Exhibit 4.20
FIRST PREFERRED FLEET MORTGAGE
Made by
HOLLYWOOD CASINO-AURORA INC.
In Favor of
HOLLYWOOD CASINO CORPORATION
ON
THE CITY OF LIGHTS I, THE CITY OF LIGHTS II,
AND THE AURORA BOREALIS
Dated as of May 19, 1999
Hollywood Casino-Aurora, Inc.
First Preferred Fleet Mortgage
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Mortgagor: Hollywood Casino-Aurora, Inc.
00 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Mortgagor's Interest in each Vessel: 100%
Mortgagee: Hollywood Casino Corporation
Two Galleria, Tower, Suite 0000
00000 Xxxx Xxxx, XX00
Xxxxxx, Xxxxx 00000
Mortgagee's Interest in each Vessel: 100%
Amount of Mortgage: $108,000,000.00
Maturity Date: May 1, 2007
THIS FIRST PREFERRED FLEET 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 HOLLYWOOD CASINO-AURORA, INC., an Illinois
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corporation, (the "Mortgagor"), whose address is set forth above, to HOLLYWOOD
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CASINO CORPORATION, a Delaware corporation, whose address is set forth above
(the "Mortgagee"). Mortgagee will assign all of its interests in this Mortgage
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to State Street Bank and Trust Company, as Trustee, as security for, among other
things, the Indenture and the Senior Secured Notes referred to below. STATE
STREET BANK AND TRUST COMPANY, as Trustee is hereinafter referred to as the
"Trustee", whose address is set forth in Section 5.6 below.
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RECITALS
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A. Of even date herewith, Xxxxxxxxx has executed a promissory note (with
such note herein referred to as the "Note") payable to the order of Mortgagee in
the original principal amount of $31,500,000.00, with a maximum principal amount
not to exceed at any time outstanding $108,000,000.00. Mortgagor is entering
into this Mortgage to secure, among other things, its obligations under the Note
payable to the order of the Mortgagee. Mortgagee, HWCC-Tunica, Inc., HWCC-
Shreveport, Inc. and the Trustee 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 Mortgagee
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will 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 "Senior Secured Notes"). The Mortgagee will collaterally assign all
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of its right, title and interest in and to the Note and the liens and security
interests securing same (including the liens and security interests granted
under this Mortgage) to the Trustee as security for, among other things the
Mortgagee's obligations under the Indenture and the Senior Secured Notes.
B. The Trustee has requested pursuant to the terms of the Indenture that
Xxxxxxxxx execute and deliver this Mortgage, and Xxxxxxxxx has agreed to enter
into this Mortgage on the City of Lights I (Official Number 993836), the City of
Lights II (Official Number 993837), and the Aurora Borealis (Official Number
1029229) (collectively, the "Vessels").
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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, Xxxxxxxxx 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 xxxxx, convey, mortgage, pledge,
assign, transfer, set over and confirm unto the Mortgagee, its successors and
assigns, the following:
The whole of each of the Vessels, 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 each Vessel as a vessel,
including, but not limited to, all of its respective 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 such Vessel and belonging to such Vessel, all machinery,
equipment, engines, appliances and fixtures for
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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
any said Vessel, and all extensions, additions, accessions, improvements,
renewals, substitutions, and replacements hereafter made in or to any 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 not a "vessel" within the
meaning of 46 U.S.C. (S) 31322(a); and provided, 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. (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 Senior Secured
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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"Indenture", "Note", "Senior Secured Notes", "Trustee", and "Vessels" shall have
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the 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 Note is in the principal sum not to exceed at any time
outstanding of $108,000,000.00, interest (including post-petition interest) as
set forth therein, 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 under the Note, this Mortgage, and the other documents executed as
security for or in connection with the Note; 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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REPRESENTATION, 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 Illinois; 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 trades in which each of the Vessels operates. The
Mortgagor is duly authorized to mortgage each of the Vessels, 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, after giving effect to the use of proceeds of the Note and the Senior
Secured Notes, 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.
Section 2.2. Ownership of Vessels; Xxxxxxxx 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 each of the Vessels and is lawfully possessed of the whole
of each of the Vessels, 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 each of the Vessels 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. Each 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,
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and the Mortgagor will comply with and satisfy all of the provisions of the laws
of the United States in order that each 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 such 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 to
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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 or fleet mortgage
thereunder upon each of the Vessels. This Mortgage is in substantial compliance
with the conditions and requirements contained in Section 31321 of Title 46 of
the United States Code.
(c) Laws, Treaties and Conventions. Each Vessel shall, and the
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Mortgagor covenants that it will in the operation of each 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, with respect to a Vessel, when (i) the use or title of such 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 such Vessel, or damage to such Vessel to the extent, determined in the
good faith opinion of the Mortgagor, as would make repair thereof uneconomical,
or (iii) such Vessel has been laid up and removed from service and the Mortgagor
has taken adequate precautions for the preservation and maintenance of such
Vessel.
Section 2.4. Operation of Vessels.
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The Mortgagor will not (except during any period when the use or title to
any Vessel has been taken, requisitioned or chartered by any Governmental
Authority) cause or permit any Vessel to be operated in any manner contrary to
applicable law or regulation, will not abandon any Vessel in any foreign port
(unless an Event of Loss (as hereinafter defined) has occurred as to such Vessel
or the safety or welfare of the Mortgagor's employees on such Vessel is
endangered), will not engage in any unlawful trade, violate any law or carry any
cargo that will expose any 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 any Vessel under the existing laws and regulations of the
United States of America. Mortgagor shall keep the operation of each Vessel
within the permitted navigational limits set forth in the trading warranties of
the policies of insurance covering such Vessel and in any case will not operate
such Vessel, or permit such Vessel to be operated, in any area where such
insurance would not be fully applicable and enforceable with respect to such
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 a Vessel or any accident, occurrence or event
resulting in a constructive total loss or an agreed or compromised total loss of
such Vessel; or (ii) substantial damage to a 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 such Vessel or
any other event
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resulting for any reason whatsoever in such 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 a
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 a Vessel by any United States' Governmental Authority on a basis not
involving, requisition of title to or seizure or forfeiture of such Vessel.
Section 2.5. Claims, Taxes, Fees, etc.
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The Mortgagor will pay and 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 Vessels, their
respective cargoes or any income therefrom; provided, that nothing in this
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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 any Vessel, or any part
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thereof, to forfeiture or loss.
Section 2.6. Liens.
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Neither the Mortgagor, any charterer, the master of any 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 any 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
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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 any 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 each 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 such Vessel which might
give rise to a Lien upon such 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 each 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 Hollywood Casino-Aurora, Inc. and is
subject to a First Preferred Fleet Mortgage in favor of
Hollywood Casino Corporation, as Mortgagee, which First
Preferred Fleet 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 Mortgage is kept with this Vessel's
papers. Under the terms of said Mortgage 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 Mortgage, liens for
wages, general average or salvage, and certain other liens
permitted by the provisions of said Mortgage."
Section 2.8. Libel or Attachment.
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If a libel is filed against any Vessel or if any 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 such Vessel to be released and will
promptly notify the Mortgagee of such release in the manner aforesaid. In the
event that such 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 such 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
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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 Vessels; Change of Flag or Hailing Port.
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(a) Except as to any Vessel during such period as (i) the use or title
of such 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 such Vessel, or damage to such Vessel to the extent,
determined in the good faith opinion of the Mortgagor, as would make repair
thereof uneconomic, or (iii) such Vessel has been laid up and removed from
service and the Mortgagor has taken adequate precautions for the preservation
and maintenance of such 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, each Vessel in good running order and repair, so that
such 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, that nothing in this Section shall prevent Mortgagor from discontinuing
any operation or maintenance of any portion of a Vessel, or disposing thereof,
if 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 of
the Senior Secured Notes, subject in both instances to the terms of the
Indenture.
(b) Except as to any Vessel during a period set out in clauses (i) or
(ii) of Subsection 2.9(a) above, the Mortgagor will (i) keep such Vessel in such
condition and will comply with all United States Coast Guard and Marine
Insurance Underwriters requirements for vessels of this type and size, and (ii)
will cause such Vessel (except for the Aurora Borealis) to be overhauled when
necessary and to have the bottom inspected, when necessary, and as often as
required by the United States Coast Guard and by the Marine Insurance
Underwriters.
(c) Except as to any Vessel (except for the Aurora Borealis) 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 such Vessel.
(d) The Mortgagor will not make, or permit to be made, any material
change in the structure or type of any of the Vessels or in their respective
rigs if such change is disadvantageous in any material respect to the Holders of
the Senior Secured Notes, subject to the terms of the Indenture. The Mortgagor
will not change the location where the Vessels are moored or the flag or hailing
port of any of the Vessels, if such change is disadvantageous in any material
respect to the Holders of the Senior Secured Notes, 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.
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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 each Vessel for
the purpose of inspecting or surveying the same and its papers.
Section 2.11. Sale or Other Disposition of Vessels.
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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 any
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 any Vessel or any casualty, accident or
damage to any 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
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such Vessel insured against all such risks that are insured against by prudent
owners of vessels and equipment similar to the Vessels, such insurance to
include, without limitation, insurance against the risks indicated below:
(i) marine (including without limitation, marine and port
risk) hull insurance under the latest (at the time of issue of the policies in
question) forms of American Institute of Marine Underwriters' policies, or under
such other forms of policies as are customary for similar vessels with such a
use, insuring the Vessel against the usual risks covered by such forms; and
(ii) while any Vessel is laid up, at the option of the
Mortgagor and in lieu of the insurance specified by subparagraph (i) above with
respect to such Vessel, port risk insurance under the latest (at the time of
issue of the policies in question) forms of American Institute of Marine
Underwriters' policies, or under such other forms of policies as are customary
for similar vessels with such a use, insuring such Vessel against the usual
risks covered by such forms.
(b) Liability; Workers' Compensation. The Mortgagor shall
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maintain at all times, to the extent required by applicable law, such workers'
compensation or longshoremen's and harbor workers' insurance including a
Maritime Coverage Endorsement and pollution insurance. The Mortgagor shall also,
at its own expense, keep the Vessels insured against such marine protection and
indemnity risks and liabilities (including, without limitation, public
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liabilities, marine liabilities and employer's liability) together with umbrella
liability coverage as insured against by prudent owners of vessels and equipment
similar to the Vessels. 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 any 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 such
Vessel, and if both (i) such claim is accepted by all underwriters under all
policies then in force as to such Vessel and (ii) payment in full is made in
cash under such policies, then the Mortgagee shall have the right to abandon
such 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 any 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
such Xxxxxx, 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 any Vessel by any governmental body of the
United States of America (including, without limitation, the state of Illinois),
the provisions of this Section 2.13 shall be deemed to have been complied with
in all respects as to such Vessel if the United States Government or
governmental body (including, without limitation, the state of Illinois) 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 such Vessel shall have been taken or requisitioned by the United States
Government or governmental body (including, without limitation, the state of
Illinois) or there shall have been an actual or constructive total loss or an
agreed or compromised total loss of such Vessel. In the event of any taking,
requisition, charter or loss of such 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 such Vessel, that the United States Government or governmental body
(including, without limitation, the state of Illinois) has agreed (i) to
reimburse the Mortgagor for loss or damage resulting from the risks indicated in
the
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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 or Mortgagee's interest insurance
shall be carried in lieu thereof.
(i) Compliance. The Mortgagor shall not do any act, nor voluntarily
----------
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 any 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
---------------------------------
Lien is asserted against any 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 such Vessel or to obtain the release
of such 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
such 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
--------
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.
(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
11
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 Vessels 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 any of the Vessels 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 Vessels, with or without legal proceedings,
at any place where they may be found, and the Mortgagor or any person in
possession of any 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 such 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 such Vessel by court proceedings or 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
12
such Vessel and shall take it, the Mortgagee shall have the right to dock such
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 any 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 such 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 any 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 such
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 a 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 Senior Secured 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 any 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 any Vessel by
executing and delivering to the
13
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 sue for, so far as may be
permitted by law, all freights, hire, earnings, issues, revenues, income and
profits of the Vessels, and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise,
salvage awards and recoveries, recoveries in general average or otherwise, and
all other sums due or to become due in respect of the Vessels 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 any Vessel or the Vessels and any receiver or receivers
so appointed shall have full right and power to use and operate any Vessel or
the Vessels as shall be ordered by the federal court, and (ii) to a decree
ordering and directing the sale and disposal of any 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.
-----------------------
14
The proceeds of any sale and net earnings derived from the operation, use,
charter, or any other employment of the Vessels 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 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 Vessels 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 a 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, any 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.
Section 3.8. Collateral Assignment of Note and Mortgage.
------------------------------------------
The Note and this Mortgage are contemporaneously herewith being
collaterally assigned to the Trustee. Mortgagor hereby acknowledges and
consents to such collateral assignment and agrees that, so long as such
collateral assignment shall remain in effect, the Trustee shall be, for all
purposes hereunder, the Mortgagee under this Mortgage and the other Collateral
Documents.
15
ARTICLE IV.
-----------
GENERAL POWERS OF MORTGAGEE
---------------------------
Section 4.1. General Powers of Mortgagee.
---------------------------
(a) Arrest or Detention of Vessel. In the event that any 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 such 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 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 any Vessel because of or on account of any alleged
Lien against such 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 Note and shall be secured by the
Lien of this Mortgage.
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.
16
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 each 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 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 Vessels to the lien of this Mortgage or more
effectively subject the Vessels 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 and fleet 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
17
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: Hollywood Casino-Aurora, Inc.
00 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier No. (000) 000-0000
with copies to:
Two Galleria Tower
Suite 2200
00000 Xxxx Xxxx, XX 00
Xxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
Mortgagee: Hollywood Casino Corporation
Two Galleria Tower, Suite 2200
00000 Xxxx Xxxx, XX 00
Xxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
Trustee: State Street Bank and Trust Company,
as Trustee
Corporate Trust Administration
Two International Place, 4th Floor
Boston, Massachusetts 02110
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.
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
TITLE 46, UNITED STATES 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.
18
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 Senior Secured Notes under the terms of the Indenture and (B)
all Obligations then due and owing under the Indenture, the Senior Secured Notes
and the Collateral Documents; provided however that after receipt from the
Mortgagor by the Trustee of a request for a release of any Vessel permitted
under the Indenture upon the sale, transfer, assignment, exchange or other
disposition of such 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), such 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 Senior Secured 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 such of Vessels pledged by it as shall not have
been sold or otherwise applied pursuant to the terms hereof.
Upon any termination of this Mortgage or release of any Vessel as
permitted by the Indenture the Trustee 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 such Vessel, as the case may be. Any such action
taken by the Mortgagee shall be without warranty by or recourse to the
Mortgagee, except as to the absence of any prior assignments by the Mortgagee of
its interests in any Vessel, and shall be at the expense of the Mortgagor. The
Trustee may conclusively rely on any certificate delivered to it by the
Mortgagor stating that the execution of such documents and release of any Vessel
is in accordance with and permitted by the terms of the Indenture and this
Mortgage.
Section 5.12. Indenture.
---------
This Mortgage is issued pursuant to the terms, conditions and provisions
of the Indenture.
Section 5.13. Rights of Senior Secured Noteholders.
------------------------------------
No Senior Secured Noteholder shall have any independent rights hereunder
other than those rights granted to individual Senior Secured Noteholders
pursuant to Section 6.07 of the
19
Indenture; provided that nothing in this Section 5.13 shall limit any rights
granted to the Trustee under the Senior Secured 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 Senior Secured
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.
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 each Vessel as required by Chapter 313 of Title 46 of the
United States Code, as amended, the total amount of this Mortgage is One Hundred
Eight Million and No/100 Dollars ($108,000,000.00) plus interest and performance
of mortgage covenants. The Vessels subject to this Mortgage are identified on
Schedule 6.1 hereto. The Mortgagor holds an interest of 100% in each of the
Vessels and 100% of such interest is subject to this Mortgage. The addresses of
the parties are:
Mortgagor: 00 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
with copy to:
Two Galleria Tower
Suite 2200
00000 Xxxx Xxxx, XX 00
Xxxxxx, Xxxxx 00000
Mortgagee: Two Galleria Tower, Suite 0000
00000 Xxxx Xxxx, XX00
Xxxxxx, Xxxxx 00000
Trustee: State Street Bank and Trust Company,
as Trustee
Corporate Trust Administration
Two International Place, 4th Floor
Boston Massachusetts 02110
Although it is not intended that this Mortgage include any property other than
the whole of the Vessels 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 "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.
20
[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.
HOLLYWOOD CASINO-AURORA, INC.
By: /s/Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Director and
Assistant Secretary
THE STATE OF Illinois )
)
COUNTY OF Xxxx )
THIS INSTRUMENT was acknowledged before me on May 19, 1999, by Xxxxxxx X.
Xxxxx, Assistant Secretary of HOLLYWOOD CASINO-AURORA, INC., an Illinois
corporation, on behalf of such corporation, 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
-----------
NONE
----
SCHEDULE 6.1
------------
Description of Vessels
----------------------
Vessel Name Official Number
----------- ---------------
City of Lights I 993836
City of Lights II 993837
Aurora Borealis 1029229
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 (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.
