article.
SECTION 4.08. Rights of Mortgagee. Each and every power and remedy
herein given to Mortgagee shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity, in admiralty or by statute, and each and every power and remedy whether
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by Mortgagee, and the
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exercise or the beginning of the exercise of any power to remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy. No delay or omission by Mortgagee in the
exercise of any right or power or in the pursuance of any remedy accruing upon
any default as above defined shall impair any such right, power or remedy or be
construed to be a waiver of any such Event of Default or to be any acquiescence
therein; nor shall the acceptance by Mortgagee of any security or of any payment
of or on account of the Notes after any Event of 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 Event of Default or of any past Event of Default not
completely cured thereby.
SECTION 4.09. Cure of Defaults. If at any time after an Event of
Default and prior to the actual sale of a Vessel by Mortgagee or prior to any
foreclosure proceedings or prior to the acceleration of the Notes (and provided
that such acceleration has not been rescinded), the Mortgagor completely cures
all Events of Default and pays all expenses, advances and damages to Mortgagee
consequent on such Events of Default, with interest at the Default Rate, then
Mortgagee shall restore the Mortgagor to its former position, but such action,
if any, shall not affect any subsequent Event of Default or impair any rights
consequent thereon.
SECTION 4.10. Restoration of Position. In case Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Mortgagee, then and in every such case the Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder with respect to the
property subject or intended to be subject to this Mortgage, and all rights,
remedies and powers of Mortgagee shall continue as if no such proceedings had
been taken.
SECTION 4.11. Proceeds of Sale. The proceeds of any sale of a Vessel
and the net earnings from the hire or from any operation or use of a Vessel by
Mortgagee under any of the powers herein specified and any and all other money
received by Mortgagee pursuant to or under the terms of this Mortgage or in any
proceedings hereunder, the application of which has not elsewhere herein been
specifically provided, shall be applied at the discretion of Mortgagee with
Mortgagee having the right to impute payments as it may desire among the
following:
FIRST: To the payment of all reasonable expenses and charges,
including the expenses of any sale, and expenses of any retaking, reasonable
attorneys' fees, court costs, keepers' fees, necessary repairs and any other
expenses or advances made or incurred by Mortgagee in the protection of its
rights or the pursuance of its remedies hereunder, and to provide adequate
indemnity against liens claiming priority over or equality with the lien of this
Mortgage;
SECOND: To the payment in full of any amounts then due and unpaid
under the Credit Agreement and any other Loan Documents (other than the Notes).
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THIRD: To the payment of the balance of interest remaining unpaid
under the Notes.
FOURTH: To the balance, if any, of principal remaining unpaid under
the Notes; and
FIFTH: The balance, if any, of such payment on proceeds to any party
who may be legally entitled thereto.
SECTION 4.12. Repairs to Vessels and Sale of Equipment. Until one or more
of the Events of Default hereinabove described shall happen, the Mortgagor
(a) shall be suffered and permitted to retain actual possession and use of the
Vessels; (b) may at any time alter, repair, change or re-equip the Vessels,
subject, however, to the provisions of Section 3.08 of Article III; and (c)
shall have the right, from time to time in its discretion and without obtaining
a release thereof by Mortgagee, to dispose of, free from the lien hereof,
equipment or other appurtenances, including any gaming machinery, any equipment
and accessories relating to the gaming operations, of the Vessels that may
become worn out or obsolete or otherwise are no longer useful, necessary,
profitable or advantageous in the operation of the Vessels, provided that such
does not materially affect the value of the Vessels. Either prior to or promptly
following such removal any such property shall be replaced with serviceable
equipment or other appurtenances of substantially equal utility and of a value
at least substantially equal to that of the replaced property when first
acquired and free of any security interest of any other person, which shall
forthwith become subject to the lien of this Mortgage as a preferred mortgage
thereon.
ARTICLE V
---------
MISCELLANEOUS PROVISIONS
------------------------
SECTION 5.01. Addresses. Any notice to be given under this Mortgage
shall, except as otherwise expressly provided herein, be served by registered or
certified mail or hand delivered, addressed as follows:
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(a) To Mortgagor:
EMPRESS CASINO JOLIET CORPORATION
[address]
with a copy to:
(b) To Mortgagee:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Gaming Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
with copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
unless another address shall be furnished in writing by the party to receive
such notice to the party giving such notice, and any such notice shall be deemed
made as of the date of mailing or hand delivery.
SECTION 5.02. Counterparts. This Mortgage may be executed in any number of
counterparts and all such counterparts executed and delivered each as an
original shall constitute but one and the same instrument.
SECTION 5.03. Interest of Mortgagor. The interest of the Mortgagor in
the Vessels and the interest mortgaged by this Mortgage is that of one hundred
percent (100%) absolute and sole ownership.
SECTION 5.04. Survivorship of Covenants. All the covenants, promises,
stipulations and agreements of the Mortgagor secured hereby shall bind the
Mortgagor and its successors and assigns and shall inure to the benefit of
Mortgagee and its successors and assigns.
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SECTION 5.05. Amendments. The Notes, the Loan Documents and this
Mortgage may not be modified, supplemented or amended in any respect, or any
waiver given in regard to any of the provisions hereof, in any case which might
affect the rights of Mortgagee hereunder, except with the written consent of
Mortgagee, and so long as Mortgagor shall do all acts and things necessary to
maintain the preferred status of this Mortgage.
SECTION 5.06. Discharge of Lien. When the Notes have been paid in
full, and the Mortgagor's obligations to the Mortgagee arising under the other
Loan Documents have been satisfied in full, Mortgagee shall, at the Mortgagor's
expense, execute and deliver to the Mortgagor such documents as the Mortgagor
shall reasonably request to evidence the surrender and discharge of the lien
hereof upon the Vessels.
SECTION 5.07. Incorporation into Mortgage. The Whereas Clauses and the
Granting Clause of this Mortgage are incorporated in and are made a part of this
Mortgage.
SECTION 5.08. Governing Law. This Mortgage shall be governed by and
construed according to the provisions of the Act, and where silent, by the
General Maritime Law of the United States.
IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage in
multiple original counterparts effective as of the day and year first above
written.
EMPRESS CASINO JOLIET CORPORATION
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
TITLE: Chief Executive Officer
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ACKNOWLEDGMENT
EMPRESS CASINO JOLIET CORPORATION
STATE OF ILLINOIS )
) SS:
COUNTY OF ▇▇▇▇ )
On the 30th day of June 1998, before me personally came ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., to me known, who, being by me duly sworn, did depose and say that he
resides at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; that he is the Chief Executive
Officer of EMPRESS CASINO JOLIET CORPORATION, the corporation described in and
on whose behalf he executed the above instrument; and that he has been duly
authorized and instructed by the Board of Directors of said corporation to
execute the foregoing First Preferred Fleet Mortgage for the uses and purposes
set forth therein.
------------------------------------
"OFFICIAL SEAL"
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notary Public State of Illinois /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
My Commission Expires April 21, 1999 ---------------------------
------------------------------------ Notary Public
My Commission expires:
April 21, 1999
----------------------
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