EXHIBIT 4.9
FIRST PREFERRED SHIP MORTGAGE
Made by
HWCC-TUNICA, INC.
In Favor of
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE
ON
THE HOLLYWOOD-TUNICA
Dated as of May 19, 1999
HWCC-Tunica, Inc.
First Preferred Ship Mortgage
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Mortgagor: HWCC-Tunica, Inc.
Two Galleria Tower, Suite 2200 13455
Xxxx Road, LB48
Xxxxxx, Xxxxx 00000
Mortgagor's Interest in the Vessel: 100%
Mortgagee: State Street Bank and Trust Company, as Trustee
Corporate Trust Administration
Two International Place, 4th Floor
Xxxxxx, Xxxxxxxxxxxxx 00000
Mortgagee's Interest in the Vessel: 100%
Amount of Mortgage: $360,000,000.00
Maturity Date: May 1, 2007
THIS FIRST PREFERRED SHIP MORTGAGE, dated as of the 19th day of May, 1999,
(as amended, supplemented or otherwise modified from time to time, the
"Mortgage") is made and given by HWCC-TUNICA, INC., a Texas corporation, (the
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"Mortgagor"), whose address is set forth above, to STATE STREET BANK AND TRUST
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COMPANY, as Trustee for any and all future holders of the Notes (as such term is
hereinafter defined), whose address is set forth above (hereinafter referred to,
together with its successors and assigns, as the "Mortgagee" or the "Trustee").
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RECITALS
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A. Hollywood Casino Corporation (the "Borrower"), the Mortgagor, HWCC-
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Shreveport, Inc. and the Mortgagee have entered into an Indenture dated as of
May 19, 1999 (as the same may be amended, supplemented, restated or otherwise
modified from time to time, the "Indenture") pursuant to which the Borrower will
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issue up to (i) $310,000,000 of its 11 1/4% Series A and Series B Senior Secured
Notes due 2007 and (ii) $50,000,000 of its Floating Rate Series A and Series B
Senior Secured Notes due 2006 (as the same may be amended, supplemented,
restated, exchanged, replaced or otherwise modified from time to time, the
"Notes"). Mortgagor acknowledges that the Mortgagor will derive substantial
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benefits from the transactions contemplated herein and in the Indenture.
B. The Trustee has requested pursuant to the terms of the Indenture that
Mortgagor execute and deliver this Mortgage, and Mortgagor has agreed to enter
into this Mortgage on the Hollywood-Tunica (Official Number 534006) (the
"Vessel").
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C. Now, therefore, to induce the Trustee to execute the Indenture, in
consideration of the premises and of other valuable consideration, receipt of
which is hereby acknowledged, Mortgagor hereby agrees as follows:
ARTICLE I.
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GRANTING CLAUSE AND DEFINITIONS
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Section 1.1. Granting Clause.
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To secure the full and timely payment of and the full and timely
performance and discharge of the Obligations (as hereinafter defined), the
Mortgagor has granted, conveyed, mortgaged, pledged, assigned, transferred, set
over and confirmed and by these presents does grant, convey, mortgage, pledge,
assign, transfer, set over and confirm unto the Mortgagee, its successors and
assigns, the following:
The whole of the Vessel, duly documented in the name of the Mortgagor
under the laws of the United States, together with all equipment, parts and
accessories integral to the operation of the Vessel as a vessel, including, but
not limited to, all of its boilers, engines, generators, air compressors,
machinery, masts, spars, sails, riggings, boats, anchors, cables, chains,
tackle, tools, pumps and pumping equipment, motors, apparel, furniture, computer
equipment, electronic equipment used in connection with the operation of the
Vessel and belonging to 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, fittings and equipment, supplies, spare parts, fuel, and all other
appurtenances thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether or not on board said Vessel, and all extensions,
additions, accessions, improvements, renewals, substitutions, and replacements
hereafter made in or to said Vessel or any part thereof, or in or to any said
appurtenances (the term "Vessel" as used herein being inclusive of all of the
foregoing; provided that the foregoing shall not include any property which is
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not a "vessel" within the meaning of 46 U.S.C.(S) 31322(a); and provided
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further, that if any determination is made at any time that for any reason this
Mortgage does include any property which is not a "vessel" within the meaning of
46 U.S.C.
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(S) 31322(c)(i), then such property may be separately discharged from the Lien
of this Mortgage (but not the Lien of any other security instruments) by the
payment by the Mortgagor to the Trustee (for application to the Notes of .01% of
the total amount set forth in Section 6.1 to be applied in the manner set forth
in the Indenture);
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto the Mortgagee, its successors and assigns, forever upon the terms
herein set forth;
PROVIDED, HOWEVER, and these presents are on the condition that if the
Obligations are paid and performed in accordance with the terms thereof and this
Mortgage, then these presents and the estates and rights hereunder shall cease,
terminate and be void, otherwise to be and remain in full force and effect.
Section 1.2. Definitions.
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As used in this Mortgage, the terms "Mortgage", "Mortgagor", "Mortgagee",
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"Borrower", "Trustee", "Indenture", "Notes", and "Vessel" shall have the
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meanings assigned to them in the recitals hereto. Any capitalized term used in
this Mortgage and not defined herein shall have the meaning assigned to such
term in the Indenture. As used herein, the following terms shall have the
following meanings:
"Event of Loss" shall have the meaning set forth in Section 2.4 hereof.
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"Event of Default" shall have the meaning set forth in Section 3.1 hereof.
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"Obligations" shall mean (i) the payment when due of indebtedness
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evidenced by the Notes in the principal sum not to exceed at any time
outstanding of $360,000,000, interest (including post-petition interest) as set
forth in the Indenture and the Notes, and premiums, penalties, and late charges
thereon; (ii) all other indebtedness and other sums (including, without
limitation, all expenses, attorneys' fees, other fees, indemnifications,
reimbursements, damages, other monetary liabilities, and other charges) and
obligations that may or shall become due hereunder or under the Notes, the
Guarantees, the Indenture or the other Collateral Documents; and (iii) any and
all renewals, modifications, amendments, extensions for any period, supplements
and restatements of any of the foregoing.
"Permitted Encumbrances" shall mean the items on Exhibit A hereto.
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ARTICLE II.
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REPRESENTATIONS, WARRANTIES AND COVENANTS
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In order to induce the Mortgagee to accept this Mortgage as collateral
security for the Obligations, the Mortgagor represents and warrants to the
Mortgagee and covenants and agrees with the Mortgagee that:
Section 2.1. Legal Existence; Citizenship Authorization.
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The Mortgagor is a corporation duly organized and validly existing under
the laws of the State of Texas; and except as permitted by the Indenture, shall
maintain its corporate existence during the term of this Mortgage; and the
Mortgagor is and will continue to be a citizen of the United States within the
meaning of Section 2 of the Shipping Act of 1916, as amended, and is duly
qualified to engage in the trade in which the Vessel operates. The Mortgagor is
duly authorized to mortgage the Vessel, and all corporate action necessary and
required by law for the execution and delivery of this Mortgage has been duly
and effectively taken by it, and this Mortgage is the valid and enforceable
obligation of the Mortgagor, except that (a) the enforceability of any rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws or principles of public policy, (b) enforceability hereof may be
subject to applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and (c) the enforceability hereof may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). All necessary consents and approvals of any
Governmental Authority or any other entity to the entering into and performance
of this Mortgage have been duly obtained or given and the entering into and
performance of this Mortgage does not and will not contravene the terms of or
constitute a default under (with or without giving of notice or lapse of time or
both) any material agreement, instrument or document to which the Mortgagor is a
party or by which it or its properties are bound or affected after giving effect
to the use of the proceeds of the Notes.
Section 2.2. Ownership of Vessel; Warranty and Defense of Title.
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Except as set forth on Schedule 2.2 hereto, the Mortgagor is the sole
owner of the whole of the Vessel and is lawfully possessed of the whole of the
Vessel, free from any Lien whatsoever other than the Lien of this Mortgage and
the Liens permitted by Section 2.6 hereof, and the Mortgagor will warrant and
defend the title to and possession of the Vessel and every part thereof for the
benefit of the Mortgagee against the claims and demands of all other persons
whomsoever, subject to the Liens and other matters not prohibited by the
Indenture or this Mortgage.
Section 2.3. Compliance with Laws.
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(a) Documentation. The Vessel is, and during the term of this
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Mortgage shall continue to be, duly and lawfully registered under the laws and
flag of the United States, and the Mortgagor will comply with and satisfy all of
the provisions of the laws of the United States in order that the Vessel shall
continue to be documented pursuant to the laws of the United States as a vessel
of the United States under the United States flag with such endorsements as
shall qualify the Vessel for participation in the trades and services to which
it may be dedicated from time to time.
(b) Title 46. The Mortgagor will, at its expense and at no cost
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to the Mortgagee, comply with and satisfy all the provisions of Chapters 301 and
313 of Title 46 of the United States Code, as amended, in order to establish,
record and maintain this Mortgage as a first preferred ship mortgage thereunder
upon the Vessel. This Mortgage is in substantial compliance with the conditions
and requirements contained in Section 31321 of Title 46 of the United States
Code.
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(c) Laws, Treaties and Conventions. The Vessel shall, and the
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Mortgagor covenants that it will in the operation of the Vessel, at all times
comply in all material respects with all applicable laws, treaties and
conventions and rules and regulations issued thereunder, and shall have on board
as and when required thereby valid certificates showing compliance therewith,
except when (i) the use or title of the Vessel has been taken, requisitioned or
chartered by any Governmental Authority, (ii) there has been actual or
constructive total loss or an agreed or compromised total loss of the Vessel, or
damage to the Vessel to the extent, determined in the good faith opinion of the
Mortgagor, as would make repair thereof uneconomical, or (iii) the Vessel has
been laid up and removed from service and the Mortgagor has taken adequate
precautions for the preservation and maintenance of the Vessel.
Section 2.4. Operation of Vessel.
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The Mortgagor will not (except during any period when the use or title to
the Vessel has been taken, requisitioned or chartered by any Governmental
Authority) cause or permit the Vessel to be operated in any manner contrary to
applicable law or regulation, will not abandon the Vessel in any foreign port
(unless an Event of Loss (as hereinafter defined) has occurred as to the Vessel
or the safety or welfare of the Mortgagor's employees on the Vessel is
endangered), will not engage in any unlawful trade, 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 existing laws and regulations of the
United States of America. Mortgagor shall keep the operation of the Vessel
within the permitted navigational limits set forth in the trading warranties of
the policies of insurance covering the Vessel and in any case will not operate
the Vessel, or permit the Vessel to be operated, in any area where such
insurance would not be fully applicable and enforceable with respect to the
Vessel and its operation.
"Event of Loss" shall mean any one of the following events: (i) actual
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total loss or destruction of the Vessel or any accident, occurrence or event
resulting in a constructive total loss or an agreed or compromised total loss of
the Vessel; or (ii) substantial damage to the Vessel, the repair of which is
uneconomical, including, but not limited to, any event pursuant to which
insurance proceeds are available which are not applied to repair the Vessel or
any other event resulting for any reason whatsoever in the Vessel being
permanently rendered unfit for normal use; or (iii) the condemnation,
confiscation, acquisition, seizure, detention, forfeiture, purchase or other
taking of title to or use of the Vessel (unless in the case of a requisition,
seizure, detention, or forfeiture, such action is revoked within ninety (90)
days) except the requisition of the use of the Vessel by any United States'
Governmental Authority on a basis not involving requisition of title to or
seizure or forfeiture of the Vessel.
Section 2.5. Claims, Taxes, Fees, etc. The Mortgagor will pay and
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discharge or cause to be paid and discharged prior to delinquency, all claims
against, and fees, taxes, assessments, governmental charges, fines and penalties
imposed on, the Vessel, its cargoes or any income therefrom; provided, that
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nothing in this Section 2.5 shall require the Mortgagor to pay any such claim,
fee, tax, assessment, governmental charge, fine or penalty so long as the
validity thereof shall be contested by it in good faith and by appropriate
proceedings, and, provided, further, that such contest shall not subject the
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Vessel, or any part thereof, to forfeiture or loss.
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Section 2.6. Liens. Neither the Mortgagor, any charterer, the master of
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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 the Lien of this Mortgage, Permitted Encumbrances
and the following:
(i) Liens for wages of the crew (including wages of a
master to the extent provided by 46 U.S.C. App. (S)(S) 10301-10321, inclusive
("Master's Wages")), general average and salvage (including contract salvage)
which shall not have been due and payable for forty-five (45) days after
termination of a voyage or which shall then be contested by the Mortgagor in
good faith;
(ii) Liens for wages of the crew (including Master's
Wages) and salvage (including contract salvage) which are either unclaimed or
covered by insurance;
(iii) Liens incident to current operations (except for
wages of the crew including Master's Wages and salvage) or liens covered by
insurance and any deductible applicable thereto;
(iv) Liens for repairs; and
(v) Liens disclosed on Schedule 2.2 hereto;
provided that the Liens stated to be permitted by the foregoing subparagraphs
(i) through (iv) shall, unless they constitute a Lien for damage arising out of
tort, for wages of a stevedore when employed directly by the Mortgagor, master,
ship's husband, or agent, for wages of the crew (including Master's Wages) for
general average, or for salvage (including contract salvage), be permitted only
to the extent such Liens are either accrued (but not yet due) or are subordinate
to the Lien of this Mortgage. Nothing contained in this Section 2.6 constitutes
a waiver by the Mortgagee of the Mortgagee's preferred status pursuant to the
provisions of Chapters 301 and 313 of Title 46 of the United States Code. If
any such Lien is placed on the Vessel which is not subordinate to the Lien of
this Mortgage, Mortgagor will promptly after becoming aware of such Lien notify
the Mortgagee.
Section 2.7. Notice of Mortgage.
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The Mortgagor will at all times carry on board the Vessel (with the ship's
papers) a certified copy of this Mortgage and any amendments and supplements
hereto and any assignments hereof, and will exhibit or cause to be exhibited the
same to any person having business with the Vessel which might give rise to a
Lien upon the Vessel or to the sale, conveyance, mortgage or lease thereof and,
on demand, to any representative of the Mortgagee. The Mortgagor will also
place and keep prominently displayed on the Vessel a framed printed notice in
plain type of such size that the paragraph of reading matter shall cover a space
of not less than six inches wide by nine inches high (or such other dimensions
as may be required by law) reading as follows:
"NOTICE OF MORTGAGE
This Vessel is owned by HWCC-Tunica, Inc. and is subject to
a First Preferred Ship Mortgage in favor of State Street
Bank and Trust Company, as Trustee, as Mortgagee, and a
Second Preferred
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Ship Mortgage in favor of Hollywood Casino Corporation, as
Mortgagee, which Second Preferred Ship Mortgage has been
assigned by Hollywood Casino Corporation to State Street
Bank and Trust Company, as Trustee, under the authority of
Chapter 301 and Chapter 313 of Title 46 of the United States
Code, as amended, a certified copy of which Mortgages are
kept with this Vessel's papers. Under the terms of said
Mortgages neither the owner, any charterer, the master of
this Vessel nor any other person has any right, power or
authority to create, incur or permit to be placed or imposed
upon this Vessel any lien whatsoever other than the lien of
said Mortgages, liens for wages, general average or salvage,
and certain other liens permitted by the provisions of said
Mortgages."
Section 2.8. Libel or Attachment.
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If a libel is filed against the Vessel or if the Vessel shall be attached,
levied upon or taken into custody by virtue of any proceeding in any court or
tribunal, the Mortgagor will promptly notify the Mortgagee thereof by telegram,
cable or facsimile, confirmed by letter addressed to the Mortgagee, and within
fifteen (15) days after any such libel, levy, attachment or taking into custody,
Mortgagor will use its best efforts to cause the Vessel to be released and will
promptly notify the Mortgagee of such release in the manner aforesaid. In the
event that the Vessel shall not be released within such fifteen (15) day period,
the Mortgagor does hereby authorize and empower the Mortgagee, in the name of
the Mortgagor, or its successor or assigns, to apply for and receive possession
of and to take possession of the Vessel with all the rights and powers that the
Mortgagor, or its successors or assigns, might have, possess or exercise in any
such event; and this power of attorney shall be irrevocable and may be exercised
not only by the Mortgagee hereinabove named but also by any one such appointee
or the appointees of the Mortgagee, with full power of substitution, to the same
extent as if the said appointee or appointees had been named as one of the
attorneys above named by express designation.
Section 2.9. Maintenance of Vessel; Change of Flag or Hailing Port.
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(a) Except as to such period as (i) the use or title of the
Vessel has been taken, requisitioned or chartered by a Governmental Authority,
(ii) there has been actual or constructive total loss or an agreed or
compromised total loss of the Vessel, or damage to the Vessel to the extent;
determined in the good faith opinion of the Mortgagor, as would make repair
thereof uneconomic, or (iii) the Vessel has been laid up and removed from
service and the Mortgagor has taken adequate precautions for the preservation
and maintenance of the Vessel, the Mortgagor 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 tight, staunch, strong and well and sufficiently tackled, appareled,
furnished, equipped and in every respect seaworthy, in compliance with all
applicable United States Coast Guard Regulations, and in as good order and
operating condition for Mortgagor's gaming operations as when made subject to
the Lien of this Mortgage, ordinary wear and tear excepted; provided, however,
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that nothing in this Section shall prevent Mortgagor from discontinuing any
operation or maintenance of any portion of the Vessel, or disposing thereof, if
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such discontinuance or disposal is (A) in the judgment of the Board of Directors
of the Mortgagor, desirable in the conduct of the business of the Mortgagor, and
(B) not disadvantageous in any material respect to the Holders, subject in both
instances to the terms of the Indenture.
(b) Except as to the Vessel during a period set out in clauses
(i) or (ii) of Subsection 2.9(a) above, the Mortgagor will (i) keep the Vessel
in such condition and will comply with all Marine Insurance Underwriters
requirements for vessels of its type and size, and (ii) will cause the Vessel to
be overhauled when necessary, and as often as required by the Marine Insurance
Underwriters.
(c) Except as to the Vessel during a period set out in clause
(i) or (ii) of Subsection 2.9(a) above, during each calendar year (or part
thereof) in which this Mortgage is in effect, the Mortgagor shall promptly
furnish to the Mortgagee copies of all Certified Marine Survey Reports in
connection with annual, and other periodic and damage surveys with respect to
damage greater than $250,000 with respect to the Vessel.
(d) The Mortgagor will not make, or permit to be made, any
material change in the structure or type of the Vessel or in its rig if such
change is disadvantageous in any material respect to the Holders, subject to the
terms of the Indenture. The Mortgagor will not change the location where the
Vessel is moored or the flag or hailing port of the Vessel, if such change is
disadvantegeous in any material respect to the Holders, subject to the terms of
the Indenture; Mortgagor shall pay for all expenses of registration or re-
registration of this Mortgage incurred in connection with any such change of
location.
Section 2.10. Inspection.
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Weather permitting, the Mortgagor will at all reasonable times, upon
reasonable notice and at no cost or risk to the Mortgagor, afford the Mortgagee
or its authorized representatives full and complete access to the Vessel for the
purpose of inspecting or surveying the same and its papers.
Section 2.11. Sale or Other Disposition of Vessel.
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Except as allowed in the Indenture, the Mortgagor will not sell, mortgage,
bareboat charter, transfer or in any other way dispose of all or any part of the
Vessel without the prior written consent of the Mortgagee.
Section 2.12. Notice of Loss, Requisition or Damage.
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In the event of actual loss of the Vessel or any casualty, accident or
damage to the Vessel involving or estimated in good faith to involve an amount
in excess of $250,000, the Mortgagor will forthwith give written notice thereof
(containing full particulars) to the Mortgagee.
Section 2.13. Insurance.
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(a) All Risk. The Mortgagor shall, at its own expense, keep the
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Vessel insured against all such risks that are insured against by prudent owners
of vessels and equipment similar to the Vessel.
(b) Liability; Workers' Compensation. The Mortgagor shall maintain at
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all times, to the extent required by applicable law, such worker's compensation,
employer's liability, and longshoreman and harbor worker's insurance including a
Maritime Coverage Endorsement and pollution insurance. The Mortgagor shall
also, at its own expense, maintain public liability insurance, together with
umbrella liability coverage as insured against by prudent owners of vessels and
equipment similar to the Vessel. Such policies shall provide that any loss under
such insurance may be paid directly to the entity to whom any liability covered
by such policies has been incurred.
(c) Payment Provisions. All payments made under policies of insurance
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maintained under this Section shall be applied as set forth in Section 4.11 of
the Indenture.
(d) Constructive Total Loss. In the case of an Event of Loss which is
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a constructive total loss of the Vessel, the Mortgagee shall have the right (but
only with prior written consent of the Mortgagor unless an Event of Default has
occurred and is continuing) to claim for a constructive total loss of the
Vessel, and if both (i) such claim is accepted by all underwriters under all
policies then in force as to the Vessel and (ii) payment in full is made in cash
under such policies, then the Mortgagee shall have the right to abandon the
Vessel to the underwriters under such policies, free from the Lien of this
Mortgage.
(e) Agreed Total Loss. The Mortgagee shall not have the right to
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enter into an agreement or compromise providing for an agreed or compromised
total loss of the Vessel without the prior consent of the Mortgagor unless an
Event of Default has occurred and is continuing. If the Mortgagor shall have
given its prior consent thereto, or an Event of Default has occurred and is
continuing, the Mortgagee shall have the right in its discretion to enter into
an agreement or compromise providing for an agreed or compromised total loss of
the Vessel, provided the same is agreed to by underwriters under all applicable
policies.
(f) Insurers. All insurance required under this Section 2.13 shall be
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placed and kept with the United States Government, or such insurance companies,
underwriters' associations, clubs or underwriting funds as are reputable and
generally recognized within the industry.
(g) Taking by United States. During the continuance of a taking,
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requisition or charter of the use of the Vessel by any governmental body of the
United States of America (including, without limitation, the state of
Mississippi), the provisions of this Section 2.13 shall be deemed to have been
complied with in all respects as to the Vessel if the United States Government
or any governmental body (including, without limitation, the state of
Mississippi) shall have agreed (i) to reimburse the Mortgagee and the Mortgagor
for loss or damage resulting from the risks indicated in paragraphs (a) and (b)
of this Section 2.13, or (ii) that the Mortgagee and the Mortgagor shall be
entitled to just compensation therefor. In addition, the provisions of this
Section 2.13 shall be deemed to have been complied with in all respects during
any period after title to the Vessel shall have been taken or requisitioned by
the United States Government
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or governmental body (including, without limitation, the state of Mississippi)
or there shall have been an actual or constructive total loss or an agreed or
compromised total loss of the Vessel. In the event of any taking, requisition,
charter or loss of the Vessel contemplated by this paragraph (g), the Mortgagor
shall promptly furnish to the Mortgagee a sworn certificate of an officer of the
Mortgagor stating that such taking, requisition, charter or loss has occurred
and, if there shall have been a taking, requisition or charter of the use of the
Vessel, that the United States Government or governmental body (including,
without limitation, the state of Mississippi) has agreed (i) to reimburse the
Mortgagor for loss or damage resulting from the risks indicated in the above-
mentioned paragraphs (a) and (b) or (ii) that the Mortgagor or the Mortgagee, as
the case may be, is entitled to just compensation therefor.
(h) Mortgage Provisions. All insurance required under this Section
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2.13 shall be taken out in the name of the Mortgagor. The Mortgagee shall be
named as an additional insured under all liability policies (other than workers'
compensation and similar insurance) and the Mortgagor and the Mortgagee (or its
assignee) shall be named as the sole loss payees under all physical damage
policies in accordance with paragraph (c) of this Section 2.13. All policies
for such insurance shall also provide that (i) there shall be no recourse
against the Mortgagee (or its assignee) for the payment of premiums or
commissions, (ii) if such policies provide for the payment of club calls,
assessments or advances, there shall be no recourse against the Mortgagee (or
its assignee) for the payment thereof, and (iii) at least ten (10) days' or such
greater period as may be provided in any such policy prior written notice of any
cancellation, reduction in amount or material change in coverage of such
insurance shall be given to the Mortgagee (or its assignee) by the insurance
underwriters. All policies for physical damage shall also contain a breach of
warranty clause in favor of the Mortgagee, to the extent applicable.
(i) Compliance. The Mortgagor shall not do any act, nor voluntarily
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suffer nor permit any act to be done, whereby any insurance required by this
Section 2.13 shall or may be suspended, impaired or defeated, or suffer or
permit the Vessel to engage in any voyage, to engage in any activity or to carry
any cargo not permitted under the policies of insurance then in effect without
first procuring reasonably comparable insurance for such voyage, activity or the
carriage of such cargo.
(j) Assignment of Insurance to Surety. In the event that any claim or
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Lien is asserted against the Vessel for loss, damage or expense which is covered
by insurance hereunder and it is necessary for the Mortgagor to obtain a bond or
supply other security to prevent arrest of the Vessel or to obtain the release
of the Vessel from arrest on account of said claim or Lien, so long as no Event
of Default has occurred and is continuing, the Mortgagee, upon the written
request of the Mortgagor, shall assign all or any part of its right, title and
interest in and to said insurance covering such loss, damage or expense, to any
entity executing a surety or guaranty bond or other agreement to save or release
the Vessel from such arrest as collateral security to indemnify against
liability under said bond or other agreement.
(k) Policies. The Mortgagor, upon execution of this Mortgage, shall
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deliver to the Mortgagee true copies of the original policies, certified to the
satisfaction of the Mortgagee, evidencing the insurance maintained under this
Section 2.13. If the Mortgagor executes any new or renewal policies of insurance
under this Section 2.13, the Mortgagor, upon the request of Mortgagee, will
promptly deliver to the Mortgagee true copies of such policies.
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(l) Opinion and Certificates. At such times as the Mortgagee
------------------------
may reasonably request, the Mortgagor shall furnish or cause to be furnished to
the Mortgagee a detailed certificate or opinion (signed by a reputable insurance
broker) as to the insurance maintained by the Mortgagor pursuant to this Section
2.13, specifying the respective policies of insurance covering the same and
attaching certificates of confirmation evidencing the same and stating with
regard to the insurance maintained by the Mortgagor pursuant to this Section
2.13 the amounts, deductibles, and the risks against which such insurance is
issued.
(m) Oil Pollution. The Mortgagor shall on behalf and for the
-------------
benefit of itself and the Mortgagee (i) when required by law, maintain a
Certificate of Financial Responsibility (Oil Pollution) issued by the United
States Coast Guard pursuant to the Oil Pollution Act of 1990, as amended, and
(ii) maintain such additional coverage for the Vessel in respect of oil
pollution liability as may be customary among prudent owners of similar vessels
from time to time.
(n) Obligation to Collect. Mortgagor shall, at no cost or
---------------------
expense to the Mortgagee, have the duty and responsibility to make all proofs of
loss and take any and all other steps necessary to effect collections from
underwriters for any loss under any insurance on or in respect of the Vessel or
the operation thereof; provided, that Mortgagor shall have such duty only to the
--------
extent that such conduct would be taken by a prudent owner.
ARTICLE III.
-----------
REMEDIES; APPLICATION OF PROCEEDS
---------------------------------
Section 3.1. Sale, Etc.
---------
If an Event of Default shall have occurred and be continuing which has
resulted in the Mortgagee accelerating the maturity of the Obligations, the
Mortgagee may, to the fullest extent permitted by and in accordance with
applicable law:
(a) exercise all the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the Chapter 313 of Title 46
of the United States Code, as amended, or by the applicable laws of any other
applicable jurisdiction;
(b) bring suit at law, in equity or in admiralty or initiate and
prosecute such other judicial, extrajudicial, or administrative proceedings as
it may consider appropriate to recover any and all sums due, or declared due, in
respect of the Obligations, with the right to enforce payment of said sums
against any assets of the Mortgagor, whether they are covered by this Mortgage
or otherwise;
(c) take possession of the Vessel, with or without legal
proceedings, at any place where it may be found, and the Mortgagor or any person
in possession of the Vessel, forthwith upon request by the Mortgagee, as
mortgage creditor, shall deliver possession to the Mortgagee on demand of the
Mortgagee, and the Mortgagee shall have the right, subject to applicable law,
without being responsible for loss or damage to lay up, hold, charter, lease,
operate or otherwise use the Vessel for such period and under such conditions as
it may deem most expedient for its interest, accounting only for net profits, if
any, arising from such use and charging against all receipts from such use or
from the sale of the Vessel by court proceedings or
11
pursuant to subsection (d) below, all costs, expenses, charges, damages or
losses by reason of such use; and if at any time the Mortgagee shall avail
itself of the right herein given to it to take the Vessel and shall take it, the
Mortgagee shall have the right to dock the Vessel at any dock, pier or other
premises owned or leased by the Mortgagor without charge, or at any other place
at the cost and expense of the Mortgagor;
(d) sell the Vessel at public or private sale, by sealed bids or
otherwise, on such terms and conditions as the Mortgagee deems best, free of any
claim, commitment or encumbrance, regardless of the nature thereof, in favor of
the Mortgagor and, except as provided by law, any other person, upon advance
notice of ten (10) consecutive days published in any newspaper authorized to
publish legal notices of that kind in the port of registry and the place of sale
of the Vessel and by sending notice of such sale at least fourteen (14) days
prior to the date fixed for such sale, by telegraph, cable or telex, confirmed
by mail, to the Mortgagor. In the event that the Vessel shall be offered for
sale by private sale, no newspaper publication of notice shall be required, nor
notice of adjournment of sale. Sale may be held at such place and at such time
as the Mortgagee by notice may have specified, or may be adjourned by the
Mortgagee from time to time by announcement at the time and place appointed for
such sale or for such adjourned sale, and without further notice or publication
the Mortgagee may make any such sale at the time and place to which the same
shall be so adjourned; and any sale may be conducted without bringing the Vessel
to the place designated for such sale and in such manner as the Mortgagee may
deem to be for its best advantage, and the Mortgagee may become the purchaser at
any public sale, and shall have the right to credit on the purchase price any
and all sums of money due hereunder.
As used in this Mortgage, "Event of Default" shall mean the occurrence of
----------------
any Event of Default under the Indenture.
Section 3.2. Finality of Sale. A sale of the Vessel 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.
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
application of the proceeds thereof.
Section 3.3. Powers and Rights of Mortgagee Upon Notice of Default.
-----------------------------------------------------
During the occurrence and continuance of an Event of Default and after the
acceleration of the Notes, Mortgagee shall have the following powers and rights:
(a) Sale. The Mortgagor does hereby irrevocably appoint the
----
Mortgagee and its successors and assigns the true and lawful attorney of the
Mortgagor, in its name and stead, for the purpose of Sections 3.1 and 3.2, to
make all necessary transfers of the Vessel, and for that purpose the Mortgagee
shall execute all necessary instruments of assignment and transfer (including
bills of sale), the Mortgagor hereby ratifying and confirming all that its said
attorney shall lawfully do by virtue hereof. Nevertheless, the Mortgagor shall,
if so requested by the Mortgagee, ratify and confirm any sale of the Vessel by
executing and delivering to the
12
purchaser thereof such proper bills of sale, conveyances, instruments of
transfer and releases as may be designated in such request.
(b) Revenues and Proceeds of Vessel: Prior Liens.
--------------------------------------------
(i) The Mortgagee is hereby irrevocably appointed
attorney-in-fact of the Mortgagor, with the power, among other things in the
name of the Mortgagor to demand, collect, receive, compromise and xxx 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 payment 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 in respect of the Vessel or in respect of
any insurance thereon 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,
the Mortgagor hereby confirming and ratifying the same.
(ii) The Mortgagee is hereby irrevocably authorized to pay
or furnish indemnity in the proper amounts against any Liens which have or may
(in the opinion of the Mortgagee) have priority over the Lien of this Mortgage
and which are not permitted under this Mortgage.
(c) Additional Rights. The Mortgagor covenants and agrees that
-----------------
in addition to any and all other rights, powers and remedies elsewhere in this
Mortgage granted to and conferred upon the Mortgagee, the Mortgagee in any suit
to enforce any of its rights, powers or remedies shall be entitled as a matter
of right and not as a matter of discretion (i) to seek the appointment of a
receiver or receivers of the Vessel and any receiver or receivers so appointed
shall have full right and power to use and operate the Vessel as shall be
ordered by the federal court, and (ii) to a decree ordering and directing the
sale and disposal of the Vessel, and the Mortgagee may become the purchaser at
such sale and shall have the right to credit against the purchase price any and
all sums of money due hereunder.
Section 3.4. Restoration of Position. In case the Mortgagee shall have
-----------------------
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceeding 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 Mortgagor and the Mortgagee
shall, subject to any determination in such proceeding, 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, subject to any determination in such proceeding, continue
as if no such proceedings had been taken.
Section 3.5. Application of Proceeds.
-----------------------
The proceeds of any sale and net earnings derived from the operation, use,
charter, or any other employment of the Vessel by the Mortgagee, as mortgage
creditor, and within any of the powers and authority above given, as well as the
proceeds of any judgment which the
13
Mortgagee may obtain by reason of the breach of failure to perform any of the
terms of this Mortgage, as well as the proceeds of any claim for damage received
by the Mortgagee while exercising the powers and the authorities above given
shall be applied as follows:
(i) to the payment of all charges and expenses, including
the costs of any public or private sale or sales, the cost of replevying or
taking possession of the Vessel which may be incurred or paid out by the
Mortgagee, as mortgage creditor, and the expenses and reasonable administrator
and attorneys' fees incurred on foreclosure or in the protection of the rights
and interests of the Mortgagee founded upon this Mortgage;
(ii) to pay or to furnish indemnity in the proper amounts
against any Liens which have or may (in the opinion of the Mortgagee) have
priority over the Lien of this Mortgage and which are not Liens permitted under
this Mortgage;
(iii) to reduce or pay in full the Obligations; and
(iv) to the payment of any surplus thereafter remaining to
the Mortgagor or to whomsoever shall be entitled thereto.
Section 3.6. No Transfer in Violation of Shipping Act.
----------------------------------------
Notwithstanding any other provision herein to the contrary, no sale,
charter, transfer or other disposition of the Vessel or any interest therein may
be made to any entity not a citizen of the United States within the meaning of
Section 2 of the Shipping Act of 1916, as amended, without the approval of the
Secretary of Transportation of the United States. Furthermore, the Vessel shall
not be operated by the Trustee without the approval of the Secretary of
Transportation.
Section 3.7. Gaming Authority.
----------------
Each of the provisions of this Mortgage is subject to, and shall be
enforced in compliance with, the requirements of any applicable Gaming
Authority.
ARTICLE IV.
----------
GENERAL POWERS OF MORTGAGEE
---------------------------
Section 4.1. General Powers of Mortgagee.
---------------------------
(a) Arrest or Detention of Vessel. In the event that the Vessel
-----------------------------
shall be arrested or detained by a marshal or other officer of any court of law,
equity or admiralty jurisdiction in any country or nation of the world or by any
government or other entity and shall not be released from arrest or detention
within thirty (30) days from the date of arrest or detention, the Mortgagor does
hereby authorize and empower the Mortgagee, in the name of the Mortgagor, or its
successors or assigns, to apply for and receive possession of and to take
possession of the Vessel with all the rights and powers that the Mortgagor, or
its successors or assigns, might have, possess or exercise in any such event;
and this power of attorney shall be irrevocable and may be exercised not only by
the Mortgagee but also by its appointee or
14
appointees, with full power of substitution, to the same extent as if the said
appointee or appointees had been named as the attorney above named by express
designation.
(b) Suits. The Mortgagor also authorizes and empowers the
-----
Mortgagee or its appointees or any of them to appear in the name of the
Mortgagor, its successors or 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
any alleged Lien against the Vessel from which the Vessel has not been released
in accordance with the terms of this Mortgage and to take such proceedings as to
it may seem proper towards the defense of such suit and the discharge of such
Lien.
(c) Reimbursement of Expenses. If Mortgagor fails to perform any
-------------------------
obligation or covenant under this Mortgage, Mortgagee shall have the right, but
not the obligation, to perform or take such actions to comply with the terms of
this Mortgage, and all amounts reasonably expended in connection with such
conduct shall be a demand obligation of Mortgagor owing to Mortgagee at the
post-default rate of interest specified in the Notes and shall be secured by the
Lien of this Mortgage and the other Collateral Documents.
ARTICLE V.
---------
SUNDRY PROVISIONS
-----------------
Section 5.1. Defeasance.
----------
If the Obligations shall have been satisfied and discharged then this
Mortgage and the estate and rights hereunder shall cease, determine, and become
null and void; and the Mortgagee, on the request of the Mortgagor and at the
Mortgagor's cost and expense, shall forthwith cause satisfaction and discharge
of this Mortgage to be entered upon its and other appropriate records and shall
execute and deliver to the Mortgagor such instruments as may be necessary in the
Mortgagor's reasonable opinion to duly acknowledge the satisfaction and
discharge of this Mortgage.
Section 5.2. Right of Peaceful Enjoyment.
---------------------------
During the term of this Mortgage and so long as no Event of Default shall
have occurred and be continuing, the Mortgagor shall have full and peaceful
enjoyment, use, right to possession and control of the Vessel.
Section 5.3. Cumulative Remedies: No Waiver.
------------------------------
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 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 course of
dealing on the part of the Mortgagee, its officers, employees, consultants or
agents, nor any delay or omission by the
15
Mortgagee in the exercise of any right or power or in the pursuance of any
remedy shall operate as a waiver of any such right, power or remedy.
Section 5.4. Further Assurances.
------------------
In the event that this Mortgage, or any provisions hereof, shall be deemed
invalid in whole or in part by reason of any present or future law or any
decision of any court having jurisdiction, 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 rights and powers granted to the Mortgagee herein, then, from time
to time, the Mortgagor will do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered such other and further assurances and
documents as in the opinion of the Mortgagee may reasonably be required in order
to more effectively subject the Vessel to the lien of this Mortgage or more
effectively subject the Vessel to the performance of the terms and provisions of
this Mortgage, or to enable this Mortgage to continuously enjoy the status of a
first preferred ship mortgage.
Section 5.5. Survival of Agreements.
----------------------
All representations, warranties, covenants and agreements herein contained
or made in writing in connection with this Mortgage shall survive the execution
of this Mortgage and shall continue in full force and effect until all sums
secured hereby shall have been paid in full, and the same shall bind and inure
to the benefit of the respective successors and assigns of the Mortgagor and the
Mortgagee.
Section 5.6. Notices.
-------
All notices, requests and demands to or upon the respective parties hereto
to be effective shall be in writing (including by telex or facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of telex
notice, when sent, answerback received, or in the case of facsimile
transmission, when received and telephonically confirmed, addressed as follows
or to such other address as may be hereafter notified by the respective parties
hereto or any assignee thereof or successor thereto:
Mortgagor: HWCC-Tunica, Inc.
Two Galleria Tower, Suite 2200
00000 Xxxx Xxxx, XX 00
Xxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
Mortgagee: State Street Bank and Trust Company
Corporate Trust Administration
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
Section 5.7. Counterparts.
------------
This instrument may be executed in any number of counterparts, and each of
such counterparts shall for all purposes be deemed to be an original.
16
Section 5.8. Section Headings.
----------------
The section headings used in this Mortgage are for convenience of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Mortgage.
Section 5.9. GOVERNING LAW.
-------------
THIS MORTGAGE, AND ALL OF THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, SHALL BE GOVERNED BY
XXXXX 00, XXXXXX XXXXXX CODE, CHAPTERS 301 AND 313 AND THE FEDERAL MARITIME LAWS
OF THE UNITED STATES OF AMERICA AND, ONLY TO THE EXTENT NOT ADDRESSED THEREBY,
BY THE LAWS OF THE STATE OF NEW YORK.
Section 5.10. Amendments and Waivers.
----------------------
None of the terms or provisions of this Mortgage may be waived, amended,
supplemented or otherwise modified except if made or given in compliance with
the terms and provisions of the Indenture.
Section 5.11. Termination.
-----------
The grant of the Liens hereunder and all of Mortgagee's rights, powers and
remedies in connection therewith, shall unless otherwise provided in the
Indenture or this Mortgage, remain in full force and effect until payment in
full of (A) the Notes under the terms of the Indenture and (B) all Obligations
then due and owing under the Indenture, the Notes and the Collateral Documents;
provided, however, that after receipt from the Mortgagor by the Trustee of a
-------- -------
request for a release of the Vessel permitted under the Indenture upon the sale,
transfer, assignment, exchange or other disposition of the Vessel not prohibited
by the Indenture or otherwise (and upon receipt by the Trustee of all proceeds
of such sale, transfer, assignment, exchange or other disposition to the extent
required to be remitted to the Trustee under the Indenture), the Vessel shall be
released from the Lien and security interest created hereunder in accordance
with the provisions of the Indenture and no longer be subject to the Liens
granted herein. Upon the payment in full of (A) the Notes under the terms of the
Indenture and (B) all Obligations then due and owing under the Indenture and the
Collateral Documents, the Mortgagor shall be entitled to the return, upon its
request and at its expense, of the Vessel.
Upon any termination of this Mortgage or release of the Vessel as
permitted by the Indenture, the Mortgagee will, at the expense of the Mortgagor,
execute and deliver to the Mortgagor such documents and take such other actions
as the Mortgagor shall reasonably request to evidence the termination of this
Mortgage or the release of the Vessel, as the case may be. Any such action taken
by the Mortgagee shall be without warranty by or recourse to the Trustee, except
as to the absence of any prior assignments by the Mortgagee of its interests in
the Vessel, and shall be at the expense of the Mortgagor. The Mortgagee may
conclusively rely on any certificate delivered to it by the Mortgagor stating
that the execution of such documents and release of the Vessel is in accordance
with and permitted by the terms of the Indenture and this Mortgage.
17
Section 5.12. Indenture.
---------
This Mortgage is issued pursuant to the terms, conditions and provisions
of the Indenture.
Section 5.13. Rights of Holders.
-----------------
No Holder shall have any independent rights hereunder other than those
rights granted to individual Holders pursuant to Section 6.07 of the Indenture;
provided that nothing in this Section 5.13 shall limit any rights granted to the
Trustee under the Notes, the Indenture or the Collateral Documents.
Section 5.14. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders. No past, present or future director, officer, employee,
------------
incorporator or stockholder of the Mortgagor as such, or the Holder of any of
the Notes, or any successor Person, as such, shall have any liability for any
obligations of the Mortgagor under this Mortgage or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
Section 5.15. Fraudulent Conveyance Savings Clause. Notwithstanding any
------------------------------------
provision of this Mortgage to the contrary, it is intended that neither this
Mortgage nor any Lien granted by Mortgagor to secure the Obligations shall
constitute a "Fraudulent Conveyance" (as defined below). Consequently,
Mortgagor agrees that if the Mortgage, or any Liens securing this Mortgage,
would, but for the application of this sentence, constitute a Fraudulent
Conveyance, this Mortgage and each such Lien shall be valid and enforceable only
to the maximum extent that would not cause this Mortgage or such Lien to
constitute a Fraudulent Conveyance, and this Mortgage shall automatically be
deemed to have been amended accordingly at all relevant times. For purposes
hereof, a "Fraudulent Conveyance" means a fraudulent conveyance under Xxxxxxx
000 xx Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from time to time (or any
successor section) or a fraudulent conveyance or fraudulent transfer under the
provisions of any applicable fraudulent conveyance or fraudulent transfer law or
similar law of any state, nation or other governmental unit, as in effect from
time to time.
ARTICLE VI.
----------
AMOUNT OF MORTGAGE: RECORDATION
-------------------------------
Section 6.1. Recordation. For the purpose of this Mortgage and the
-----------
recordation of this Mortgage on the documents of the Vessel as required by
Chapter 313 of Title 46 of the United States Code, as amended, the total amount
of this Mortgage is $360,000,000.00 plus interest and performance of mortgage
covenants. The Vessel subject to this Mortgage is identified on Schedule 6.1
hereto. The Mortgagor holds an interest of 100% in the Vessel and 100% of such
interest is subject to this Mortgage. The addresses of the parties are:
Mortgagor: HWCC-Tunica, Inc.
Two Galleria Tower, Suite 2200
00000 Xxxx Xxxx, XX00
Xxxxxx, Xxxxx 00000
Mortgagee: State Street Bank and Trust Company
18
Corporate Trust Administration
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
Although it is not intended that this Mortgage include any property other than
the whole of the Vessel named on Schedule 6.1 hereto, including earned freights,
if any determination is made at any time that for any reason this Mortgage does
include any property other than a "vessel" within the meaning of 46 U.S.C. (S)
31322(c)(i), then such property may be separately discharged from the lien of
this Mortgage (but not the lien of any other security instruments) by the
payment of .01% of the said total amount.
[Signature page follows]
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed as of the day and year first above written.
HWCC-TUNICA, INC. By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Executive Vice President
THE STATE OF ILLINOIS )
)
COUNTY OF XXXX )
THIS INSTRUMENT was acknowledged before me on May 19th, 1999, by
Xxxxxxx X. Xxxxx, Executive Vice President of HWCC-TUNICA, a Texas corporation,
on behalf of such corporation, and after having first been duly authorized by
said corporation to do so.
/s/ Xxxxx Xxxxx
Notary Public in and for ----------------
the State of Illinois
Printed Name of Notary: Xxxxx Xxxxx
My Commission Expires: May 15, 2002
SCHEDULE 2.2
------------
Other Liens
-----------
Lien evidenced by the Second Preferred Ship Mortgage dated May 19, 1999, by
Mortgagor in favor of Hollywood Casino Corporation, assigned to Trustee.
SCHEDULE 6.1
------------
Description of Vessel
---------------------
Vessel Name Official Number
----------------------------------------
Hollywood - Tunica 534006
EXHIBIT A
---------
"Permitted Encumbrances"
----------------------
1. Liens on the assets of the Company and any Guarantor created by the
Indenture and the Collateral Documents securing the Notes and the Note
Guarantees;
2. Liens in favor of the Company or the Guarantors;
3. Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary;
4. Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to the contemplation of such acquisition;
5. Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature incurred
in the ordinary course of business;
6. Liens to secure Indebtedness permitted by clause (a) of Section 4.09
of the Indenture covering only inventory and accounts receivable;
7. Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (d) of the second paragraph of Section 4.09 of the Indenture
covering only the assets acquired with such Indebtedness;
8. Liens of record on the date of the Indenture;
9. Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provisions as shall be required in conformity with
GAAP shall have been made therefor;
10. Liens arising from UCC financing statements regarding property leased
by the Company or any of its Restricted Subsidiaries;
11. Liens of carriers, warehousemen, mechanics, landlords, materialmen,
repairmen or other like Liens arising by operation of law or in the ordinary
course of
business and consistent with industry practices and Liens on deposits made to
obtain the release of such Liens if:
(a) the underlying Obligations are not overdue for a period of more than
60 days, or
(b) such Liens are being contested in good faith and by appropriate
proceedings by the Company or applicable Restricted Subsidiaries and adequate
reserves with respect thereto are maintained on the books of the Company in
accordance with GAAP, and
(c) the Company or applicable Restricted Subsidiaries is/are in compliance
with the terms of the security documents applicable to such Liens;
12. A Lien on a vessel to secure FF&E Financing or Capital Lease
Obligations in accordance with Section 4.09(d) of the Indenture where (a) the
creditor under such FF&E Financing or Capital Lease Obligations agrees to
release such Lien upon satisfaction of the Obligations under such FF&E Financing
or Capital Lease Obligations, (b) the creditor under such FF&E Financing or
Capital Lease Obligations agrees to release such Lien upon payment of the
proceeds from the sale of such vessel attributable to such FF&E Financing or
Capital Lease Obligations, (c) the creditor under such FF&E Financing or Capital
Lease Obligations acknowledges that such Lien does not create rights on the hull
or other equipment constituting such vessel, but shall be limited to the FF&E
specifically identified in such creditor's financing or lease and Lien
documents, (d) such Lien is expressly subject and subordinate to the Liens
granted in favor of the Trustee, (e) the creditor under such FF&E Financing or
Capital Lease Obligations agrees to promptly notify the Trustee of the
occurrence of any event of default under such creditor's financing or lease
documents, and (f) the creditor under such FF&E Financing or Capital Lease
Obligations acknowledges and agrees that it has no right to possess or use such
vessel or anything on board such vessel, except for its right to come on board
the vessel to inspect the related FF&E and, after the occurrence and continuance
of an event of default under such creditor's financing or lease documents, to
remove or repossess the subject FF&E, provided that such creditor's efforts to
remove or repossess such FF&E shall be commercially reasonable and shall not
damage the vessel, its hull or any other equipment constituting such vessel.
13. Liens incurred in the ordinary course of business of the Company or
any Restricted Subsidiary of the Company with respect to obligations that do not
exceed Five Million Dollars ($5,000,000) at any one time outstanding.
14. Liens incurred and pledges made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and Social
Security benefits.
