EXHIBIT 4.9
SECURITY AGREEMENT - VESSEL CONSTRUCTION
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THIS SECURITY AGREEMENT - VESSEL CONSTRUCTION ("Agreement"), dated as of
August 10, 1999, is made between HOLLYWOOD CASINO SHREVEPORT, a Louisiana
general partnership ("Debtor"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, Trustee under the Indenture (hereinafter defined)
for the Persons that now or in the future are holders (the "Holders") of the
Notes (hereinafter defined) issued under the Indenture (in such capacity,
together with its successors and assigns in such capacity, "Secured Party"), who
agree as follows:
RECITALS
A. Debtor, Shreveport Capital Corporation, a Louisiana corporation
("Shreveport Capital", and together with the Debtor, the "Issuers"), HCS I,
Inc., a Louisiana corporation, HCS II, Inc., a Louisiana corporation, and HWCC-
Louisiana, Inc., a Louisiana corporation, each as a Guarantor, have entered into
an Indenture dated as of the date hereof (as amended, supplemented, restated or
otherwise modified from time to time, the "Indenture") with the Secured Party,
pursuant to which the Issuers will issue up to $150,000,000 of their 13% First
Mortgage Notes due 2006 with Contingent Interest (as the same may be amended,
supplemented, restated, exchanged, replaced or otherwise modified from time to
time, collectively, the "Notes").
B. It is a condition precedent to the purchase of the Notes under the
Indenture that Debtor shall have executed and delivered this Agreement.
C. Leevac Shipyards, Inc., a Louisiana corporation (the "Contractor"), is
performing the construction of the Vessel for the Debtor in accordance with and
pursuant to the Construction Contract (hereinafter defined).
D. Therefore, in order to comply with the terms and conditions of the
Indenture and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor hereby agrees with Secured
Party as follows:
AGREEMENT
ARTICLE 1
GENERAL TERMS
Section 1.1 Terms Defined Above or Elsewhere. Terms not otherwise defined
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in this Agreement shall have the meanings provided in the Indenture.
Section 1.2 Certain Definitions. As used in this Agreement, the
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following additional terms shall have the meanings indicated:
"Collateral" has the meaning set forth in Section 2.1 of this
Agreement.
"Components" means all parts and components of the Vessel which are
fabricated by the Contractor for use in the construction or
modification of the Vessel, which will, when so used, form a part of
the Vessel, and the fabrication of which is commenced at the Shipyard.
"Construction Contract" means the Vessel Construction Agreement dated
as of July16, 1999 between the Debtor and the Contractor relative to
the construction of the Vessel, as it may from time to time be
amended, modified or supplemented.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by the Debtor and now or hereafter used or to be
used in the construction, design or furnishing of the Vessel
(including, without limitation, Components, Materials, and Work, to
the extent such items are not Pre-Existing Inventory or Inventory),
together with all additions, accessories, parts, attachments, special
tools and accessions now and hereafter affixed thereto or used in
connection therewith, and all replacements thereof and substitutions
therefor, and shall include without limitation all machinery, tools,
fire sprinklers, alarm, air conditioning, heating, refrigerating and
electronic monitoring systems and equipment, window or structural
cleaning rigs, maintenance equipment, equipment for the exclusion of
vermin or insects or the removal of dust, refuse or garbage, lobby and
all other indoor and outdoor furniture (including without limitation
tables, chairs, planters, desks, sofas, shelves, lockers and
cabinets), wall beds, wall safes, furnishings, appliances (including
ice boxes, refrigerators, fans, heaters, stoves, water heaters and
incinerators), rugs, carpets and other floor coverings, draperies and
drapery rods and brackets, awnings, window shades, venetian blinds,
curtains, wall hangings, lamps, chandeliers and other lighting
fixtures and office maintenance and other supplies, together with all
additions, accessories, parts, attachments, special tools and
accessions now or hereafter affixed thereto or used in connection
therewith, and all replacements thereof and substitutions therefor.
"Excluded Collateral" means (i) all such items of personal property
(of the type in which a security interest may be perfected under the
UCC) constituting furniture, fixtures or equipment of the Debtor, the
acquisition of which has been financed pursuant to FF&E Financing,
which items shall constitute "Excluded Collateral" for so long as such
items are subject to a lien in favor of the lender or lenders (or one
or more agents therefore) providing such FF&E Financing, and (ii) the
Equity Escrow Account.
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"General Intangibles" means all "general intangibles" (as defined in
the UCC) now owned or hereafter acquired by the Debtor, but in any
event relative to the Vessel under construction, including without
limitation (i) all contractual rights of and obligations or
indebtedness owing to the Debtor, including without limitation all
contract rights of, and obligations or indebtedness owing to, the
Debtor under the Construction Contract, (ii) all things in action,
rights represented by judgments, claims arising out of tort, warranty
or contract and other claims relating to the Vessel or the other
Collateral (including without limitation the right to assert and
otherwise be the proper party of interest to commence, control,
prosecute and/or settle such actions, whether as claims, counterclaims
or otherwise, and whether involving matters arising from casualty,
condemnation, indemnification, negligence, strict liability, other
tort, contract, warranty or in any other manner), (iii) rights under
service, maintenance or warranty contracts, and other warranties,
guaranties and bonds, including, without limitation, the performance
and payment bond provided pursuant to the Construction Contract, with
regard to the Vessel and the other Collateral, (iv) the right to
receive proceeds attributable to insurance loss of the Vessel and the
other Collateral, and (v) all goodwill, patents, patent licenses,
trademarks, trademark licenses, trade names, service marks, trade
secrets, rights in intellectual property, copyrights, permits and
licenses relating to the design, construction, and/or delivery of the
Vessel.
"Inventory" means all "inventory" (as defined in the UCC) now owned or
hereafter acquired by the Debtor and now or hereafter located at the
Shipyard to be furnished in connection with the design or construction
of the Vessel (including, without limitation, Components, Materials
and Work), and shall also mean and include, without limitation (but in
any event relative to the design or construction of the Vessel), (i)
all raw materials and other supplies, work in process and finished
goods and any products assembled, compiled or processed therefrom and
all substances, if any, commingled therewith or added thereto, and
(ii) to the extent the same are not Equipment, all machinery, tools,
fire sprinklers, alarm, air conditioning, heating, refrigerating and
electronic monitoring systems and equipment, window or structural
cleaning rigs, maintenance equipment, equipment for the exclusion of
vermin or insects or the removal of dust, refuse or garbage, lobby and
all other indoor and outdoor furniture (including without limitation
tables, chairs, planters, desks, sofas, shelves, lockers and
cabinets), wall beds, wall safes, furnishings, appliances (including
ice boxes, refrigerators, fans, heaters, stoves, water heaters and
incinerators), rugs, carpets and other floor coverings, draperies and
drapery rods and brackets, awnings, window shades, venetian blinds,
curtains, wall hangings, lamps, chandeliers and other lighting
fixtures and office maintenance and other supplies.
"Materials" means all materials, all items of machinery, and all items
of equipment which are purchased or acquired for use in the
construction of
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the Vessel, or related modifications of the Vessel, which will, when
so used, form a part of the Vessel.
"Obligations" means (i) the payment when due of indebtedness evidenced
by the Notes in the principal sum not to exceed at any time
outstanding of $150,000,000, 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 or restatements of any of the foregoing.
"Pre-Existing Inventory" means any and all items or types of property
other than Materials and Components which are incorporated into or
affixed to the Work, including without limitations all piping, cable,
fittings and other materials and equipment which are taken out of the
Contractor's stock.
"Proceeds" means all cash and non-cash proceeds, in whatever form,
arising from the collection, sale, lease, exchange, assignment or
other disposition of, or realization upon, Collateral, and, to the
extent not otherwise included, all payments under insurance (whether
or not the Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the Collateral, and including
proceeds of all such proceeds, in each case whether now existing or
hereafter arising.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Obligations.
"Shipyard" means any of the Contractor's shipyards located at
Xxxxxxxxx Xxxxx Parish or St. Mary's Parish or any temporary yard in
Bossier or Caddo Parish, Louisiana and any and all warehouses or other
shipyards of the Contractor.
"UCC" means the Uniform Commercial Code, Commercial Laws - Secured
Transactions (Louisiana Revised Statutes 10:9-101 through 9-605) in
the State of Louisiana, as amended from time to time; provided, that
if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the Security Interests in
any Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than Louisiana, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
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"Vessel" means the riverboat, being 242' in length and 114' in breadth
and bearing the Contractor's Hull Number 327, to be constructed and
being constructed pursuant to the Construction Contract at the
Shipyard, and all improvements and structures from time to time
thereon, and all equipment and appurtenances from time to time thereon
or thereof, including without limitation all engines, machinery,
masts, spars, boats, cables, motors, tools, anchors, chains, booms,
cranes, rigs, pumps, pipes, tanks, tackle, rigging, supplies, fittings
and all other property located thereon, derived therefrom or used in
connection therewith.
"Work" means, in the case of a ship having a keel, the keel, and in
the case of a ship not having a keel, the bottom plates, and in
addition to the foregoing, all Materials, machinery, Equipment, Pre-
Existing Inventory, Inventory, Components, tackle, appurtenances, and
fabrications, including but not limited to engines, gears, piping,
cables and fittings, forming a part of the Vessel when permanently
installed in place.
ARTICLE 2
SECURITY INTEREST
Section 2.1 The Security Interests. In order to secure the full and
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punctual payment and performance of all present and future Obligations, the
Debtor hereby grants to the Secured Party, for itself and the ratable benefit of
the Holders, a continuing security interest in and to all right, title and
interest of the Debtor in, to or under the following property, whether now owned
or existing or hereafter acquired or arising and regardless of where located:
(i) the Vessel and all Materials, Components, Pre-Existing
Inventory and Work relating thereto, and all other materials,
equipment and accessories installed thereon, and any
substitutions therefor, whether now existing or hereafter
acquired;
(ii) the Inventory;
(iii) the Equipment;
(iv) the General Intangibles;
(v) the Plans;
(vi) all books and records (including, without limitation, computer
programs, tapes, disks, punch cards, data processing software,
transaction files, master files, printouts and other computer
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materials and records) of the Debtor pertaining to any of the
Collateral; and
(vii) all Proceeds of all or any of the Collateral described in
clauses (i) through (vi) hereof.
The term "Collateral" means each and all of the items and property rights
described in clauses (i) - (vii) above.
Notwithstanding the foregoing provisions of this Section 2.1, such
grant of security interest shall not extend to, and the term "Collateral" shall
not include (i) any of the Excluded Collateral, and (ii) any of the foregoing
property that is, pursuant to restrictions enforceable under applicable law,
prohibited from being pledged as security; provided that, with respect to this
clause (ii), upon the termination of such prohibitions for any reason whatsoever
or in the event such prohibitions are or become unenforceable under applicable
law, such foregoing property shall automatically become Collateral hereunder, it
being understood that upon request of the Secured Party, Debtor will in good
faith use reasonable efforts to obtain consent for the creation of a security
interest in favor of the Secured Party in Debtor's rights in such property
referred to in this clause (ii). Notwithstanding the foregoing, so long as no
Event of Default shall have occurred and be continuing, all dividends,
distributions, interest and principal payments, cash, instruments and other
property and proceeds made upon or with respect to or of the Collateral may be
used by the Debtor subject to the terms and conditions of the Indenture. Upon
the occurrence and during the continuance of an Event of Default, all rights of
the Debtor to receive all such dividends, distributions, interest and principal
payments, cash, instruments and other property and proceeds shall cease, and
such dividends, distributions, interest and principal payments, cash,
instruments and other property and proceeds shall constitute Collateral, and
shall be paid or otherwise delivered to the Secured Party. It is expressly
contemplated that additional property may from time to time be pledged, assigned
or granted to Secured Party as additional security for the Obligations, and the
term "Collateral" as used herein shall be deemed for all purposes hereof to
include all such additional property, together with all other property of the
types described above related thereto.
Section 2.2 No Liability. The Security Interests are granted as
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security only and shall not subject the Secured Party to, or transfer or in any
way affect or modify, any obligation or liability of the Debtor with respect to
any of the Collateral or any transaction in connection therewith.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Debtor represents and warrants to the Secured Party that:
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Section 3.1 No Liens. Other than financing statements or other
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similar or equivalent documents or instruments with respect to the Security
Interests and Permitted Liens, no financing statement, mortgage, security
agreement or similar or equivalent document or instrument covering all or any
part of the Collateral is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect a Lien on such Collateral. No
Collateral is in the possession of any Person (other than the Debtor) asserting
any claim thereto or security interest therein, except that the Contractor and
the Contractor's designees or subcontractors may have possession of Collateral.
Section 3.2 Name. The name of the Debtor is as it appears on page 1
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of this Agreement. Set forth on Exhibit A attached hereto is every other name
the Debtor has had since its organization, together with the date of the
relevant change. Also set forth on Exhibit A is a list of all other names
(including trade names or similar appellations) used by the Debtor or any of its
divisions or other business units at any time during the past five years.
Section 3.3 Taxpayer Identification Number. The federal taxpayer
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identification number of the Debtor is 00-0000000.
Section 3.4 Chief Executive Office. The chief executive office of
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the Debtor is located at Two Galleria Tower, Suite 2200, 00000 Xxxx Xxxx, XX 00,
Xxxxxx, Xxxxx 00000.
Section 3.5 Records Location. Set forth on Exhibit A are all of the
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locations where the Debtor maintains any books or records relating to any
Collateral.
Section 3.6 Business Locations. Set forth on ExhibitA are all of the
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places of business of the Debtor, including all the places (including without
limitation names and addresses) where any of the Components, Equipment,
Inventory, Materials, Pre-Existing Inventory or Work is maintained.
Section 3.7 Filing Location. When UCC financing statements have been
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filed in the office of a Louisiana Clerk of Court (or, if in Orleans Parish,
then with the Recorder of Mortgages) and with the Texas Secretary of State, the
Security Interests shall constitute perfected security interests in the
Collateral (except Inventory and Materials in transit from outside the state of
Louisiana) to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all other Liens thereon and rights of
others therein except for Permitted Liens, if any, arising by operation of law.
Section 3.8 No Inconsistent Agreements. The Debtor has not performed
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any acts or signed any agreements which might prevent the Secured Party from
enforcing any of the terms of this Agreement or which would limit the Secured
Party in any such enforcement.
Section 3.9 Title. Pursuant to the Construction Contract, (i) the
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Debtor is and shall be the owner of the Vessel during the construction thereof,
(ii) title to the Work
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shall vest in the Debtor as and when performed, (iii) title to the Materials
shall vest in the Debtor as and when delivered to the Shipyard, and (iv) title
to the Components shall vest in the Debtor as and when fabricated. The Debtor
has good and valid title to all Collateral, except the portion thereof
consisting of after-acquired property, free of Liens except Permitted Liens, and
the Debtor will have good and merchantable title to such after-acquired
Collateral, free of Liens except Permitted Liens. Furthermore, the Debtor has
not heretofore conveyed or agreed to convey or encumber any Collateral in any
way, except in favor of the Secured Party and with respect to Permitted Liens.
Section 3.10 Hull Number. The hull number of the Vessel shall
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be 327.
Section 3.11 Components, Equipment, Inventory, Materials, Pre-
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Existing Inventory and Work. The Components, Equipment, Inventory, Materials,
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Pre-Existing Inventory and Work as to the Vessel are in good condition and are
free of damage caused by fire or other casualty.
Section 3.12 Construction Contract. The Construction Contract is in
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full force and effect, and has not been amended or modified in any way.
ARTICLE 4
COVENANTS
Section 4.1 Change in Location of Collateral or Debtor. Except with
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respect to Collateral under repair or temporarily in transit between locations
(and in any such case, for a period not to exceed four (4) months), Debtor will
not change the location of the Collateral (except for (a) Collateral held by the
Trustee, and (b) motor vehicles and rolling stock), to any state, county or
other jurisdiction in which Secured Party has not already filed a financing
statement or taken other necessary steps to perfect or maintain its security
interests in the Collateral without Secured Party's prior written consent and
the delivery of such new financing statements or other documentation as may be
reasonably necessary or required by Secured Party to ensure the continued
perfection and priority of its security interest in the Collateral. Debtor will
not change the location of Debtor's chief executive office, principal place of
business or the locations of Debtor's records concerning the Collateral unless
Debtor shall have given Secured Party at least thirty (30) days prior written
notice thereof and shall have delivered to Secured Party such new financing
statements or other documentation as may be reasonably necessary or required by
Secured Party to ensure the continued perfection and priority of its security
interest in the Collateral.
Section 4.2 Change in Debtor's Name or Corporate Structure. Debtor
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will not change its name, identity or corporate structure (including, without
limitation, any merger, consolidation or sale of substantially all of its
assets) unless Debtor shall have given Secured Party at least thirty (30) days
prior written notice thereof and shall have delivered to Secured Party such new
financing statements or other documentation as
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may be reasonably necessary or required by Secured Party to ensure the continued
perfection and priority of its security interest on the Collateral.
Section 4.3 Filing. The Debtor agrees that a carbon, photographic,
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facsimile, photostatic or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. The Debtor shall pay all
costs of or incidental to the recording or filing of any financing, amendment,
continuation, termination or other statements concerning the Collateral.
Section 4.4 Sale, Disposition or Encumbrance of Collateral. Except
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as permitted pursuant to the provisions of the Indenture or with Secured Party's
prior written consent, Debtor will not in any way encumber any of the Collateral
(or permit or suffer any of the Collateral to be encumbered) or sell, assign,
lend, rent, lease or otherwise dispose of or transfer any of the Collateral to
or in favor of any Person other than Secured Party.
Section 4.5 Condition of Components, Equipment, Inventory,
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Materials, Pre-Existing Inventory and Work. The Debtor will, and will cause the
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Contractor and the Contractor's designees and subcontractors to, maintain,
preserve and keep the Components, Equipment, Inventory, Materials, Pre-Existing
Inventory and Work as to the Vessel at all times in thorough repair and good
working order and condition, and from time to time make all needful repairs,
renewals and additions so that its value and the Security Interests shall at no
time become impaired in any material respect. The Debtor will not do or permit
anything to be done to the Collateral that may violate the terms of any
insurance covering the Collateral or any part thereof.
Section 4.6 Insurance. Reference is hereby made to Section 4.28 of
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the Indenture, which contains the requirements as to insurance to be maintained
on the Collateral.
Section 4.7 Right of Inspection and Information. Debtor, at all
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reasonable times and upon reasonable prior notice, will permit Secured Party and
its agents, representatives and employees to inspect the Collateral. Without
limiting the generality of the foregoing, the Debtor will furnish to the Secured
Party promptly upon request and in the form and content specified by the Secured
Party such data and information concerning the Collateral as the Secured Party
may from time to time reasonably specify.
Section 4.8 Further Assurances. On request of the Secured Party,
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the Debtor will promptly (i) correct any defect, error or omission which may be
discovered in the contents of this Agreement or any financing statement relating
thereto or in the execution or acknowledgment of this Agreement or any financing
statement; (ii) execute, acknowledge, deliver and record such further
instruments (including, without limitation, further security agreements,
financing statements, continuation statements, general intangibles and proceeds)
and do such further acts as may be reasonably necessary, desirable or proper to
carry out more effectively the purposes of this Agreement and to more fully
identify and subject to the Security Interests hereof any property intended to
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be covered hereby, including without limitation any renewals, additions,
substitutions, replacements or accessions to the Collateral; and (iii) execute,
acknowledge, deliver and record any document or instrument (including
specifically any financing statement) reasonably necessary, desirable or proper
to protect the Lien and Security Interests hereunder against the rights or
interests of third persons. The Debtor shall pay all costs connected with any
of the foregoing.
Section 4.9 Collateral Indemnity. If the validity or priority of
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this Agreement or any rights, security interests or other interests created or
evidenced hereby shall be attacked, endangered or questioned or if any legal
proceedings are instituted with respect thereto, the Debtor will give prompt
written notice thereof to the Secured Party and at the Debtor's own cost and
expense will diligently endeavor to cure any defect that may be developed or
claimed, and will take all necessary and proper steps for the defense of such
legal proceedings, and the Secured Party (whether or not named as a party to
legal proceedings with respect thereto) is hereby authorized and empowered to
take such additional steps as in its judgment and discretion may be necessary or
proper for the defense of any such legal proceedings or the protection of the
validity or priority of this Agreement and the rights, security interests and
other interests created or evidenced hereby, and all expenses so incurred of
every kind and character shall be a demand obligation owing by the Debtor to the
Secured Party and shall be a part of the Obligations.
Section 4.10 Non-Liability. The Debtor hereby agrees to indemnify
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and hold the Secured Party harmless from and against any and all liability, loss
or damage which the Secured Party may incur under or by reason of this
Agreement, and from any and all claims, costs, expenses and demands whatsoever
which may be asserted against the Secured Party by reason of any act of the
Secured Party under this Agreement or otherwise incurred by the Secured Party in
connection with the enforcement of its rights under this Agreement, except to
the extent caused by the gross negligence or willful misconduct of the Secured
Party.
Section 4.11 Vessel Documentation; Ship Mortgage. Once the Vessel
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is completed, Debtor will have the Vessel documented with the United States
Coast Guard as promptly as possible. Immediately after the Vessel is so
documented, Debtor will execute and deliver to the Secured Party a first
preferred ship mortgage covering the Vessel, in the form attached as Exhibit L
to the Indenture. Debtor will take all such other acts and deliver all such
other documents or instruments that the Secured Party may reasonably require in
connection with the granting of said first preferred ship mortgage. Without
limiting the foregoing, the Debtor shall not take delivery of the Vessel without
having granted such first preferred ship mortgage.
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ARTICLE 5
DEFAULT
Section 5.1 General Authority. Debtor hereby irrevocably appoints
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Secured Party as Debtor's attorney-in-fact, with full authority in the place and
stead of Debtor and in the name of Debtor or otherwise, either directly or
through an agent, from time to time in Secured Party's discretion upon the
occurrence and during the continuance of an Event of Default, but at Debtor's
cost and expense and without notice to Debtor:
(a) To obtain, adjust, sell and cancel any insurance with
respect to the Collateral, and endorse any draft drawn by insurers of
the Collateral. Secured party may apply any proceeds or unearned
premiums of such insurance to the Obligations (whether or not due).
(b) To take any action and to execute any assignment,
certificate, financing statement, notification, document or instrument
which Secured Party may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments may
payable to Debtor representing any payment or other distribution in
respect of the Collateral or any part thereof and to give full
discharge for the same.
The aforesaid mandate and power of attorney, being coupled with an interest, is
irrevocable so long as any of the Obligations remains outstanding.
Section 5.2 Sale. Upon the occurrence and during the continuance of
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an Event of Default, the Secured Party may exercise all rights of a secured
party under the UCC and other applicable law (including without limitation such
rights under the UCC or other applicable law authorizing the taking of self-help
remedies by a secured party in protecting its rights in, to and under
collateral) and, in addition, the Secured Party may, without being required to
give any notice, except as herein provided or as may be required by mandatory
provisions of law, sell the Collateral or any part thereof at public or private
sale, for cash, upon credit or for future delivery, and at such price or prices
as the Secured Party may deem satisfactory. The Secured Party may be the
purchaser of any or all of the Collateral so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale). The Debtor will execute and deliver such documents and take such
other action as the Secured Party deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Secured
Party shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind,
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including any equity or right of redemption of the Debtor which may be waived,
and the Debtor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted. The Debtor agrees that ten (10) days prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral constitutes "reasonable notification" within the
meaning of Section 9-504(3) (or any comparable section in any other
jurisdiction) of the UCC, except that shorter or no notice shall be reasonable
as to any Collateral which is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market. The notice (if
any) of such sale shall (l) in case of a public sale, state the time and place
fixed for such sale, and (2) in the case of a private sale, state the day after
which such sale may be consummated. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Secured Party may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels or
portions, as the Secured Party may determine. The Secured Party shall not be
obligated to make any such sale pursuant to any such notice. The Secured Party
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Secured Party until the selling price is paid by the purchaser
thereof, but the Secured Party shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may again be sold upon like notice.
Section 5.3 Remedies. The provisions of this Section shall, without
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limiting the generality of any other provision of this Agreement, be applicable
in the event any foreclosure shall take place in Louisiana on any Collateral.
The Secured Party, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction. For the purposes of
Louisiana executory process procedures, the Debtor does hereby acknowledge the
Obligations and confess judgment in favor of the Secured Party for the full
amount of the Obligations. The Debtor does by these presents consent and agree
that upon and during the continuance of the occurrence of an Event of Default it
shall be lawful for the Secured Party to cause all and singular the Collateral
to be seized and sold under executory or ordinary process, at the Secured
Party's sole option, without appraisement, appraisement being hereby expressly
waived, in one lot as an entirety or in separate parcels or portions as the
Secured Party may determine, to the highest bidder, and otherwise exercise the
rights, powers and remedies afforded herein and under applicable Louisiana law.
Any and all declarations of fact made by authentic act before a Notary Public in
the presence of two witnesses by a person declaring that such facts lie within
his knowledge shall constitute authentic evidence of such facts for the purpose
of executory process. The Debtor hereby waives in favor of the Secured Party:
(a) the benefit of appraisement as provided in Louisiana Code of Civil Procedure
Articles 2332, 2336, 2723 and 2724, and all other laws conferring the same; (b)
the demand and three
12
days delay accorded by Louisiana Code of Civil Procedure Articles 2639 and 2721;
(c) the notice of seizure required by Louisiana Code of Civil Procedure Articles
2293 and 2721; (d) the three days delay provided by Louisiana Code of Civil
Procedure Articles 2331 and 2722; and (e) the benefit of the other provisions of
Louisiana Code of Civil Procedure Articles 2331, 2722 and 2723, not specifically
mentioned above. In the event the Collateral or any part thereof is seized as an
incident to an action for the recognition or enforcement of this Agreement by
executory process, ordinary process, sequestration, writ of fieri facias, or
otherwise, the Debtor and the Secured Party agree that the court issuing any
such order shall, if petitioned for by the Secured Party, direct the applicable
sheriff to appoint as a keeper of the Collateral, the Secured Party or any agent
designated by the Secured Party or any person named by the Secured Party at the
time such seizure is effected. This designation is pursuant to Louisiana Revised
Statutes 9:5136-9:5140.2 and the Secured Party shall be entitled to all the
rights and benefits afforded thereunder as the same may be amended. It is hereby
agreed that the keeper shall be entitled to receive as compensation, in excess
of its reasonable costs and expenses incurred in the administration or
preservation of the Collateral, an amount equal to $250.00 per day payable on a
monthly basis. The designation of keeper made herein shall not be deemed to
require the Secured Party to provoke the appointment of such a keeper.
Section 5.4 Assemble Collateral. For the purpose of enforcing any
-------------------
and all rights and remedies under this Agreement the Secured Party may (i)
require the Debtor to, and the Debtor agrees that it will, at its expense and
upon the request of the Secured Party, forthwith assemble all or any part of the
Collateral (not otherwise in the possession or control of the Secured Party) as
directed by the Secured Party and make it available at a place designated by the
Secured Party which is, in its opinion, reasonably convenient to the Secured
Party and the Debtor, whether at the Shipyard or otherwise, and the Secured
Party shall be entitled to specific performance of this obligation, (ii) to the
extent permitted by applicable law of this or any other state, enter, with or
without process of law and without breach of the peace, any premise where any of
the Collateral is or may be located, and without charge or liability to it seize
and remove such Collateral from such premises, (iii) have access to and use the
Debtor's books and records relating to the Collateral and (iv) prior to the
disposition of the Collateral, store or transfer it without charge in or by
means of any storage or transportation facility owned or leased by the Debtor,
process, repair, recondition or complete construction of it or otherwise prepare
it for disposition in any manner and to the extent the Secured Party deems
appropriate and, in connection with such preparation and disposition, use
without charge any trademark, trade name, copyright, patent or technical process
used by the Debtor.
Section 5.5 Limitation on Duty of Secured Party. Beyond the exercise
-----------------------------------
of reasonable care in the custody thereof, the Secured Party shall have no duty
as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon. The Secured Party shall
be deemed to have exercised reasonable care in the custody of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or responsible
for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any warehouseman,
13
carrier, forwarding agency, consignee or other agent or bailee selected by the
Secured Party in good faith. The Debtor agrees that the Secured Party shall not
be obligated to preserve rights against prior parties obligated on any
Collateral. The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Debtor hereby agrees that Secured
Party shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the
Collateral. Nothing herein shall affect any obligation of Secured Party to the
Holders under the Indenture or under applicable law. Except as may be required
by the Indenture, and to the fullest extent permitted by applicable law, Secured
Party shall be under no duty whatsoever to make or give any presentment, notice
of dishonor, protest, demand for performance, notice of non-performance, notice
of intent to accelerate, notice of acceleration, or other notice or demand in
connection with any Collateral or the Obligations, or to take any steps
reasonably necessary to preserve any rights against Debtor or any other Person.
Debtor waives any right of marshaling in respect of any and all Collateral, and
waives any right to require Secured Party to proceed against Debtor or any other
Person, exhaust any Collateral or enforce any other remedy which Secured Party
now has or may hereafter have against Debtor or any other Person.
Section 5.6 Appointment of Agent. At any time or times, in order to
--------------------
comply with any legal requirement in any jurisdiction, the Secured Party may
appoint, to act on its behalf, a bank or trust company or one or more other
Persons with such power and authority as may be necessary for the effectual
operation of the provisions hereof as may be specified in the instrument of
appointment. Upon the occurrence and during the continuance of an Event of
Default, the Secured Party may retain, to act on its behalf, one or more Persons
for the effectual operation of the provisions hereof. The Debtor shall bear the
expenses incurred with the appointment or retention of any such agents.
Section 5.7 Expenses. Debtor hereby assumes all liability for the
--------
Collateral, the security interests created hereunder and any use, possession,
maintenance, management, enforcement or collection of any or all of the
Collateral. Debtor agrees to indemnify and hold Secured Party harmless from and
against and covenants to defend Secured Party against any and all losses,
damages, claims, costs, penalties, liabilities and expenses, including, without
limitation, court costs and reasonable attorneys' fees, incurred because of,
incident to, or with respect to the Collateral (including, without limitation,
any use, possession, maintenance or management thereof, or any injuries to or
deaths of Persons or damage to property, except to the extent caused by the
gross negligence or willful misconduct of the Secured Party). All amounts for
which Debtor is liable pursuant to this Section 5.7 shall be due and payable by
Debtor to Secured Party upon demand. If Debtor fails to make such payment upon
demand (or if demand is not made due to an injunction or stay arising from
bankruptcy or other proceedings) and Secured Party pays such amount, the same
shall be due and payable by Debtor to Secured Party, plus interest thereon from
the date of Secured Party's demand (or from the date of Secured party's payment
if demand is not made due to such proceedings) at the interest rate applicable
to overdue principal as provided in the Notes. All amounts for which
14
Debtor is liable pursuant to this Section 5.7 shall be additional Indebtedness
under the Indenture.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Attachment of Security Interest. The parties hereto
-------------------------------
understand and acknowledge that, pursuant to La. R.S. 9:5525.A, the Security
Interests created by this Agreement shall attach to the Work as and when
performed, the Materials as and when delivered to the Shipyard and the
Components as and when fabricated and to the Vessel upon completion thereof.
The parties hereto understand and further acknowledge that the Security
Interests created by this Agreement shall attach to all other Collateral in
accordance with and pursuant to the UCC.
Section 6.2 Notices. Any notice required or permitted to be given
-------
under or in connection with this Agreement shall be given in accordance with the
notice provisions in the Indenture.
Section 6.3 Amendment. Neither this Agreement nor any provisions
---------
thereof may be changed, waived, discharged or terminated orally or in any manner
other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought, but in
any event in accordance with the terms and conditions of the Indenture.
Section 6.4 Waivers. No course of dealing on the part of the
-------
Secured Party or the Holders, their respective officers, employees, consultants
or agents, nor any failure or delay by the Secured Party with respect to
exercising any of its or their rights, powers or privileges under this Agreement
shall operate as a waiver thereof.
Section 6.5 Cumulative Rights. The rights and remedies of the
-----------------
Secured Party (and the Holders) under this Agreement and the other Collateral
Documents shall be cumulative, and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy.
Section 6.6 Titles of Articles, Sections and Subsections. All
--------------------------------------------
titles or headings to articles, sections, subsections or other divisions of this
Agreement or the exhibits hereto are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect to the other
content of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.
Section 6.7 Singular and Plural. Words used herein in the
-------------------
singular, where the context so permits, shall be deemed to include the plural
and vice versa. The
15
definitions of words in the singular herein shall apply to such words when used
in the plural where the context so permits and vice versa.
Section 6.8 Governing Law. This Agreement is a contract made under
-------------
and shall be construed in accordance with and governed by the laws of the State
of Louisiana.
Section 6.9 Successors and Assigns. (a) All covenants and
----------------------
agreements contained by or on behalf of the Debtor in this Agreement shall bind
its successors and assigns and shall inure to the benefit of the Secured Party
and its successors and assigns.
(b) This Agreement is for the benefit of the Secured Party, for itself
and the ratable benefit of the Holders, and for such other Person or Persons as
may from time to time become or be the holders of any of the Obligations, and
this Agreement shall be transferrable and negotiable, with the same force and
effect and to the same extent as the Obligations may be transferrable.
Section 6.10 Gaming Laws and Regulations. Debtor and Secured Party
---------------------------
acknowledge that, to the extent required under applicable law, the consummation
of the transactions contemplated hereby and the exercise of remedies hereunder
may be subject to the Louisiana Riverboat Economic Development and Gaming
Control Act, La. R.S. 27:41 et seq., the Louisiana Gaming Control Law, La. R.S.
27:1 et seq., and the rules and regulations thereunder, all as amended from time
to time (collectively, the "Louisiana Gaming Regulations"). Debtor and Secured
Party further acknowledge that the riverboat gaming license held by Debtor is
not part of the Collateral and that, under the Louisiana Gaming Regulations,
Secured Party may be precluded from or otherwise limited in taking possession of
or selling the Collateral pursuant to the remedies provisions of this Agreement.
Debtor and Secured Party also acknowledge that due to various requirements under
the Louisiana Gaming Restrictions, including without limitation, requirements
relating to the licensing of operators of gaming facilities and the prior
approval of the sale or disposition of certain assets of a licensed gaming
operation, the sale of certain Collateral may be denied by the Louisiana Gaming
Control Board or delayed pending Louisiana Gaming Control Board approval.
Section 6.11 Termination. The grant of a security interest
-----------
hereunder and all of Secured Party's rights, power and remedies in connection
therewith shall unless otherwise provided in the Indenture or this Agreement,
remain in full force and effect until payment in full of (A) the Notes under the
terms of the Indenture, (B) all obligations then due and owing under the
Indenture, the Notes and the Collateral Documents and (C) all other Obligations;
provided, however, that after receipt from the Debtor by the Secured Party of a
request for a release of any Collateral permitted under the Indenture upon the
sale, transfer, assignment, exchange or other disposition of such Collateral not
prohibited by the Indenture (and upon receipt by the Secured Party of all
proceeds of such sale, transfer, assignment, exchange or other disposition to
the extent required to be remitted to the Secured Party under the Indenture or
otherwise), such Collateral shall be released from the lien and security
interest created hereunder in accordance with
16
the provisions of the Indenture and shall no longer constitute Collateral. Upon
the payment in full of (A) the Notes under the terms of the Indenture (B) all
obligations then due and owing under the Indenture and the Collateral Documents,
and (C) all other Obligations, the Debtor shall be entitled to the return, upon
its request and at its expense, of such of the Collateral pledged by it as shall
not have been sold or otherwise applied pursuant to the terms hereof.
Notwithstanding the foregoing, the reimbursement and indemnification provisions
of Section 5.7 shall survive the termination of this Agreement.
Upon any termination of this Agreement or release of any Collateral as
permitted by the Indenture the Secured Party will, at the expense of the Debtor,
execute and deliver to the Debtor such documents and take such other actions as
the Debtor shall reasonably request to evidence the termination of this
Agreement or the release of such Collateral, as the case may be. Any such
action taken by the Secured Party shall be without warranty by or recourse to
the Secured Party, except as to the absence of any prior assignments by the
Secured Party of its interests in the Collateral, and shall be at the expense of
the Debtor. The Secured Party may conclusively rely on any certificate
delivered to it by the Debtor stating that the execution of such documents and
release of the Collateral is in accordance with and permitted by the terms of
the Indenture and this Agreement.
Section 6.12 Counterparts. This Agreement may be executed in two or
------------
more counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Section 6.13 Trustee. State Street Bank and Trust Company is acting
-------
hereunder solely in its capacity as Trustee under the Indenture, and all of the
rights of Trustee set forth in the Indenture shall apply to Trustee's actions
hereunder. To the extent this Agreement contemplates payments by the Secured
Party, the Trustee shall have no liability therefor, such liability continuing
to be the liability of Debtor or realized through the value of any collateral
for the Obligations.
[signature page follows]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
Debtor:
HOLLYWOOD CASINO SHREVEPORT
BY: HCS I, INC., a Louisiana corporation
Its Managing General Partner
By: /s/ XXXX X. XXXXX
-------------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
Secured Party:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ XXXXXX X. XXXX
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
18
EXHIBIT A
TO
SECURITY AGREEMENT
1. (A) Prior Names.
Name Date of Change
Queen of New Orleans September 1998
at the Hilton Joint Venture
QNOV May 1999
(B) Trade Names
None
2. Business Locations.
(a) Address of Office Containing Books and Records
Dallas County, Texas
Caddo Parish, Louisiana
Bossier Parish, Louisiana
(b) Other Business Locations
None
19