EXHIBIT 10.6
FIRST PREFERRED SHIP MORTGAGE
ON THE WHOLE OF THE CASINO ROUGE
(Official Number 1027353)
$55,000,000
LOUISIANA CASINO CRUISES, INC.
1717 River Road North
Baton Rouge, Louisiana 70802
Owner and Mortgagor
In Favor of
U.S. BANK TRUST NATIONAL ASSOCIATION
in its capacity as Trustee under
that certain Indenture dated as of
January 27, 1999 between Trustee,
Louisiana Casino Cruises, Inc.
and the Subsidiary Guarantors referred to therein
180 East 5th Street
St. Paul Minnesota 55101
Attention: Corporate Trust Administration
Dated as of January 27, 1999
Discharge Amount: $55,000,000 Together
With Interest, Expenses, Fees
and Performance of Mortgage Covenants
FIRST PREFERRED SHIP MORTGAGE
FIRST PREFERRED SHIP MORTGAGE (the "Mortgage") made as of the 27th day
of January, 1999, by:
LOUISIANA CASINO CRUISES, INC.
1717 River Road North
Baton Rouge, Louisiana 70802
a corporation organized and existing under the laws of Louisiana (the
"Shipowner") in favor of
U.S. BANK TRUST NATIONAL ASSOCIATION AS TRUSTEE
180 East 5th Street
St. Paul Minnesota 55101
Attention: Corporate Trust Administration
a national banking association, as Trustee (the "Mortgagee") under that certain
Indenture (the "Indenture") dated as of January 27, 1999, between the Mortgagee,
the Shipowner and the Subsidiary Guarantors referred to therein. Capitalized
terms not otherwise defined herein shall have the meanings set forth for such
terms in the Indenture.
WHEREAS:
1. The Shipowner is the sole owner of the Vessel, Casino Rouge, having
its hailing port as the Port of Baton Rouge, Louisiana. The Vessel is documented
under the laws and flag of the United States, with Official Number 1027353.
2. The Shipowner has duly authorized the creation of an issue of 11%
Senior Secured Notes Due 2005 (the "Notes") more fully described in the
Indenture.
3. In order to induce Initial Purchaser to purchase the Notes, and in
order to secure (i) the due and punctual payment of the principal of, and
interest on, the Notes and the payment of any fees, expenses and all other
amounts at any time and from time to time payable by the Shipowner with respect
to the Notes, or under the Indenture, or any of the Security Documents
(collectively, the "Transaction Documents") and (ii) all the obligations of the
Shipowner under this Mortgage (all such obligations recited in subsections (i)
and (ii) of this Recital 3 being the "Secured Obligations", the Shipowner has
duly authorized the execution and delivery of this First Preferred Ship Mortgage
under and pursuant to 46 United States Code, Sections 31301 through 31343, as
amended from time to time (the "Ship Mortgage Act")
4. For purposes of this Mortgage and in order to comply with Section
31321(b)(3) of the Ship Mortgage Act, the parties to this Mortgage hereby
declare that the maximum amount of Indebtedness that is now or will in the
future be owed under the Secured Obligations at any one time
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is $55,000,000, plus interest (including, without limitation, interest after the
filing of a petition initiating a proceeding referred to in Section 6.1(xi) and
(xii) of the Indenture, whether or not such interest constitutes an allowed
claim for purposes of such proceeding), expenses and fees incurred by the
Trustee and/or the Holders and performance of the covenants of this Mortgage and
the Transaction Documents.
5. The interest of the Shipowner in the Vessel (as defined below) and
the interest mortgaged by this Mortgage is that of one-hundred percent (100%)
absolute and sole ownership.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Notes and in order to secure the payment of the Secured Obligations and the
performance and observance of all of the agreements, covenants and provisions
contained in this Mortgage and in each other Transaction Document, THE SHIPOWNER
HAS GRANTED, CONVEYED, MORTGAGED, PLEDGED, CONFIRMED, ASSIGNED, TRANSFERRED AND
SET OVER, AND BY THESE PRESENTS DOES GRANT, CONVEY, MORTGAGE, PLEDGE, CONFIRM,
ASSIGN, TRANSFER AND SET OVER, UNTO THE MORTGAGEE in its capacity as the Trustee
for the benefit of the Holders the WHOLE of the vessel described in Recital 1
above, together with all of its boilers, engines, machinery, masts, spars,
sails, boats, anchors, cables, chains, rigging, tackle, apparel, furniture,
fittings, equipment and all other appurtenances thereunto appertaining or
belonging, and also any and all additions, improvements and replacements
hereafter made in or to such Vessel, or any part thereof, or in or to her
equipment and appurtenances aforesaid (each of the foregoing, individually, a
"Vessel" and, collectively, the "Vessel");
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto the Mortgagee and its successors and assigns, to its and its
successors and assigns own use, benefit and behoof forever;
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the property above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses set forth in the attached Annex I;
PROVIDED, HOWEVER, and these presents are upon the condition that, if
the Shipowner or any of its successors or assigns shall pay or cause to be paid
the Secured Obligations in accordance with the terms hereof and of the other
Transaction Documents, and shall perform and observe all of the agreements,
covenants and provisions contained herein and in the other Transaction
Documents, this Mortgage and the estate and rights hereby granted shall cease to
be binding and be void, otherwise to remain in full force and effect.
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IN WITNESS WHEREOF, the Shipowner has executed this Mortgage on the day
and year first above written.
LOUISIANA CASINO CRUISES, INC.
By:________________________________________
Name:
Title:
[SEAL]
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ACKNOWLEDGMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
On January __, 1999 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 _____________________ of
LOUISIANA CASINO CRUISES, INC. the corporation described in and which executed
the above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, that he signed his name
thereto by like order.
____________________________________
NOTARY PUBLIC
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ANNEX I
TO
FIRST PREFERRED SHIP MORTGAGE
made as of the 27th day of January, 1999
by LOUISIANA CASINO CRUISES, INC.
regarding the WHOLE of the CASINO ROUGE
(Official Number 1027353)
ARTICLE I
COVENANTS OF THE SHIPOWNER
The Shipowner covenants and agrees with the Mortgagee as
follows:
SECTION 1.1 Subject to applicable grace or cure periods (if
any), the Shipowner will pay the Secured Obligations payable by it and will
observe, perform and comply with the covenants, terms and conditions herein and
in the other Transaction Documents, express or implied, on its part to be
observed, performed or complied with.
SECTION 1.2 The Shipowner was duly organized and is now duly
existing as a corporation under the laws of the State of Louisiana; it is duly
authorized to mortgage the Vessel; all corporate action necessary and required
by law for the execution and delivery of this Mortgage has been duly and
effectively taken; and the Shipowner shall at all times maintain its corporate
existence and right to carry on its business. The Shipowner is and will remain a
citizen of the United States of America within the meaning of Title 46, Section
802, of the United States Code, entitled to own and document the Vessel under
the laws of the United States of America.
SECTION 1.3 The Shipowner lawfully owns the whole of and is
lawfully possessed of the Vessel free from any Lien whatsoever (except for Liens
created by the Security Documents, other Liens expressly permitted under the
Transaction documents and Liens for current crew's wages, salvage and those
Liens which arise during normal operations which will be paid in the ordinary
course of business and maritime Liens which have not been recorded on the
General Index Or Abstract of Title (U.S.C.G. 1332) of the Vessel or judicially
asserted, if any (collectively, the "Permitted Encumbrances")) and will warrant
and defend the title and possession thereto and to every part thereof for the
benefit of the Mortgagee against the claims and demands of all Persons
whomsoever, except claims and demands relating to Permitted Encumbrances.
SECTION 1.4 The Vessel is duly documented in the name of the
Shipowner under the laws and flag of the United States of America, entitled to
engage in the operations conducted by the Shipowner, and the Shipowner will, at
its own expense, cause the Vessel to remain so documented. The Shipowner will
cause this Mortgage immediately after its execution and delivery to be filed for
recordation, in accordance with the Ship Mortgage Act, and will comply with and
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satisfy all of the provisions of United States law and all other provisions and
requirements of law from time to time in force so as to establish and maintain
the Lien of this Mortgage, as at any time amended, supplemented or assigned as a
first "preferred mortgage" Lien under the Ship Mortgage Act upon the Vessel and
upon all additions, improvements and replacements hereafter made on or to the
Vessel or any part thereof for the amount of the Secured Obligations.
SECTION 1.5 (a) The Shipowner will not cause or permit the
Vessel to be operated in any manner contrary to law and the Shipowner will not
engage in any unlawful trade or violate any law or carry any cargo that will
expose the Vessel to penalty, forfeiture or capture, and will not do, or suffer
or permit to be done, anything which can or may injuriously affect the
documentation of the Vessel under the laws and regulations of the United States
and will at all times keep the Vessel duly documented thereunder.
(b) The Shipowner shall comply with and satisfy all applicable
laws and regulations of the United States and of the State of Louisiana or any
other jurisdiction in which the Vessel is or may be operating pursuant to the
terms of the Indenture, specifically including, but not limited to, the Gaming
Laws, which if not complied with, could reasonably be expected to materially and
adversely affect the Shipowner's financial condition or its ability to fulfill
its obligations under this Mortgage or any other Transaction Document.
(c) The Shipowner will not operate any Vessel outside of the
navigation limits of the insurance carried pursuant to Section 1.15.
SECTION 1.6 The Shipowner will pay and discharge when due and
payable, from time to time, all taxes, assessments, governmental charges, fines
and penalties lawfully imposed on the Vessel or any income therefrom, subject to
the proviso of Section 1.9.
SECTION 1.7 Neither the Shipowner, any charterer, the Master
of the Vessel nor any other Person has or shall have any right, power or
authority to create, incur or permit to be placed or imposed or continued upon
the Vessel any Lien whatsoever other than Permitted Encumbrances.
SECTION 1.8 The Shipowner will place, and at all times and
places will retain, a properly certified copy of this Mortgage on board the
Vessel with her papers and will cause such certified copy and the Vessel's
Certificate of Documentation to be exhibited to (i) any and all persons having
business therewith which might give rise to any Lien thereon other than
Permitted Encumbrances and (ii) to any representative of the Mortgagee; and will
place and keep prominently displayed a framed printed notice in plain type
reading as follows:
"NOTICE OF MORTGAGE
This Vessel is covered by a First Preferred Ship Mortgage under 46
U.S.C. Section 31301 et seq. to U. S. Bank Trust National Association,
as Trustee for the Holders under an Indenture dated as of January 27,
1999 with Louisiana Casino Cruises, Inc.
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Under the terms of said Mortgage, neither the Shipowner, any charterer,
the Master of this Vessel nor any other person has any right, power or
authority to create, incur or permit to be imposed upon this Vessel any
Lien whatsoever other than Permitted Encumbrances (as defined in such
First Preferred Ship Mortgage)."
SECTION 1.9 Except for the Lien of this Mortgage, the
Shipowner will not suffer to be continued any Lien other than Permitted
Encumbrances and in due course and in any event within 30 days after the same
becomes due and payable will pay or cause to be discharged or make adequate
provision for the satisfaction or discharge of all claims or demands, or will
cause the Vessel encumbered by such Lien to be released or discharged from any
Lien therefor; provided, however, that the Shipowner shall have the right to
contest, at its own expense, by appropriate legal proceedings conducted in good
faith and with due diligence, the amount or validity (or the applicability to
the Shipowner, the Vessel or this Mortgage) of any tax, assessment, governmental
charge, fine, penalty or Lien (other than this Mortgage, any Transaction
Document or any other document or instrument securing any of the Secured
Obligations or creating a Lien in favor of the Trustee and/or the Holders);
provided further that (a) the Shipowner gives the Mortgagee timely notice of its
intention to contest the same, (b) the commencement of such proceedings shall
suspend the collection or enforcement of the matter under contest, or, if the
commencement of such proceedings does not suspend such collection or
enforcement, the Shipowner shall have made payment of any item sought to be
collected with or without protest, (c) there shall be no impairment of the Lien
of this Mortgage or any other Transaction Document or undue interference with
the normal conduct of the Shipowner's riverboat gaming operation on the Vessel
or at the Mortgaged Property (as defined in the Shore Mortgage) where such
Vessel is operating, (d) neither the Vessel nor the Mortgaged Property where the
Vessel is operating, nor any part thereof or interest therein, would be in any
immediate danger of being sold, forfeited or lost, (e) neither the Mortgagee nor
any Holder would be potentially subjected to criminal, or in imminent danger of
civil, liability for failure to comply therewith pending the outcome of such
proceedings, (f) in the case of taxes, assessments, charges, fines, penalties or
other impositions, the Shipowner shall have either (i) paid the amount in
dispute prior to instituting such contest, in which event the notice requirement
of clause (a) above shall be satisfied by giving notice prior to initiating such
contest rather than prior to making payment, or (ii) furnished reasonable
security during the pendency of such proceedings, and (g) if such contest be
finally resolved against the Shipowner, the Shipowner shall promptly pay the
amount required to be paid, together with all interest and penalties accrued
thereon, or comply with the applicable requirement. The Shipowner shall
indemnify and save the Mortgagee and each Holder harmless from and against any
liability, loss, damage, cost or expense of any kind (including reasonable
attorneys, fees and expenses) that may be imposed upon the Mortgagee or such
Holder in connection with any such contest and any determination resulting
therefrom.
SECTION 1.10 (a) If a complaint be filed against the Vessel or
the Vessel be otherwise attached, arrested, levied upon or taken into custody
under process or color of legal authority for any cause whatsoever, the
Shipowner will promptly notify the Mortgagee by telecopier or by telephone that
is confirmed in writing, at the address specified in Section 3.5 of this
Mortgage, and within 15 days from the time of such complaint, attachment, arrest
or seizure will cause the
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Vessel to be released and all Liens thereon other than Permitted Encumbrances to
be discharged (subject to the provisions of Section 1.9 hereof) and will
promptly notify the Mortgagee hereof in the manner aforesaid.
(b) If the Shipowner shall fail or neglect to furnish proper
security or otherwise to release the Vessel from complaint, arrest, levy,
seizure or attachment, the Mortgagee or any person acting on behalf of the
Mortgagee may furnish security to release the Vessel and by so doing shall not
be deemed to cure the default of the Shipowner.
SECTION 1.11 (a) The Shipowner will at all times and without
cost or expense to the Mortgagee maintain and preserve, or cause to be
maintained and preserved, the Vessel in good running order and repair, so that
the Vessel shall be, insofar as due diligence can make her so, tight, staunch,
strong and well and sufficiently tackled, appareled, furnished, equipped and in
every respect seaworthy.
(b) The Mortgagee shall have the right at any time, on
reasonable notice, to inspect or survey the Vessel to ascertain its condition
and to satisfy itself that the Vessel is being properly repaired and maintained,
and the Shipowner shall cause to be made all such repairs, without expense to
the Mortgagee, as such inspection or survey may show to be required. The
Shipowner shall also permit the Mortgagee to inspect the Vessel's logs, whenever
requested, on reasonable notice, and shall furnish the Mortgagee with full
information regarding any material casualties or other accidents or damage to
the Vessel.
(c) The Vessel shall, and the Shipowner covenants that she
will, at all times comply with all applicable laws, treaties and conventions of
the United States, and rules and regulations issued thereunder, and shall have
on board as and when required thereby valid certificates showing compliance
therewith.
(d) The Shipowner will not make, or permit to be made, any
substantial change in the structure, type or speed of the Vessel or change in
her rig, without first receiving the written approval thereof of the Mortgagee.
SECTION 1.12 The Shipowner will permit the Mortgagee or any
agents or representatives thereof from time to time upon prior reasonable notice
full and complete access to the Vessel for the purpose of inspecting the Vessel
and her cargo and papers and, at the reasonable request of the Mortgagee, the
Shipowner will deliver for inspection copies of any and all contracts and
documents relating to the Vessel, whether on board or not.
SECTION 1.13 The Shipowner will not transfer or change the
flag of the Vessel unless and until, upon 30 days' prior written notice to the
Mortgagee, all filings, recordations or other actions necessary to perfect and
protect the Lien created by this Mortgage and to enable the Mortgagee to
exercise and enforce its rights and remedies hereunder with respect to the
Vessel after giving effect to such transfer or change of flag shall have been
completed (including, without
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limitation, opinions of counsel as to the perfected status of the Mortgagee
after giving effect to such transfer or change of flag).
SECTION 1.14 Except to the extent expressly permitted by the
Indenture, the Shipowner will not sell, mortgage, charter or in any way transfer
the Vessel or any interest therein without the written consent of the Mortgagee
first had and obtained, and any such written consent to any one sale, mortgage,
demise charter or transfer shall not be construed to be a waiver of this
provision with respect to any subsequent proposed sale, mortgage, charter or
transfer. Any such sale, mortgage, charter or transfer of the Vessel or any
interest therein shall be subject to the provisions of this Mortgage and the
Lien hereof.
SECTION 1.15 (a) (i) Unless such types of insurance are no
longer commercially available, the Shipowner will at all times and at its own
cost and expense cause to be carried and maintained in respect of the Vessel
insurance payable in United States Dollars in such amounts against such risks
(including navigating risk and marine hull and machinery (including excess
value) insurance, marine protection and indemnity insurance and public liability
insurance), in such form (including, without limitation, the form of the loss
payable clause and the designation of named assureds) and with such insurance
companies, underwriters, funds, mutual insurance associations or clubs as shall
be selected by the Shipowner.
(ii) In the case of all marine hull and machinery
policies, the Shipowner will cause the Mortgagee to be named an
additional insured and will (and cause its insurance broker to) cause
the insurers under such policies to waive any liability of the
Mortgagee and the Holders for premiums payable under such policies. In
the case of all protection and indemnity insurance, if obtainable, the
Shipowner will cause the Mortgagee, to be named as an additional
insured unless it cannot be provided that the Mortgagee shall not be
liable under such policies for payment of any premium, club call,
assessment or advance. Notwithstanding the foregoing, at no time shall
there be recourse against the Mortgagee under such policies for payment
of any premium, club call, assessment, advance or commission.
(iii) The Shipowner will cause the firm of insurance
brokers referenced in Section 1.15(a)(iv) of this Mortgage to agree to
advise the Mortgagee forthwith by telecopier to its address specified
in Section 3.5 of this Mortgage, of any lapse of any such insurance by
expiration, termination, failure to renew or otherwise and of any
default in payment of any premium and of any other act or omission on
the part of the Shipowner of which such brokers have knowledge and
which might invalidate or render unenforceable, in whole or in part,
any insurance on the Vessel. Absent actual knowledge, the Mortgagee
shall not be deemed to have knowledge of any such lapse of insurance in
the absence of receipt of notice from such brokers. The Shipowner will
also cause such brokers to agree to mark their records and to advise
the Mortgagee, by telecopier, addressed as provided above in this
subsection, at least five business days prior to the expiration date of
any insurance carried pursuant to this Mortgage, that such insurance
has been renewed or replaced with new
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insurance which complies with the provisions of this Section 1.15. In
addition, the Shipowner will endeavor to or use its best efforts to
cause each insurance company, underwriter, club or fund (or an
authorized agent thereof) with respect to all insurance required hereby
to agree in writing for the benefit of the Mortgagee that each policy
or contract issued by such insurance company, underwriter, club or fund
shall not lapse, canceled for any reason whatsoever without at least
ten days, prior notice to the Mortgagee by telecopier or cable
addressed as provided above in this subsection (iii).
(iv) The Shipowner will deliver to the Mortgagee,
within 120 days after the end of each fiscal year, a certificate from a
firm of independent insurance brokers appointed by the Shipowner and
acceptable to the Mortgagee confirming that the insurance carried and
maintained in respect of the Vessel complies with the requirements of
this Mortgage.
(b) For the purposes of insurance against total loss, the
Vessel, its equipment, appurtenances, etc., shall be insured for and valued at
an amount at least equal to the fair market value thereof. Protection and
indemnity insurance in respect of the Vessel shall be in the highest amount from
time to time commercially reasonable for vessels of the same type, size, age and
flag as the Vessel, but in any event shall be in an amount for each occurrence
of not less than the declared value of the Vessel under its hull and machinery
insurance.
(c) Unless otherwise required by the Mortgagee by notice to
the Mortgagee, which notice shall be given only upon receipt of instructions
from the Holders of a majority in principal amount of the Notes as set forth in
Section 6.5 of the Indenture, although the following insurance is payable to the
Mortgagee, (i) any loss under any insurance on the Vessel with respect to
protection and indemnity risks and public liability may be paid directly to the
Shipowner to reimburse it for any loss, damage or expense incurred by it and
covered by such insurance or directly to the person to whom any liability
covered by such insurance has been incurred and (ii) in the case of any loss
(other than (A) a loss covered by clause (i) of this subsection or by Section
1.15(d) or (B) a loss in excess of $1,000,000 per occurrence) under any
insurance with respect to the Vessel involving any damage to the Vessel, the
Mortgagee may pay directly for the repair, salvage or other charges involved or,
if the Shipowner shall have first fully repaired the damage or paid all of the
salvage or other charges, may pay the Shipowner as reimbursement therefor.
(d) In the event of an actual, constructive or compromised
total loss of the Vessel, all insurance or other payments for such loss shall be
paid to the Mortgagee and deposited by the Mortgagee in the Collateral Account
to be distributed or disbursed in accordance with the agreements between the
parties, and to the extent of the respective interests of the Shipowner and
Mortgagee, as they may appear.
(e) The Shipowner will cause all policies and certificates of
entry with respect to insurance required hereby to contain a loss payable clause
which shall (i) in the case of protection and indemnity insurance and public
liability insurance, provide for payment to the Shipowner or its
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order unless and until the underwriters or associations receive notice from the
Mortgagee that there has occurred and is continuing an Event of Default
hereunder, in which event all payments shall be made to the Mortgagee for
deposit in the Collateral Account, and (ii) in the case of all other insurance,
provide for payment in accordance with the terms of subsections (c) and (d) of
this Section 1.15. In addition (unless all or substantially all of the insurance
required by this Section 1.15 is placed in the United States market), the
Shipowner will, at its own cost and expense, assign to the Mortgagee all of the
Shipowner's right, title and interest in and to each policy and contract of
insurance (including all entries in protection and indemnity associations) with
respect to the insurance required hereby and furnish, or cause its brokers to
furnish, written notice of such assignment to all insurers, underwriters, clubs
and associations with respect to such insurance.
(f) In the event that any claim or Lien is asserted against
the Vessel for loss, damage or expense which is covered by insurance required
hereunder, and it is necessary for the Shipowner to obtain a bond or supply
other security to prevent arrest of the Vessel or to release the Vessel from
arrest on account of such claim or Lien, the Mortgagee, on request of the
Shipowner or its agent, may assign to any person, firm or corporation executing
a surety or guarantee bond or other agreement to save or release the Vessel from
such arrest, all right, title and interest of the Mortgagee in and to said
insurance covering said loss, damage or expense, as collateral security to
indemnify against liability under said bond or other agreement.
(g) The Shipowner will deliver to the Mortgagee copies of all
cover notes, binders, policies and certificates of entry in protection and
indemnity associations, and all endorsements and riders amendatory thereof, in
respect of insurance maintained in connection with the Vessel.
(h) The Shipowner agrees that it will not do or permit or
willingly allow to be done any act by which any insurance required by the terms
of this Mortgage may be suspended, impaired or canceled, and that it will not
permit or allow the Vessel to undertake any voyage or run any risk or transport
any cargo which may not be permitted by the policies in force, without having
previously insured the Vessel by additional coverage to extend to such voyages,
risks or cargoes.
SECTION 1.16 The Shipowner will reimburse the Mortgagee
promptly, with interest at a rate equal to the rate applicable to the Notes, for
any and all expenditures which the Mortgagee may from time to time make, lay out
or expend in providing such protection in respect of insurance, discharge or
purchase of Liens, taxes, dues, assessments, governmental charges, fines and
penalties lawfully imposed, repairs, attorneys' fees and other matters as the
Shipowner is obligated herein to provide, but fails to provide. Such obligation
of the Shipowner to reimburse the Mortgagee shall be an additional Indebtedness
due from the Shipowner, secured by this Mortgage, and shall be payable by the
Shipowner on demand. The Mortgagee, though privileged so to do, shall be under
no obligation to the Shipowner to make any such expenditures, nor shall the
making thereof relieve the Shipowner of any default in that respect.
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SECTION 1.17 The Shipowner will fully perform any and all
charter parties which are or may be entered into with respect to the Vessel.
SECTION 1.18 In the event that at any time and from time to
time this Mortgage, any other Transaction Document or any provisions hereof 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, or if the documents at any time held
by the Mortgagee shall be deemed by the Mortgagee for any reason insufficient to
carry out the true intent and spirit of this Mortgage and each other Transaction
Document, then the Shipowner, forthwith upon the reasonable request of the
Mortgagee, will execute and deliver, on its own behalf, such other and further
assurances and documents as may be reasonably necessary to more effectively
subject the Vessel to secure the payment of the Secured Obligations, as provided
in this Mortgage and each other Transaction Document and the performance of the
terms and provisions of this Mortgage and each other Transaction Document and do
such things as the Mortgagee in its sole discretion may reasonably deem to be
necessary to carry out the true intent of this Mortgage.
SECTION 1.19 In the event of the requisition (whether of title
or use), condemnation, sequestration, seizure or forfeiture of the Vessel by any
governmental or purported authority or by anyone else, any payments in respect
thereof shall be paid to the Mortgagee and applied in accordance with the terms
of Section 1.15(d).
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
SECTION 2.1 In case any one or more of the following events,
herein termed "Events of Default", shall have occurred and be continuing:
(a) if any "Event of Default", as said term is defined in the
Indenture, shall have occurred and be continuing; or
(b) if the Shipowner shall default in the use and punctual
performance or observance of any of the provisions of Sections 1.2, 1.4, 1.5,
1.9, 1.10, 1.13, 1.14 and 1.15; or
(c) if the Shipowner shall fail to perform or observe any
other term, covenant or agreement contained in this Mortgage on its part to be
performed or observed and if such failure shall remain unremedied for the lesser
of the cure period provided for herein and 60 days after written notice thereof
shall have been given to the Shipowner by the Mortgagee; or
(d) if any representation and warranty made in this Mortgage
is untrue in any material respect, as of the time when the same shall have been
made;
then, in each and every such case, the Mortgagee shall have
the right to:
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(1) declare immediately due and payable all of the
Secured Obligations (in which case all of the same
shall be immediately due), bring suit at law, in
equity or in admiralty, as it may be advised, to
recover judgment for the Secured Obligations and
collect the same out of any and all property of the
Shipowner, whether covered by this Mortgage or
otherwise;
(2) exercise all of the rights and remedies in
foreclosure and otherwise given to mortgagees by the
provisions of applicable law, including, but not
limited to, the provisions of the Ship Mortgage Act;
(3) take and enter into possession of the Vessel, at any
time, wherever the same may be, without legal process
(except to the extent required by applicable law),
and, except to the extent caused by the Mortgagee's
gross negligence or bad faith, without being
responsible for loss or damage, and the Shipowner or
other person in possession forthwith upon demand of
the Mortgagee, shall surrender to the Mortgagee
possession of the Vessel, and the Mortgagee may,
without being responsible for loss or damage, except
to the extent caused by the Mortgagee's gross
negligence or bad faith, hold, lay up, lease,
charter, operate or otherwise use the Vessel for such
time and upon such terms as it may deem to be for its
best advantage, and demand, collect and retain all
hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or
recoveries, recoveries in general average, and all
other sums due or to become due in respect of the
Vessel or in respect of any insurance thereon from
any person whomsoever, accounting only for the net
profits, if any, arising from such use of the Vessel
and charging upon all receipts from the use of the
Vessel or from the sale thereof by court proceedings
or pursuant to subsection (4) next following, all
costs, expenses, charges, damages or losses by reason
of such use; and if at any time the Mortgagee shall
avail itself of the right herein given it to take the
Vessel, the Mortgagee shall have the right to dock
the Vessel at any dock, pier or other premises of the
Shipowner without charge, or to dock her at any other
place at the cost and expense of the Shipowner;
and/or
(4) take and enter into possession of the Vessel, upon
reasonable notice, wherever the same may be, without
legal process (except to the extent required by
applicable law), and if it seems desirable to the
Mortgagee and without being responsible for loss or
damage, except to the extent caused by the
Mortgagee's gross negligence or bad faith, sell the
Vessel, at any place and at such time as the
Mortgagee may specify and in such manner and such
place (whether by public or private sale) as the
Mortgagee may deem advisable (without necessity of
bringing the Vessel to the place designated for such
sale), free from any claim by the Shipowner in
admiralty, in equity, at
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law or by statute, after first giving notice of the
time and place of any public sale with a general
description of the property in the following manner:
(i) by publishing such notice for 10 consecutive days
in a daily newspaper of general circulation published in Baton
Rouge, Louisiana;
(ii) if the place of sale should not be Baton Rouge,
Louisiana, then also by publication of a similar notice in a
daily newspaper, if any, published at the place of sale; and
(iii) by mailing a similar notice to the Shipowner at
its last known address on the day of first publication and
notice of the time and place of any private sale by mailing
such notice to the Shipowner at its last known address.
The notice provisions contained in this Section are not
exclusive, and to the extent that Mortgagee elects to foreclose or
enforce its interests in a court of admiralty, Mortgagee will comply
with the notice provisions required by any applicable federal statutes
and procedural rules.
SECTION 2.2 Any sale of the Vessel made in pursuance of the
Mortgage shall operate to divest all right, title and interest of any nature
whatsoever of the Shipowner therein and thereto and shall bar any claim from the
Shipowner, its successors and assigns, and all persons claiming by, through or
under them. No purchaser shall be bound to inquire whether notice has been
given, or whether any default has occurred, or as to the property of the sale,
or as to the application of the proceeds thereof. In the case of any such sale,
the Mortgagee shall be entitled to bid for the purchase of the Vessel and, for
the purpose of making settlement or payment for the property purchased, to use
and apply the Secured Obligations in order that there may be credited against
the amount remaining due and unpaid thereon the sums payable out of the net
proceeds of such sale with respect to the Secured Obligations after allowing for
the costs and expense of sale and other charges; and thereupon such purchaser
shall be credited, on account of such purchase price, with the net proceeds that
shall have been so credited with respect to the Secured Obligations. At any such
sale, the Mortgagee may bid for and purchase such property and upon compliance
with the terms of sale may hold, retain and dispose of such property without
further accountability therefor.
SECTION 2.3 The Mortgagee is hereby appointed attorney-in-fact
of the Shipowner to execute and deliver to any purchaser aforesaid, and is
hereby vested with full power and authority to make, in the name and on behalf
of the Shipowner, a good conveyance of the title to the Vessel so sold. In the
event of any sale of the Vessel under any power herein contained, the Shipowner
will, if and when required by the Mortgagee, execute such form of conveyance of
the Vessel and other related documents as the Mortgagee may direct or approve.
SECTION 2.4 The Shipowner hereby irrevocably appoints the
Mortgagee attorney-in-fact in the name of the Shipowner with full authority in
the place and stead of the
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Shipowner from time to time upon the occurrence and during the continuance of an
Event of Default, to demand, collect, receive, compromise and sue for, so far as
may be permitted by law, all freights, hire, earnings, issues, revenues, income
and profits of the Vessel and all amounts due from underwriters under any
insurance thereon as payments of losses or as return premiums or otherwise,
salvage awards and recoveries, recoveries in general, average or otherwise, and
all other sums due or to become due at the time of the occurrence of any Event
of Default, or in respect of any insurance thereon, from any person whomsoever,
and to make, give and execute in the name of the Shipowner acquittances,
receipts, releases or other discharges for the same, whether under seal or
otherwise, and to endorse and accept in the name of the Shipowner all checks,
notes, drafts, warrants, agreements and other instruments in writing with
respect to the foregoing, or in respect of any actions in law or in equity, in
contract or in negligence, against third parties, to file suit against said
third parties for damage sustained by the Vessel while under the care and
custody of said third parties and prosecute through judgment or settlement, the
Mortgagee to have by assignments, all rights and remedies that would be afforded
to the Shipowner under principles and theories of privity, standing and
jurisdiction.
SECTION 2.5 Whenever any right to enter and take possession of
the Vessel accrues to the Mortgagee, it may require the Shipowner to deliver,
and the Shipowner shall on demand, at its own cost and expense, deliver to the
Mortgagee the Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Mortgage, the Mortgagee shall be entitled as a
matter of right to the appointment of a receiver of the Vessel and of the
freights, hire, earnings, issues, revenues, income and profits due or to become
due and arising from the operation thereof.
SECTION 2.6 Upon the occurrence and during the continuance of
an Event of Default, the Shipowner authorizes and empowers the Mortgagee or its
appointees or any of them to appear in the name of the Shipowner, its successors
and assigns, in any court of any country or nation of the world where a suit is
pending against the Vessel because of or on account of an alleged Lien against
the Vessel from which the Vessel has not been released and to take such
proceedings as to them or any of them may seem proper towards the defense of
such suit and the purchase or discharge of such Lien, and all expenditures made
or incurred by them or any of them for the purpose of such defense or purchase
or discharge shall be a debt due from the Shipowner, its successors and assigns,
to the 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 2.7 The Shipowner covenants that, at any time that any
Secured Obligations shall be due and payable (whether by acceleration or
otherwise), the Mortgagee may demand the payment thereof; and in case the
Shipowner shall fail to pay the same forthwith upon such demand, the 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 compensation to the Mortgagee's agents, attorneys and counsel and any
necessary advances, expenses and liabilities made or incurred by it hereunder.
All moneys collected by the Mortgagee under this Section 2.7 shall be applied by
the Mortgagee in accordance with the provisions of Section 2.11.
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SECTION 2.8 Each and every power and remedy herein given to
the 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 the Mortgagee, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
power or remedy. No delay or omission by the Mortgagee in the exercise of any
right or power or in the pursuance of any remedy accruing upon any Event of
Default shall impair any such right, power or remedy or be construed to be a
waiver of any such Event of Default or to be an acquiescence therein; nor shall
the acceptance by the Mortgagee of any security or of any payment of or on
account of the Secured Obligations after any Event of Default or of any payment
on account of any past Event of Default be construed to be a waiver of any right
to take advantage of any future Event of Default or of any past Event of Default
not completely cured thereby.
SECTION 2.9 If at any time after an Event of Default and prior
to the actual sale of the Vessel by the Mortgagee or prior to any foreclosure
proceedings, the Shipowner offers completely to cure all Events of Default and
to pay all expenses, advances and damages to the Mortgagee consequent on such
Events of Default, with interest at the rate provided in Section 1.16 hereof,
then the Mortgagee may, but shall be under no obligation to, accept such offer,
cure and payment and restore the Shipowner to its former position, but such
action shall not affect any subsequent Event of Default or impair any rights
consequent thereon.
SECTION 2.10 In case the 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 the Mortgagee, then and in
every such case the Shipowner and the 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
the Mortgagee shall continue as if no such proceedings had been taken.
SECTION 2.11 The proceeds of any sale of the Vessel and the
net earnings of any charter operation or other use of the Vessel by the
Mortgagee under any of the powers herein specified in this Article II, as well
as any and all other moneys received by the Mortgagee pursuant to or under any
of the provisions of Article I hereof or this Article II or in any proceedings
pursuant to this Article II, shall be held and applied by the Mortgagee from
time to time as set forth in the Indenture, any other provision in this Mortgage
to the contrary notwithstanding. In the event that the proceeds and amounts
referred to above received by the Mortgagee are insufficient to pay in full all
Secured Obligations, the Mortgagee shall be entitled to collect the balance from
the Shipowner or from any other person or entity liable therefor.
SECTION 2.12 Unless and until one or more Events of Default
shall occur and be continuing, the Shipowner (a) shall be suffered and permitted
to retain actual possession and use
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of the Vessel and (b) shall have the right, from time to time, in its
discretion, and without application to the Mortgagee, and without obtaining a
release therefrom by the Mortgagee, to dispose of, free from the Lien hereof,
any boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors,
cables, chains, tackle, apparel, furniture, fittings, equipment or any other
appurtenances of the Vessel that are no longer useful, necessary, profitable or
advantageous in the operation of the Vessel, by first or simultaneously
replacing the same by new boilers, engines, machinery, masts, spars, sails,
rigging, boats, anchors, cables, chains, tackle, apparel, furniture, fittings,
equipment or other appurtenances of substantially equal value to the Shipowner,
which shall forthwith become subject to the Lien of this Mortgage as a first
preferred mortgage thereon unless otherwise permitted by the Indenture.
ARTICLE III
SUNDRY PROVISIONS
SECTION 3.1 All of the covenants, promises, stipulations and
agreements of the Shipowner in this Mortgage contained shall bind the Shipowner
and its successors and assigns and shall inure to the benefit of the Mortgagee
and its successors and assigns (including successor trustees under the
Indenture). In the event of any assignment of this Mortgage, the term
"Mortgagee" as used in this Mortgage shall be deemed to mean any such assignee.
SECTION 3.2 Wherever and whenever herein any right, power or
authority is granted or given to the Mortgagee, such right, power or authority
may be exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of the Mortgagee hereunder. Without limitation of the foregoing, in each
instance where the Mortgagee has engaged a consultant to advise the Mortgagee in
connection with the exercise of any such rights, powers and authority, the
Mortgagee shall be entitled to rely upon the advice of such consultant and when
so relying shall conclusively be deemed to have acted in a reasonable manner.
SECTION 3.3 In the event that any provision of this Mortgage
shall be deemed invalid or unenforceable by reason of any present or future law
or any decision of any court of competent jurisdiction, the validity and
enforceability of any other provision hereof shall not be affected thereby. Any
such invalidity or unenforceability of any provision of this Mortgage in any
jurisdiction or nation shall not render such provision invalid or unenforceable
under the laws of any other jurisdiction or nation.
SECTION 3.4 Anything herein to the contrary notwithstanding,
it is intended that nothing herein shall waive the preferred status of this
Mortgage and that, if any provision of this Mortgage or portion hereof shall be
construed to waive the preferred status of this Mortgage, then such provision to
such extent shall be void and of no effect and shall cease to be a part of this
Mortgage without affecting the remaining provisions, which shall remain in full
force and effect.
SECTION 3.5 The Shipowner irrevocably submits itself to the
non-exclusive jurisdiction of the State of Louisiana or federal court sitting in
Louisiana and any appellate court of
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any thereof, for the purposes of any suit, action or other proceeding arising
out of, or relating to, this Mortgage or any of the transactions contemplated
hereby, hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard in such Louisiana state or federal court and hereby, to
the fullest extent it may effectively do so, irrevocably waives, and agrees not
to assert, by way of motion, as a defense or otherwise, in any such suit, action
or proceeding any claim that it is not personally subject to the jurisdiction of
the above-named courts for any reason whatsoever, that such suit, action or
proceeding is brought in an inconvenient forum, that the venue of such suit,
action or proceeding is improper or that this Mortgage or the subject matter
hereof may not be enforced in or by such courts. The Shipowner hereby
irrevocably consents to the service of any and all process in any suit, action
or proceeding by the mailing (certified mail, return receipt requested) or
delivery of copies of such process to the Shipowner at 1717 River Boat Road
North, Baton Rouge, Louisiana 70802, Attention: President. The Shipowner agrees
that all notices to the Mortgagee hereunder shall be validly given only if
delivered at or mailed (certified mail, return receipt requested) to the
Mortgagee at 180 East 5th Street, St. Paul, Minnesota 55101, Attention:
Corporate Trust Department. The Shipowner further agrees that a final judgment
in any such action, suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Section 3.5 shall affect the right of the Mortgagee to
serve legal process in any other manner permitted by law or affect the right of
the Mortgagee to bring any action or proceeding against the Shipowner or its
property in the courts of any other jurisdiction.
SECTION 3.6 This Mortgage may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 3.7 The term "Dollars" or the symbol as used herein
shall mean Dollars in any coin or currency of the United States of America which
at the time of payment shall be legal tender for public and private debts.
SECTION 3.8 If the Shipowner shall pay and discharge all
Secured Obligations secured hereby by well and truly paying or causing to be
paid all Secured Obligations, as and when the same become due and payable, and
if the Shipowner shall also pay or cause to be paid all other sums payable
hereunder by the Shipowner, then the Mortgage and the Lien, rights and interest
granted shall cease, determine and become null and void, and the Mortgagee
shall, at the request and cost and expense of the Shipowner, execute and deliver
such instrument or instruments of satisfaction as may be reasonably necessary to
satisfy and discharge the Lien hereof; and forthwith the estate, right, title
and interest of the Mortgagee in and to all property subject to this Mortgage
shall thereupon cease, determine and become null and void.
SECTION 3.9 The powers conferred on the Mortgagee by this
Mortgage, including without limitation the provisions of Sections 1.11(d), 1.13,
1.14, 1.15, 2.1, 2.2, 2.4, 2.5 and 2.6 hereof, are solely to protect its
interest and the interests of the Holders in the Vessel and shall not impose any
duty upon it to exercise such provisions. Except for the safe custody of any
part of the
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Vessel in its possession (subject to standards of care governing the Mortgagee
hereunder) and the accounting for moneys actually received by it hereunder, the
Mortgagee shall have no duty as to any part of the Vessel whether or not the
Mortgagee or any Holder has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to the Vessel.
SECTION 3.10 The provisions of Article IX of the Indenture
regarding amendments are specifically incorporated in this Mortgage by
reference, with the same force and effect as if the same were set out in this
Mortgage in full. All references in such incorporated provisions to "Company"
shall without further reference mean and refer to the Shipowner; and all
references in such incorporated provisions to "this Indenture" shall without
further reference mean and refer to this Mortgage; and all references in such
incorporated provisions to "Trustee" shall without further reference mean and
refer to Mortgagee.
SECTION 3.11 The Shipowner hereby agrees to indemnify and
defend Mortgagee, and its directors, officers, agents and employees, and each
Holder and saves each of them harmless from and against any and all liability,
loss, damages, judgments, claims and expenses, including reasonable attorneys'
fees and expenses, disbursements, bond expenses, printing and automated document
preparation and retention expenses and other ordinary litigation expenses,
incurred in connection with any action or proceeding to foreclose this Mortgage
or in or to which the Mortgagee or any Holder may be made a party due to the
existence of this Mortgage or to which action or proceeding the Mortgagee or any
Holder may become a party for the purpose of protecting the Vessel or the Lien
of this Mortgage. All sums paid by the Mortgagee or any Holder to prosecute or
defend the rights herein set forth shall be deemed a part of the Secured
Obligations and shall be paid by the Shipowner to the Mortgagee or such Holder
within ten days after written demand, and if not paid within that period, shall
accrue interest from and including the date of disbursement or advance by the
Mortgagee or such Holder to and including the date of payment by the Shipowner
at the interest rate then applicable to the Notes.
END OF ANNEX I
TO
FIRST PREFERRED SHIP MORTGAGE
made as of the 27th day of January, 1999
by LOUISIANA CASINO CRUISES, INC.
regarding the WHOLE of the CASINO ROUGE
(Official Number 1027353 )
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