SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
or
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 001-12419
Showboat Marina Casino Partnership
Showboat Marina Finance Corporation
(Exact name of registrant as specified in its charter)
Indiana 35-1978576
Nevada 88-0356197
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Showboat Place, East Chicago, Indiana 46312
(Address of principal executive offices) (Zip Code)
(219) 378-3000
(Registrants' telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days. Yes[X] No[ ]
Indicate the number of shares outstanding of each of the
issuers' classes of common stock, as of the latest practicable
date.
Showboat Marina Casino Partnership Not applicable.
Showboat Marina Finance Corporation 1,000 shares of common
stock, $1.00 par value
as of March 31, 1997.
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SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
(A DEVELOPMENT STAGE ENTITY)
AND
SHOWBOAT MARINA PARTNERSHIP (PREDECESSOR)
INDEX
PAGE
PART I FINANCIAL INFORMATION 3
ITEM 1. FINANCIAL STATEMENTS 3
CONDENSED CONSOLIDATED BALANCE SHEET AS OF
MARCH 31, 1997 AND DECEMBER 31, 1996 3
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 1997, THE PERIOD FROM MARCH
29, 1996 (COMMENCEMENT OF DEVELOPMENT)
THROUGH MARCH 31, 1996 AND THE PERIOD
FROM JANUARY 31, 1994 (INCEPTION)
THROUGH MARCH 31, 1997 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE THREE MONTHS ENDED MARCH
31, 1997, THE PERIOD FROM MARCH 29,
1996 (COMMENCEMENT OF DEVELOPMENT)
THROUGH MARCH 31, 1996, THE PERIOD
FROM JANUARY 1, 1996 THROUGH MARCH 28,
1996 AND THE PERIOD FROM JANUARY
31, 1994 (INCEPTION) THROUGH MARCH 31,
1997 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS MARCH 31, 1997 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 8
PART II OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 11
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 13
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Balance Sheet as of
March 31, 1997 and December 31, 1996
MARCH 31, 1997 DECEMBER 31, 1996
ASSETS (UNAUDITED)
(in thousands)
<S> <C> <C>
Cash and cash equivalents $ 620 $ 599
Short-term investments held in escrow 25,581 69,002
Interest receivable 1,175 1,601
Inventory 622 --
Prepaid expenses 1,025 --
Property and equipment:
Land improvements 2,123 2,123
Furniture, fixtures and equipment 21,708 764
Construction in progress 116,285 97,714
Total property and equipment 140,116 100,601
Preopening costs 6,150 --
Licensing costs 2,470 2,373
Economic development costs 5,591 5,264
Debt issuance costs 6,296 6,296
Other assets 3,429 2,158
23,936 16,091
$ 193,075 $ 187,894
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 5,797 $ 7,754
Accrued expenses 1,210 --
Accrued interest 832 5,557
Long-term debt 150,984 140,000
Total liabilities 158,823 153,311
Commitments and contingencies
Partners' capital (includes deficit
accumulated during the development
stage of $4,749,000 at March 31, 1997 and
$4,417,000 at December 31, 1996) 34,252 34,583
$ 193,075 $ 187,894
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
3
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<TABLE>
<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
(A DEVELOPMENT STAGE ENTITY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED MARCH 31, 1997, THE PERIOD FROM MARCH 29, 1996
(COMMENCEMENT OF DEVELOPMENT) THROUGH MARCH 31, 1996 AND THE
PERIOD FROM JANUARY 31, 1994 (INCEPTION) THROUGH
MARCH 31, 1997
(UNAUDITED)
PERIOD
FROM MARCH 29, CUMULATIVE PERIOD FROM
THREE 1996 (COMMENCEMENT JANUARY 31, 1994
MONTHS ENDED OF DEVELOPMENT) (INCEPTION)
MARCH 31, THROUGH THROUGH MARCH
1997 MARCH 31, 1996 31, 1997
(in thousands)
<S> <C> <C> <C>
Interest income $ 713 $ 59 $ 5,632
Interest expense 4,725 93 19,052
Less interest capitalized (3,680) (18) (8,671)
Net interest expense 1,045 75 10,381
Net loss accumulated during the
development stage $ (332) $ (16) $ (4,749)
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
4
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<TABLE>
<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
(A DEVELOPMENT STAGE ENTITY)
AND SHOWBOAT MARINA PARTNERSHIP (PREDECESSOR)
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 1997
the period from March 29, 1996 (commencement of development)
through March 31, 1996, the period from January 1, 1996
through March 28, 1996 and the period from
January 31, 1994 (inception) through March 31, 1997
(Unaudited)
SMCP PREDECESOR CUMULATIVE
PERIOD FROM PERIOD FROM PERIOD FROM
MARCH 29, 1996 JANUARY 1, JANUARY 31,
THREE (COMMENCEMENT 1996 1994
MONTHS ENDED OF DEVELOPMENT) THROUGH (INCEPTION)
MARCH 31, THROUGH MARCH THROUGH
1997 MARCH 31, 1996 28, 1996 MARCH 31, 1997
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ (14,543) $ 77 $ 99 $ (11,781)
Cash flows from investing
activities:
Economic development costs (327) -- (7) (5,591)
Land improvements -- -- (286) (2,123)
Purchase of property and
equipment (9,959) -- (198) (10,723)
Payments for construction
in progress (18,571) -- (5,246) (116,285)
(Purchase) Maturity of Investments 43,421 -- -- (25,581)
Net cash provided by (used
in) investing activities 14,564 -- (5,737) (160,303)
Cash flows from financing
activities:
Proceeds from issuance of notes
payable, net of issuance costs -- 134,931 (550) 133,704
Capital contributions -- 22,287 5,830 39,000
Net cash provided by financing
activities -- 157,218 5,280 172,704
Net increase (decrease) in cash 21 157,295 (358) 620
Cash at beginning of period 599 -- 358 --
Cash at end of period $ 620 $ 157,295 $ -- $ 620
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
5
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SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
(A DEVELOPMENT STAGE ENTITY)
AND SHOWBOAT MARINA PARTNERSHIP (PREDECESSOR)
Notes to Condensed Consolidated Financial Statements
March 31, 1997
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The accompanying condensed consolidated financial
statements present the financial position, results of
operations and cash flows of Showboat Marina Casino
Partnership (a development stage entity) ("SMCP") and its
wholly owned subsidiary, Showboat Marina Finance Corporation
("SMFC") as of March 31, 1997 and December 31, 1996, and for
the three months March 31, 1997, and the period March 29, 1996
(commencement of development) through March 31, 1996. These
financial statements also present the cash flows of
Showboat Marina Partnership (Predecessor) for the period from
January 1, 1996 through March 28, 1996, and the cumulative
cash flows and operations of SMCP and the Predecessor from
January 31, 1994 (inception) through March 31, 1997. The
Predecessor had no operations through March 28, 1996 other
than development and licensing activities, the costs of which
were capitalized and subsequently contributed to SMCP as
described below. Therefore a statement of operations is not
applicable.
SMCP is a general partnership and was formed as of
March 1, 1996 for the purpose of developing a riverboat
casino complex in East Chicago, Indiana to be operated on
Lake Michigan. The complex will consist of a casino cruise
vessel and a land based support facility (the East Chicago
Showboat). The East Chicago Showboat vessel is expected to
contain approximately 53,000 square feet of gaming space with
approximately 1,770 slot machines and approximately 90 table
games (including 5 poker tables). The land based facility is
expected to consist of a pavilion, parking garage and surface
parking. The pavilion will be approximately 100,000 square
feet and will include a coffee shop, hydraulic band stand
platform, upscale restaurant, cocktail lounge, gift shop,
ticket/promotions area as well as administrative offices.
The design includes an 1,800 space parking garage and 1,000
surface parking spaces. SMFC was incorporated on March 7,
1996 to assist SMCP in financing the East Chicago Showboat.
The Predecessor was formed on January 31, 1994 and had been
developing the project prior to the formation of SMCP.
SMCP is owned 99% by the Predecessor and 1% by Showboat
Marina Investment Partnership. SMCP is effectively owned 55%
by Showboat, Inc. (Showboat) and 45% by Waterfront
Entertainment and Development, Inc. (Waterfront) through
various partnership interests.
The Predecessor had applied for the sole riverboat
owner's license allocated to East Chicago, Indiana and was
granted a certificate of suitability (Certificate of
Suitability) by the Indiana Gaming Commission on January 8,
1996. On March 20, 1996, the Predecessor received approval
to transfer the Certificate of Suitability to SMCP. As of
March 27, 1996, the Predecessor contributed the Certificate
of Suitability, and on March 28, 1996 all of its
6 (continued)
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assets (except for the capital stock of East Chicago
Second Century, Inc.), liabilities and obligations were
contributed to SMCP. The Certificate of Suitability was
subsequently renewed by the Indiana Gaming Commission through
June 1, 1997. SMCP received the owners' license on April 15,
1997 and commenced operations on April 18, 1997.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been
consolidated or omitted. These condensed consolidated
financial statements should be read in conjunction with the
financial statement and notes thereto included in SMCP's
December 31, 1996 annual report on Form 10-K.
The accompanying unaudited condensed consolidated
financial statements contain all adjustments which are
only of a recurring nature, in the opinion of management,
necessary for a fair statement of the results of the interim
period. The results of operations for the interim periods
are not indicative of results of operations for an entire
year. Certain prior period balances have been reclassified
to conform to the current period's presentation.
PREOPENING COSTS
Preopening costs will be capitalized until operations of
the riverboat casino complex commence, at which time the
costs will be written off upon opening. The preopening costs
consist primarily of payroll, consulting fees, training and
related travel costs.
(2) LONG-TERM DEBT
During March 1997, the Company entered into an equipment
lease in the amount of $11.0 million secured by the equipment
purchased with the proceeds from the financing. The lease
rate is four hundred fifty (450) basis points over the four
year Treasury Note rate as published daily in The Wall Street
Journal. Principal and interest payments are in monthly
installments of $281,807 for 48 months.
SMCP is currently negotiating additional lease financing
in the amount of the lesser of $11.0 million or SMCP's cost
to acquire certain equipment.
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
GENERAL
Information contained in this quarterly report is
supplemental to disclosures in Showboat Marina Casino
Partnership's ("SMCP") and Showboat Marina Finance Corporation's
("SMFC"), a wholly-owned subsidiary of SMCP, year end financial
reports. This management's discussion and analysis of financial
condition and results of operations should be read in conjunction
with the management's discussion and analysis of financial
condition and results of operations included in SMCP's and SMFC's
December 31, 1996 Annual Report on Form 10-K.
DEVELOPMENT ACTIVITIES
The operations of SMCP and of Showboat Marina Partnership
(the "Predecessor"), which contributed all of its assets (except
for the capital stock of East Chicago Second Century, Inc.) and
liabilities to SMCP as of March 28, 1996, had been limited to
applying for appropriate gaming licenses and securing the land
for, arranging for construction of, finalizing the design of,
constructing and developing and obtaining financing for a
riverboat gaming complex (the "East Chicago Showboat"). SMFC was
incorporated to assist SMCP in financing the East Chicago
Showboat.
The East Chicago Showboat was substantially completed on
April 15, 1997. Upon completion the East Chicago Showboat
included an approximately 100,000 square foot, state-of-the-art,
five level casino vessel (the "Casino Vessel") containing
approximately 53,000 square feet of gaming space with 1,770 slot
machines and 90 table games (including five poker tables). The
land based facility consists of a pavilion, garage and surface
parking. The pavilion contains approximately 100,000 square feet
and includes a coffee shop, an upscale restaurant, a cocktail
lounge, a gift shop, a ticket/promotions area as well as
administrative offices. The East Chicago Showboat includes an
1,800 space parking garage and 1,000 surface parking spaces.
The East Chicago Showboat received a conditional Riverboat
Owner's License from the Indiana Gaming Commission on April 15,
1997 and opened for gaming operations approximately 20 hours each
day in a series of excursions lasting two to three hours each on
April 18, 1997.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
As of March 31, 1997, SMCP was in the development stage and
capitalized all costs, except for some interest expense.
Accordingly, SMCP did not have any historical operating income.
The capitalized costs consisted primarily of land improvements,
economic development payments, vessel design and construction,
legal, audit, consulting and design fees, financing and
commitment fees, interest on qualifying assets, and gaming
application fees, all associated with the development of the East
Chicago Showboat. SMCP anticipates that the results of its first
quarter of operations will be adversely affected by the write-off
at opening of certain preopening costs and will not be indicative
of future operations. Future operating results will be subject
to significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond the
control of SMCP. While SMCP believes that the East Chicago
Showboat will be able to attract a sufficient number of customers
and achieve the level of activity
8
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necessary to permit SMCP and SMFC to meet their obligations,
there can be no assurance with respect thereto.
MATERIAL CHANGES IN FINANCIAL CONDITION
Since its inception, SMCP has met its capital requirements
through the $39.0 million capital contribution, the $133.7
million net proceeds from the offering of its 13 1/2% First
Mortgage Notes due 2003 (the "East Chicago Notes") and capital
lease financing. The East Chicago Notes were issued under the
Indenture dated as of March 26, 1996 (the "Note Indenture")
between SMCP, SMFC and American Bank National Association as
Trustee. The funds provided by these sources provided sufficient
amounts to develop and commence operations of the East Chicago
Showboat.
PDS Financial Corporation provided an equipment lease in the
amount of $10.9 million (the "PDS Commitment") and SMCP and
FINOVA Capital Corporation are completing negotiations for a loan
in the amount of the lesser of $11.0 million or SMCP's cost to
acquire certain Equipment (defined in the FINOVA Loan Agreement)
(the "FINOVA Commitment"). The PDS Commitment is and the FINOVA
Commitment will be secured by the equipment purchased with the
proceeds of the PDS Commitment and the FINOVA Commitment,
respectively. The PDS Commitment is for a term of 48 months and
the rate was fixed two weeks prior to closing of each lease
schedule at four hundred fifty (450) basis points over the four
(4) year Treasury Note rate as published daily in THE WALL STREET
JOURNAL. The term of the FINOVA Commitment will be for an
initial period ending no later than October 1, 1997 (the "Initial
Term") at which time, subject to certain conditions, the FINOVA
Commitment shall be converted into a term loan for a period of
three years (the "Term Period"). During the Initial Term the
FINOVA Commitment shall accrue interest at the announced
Citibank, N.A., New York, New York prime rate plus 2% per annum.
During the Term Period, the FINOVA Commitment shall accrue
interest at the highest yield for Treasury Notes with a maturity
date on or closest to the Maturity Date of the FINOVA Commitment,
as published in THE WALL STREET JOURNAL plus 4.90% per annum.
Following the commencement of operations of the East Chicago
Showboat, SMCP expects to fund its operating debt service and
capital needs from operating cash flow. Based upon SMCP's
anticipated future operations, management believes that available
cash flow from the East Chicago Showboat's future operations,
together with the proceeds from the offering and the capital
contribution, will be adequate to meet SMCP's anticipated future
requirements for working capital, capital expenditures and
scheduled payments of principal, interest and liquidated damages,
if any, on the East Chicago Notes for the foreseeable future. No
assurance can be given, however, that operating cash flow will be
sufficient for that purpose. SMCP intends to establish initial
working capital reserves to provide for anticipated short-term
liquidity needs. Although no additional financing is
contemplated, SMCP will seek, if necessary and to the extent
permitted under the Note Indenture, additional financing through
bank borrowings, debt or equity financings. There can be no
assurance that additional financing, if needed, will be available
to SMCP, or that, if available, the financing will be on terms
favorable to SMCP. There is no assurance that SMCP's estimate
of its reasonably anticipated liquidity needs is accurate or that
new business developments or other unforeseen events will not
occur, resulting in the need to raise additional funds.
9
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All statements contained herein that are not historical
facts, including but not limited to, statements regarding SMCP's
current business strategy, and SMCP's plans for future
development and operations, are based upon current expectations.
These statements are forward-looking in nature and involve a
number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to
differ materially are the following: the availability of
sufficient capital to finance SMCP's business plan on terms
satisfactory to SMCP; competitive factors, such as expansion of
gaming in the Chicago metropolitan area, an area from which SMCP
expects to draw significant numbers of patrons and an increase in
the number of casinos serving the Chicago metropolitan area;
changes in labor, equipment and capital costs; contemplated joint
ventures on terms satisfactory to the Company and to obtain
necessary regulatory approvals; general business and economic
conditions; and other factors described from time to time in
SMCP's reports filed with the Securities and Exchange Commission.
SMCP wishes to caution the readers not to place undue reliance on
any such forward-looking statements, which statements are made
pursuant to the Private Litigation Reform Act of 1995 and, as
such, speak only as of the date made.
10
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Not Applicable.
ITEM 2. Changes in Securities
Not Applicable.
ITEM 3. Defaults upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
10.01 Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 1 to Master
Lease Agreement dated February 21, 1997, by
and between PDS Financial Corporation and
Showboat Marina Casino Partnership; Lease
Schedule No. 2 to Master Lease Agreement
dated February 21, 1997, by and between PDS
Financial Corporation and Showboat Marina
Casino Partnership; Lease Schedule No. 3 to
Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 4 to Master
Lease Agreement dated February 21, 1997, by
and between PDS Financial Corporation and
Showboat Marina Casino Partnership;
Purchase/Renewal Option to Lease Schedule
No. 1 dated February 21, 1997, by and
between PDS Financial Corporation and
Showboat Marina Casino Partnership;
Purchase/Renewal Option to Lease Schedule
No. 2 dated February 21, 1997, by and
between PDS Financial Corporation and
Showboat Marina Casino Partnership;
11
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Purchase/Renewal Option to Lease Schedule
No. 3 dated February 21, 1997, by
and between PDS Financial Corporation
and Showboat Marina Casino Partnership;
Purchase/Renewal Option to Lease Schedule
No. 4 dated February 21, 1997, by and
between PDS Financial Corporation and
Showboat Marina Casino Partnership; First
Preferred Ship Mortgage dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Intercreditor Agreement dated
February 21, 1997, by and among PDS
Financial Corporation, Showboat Marina
Casino Partnership and Firstar Bank of
Minnesota, N.A., a national banking
association.
(b) REPORTS ON FORM 8-K
None.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly
authorized.
Date: May 15, 1997
SHOWBOAT MARINA CASINO
PARTNERSHIP, an Indiana general
partnership
By: SHOWBOAT MARINA INVESTMENT By: SHOWBOAT MARINA PARTNERSHIP, an
PARTNERSHIP, an Indiana general Indiana general partnership, a
partnership, a general partner general partner
By: SHOWBOAT INDIANA INVESTMENT By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada LIMITED PARTNERSHIP, a Nevada
limited partnership, a general limited partnership, a general
partner partner
By: SHOWBOAT INDIANA, INC., a By: SHOWBOAT INDIANA, INC., a
Nevada corporation, its general Nevada corporation, its general
partner partner
By: /s/ J. Keith Wallace By: /s/ J. Keith Wallace
J. Keith Wallace J. Keith Wallace
President and Chief Executive President and Chief Executive
Officer Officer
By: /s/ Joseph G. O'Brien III By: /s/ Joseph G. O'Brien III
Joseph G. O'Brien III Joseph G. O'Brien III
Vice President Finance and Vice President Finance and
Chief Financial Officer Chief Financial Officer
By: WATERFRONT ENTERTAINMENT AND By: WATERFRONT ENTERTAINMENT AND
DEVELOPMENT, INC., an Indiana DEVELOPMENT, INC., an Indiana
corporation, a general partner corporation, a general partner
By: /s/ Michael A. Pannos By: /s/ Michael A. Pannos
Michael A. Pannos Michael A. Pannos
President President
By: /s/ Thomas S. Cappas By: /s/ Thomas S. Cappas
Thomas S. Cappas Thomas S. Cappas
Treasurer (principal financial Treasurer (principal financial
officer) officer)
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SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By: /s/ Michael A. Pannos
Michael A. Pannos
Secretary
By: /s/ Joseph G. O'Brien, III
Joseph G. O'Brien, III
Vice President Finance and
Chief Financial Officer
14
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EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
10.01 Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 1 to
Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 2 to
Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 3 to
Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Lease Schedule No. 4 to
Master Lease Agreement dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Purchase/Renewal Option to
Lease Schedule No. 1 dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Purchase/Renewal Option to
Lease Schedule No. 2 dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Purchase/Renewal Option to
Lease Schedule No. 3 dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; Purchase/Renewal Option to
Lease Schedule No. 4 dated February 21,
1997, by and between PDS Financial
Corporation and Showboat Marina Casino
Partnership; First Preferred Ship Mortgage
dated February 21, 1997, by and between
PDS Financial Corporation and Showboat
Marina Casino Partnership; Intercreditor
Agreement dated February 21, 1997, by and
among PDS Financial Corporation, Showboat
Marina Casino Partnership and Firstar Bank
of Minnesota, N.A., a national banking
association.
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MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Lease") is made and entered
into this 21st day of February, 1997, by and between PDS
FINANCIAL CORPORATION, a Minnesota corporation ("Lessor"), whose
address is 6442 City West Parkway, Suite 300, Minneapolis,
Minnesota 55344 and SHOWBOAT MARINA CASINO PARTNERSHIP, an
Indiana partnership ("Lessee"), whose address is 400 East Chicago
Avenue, East Chicago, Indiana 46312.
Lessor desires to lease to Lessee, and Lessee desires to lease
from Lessor in accordance with the terms and conditions contained
herein, certain equipment more fully described in the Lease
Schedule or Schedules, referred to herein as a "Lease Schedule,"
as may from time to time be executed by Lessee. All equipment
described in such Lease Schedules shall be collectively referred
to as the "Equipment" and individually referred to as a "Unit"
and is to be installed in and to be used in connection with the
business location described in a particular Lease Schedule
("Premises").
NOW THEREFORE, Lessor and Lessee agree as follows:
1. LEASE. This Lease establishes the general terms and
conditions by which Lessor shall lease the Equipment to Lessee.
Each Lease Schedule shall be in the form provided by Lessor and
shall incorporate by reference the terms of this Lease.
2. TERM: RENT AND PAYMENT.
2.1 TERM. The term of this Lease shall commence on the date
set forth in each Lease Schedule (the "Commencement Date") and
continue as specified in such Lease Schedule ("Term").
2.2 RENT AND PAYMENT. Lessee's obligation to pay rent for
the Equipment shall commence on the Commencement Date and
continue for the Term. The Basic Rent set forth on the Lease
Schedule shall be payable on the Commencement Date and on the
same day of each month thereafter ("Rent Date"). Any amounts
payable by Lessee, other than Basic Rent, shall be deemed
Additional Charges and shall be payable on the Rent Date next
following the date upon which they accrue or the last day of the
Term, whichever is earlier. Lessee shall make all payments at
the address of Lessor set forth above or at such other address as
Lessor may designate in writing. As used herein, the term "Rent"
shall mean all Basic Rent and Additional Charges.
2.3 LATE CHARGE. If any Rent is not received by Lessor or
its assignees within ten (10) days of when due, a late charge on
such Rent shall be due and payable with such Rent in an amount
equal to four percent (4%) of the amount past due or any part
thereof, as reimbursement for administrative costs and not as a
penalty.
2.4 LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee
fails to comply with any of its covenants or obligations herein,
Lessor may, at its option, perform such covenants or obligations
on Lessee's behalf without thereby waiving such conditions or
obligations or the failure to comply therewith and all sums
advanced by Lessor in connection therewith shall be repayable by
Lessee as Additional Charges. No such performance shall be
deemed to relieve Lessee of its obligations herein.
3. CERTIFICATE OF ACCEPTANCE. Lessee shall deliver to Lessor a
certificate of delivery, installation and acceptance
("Certificate of Acceptance") in the form provided by the Lessor.
4. NET LEASE. This Lease including each Lease Schedule is a net
lease and Lessee's obligation to pay all Rent due and the rights
of Lessor or its assignees in, and to, such Rent shall be
absolute and unconditional under all circumstances,
notwithstanding: (i) any setoff, abatement, reduction,
counterclaim, recoupment, defense or other right which Lessee may
have against Lessor, its assignees, the manufacturer or seller of
any Unit, or any other person for any reason whatsoever,
including, without limitation, any breach by Lessor of this
Lease; (ii) any defect
<PAGE>
in title, condition, operation, fitness for use, or any damage to
or destruction of, the Equipment; (iii) any interruption or
cessation of use or possession of the Equipment for any reason
whatsoever; or (iv) any insolvency, bankruptcy, reorganization or
similar proceedings instituted by or against Lessee.
5. LOCATION: USE: MAINTENANCE; IDENTIFICATION AND INSPECTION.
5.1 LOCATION, USE, MAINTENANCE AND REPAIRS. (a) Lessee shall
keep and use the Equipment on the Premises and shall not relocate
or remove any Unit unless Lessor consents, in writing, prior to
its relocation or removal. (b) Lessee shall at all times and, at
its sole cost and expense, properly use and maintain the
Equipment in good operating condition, other than the normal wear
and tear, and make all necessary repairs, alterations and
replacements thereto (collectively, "Repairs"), all of which
shall immediately become the property of Lessor and subject to
this Lease. Lessee shall comply with manufacturer instructions
relating to the Equipment, and any applicable laws and
governmental regulations. (c) Lessee shall pay all costs and
expenses associated with removal and return of the Equipment.
5.2 IDENTIFICATION AND INSPECTION. Upon request by Lessor,
Lessee shall mark each Unit conspicuously with appropriate
labels or tags furnished by Lessor and maintain such markings
through the Term to clearly disclose that said Unit is being
leased from Lessor. Subject to Lessee's reasonable security
requirements, Lessee shall permit Lessor's representatives to
enter the Premises where any Unit is located to inspect such
Unit.
6. LOCATION: LIENS AND ENCUMBRANCES.
6.1 PERSONAL PROPERTY. Each Unit is personal property and
Lessee shall not affix any Unit to realty so as to change its
nature to a fixture or real property and agrees that each Unit
shall remain personal property during the Term. LESSOR EXPRESSLY
RETAINS OWNERSHIP AND TITLE TO THE EQUIPMENT. LESSEE HEREBY
AGREES THAT IT SHALL BE RESPONSIBLE FOR ALL OF LESSOR'S
OBLIGATIONS AS REQUIRED BY THE STATE GAMING LAWS AND REGULATIONS
REGARDING MAINTENANCE, USE, POSSESSION AND OPERATION OF THE
EQUIPMENT. Lessee hereby authorizes, empowers, and grants a
limited power of attorney to Lessor to record and/or execute and
file, on Lessee's behalf, any certificates, memorandums,
statements, refiling, and continuations thereof as Lessor deems
reasonably necessary or advisable to preserve and protect its
interest hereunder. The parties intend to create a lease
agreement and the relationship of lessor and lessee between
themselves. Nothing in this Lease shall be construed or
interpreted to create or imply the existence of a finance lease
or installment lease contract. Lessor makes no representation
regarding the treatment of this Lease, the Equipment or the
payment of obligations under this Lease for financial statement
reporting or tax purposes.
6.2 LIENS AND ENCUMBRANCES. Unless otherwise provided
herein, Lessee shall not directly or indirectly create, incur or
suffer a mortgage, claim, lien, charge, encumbrance or the legal
process of a creditor of Lessee of any kind upon or against this
Lease or any Unit. Lessee shall at all times protect and defend,
at its own cost and expense, the title of Lessor from and against
such mortgages, claims, liens, charges, encumbrances and legal
processes of creditors of Lessee and shall keep all the Equipment
free and clear from all such claims, liens and legal processes.
If any such lien or encumbrance is incurred, Lessee shall
immediately notify Lessor and shall take all actions required by
Lessor to remove the same.
7. RETURN OF EQUIPMENT.
7.1 DUTY OF RETURN. At the expiration of the Term or upon
termination of the Lease, Lessee at its expense shall return each
Unit to Lessor or its designee at the destination specified by
Lessor, in accordance with appropriate gaming laws and
regulations. Each Unit shall conform to all of the
manufacturer's specifications and gaming laws and regulations
with respect to normal function, capability, design and condition
(less normal wear and tear).
7.2 FAILURE TO RETURN. If Lessee fails to return the
Equipment or any portion thereof, as provided above, within
fourteen (14) days following expiration of the term or
termination of the Lease, then Lessee shall pay to
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<PAGE>
Lessor an additional month's Rent for each month, or any
portion thereof, that Lessee fails to comply with the terms of
this return provision, until all of the Equipment is returned, as
provided herein.
8. RISK OF LOSS: INSURANCE.
8.1 RISK OF LOSS. Lessee shall bear the risk of all loss
or damage to any Unit or caused by any Unit during the period
from the time the Unit is shipped by its vendor until the time it
is returned as provided herein.
8.2 UNIT REPLACEMENT. If any Unit is lost, stolen,
destroyed, seized by governmental action or, in Lessee's opinion
or Lessor's opinion, damaged ("Event of Loss"), this Lease shall
remain in full force and effect without abatement of Rent and
Lessee shall promptly replace such Unit at its sole expense with
a Unit of equivalent value and utility, and similar kind and in
substantially the same condition as the replaced Unit immediately
prior to the Event of Loss. Title to such replacement unit
immediately shall vest and remain in Lessor, and such unit shall
be deemed a Unit under this Lease. Upon such vesting of title
and provided Lessee is not in default under this Lease, Lessor
shall cause to be paid to Lessee or the vendor of the replacement
unit any insurance proceeds actually received by Lessor for the
replacement Unit. Lessee shall promptly notify Lessor of any
Event of Loss and shall provide Lessor with and shall enter into,
execute and deliver such documentation as Lessor shall request
with respect to the replacement of any such Unit.
8.3 INSURANCE. Lessee shall obtain and maintain in full
force and effect all risk, full replacement cost property damage
insurance on the Premises: (i) comprehensive personal liability,
(ii) all risk property damage on the Equipment in amounts
reasonably acceptable to Lessor, (iii) workers compensation
insurance and (iv) marine insurance. Such insurance shall: (i)
name Lessor and its Assignees, if any, as additional insureds and
first loss payees as their interests may appear; and (ii) provide
that the policy may not be canceled or materially altered without
thirty (30) days prior written notice to Lessor and its
Assignees. All such insurance shall be placed with companies
having a rating of at least A, Class XII or better by Best's
rating service. Lessee shall furnish to Lessor, upon request and
throughout the Term, insurance certificates of a kind
satisfactory to Lessor and its Assignees showing the existence of
the insurance required hereunder and premium paid.
9. LESSOR'S PURCHASE AND PERFORMANCE. Upon receipt of a Lease
Schedule executed and delivered by Lessee, Lessee shall bear all
responsibilities and perform all obligations of Lessor thereunder
other than payment of the purchase price.
10. TAXES.
10.1 TAXES. Lessee agrees to report, file, pay promptly
when due to the appropriate taxing authority and indemnify,
defend, and hold Lessor harmless from and against any and all
taxes (including gross receipts), assessments, license fees and
other federal, state or local governmental charges of any kind or
nature, together with any penalties, interest or fines related
thereto (collectively, "Taxes") that pertain to the Equipment,
its purchase, or this Lease, except such Taxes based solely upon
the net income of Lessor.
10.2 LESSOR'S FILING OF TAXES. Notwithstanding the
foregoing, Lessor at its election may report and file sales
and/or use taxes which are filed and paid periodically through
the Term, and the amounts so due may be invoiced to Lessee and
payable as specified therein.
11. INDEMNIFICATION. Except for the negligence of Lessor, its
employees or agents and assigns, Lessee hereby assumes liability
for and agrees to indemnify, defend, protect, save and hold
harmless the Lessor, its agents, employees, directors and
assignees from and against any and all losses, damages, injuries,
claims, penalties, demands and all expenses, legal or otherwise
(including reasonable attorneys' fees) of whatever kind and
nature arising from the purchase, ownership, use, condition,
operation or maintenance of the Equipment, until the Equipment is
returned to Lessor. Any claim, defense, setoff, or other right
of Lessee against any such indemnified party shall not in any way
affect, limit, or diminish Lessee's indemnity obligations
hereunder. Lessee shall notify Lessor immediately as to any
claim, suit, action, damage, or injury related to the Equipment
of which Lessee has
3
<PAGE>
actual or other notice and shall, at its own cost and expense,
defend any and all suits which may be brought against Lessor,
shall satisfy, pay and discharge any and all judgments and fines
that may be recovered against Lessor in any such action or
actions, provided, however, that Lessor shall give Lessee written
notice of any such claim or demand. Lessee agrees that its
obligations under this Section 11 shall survive the expiration or
termination of this Lease.
12. REPRESENTATIONS AND WARRANTIES. Lessee represents and
warrants to Lessor that: i) the making of this Lease and any
Lease Schedule executed by Lessee is duly authorized on the part
of Lessee and that upon due execution thereof by Lessee and
Lessor they shall constitute valid obligations binding upon, and
enforceable against, Lessee in accordance with their terms; ii)
neither the making of this Lease or such Lease Schedule, nor the
due performance by Lessee, including the commitment and payment
of the Rent, shall result in any breach of, or constitute a
default under, or violation of, Lessee's articles of
incorporation, by-laws, or any agreement to which Lessee is a
party or by which Lessee is bound; iii) no approval or consent
not already obtained or withholding of objection is required from
any governmental authority with respect to the entering into, or
performance of this Lease or any Lease Schedule by Lessee; iv)
Lessee has obtained or will obtain all licenses and permits
required by applicable laws or regulations (the "Gaming Laws")
for the operation of its business prior to the commencement of
gaming on the Premises.
13. DISCLAIMERS; MANUFACTURERS WARRANTIES. LESSEE ACKNOWLEDGES
THAT EACH UNIT IS OF THE DESIGN, CAPACITY AND MANUFACTURE
SPECIFIED FOR AND BY THE LESSEE AND THAT LESSEE IS SATISFIED THAT
THE SAME IS SUITABLE FOR LESSEE'S PURPOSES. LESSEE AGREES,
REGARDLESS OF CAUSE, NOT TO ASSERT ANY CLAIM WHATSOEVER AGAINST
LESSOR FOR LOSS OF ANTICIPATORY PROFITS OR CONSEQUENTIAL DAMAGES.
LESSOR EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO
THE EQUIPMENT WHETHER EXPRESSED OR IMPLIED. Without limiting the
generality of the foregoing it is intended by the parties to
exclude any and all implied warranties of merchantability and
fitness for particular purposes. NO SALESMAN OR AGENT OF LESSOR
IS AUTHORIZED TO WAIVE OR ALTER ANY TERM OF THIS LEASE OR MAKE
ANY REPRESENTATION REGARDING THE EQUIPMENT.
14. ASSIGNMENT OF LEASE.
14.1 ASSIGNMENT BY LESSOR. Lessee acknowledges and agrees
that Lessor may assign, mortgage, or otherwise transfer its
interest thereunder and/or in the Equipment to others
("Assignees") without consent of Lessee, provided however that
Lessee and the Indiana Gaming Commission ("Control Board") shall
be notified of any assignment. Accordingly, Lessee and Lessor
agree that upon such assignment, Lessee (i) shall acknowledge
such assignment in writing by executing a Notice, Consent and
Acknowledgment of Assignment furnished by Lessor; (ii) shall
promptly pay all Rent when due to the designated Assignees,
notwithstanding any defense, setoff, abatement, recoupment,
reduction or counterclaim whatsoever that Lessee may have against
Lessor; (iii) shall not permit the Lease or Lease Schedule so
assigned to be amended or the terms thereof waived without the
prior written consent of the Assignees; (iv) shall not require
the Assignees to perform any obligations of Lessor under such
Lease Schedule; (v) shall not terminate or attempt to terminate
the Lease or Lease Schedule on account of any default by Lessor;
and (vi) acknowledges that any Assignee may reassign its rights
and interest with the same force and effect as the assignment
described herein.
14.2 ASSIGNMENT OR SUBLEASE BY LESSEE. Lessee shall not
assign this Lease or any Lease Schedule or assign its rights in
or sublet the Equipment, or any interest therein without Lessor's
and its Assignee's prior written consent, which consent shall not
be unreasonably withheld.
15. FINANCIAL INFORMATION; FURTHER ASSURANCES.
15.1 FINANCIAL INFORMATION. Throughout the Term, Lessee
shall deliver to Lessor copies of unaudited quarterly and audited
annual financial statements of Lessee which will reflect the
financial condition and
4
<PAGE>
operations of Lessee as well as such other information regarding
Lessee reasonably requested by Lessor or its Assignees.
15.2 FURTHER ASSURANCES. Lessee shall execute and deliver
to Lessor, such other documents, and take such further action as
Lessor may request, in order to effectively carry out the intent
and purposes of this Lease and the Lease Schedules. All
documentation shall be in a form acceptable to Lessor and its
Assignees. Lessee shall provide all necessary notices to the
Control Board. During the Term of any Lease Schedule, Lessee
shall comply with Section 4.07, Restricted Payments, of its
Indenture with American Bank National Association dated as of
March 28, 1996 (the "Indenture"). The financial covenants of
Section 4.07 of the Indenture are incorporated herein by
reference.
15.3 LEASE AGREEMENT. If any court of competent jurisdiction
should determine that this Lease constitutes a security
arrangement as opposed to a true lease, the parties then agree
that this Lease shall constitute a security agreement within the
meaning of the Uniform Commercial Code and that the Lessor shall
be considered a secured party under the provisions thereof and
shall be entitled to all the rights and remedies of a secured
party and Lessee, as debtor, grants to Lessor, as secured party,
a security interest in the Equipment; provided nothing herein
shall be construed nor shall the inclusion of this paragraph be
interpreted as derogating from the stated intent and contractual
understanding of the parties that this is a true lease.
16. DEFAULT BY LESSEE; REMEDIES.
16.1 DEFAULT BY LESSEE. Lessee shall be in default upon
the occurrence of any one of the following events ("Event of
Default"): (a) failure to pay Rent when due; (b) failure to
perform any other term, condition or covenant of this Lease or
any Lease Schedule; (c) Lessee ceases or is enjoined, restrained
or in any way prevented from conducting business as a going
concern; (d) if any proceeding is filed by or against the Lessee
for an assignment for the benefit of creditors, a voluntary or
involuntary petition in bankruptcy, or if Lessee is adjudicated a
bankrupt or an insolvent; (e) Lessee attempts to remove, sell,
transfer, encumber, part with possession or sublet the Equipment
or any Unit thereof; (f) any Unit is attached, levied upon,
encumbered, pledged, or seized under any judicial process; (g)
any warranty or representation made or furnished to the Lessor by
or on behalf of the Lessee is false in any material respect when
made or furnished; (h) failure to maintain in full force and
effect the licenses and permits required under the Gaming Laws
for the operation of Lessee's business; (i) failure to comply
with all gaming regulations; (j) if a material default occurs
under any mortgage, indenture, or instrument under which there
may be issued or by which there may be secured or evidenced any
indebtedness of Lessee for money borrowed, whether such
indebtedness now exists or shall be created hereafter, which
event of default is not cured within thirty (30) days, or in the
event of a non-monetary default, within such reasonable period of
time as may be agreed upon by the parties hereto; or (k) any
change in control of the Lessee or its business.
16.2 LESSOR REMEDIES. Lessee acknowledges that the
enforcement of this Lease requires approval of the Control Board
and/or the Indiana Gaming Commission ("the Commission") and that
copies of all Default Notices, legal proceedings, etc. will be
forwarded to the appropriate agency as required by state law,
regulation or upon request of the Control Board or the
Commission. Lessee further acknowledges that upon any Event of
Default, and at any time thereafter, Lessor, may in addition to
any and all rights and remedies it may have at law or in equity,
without notice to or demand upon Lessee at its sole option: (i)
declare the aggregate Rent then accrued and unpaid together with
the balance of any Rent to be immediately due and payable; (ii)
proceed by appropriate court action or other proceeding, either
at law or in equity to enforce performance by Lessee of any and
all covenants of this Lease; (iii) on written notice to Lessee,
terminate any of Lessee's rights under this Lease or Schedule in
which event Lessee shall immediately surrender and return the
Equipment to Lessor pursuant to the provisions hereof; and (iv)
subject to appropriate Gaming Laws, rules, laws and regulations,
and required approvals, take possession, sell and/or re-lease any
Unit as Lessor may desire, in its sole discretion.
Lessor's rights and remedies herein are cumulative and in
addition to any rights or remedies available at law or in equity
including the Uniform Commercial Code, and may be exercised
concurrently or separately. Lessee shall pay all costs,
expenses, losses, damages and legal costs (including reasonable
attorneys' fees) incurred by Lessor and its
5
<PAGE>
Assignees as a result of enforcing any terms or conditions of the
Lease or any Schedules. A termination hereunder shall occur only
upon written notice by Lessor to Lessee and no repossession or
other act by Lessor after default shall relieve Lessee from any
of its obligations to Lessor hereunder unless Lessor so notifies
Lessee in writing.
17. MISCELLANEOUS.
17.1 NOTICES. Except as otherwise required by law, all
notices required herein shall be in writing and sent by prepaid
certified mail or by courier, addressed to the party at the
address of the party specified herein or such other address
designated in writing. Notice shall be effective upon the
earlier of its receipt or four (4) days after it is sent.
17.2 SURVIVAL OF INDEMNITIES. All indemnities of Lessee
shall survive and continue in full force and effect for events
occurring prior to the return of the Equipment to the Lessor,
notwithstanding the expiration or termination of the Term.
17.3 COUNTERPARTS. Each Lease and any Lease Schedule may be
executed in counterparts.
17.4 MULTIPLE LESSEES. If more than one Lessee is named in
this Lease or a Lease Schedule the liability of each shall be
joint and several.
17.5 TITLES. Section titles are not intended to have legal
effect or limit or otherwise affect the interpretation of this
Lease or any Lease Schedule.
17.6 WAIVER. No delay or omission in the exercise of any
right or remedy herein provided or otherwise available to Lessor,
or prior course of conduct, shall impair or diminish Lessor's
rights to exercise the same or any other right of Lessor; nor
shall any obligation of Lessee hereunder be deemed waived. The
acceptance of rent by Lessor after it is due shall not be deemed
to be a waiver of any breach by Lessee of its obligations under
this Lease or any Lease Schedule.
17.7 SUCCESSORS. This Lease and each Lease Schedule shall
inure to the benefit of and be binding upon Lessor and Lessee and
their respective successors in interest.
17.8 NOT AN OFFER. Neither this Lease nor any Lease
Schedule shall be deemed to constitute an offer or be binding
upon Lessor until executed by Lessor's authorized officer.
17.9 SEVERABILITY. If any provisions of this Lease or any
Lease Schedule shall be held to be invalid or unenforceable, the
validity and enforceability of the remaining provision thereof
shall not be affected or impaired in any way.
17.10 MODIFICATION. Lessor and Lessee agree that any
modifications to this Lease or any Lease Schedule shall be in
writing and shall be signed by both parties and their last known
assignees, if any.
17.11 LEASE IRREVOCABLE. This Lease is irrevocable for the
full Term hereof and the Rent shall not abate by reason of
termination of Lessee's right of possession and/or the taking of
possession by the Lessor or for any other reason.
17.12 GOVERNING LAW. This Lease and each Lease Schedule are
entered into under and shall be construed in accordance with, and
governed by the laws of the State of Indiana.
17.13 RIDERS. In the event that any riders are attached
hereto and made a part hereof and if there is a conflict between
the terms and provisions of any rider, including any Lease
Schedule and the terms and provisions herein, the terms and
provisions of the rider or Lease Schedule shall control to the
extent of such conflict.
6
<PAGE>
17.14 ENTIRE AGREEMENT. LESSEE REPRESENTS THAT IT HAS READ,
RECEIVED, RETAINED A COPY OF AND UNDERSTANDS THIS LEASE, AND
AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. LESSOR AND
LESSEE AGREE THAT THIS LEASE, ALL RIDERS, LEASE SCHEDULES, OR
EXHIBITS HERETO, AND THE LEASE SCHEDULES SHALL CONSTITUTE THE
ENTIRE AGREEMENT AND SUPERSEDE ALL PROPOSALS, ORAL OR WRITTEN,
ALL PRIOR NEGOTIATIONS AND ALL OTHER COMMUNICATIONS BETWEEN
LESSOR AND LESSEE WITH RESPECT TO ANY UNIT.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be duly executed on the date set forth by their
authorized representatives.
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:___________________________
Its:__________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_____________________________________
Name:______________________________
Title:_____________________________
7
<PAGE>
LEASE SCHEDULE NO. 1 TO MASTER LEASE AGREEMENT
This Lease Schedule No. 1 is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee"),
dated February 21, 1997.
1. Description of Equipment: The Equipment listed on
Attachment "A" to this Lease Schedule is added to
the Equipment leased under the Lease and made
subject to the provisions of the Lease.
2. Commencement Date: The Commencement Date for the
Equipment leased under this Schedule will be the
date the Equipment is delivered and accepted by
the Lessee.
3. Term: The Term shall commence on the Commencement
Date and shall continue for 48 consecutive months.
4. The Basic Rent due each month during the Term for
the Equipment described herein is as follows:
a. The first payment under this Lease
Schedule in an amount equal to $88,609.18
shall be due and payable on April 1, 1997.
b. Payment of the Basic Rent in the amount
of $88,609.18 shall be due on May 1, 1997 and
on the first day of each month thereafter
through and including March 1, 2001.
c. In addition to the monthly Basic Rent
due as set forth above, Lessee shall pay
Lessor an amount equal to all taxes which may
be imposed by any Federal, State or local
authority from time to time.
5. All of the provisions of the Lease are
incorporated by reference herein as if set forth
fully herein.
Dated: February 21, 1997
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:___________________________
Its:__________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_____________________________________
Name:________________________________
Title:_______________________________
<PAGE>
LEASE SCHEDULE NO. 2 TO MASTER LEASE AGREEMENT
This Lease Schedule No. 2 is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee"),
dated February 21, 1997.
1. Description of Equipment: The Equipment listed on
Attachment "A" to this Lease Schedule is added to
the Equipment leased under the Lease and made
subject to the provisions of the Lease.
2. Commencement Date: The Commencement Date for the
Equipment leased under this Schedule will be the
date the Equipment is delivered and accepted by
the Lessee.
3. Term: The Term shall commence on the Commencement
Date and shall continue for 48 consecutive months.
4. The Basic Rent due each month during the Term for
the Equipment described herein is as follows:
a. The first payment under this Lease
Schedule in an amount equal to $80,035.85
shall be due and payable on April 1, 1997.
b. Payment of the Basic Rent in the amount
of $80,035.85 shall be due on May 1, 1997 and
on the first day of each month thereafter
through and including March 1, 2001.
c. In addition to the monthly Basic Rent
due as set forth above, Lessee shall pay
Lessor an amount equal to all taxes which may
be imposed by any Federal, State or local
authority from time to time.
5. All of the provisions of the Lease are
incorporated by reference herein as if set forth
fully herein.
Dated: February 21, 1997
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:___________________________
Its:__________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:___________________________________
Name:____________________________
Title:___________________________
<PAGE>
LEASE SCHEDULE NO. 3 TO MASTER LEASE AGREEMENT
This Lease Schedule No. 3 is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee"),
dated February 21, 1997.
1. Description of Equipment: The Equipment listed on
Attachment "A" to this Lease Schedule is added to
the Equipment leased under the Lease and made
subject to the provisions of the Lease.
2. Commencement Date: The Commencement Date for the
Equipment leased under this Schedule will be the
date the Equipment is delivered and accepted by
the Lessee.
3. Term: The Term shall commence on the Commencement
Date and shall continue for 48 consecutive months.
4. The Basic Rent due each month during the Term for
the Equipment described herein is as follows:
a. The first payment under this Lease
Schedule in an amount equal to $79,450.81
shall be due and payable on April 1, 1997.
b. Payment of the Basic Rent in the amount
of $79,450.81 shall be due on May 1, 1997 and
on the first day of each month thereafter
through and including March 1, 2001.
c. In addition to the monthly Basic Rent
due as set forth above, Lessee shall pay
Lessor an amount equal to all taxes which may
be imposed by any Federal, State or local
authority from time to time.
5. All of the provisions of the Lease are
incorporated by reference herein as if set forth
fully herein.
Dated: February 21, 1997
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:___________________________
Its:__________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_____________________________________
Name:______________________________
Title:_____________________________
<PAGE>
LEASE SCHEDULE NO. 4 TO MASTER LEASE AGREEMENT
This Lease Schedule No. 4 is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee"),
dated February 21, 1997.
1. Description of Equipment: The Equipment listed on
Attachment "A" to this Lease Schedule is added to
the Equipment leased under the Lease and made
subject to the provisions of the Lease.
2. Commencement Date: The Commencement Date for the
Equipment leased under this Schedule will be the
date the Equipment is delivered and accepted by
the Lessee.
3. Term: The Term shall commence on the Commencement
Date and shall continue for 48 consecutive months.
4. The Basic Rent due each month during the Term for
the Equipment described herein is as follows:
a. The first payment under this Lease
Schedule in an amount equal to $33,711.01
shall be due and payable on April 1, 1997.
b. Payment of the Basic Rent in the amount
of $33,711.01 shall be due on May 1, 1997 and
on the first day of each month thereafter
through and including March 1, 2001.
c. In addition to the monthly Basic Rent
due as set forth above, Lessee shall pay
Lessor an amount equal to all taxes which may
be imposed by any Federal, State or local
authority from time to time.
5. All of the provisions of the Lease are
incorporated by reference herein as if set forth
fully herein.
Dated: March 5, 1997
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:__________________________
Its:_________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_____________________________________
Name:______________________________
Title:_____________________________
<PAGE>
PURCHASE/RENEWAL OPTION
TO LEASE SCHEDULE NO. 1
This Purchase/Renewal Option is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee") and
Lease Schedule No. 1 to Master Lease Agreement ("Schedule
No. 1"), each dated February 21, 1997.
If Lessee has not been in default under the terms of the Lease,
at the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the Equipment described on the above Lease Schedule for the sum
equal to $1.00 (the "Exercise Price"). Upon timely receipt of
such notice of exercise, receipt of the payment of all Rent due
under the Lease and payment of the Exercise Price, Lessor will,
with exercise of the purchase option, execute and deliver to
Lessee a Bill of Sale for the Equipment described in the Lease
Schedule. Upon failure of the Lessor to so deliver a Bill of
Sale, this Purchase/Renewal Option to Lease Schedule No. 1 shall
then constitute a conveyance of the Equipment in accordance
herewith. Lessee shall in all respects remain obligated under
the Lease for payment of Rent, care, maintenance, delivery, use
and insurance of the Equipment until Lessor inspects and accepts
the Equipment. In the event it shall at any time be determined
that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option applies was
in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have
any claim or cause of action against Lessor, its successors or
assigns, for any reason for loss sustained by virtue of such
determination.
LESSEE ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER THE
PURCHASE OPTION IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR MAKES, AND WILL MAKE, NO REPRESENTATIONS OR WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR PER THE TERMS
OF THE LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF THE
EQUIPMENT.
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:__________________________
Its:_________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_____________________________________
Name:______________________________
Title:_____________________________
<PAGE>
PURCHASE/RENEWAL OPTION
TO LEASE SCHEDULE NO. 2
This Purchase/Renewal Option is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee") and
Lease Schedule No. 2 to Master Lease Agreement ("Schedule
No. 2"), each dated February 21, 1997.
If Lessee has not been in default under the terms of the Lease,
at the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the Equipment described on the above Lease Schedule for the sum
equal to $1.00 (the "Exercise Price"). Upon timely receipt of
such notice of exercise, receipt of the payment of all Rent due
under the Lease and payment of the Exercise Price, Lessor will,
with exercise of the purchase option, execute and deliver to
Lessee a Bill of Sale for the Equipment described in the Lease
Schedule. Upon failure of the Lessor to so deliver a Bill of
Sale, this Purchase/Renewal Option to Lease Schedule No. 2 shall
then constitute a conveyance of the Equipment in accordance
herewith. Lessee shall in all respects remain obligated under
the Lease for payment of Rent, care, maintenance, delivery, use
and insurance of the Equipment until Lessor inspects and accepts
the Equipment. In the event it shall at any time be determined
that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option applies was
in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have
any claim or cause of action against Lessor, its successors or
assigns, for any reason for loss sustained by virtue of such
determination.
LESSEE ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER THE
PURCHASE OPTION IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR MAKES, AND WILL MAKE, NO REPRESENTATIONS OR WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR PER THE TERMS
OF THE LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF THE
EQUIPMENT.
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner By:__________________________
Its:_________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada limited
partnership, its general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:___________________________________
Name:____________________________
Title:___________________________
<PAGE>
PURCHASE/RENEWAL OPTION
TO LEASE SCHEDULE NO. 3
This Purchase/Renewal Option is attached to and made a part of
the Master Lease Agreement ("Lease") between PDS FINANCIAL
CORPORATION, a Minnesota corporation ("Lessor"), and SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership ("Lessee") and
Lease Schedule No. 3 to Master Lease Agreement ("Schedule
No. 3"), each dated February 21, 1997.
If Lessee has not been in default under the terms of the Lease,
at the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the Equipment described on the above Lease Schedule for the sum
equal to $1.00 (the "Exercise Price"). Upon timely receipt of
such notice of exercise, receipt of the payment of all Rent due
under the Lease and payment of the Exercise Price, Lessor will,
with exercise of the purchase option, execute and deliver to
Lessee a Bill of Sale for the Equipment described in the Lease
Schedule. Upon failure of the Lessor to so deliver a Bill of
Sale, this Purchase/Renewal Option to Lease Schedule No. 3 shall
then constitute a conveyance of the Equipment in accordance
herewith. Lessee shall in all respects remain obligated under
the Lease for payment of Rent, care, maintenance, delivery, use
and insurance of the Equipment until Lessor inspects and accepts
the Equipment. In the event it shall at any time be determined
that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option applies was
in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have
any claim or cause of action against Lessor, its successors or
assigns, for any reason for loss sustained by virtue of such
determination.
LESSEE ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER THE
PURCHASE OPTION IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR MAKES, AND WILL MAKE, NO REPRESENTATIONS OR WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR PER THE TERMS
OF THE LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF THE
EQUIPMENT.
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By:SHOWBOAT MARINA PARTNERSHIP,an
Indiana general partnership,
its general partner
By:_____________________________
Its:____________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada
limited partnership, its
general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:___________________________________
Name:____________________________
Title:___________________________
<PAGE>
PURCHASE/RENEWAL OPTION
TO LEASE SCHEDULE NO. 4
This Purchase/Renewal Option is attached to and made a part of
the Master Lease Agreement dated February 21, 1997 ("Lease")
between PDS FINANCIAL CORPORATION, a Minnesota corporation
("Lessor"), and SHOWBOAT MARINA CASINO PARTNERSHIP, an Indiana
partnership ("Lessee") and Lease Schedule No. 4 to Master Lease
Agreement dated March 5, 1997 ("Schedule No. 4").
If Lessee has not been in default under the terms of the Lease,
at the expiration of the Term, Lessor grants Lessee an option to
(a) purchase (the "Purchase Option") all but not less than all of
the Equipment described on the above Lease Schedule for the sum
equal to $1.00 (the "Exercise Price"). Upon timely receipt of
such notice of exercise, receipt of the payment of all Rent due
under the Lease and payment of the Exercise Price, Lessor will,
with exercise of the purchase option, execute and deliver to
Lessee a Bill of Sale for the Equipment described in the Lease
Schedule. Upon failure of the Lessor to so deliver a Bill of
Sale, this Purchase/Renewal Option to Lease Schedule No. 4 shall
then constitute a conveyance of the Equipment in accordance
herewith. Lessee shall in all respects remain obligated under
the Lease for payment of Rent, care, maintenance, delivery, use
and insurance of the Equipment until Lessor inspects and accepts
the Equipment. In the event it shall at any time be determined
that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option applies was
in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have
any claim or cause of action against Lessor, its successors or
assigns, for any reason for loss sustained by virtue of such
determination.
LESSEE ACKNOWLEDGES THAT THE EQUIPMENT SOLD BY LESSOR UNDER THE
PURCHASE OPTION IS BEING SOLD IN AN "AS IS, WHERE IS" CONDITION.
LESSOR MAKES, AND WILL MAKE, NO REPRESENTATIONS OR WARRANTIES
REGARDING THE EQUIPMENT, ITS SUITABILITY FOR LESSEE'S PURPOSE, OR
ITS COMPLIANCE WITH ANY LAWS. LESSEE HEREBY ASSUMES ALL LIABILITY
FOR THE EQUIPMENT AND AGREES TO INDEMNIFY LESSOR PER THE TERMS
OF THE LEASE FOR ANY CLAIMS ARISING OUT OF THE PURCHASE OF THE
EQUIPMENT.
LESSEE: LESSOR:
SHOWBOAT MARINA CASINO PDS FINANCIAL CORPORATION,
PARTNERSHIP, an Indiana a Minnesota corporation
general partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner
By:______________________________
Its:_____________________________
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada
limited partnership, its
general partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:_______________________________
Name:________________________
Title:_______________________
<PAGE>
FIRST PREFERRED SHIP MORTGAGE
PRELIMINARY MORTGAGE DATA:
VESSEL NAME: MV/SHOWBOAT
U.S.C.G. OFFICIAL NUMBER: ____________
HOME PORT: __________________________
HAILING PORT: __________________________
NAME AND ADDRESS OF MORTGAGOR: Showboat Marina Casino Partnership
400 East Chicago Avenue
East Chicago, Indiana 46312
NAME AND ADDRESS OF MORTGAGEE: PDS Financial Corporation
6442 City West Parkway, Suite 300
Minneapolis, MN 55344
AMOUNT OF DIRECT OR CONTINGENT
OBLIGATIONS THAT IS OR MAY
BECOME SECURED BY THIS
MORTGAGE, EXCLUSIVE OF
INTEREST, EXPENSES AND FEES: $11,000,000.00
INTEREST OF MORTGAGOR IN VESSEL: 100%
INTEREST IN VESSEL MORTGAGED
HEREUNDER: 100%
SUBSTANTIVE MORTGAGE PROVISIONS:
THIS PREFERRED SHIP MORTGAGE (this "Mortgage") is made and
entered into as of this 21st day of February, 1997 by SHOWBOAT
MARINA CASINO PARTNERSHIP, an Indiana partnership, as Mortgagor
(the "Shipowner"), in favor of PDS FINANCIAL CORPORATION, a
Minnesota corporation, of 6442 City West Parkway, Suite 300,
Minneapolis, MN, 55344, as Mortgagee ("Mortgagee").
WHEREAS, the Shipowner, upon documentation of the Vessel
(as such term is hereinafter defined) with the United States
Coast Guard, will be the sole owner of the whole (100%) of the
self-propelled vessel "M/V Showboat", Official Number __________,
described more fully in the Granting Clause hereof (the
"Vessel").
<PAGE>
WHEREAS, Mortgagee has leased (the "Lease") to the
Shipowner certain equipment (the "Equipment") having an original
purchase price equal to $11,000,000.00 pursuant to the terms and
conditions of a Master Lease Agreement (the "Lease") dated
February 21, 1997 and various Lease Schedules thereto (each Lease
Schedule a "Schedule" and collectively the "Schedules").
WHEREAS, the Shipowner has agreed to execute this Mortgage
in favor of Mortgagee to secure Shipowner's obligations under the
Lease and the Schedules (collectively, the "Lease").
NOW, THEREFORE, WITNESSETH:
GRANTING CLAUSE
THAT, in consideration of the premises and of the
additional covenants contained herein and of other good and
valuable consideration, the receipt of which is hereby
acknowledged, and in order to secure the full payment of all
charges, fees and other sums owing under the Lease and all
amounts owing to the Mortgagee by the Shipowner, as provided in
this Mortgage, and to secure the due performance and observance
of all of the agreements and covenants contained in the Lease,
subject to the terms and conditions of that certain Intercreditor
Agreement (the "Intercreditor Agreement") entered into by and
among the Shipowner, Mortgagee and Firstar Bank of Minnesota,
N.A. dated February 21, 1997, the Shipowner by these presents
grants, conveys, pledges, confirms, renews, assigns, transfers,
mortgages and sets over, and shall warrant and defend unto the
Mortgagee the whole (100%) of the following Vessel described as
follows:
OFFICIAL NUMBER HOME PORT VESSEL NAME
_______________ _________________________ M/V SHOWBOAT
(such Vessel being duly documented in the name of the Shipowner
under the laws of the United States), together with all its
components, engines, boilers, machinery, masts, boats, anchors,
cables, chains, rigging, tackle, equipment, gaming equipment,
apparel, furniture, capstans, outfit, tools, pumps, gears,
furnishings, appliances, fittings and spare and replacement parts
and all other appurtenances thereto appertaining or belonging,
whether now owned or hereafter acquired, whether on board or not
on board, and also any and all additions, improvements and
replacements hereinafter made in or to said Vessel or any part
thereof, including all items and appurtenances as aforesaid;
provided, that the foregoing shall be deemed to cover the whole
(100%) of the Vessel, and shall not include any property other
than a "vessel" within the meaning of Chapter 313 of Title 46 of
the United States Code, as amended (the "Ship Mortgagee Act").
TO HAVE AND TO HOLD, subject to Section 4.06(b), all and
singular the above mortgaged and described Vessel unto the
Mortgagee, its successors and assigns, to its and their own use
and benefit forever.
THE SAID Vessel to remain mortgaged to the Mortgagee until
such time as the
2
<PAGE>
Mortgagor's obligations secured hereby are otherwise satisfied
and discharged in accordance with the terms thereof, and this
Mortgage, and all other sums that may be secured by this
Mortgage, are paid in accordance with the respective terms
hereof, and all of the obligations assumed herein shall have been
complied with.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the
property above described is to be held subject to the further
covenants, conditions, provisions, terms and uses hereinafter set
forth.
ARTICLE I
PARTICULAR COVENANTS OF SHIPOWNER
The Shipowner hereby further agrees to the additional terms
and conditions hereinafter set forth.
SECTION 1.01. The Shipowner will comply with and satisfy
all of the provisions of applicable laws and regulations of the
United States of America, as at any time amended, including,
without limitation, laws and regulations relating to citizenship
of the Shipowner, in order to establish and maintain this
Mortgage as a preferred ship mortgage upon the Vessel and upon
all components, replacements and improvements made in or to the
Vessel for the amounts secured hereby. The Shipowner also agrees
to execute and record from time to time, at its expense and at
reasonable advance intervals, such additional instruments as may
be necessary or appropriate so that this Mortgage may be
established and preserved as a valid preferred ship mortgage on
the Vessel and all components, improvements, renewals and
substitute parts subject to no prior Liens, except Permitted
Liens, until the obligations of Mortgagor hereby secured shall
have been satisfied in full and all of the obligations assumed
herein shall have been complied with.
SECTION 1.02.
(a) Prior to any repair or construction on or to the
Vessel by any shipyard, shipbuilder, contractor or otherwise, the
Shipowner shall cause any agreement between the Shipowner and
such shipyard, shipbuilder, contractor or other party with
respect to such repair or construction, except any such agreement
entered into prior to or as of the date hereof in connection with
the Contemplated Improvements, to expressly provide that (i)
title to the Vessel shall remain with the Shipowner, subject to
the Lien granted under this Mortgage, and (ii) any additions,
replacements, and substitutions to the Vessel (together with all
goods, materials, equipment and other personal property affixed
to the Vessel) shall be part of the Vessel, subject to this
Mortgage.
(b) Notwithstanding the foregoing, at least thirty (30)
days prior to such time, if any, that the Vessel shall be
eligible or required under Chapter 121 of Title 46 of the United
States Code or other Applicable Law to be redocumented or
remeasured or reclassified with the United States Coast Guard or
other appropriate Governmental Authority as a successor vessel of
the Vessel, whether as
3
<PAGE>
a.result of any construction, repair or improvement to the Vessel
or otherwise, the Shipowner shall provide the Mortgagee with
written notice of such potential eligibility for or requirement
of redocumentation or remeasurement or reclassification. Whether
or not the Shipowner provides such notice to the Mortgagee, the
Shipowner shall promptly take, as soon as the Vessel is eligible
for redocumentation or remeasurement or reclassification, any and
all such actions necessary to obtain such redocumentation or
remeasurement or reclassification and in the event this Mortgage
shall, as a result of such redocumentation or remeasurement or
reclassification or any failure to obtain any redocumentation or
remeasurement or reclassification within any required period of
time after application for such redocumentation or remeasurement
or reclassification has been made, fail to be a valid preferred
ship mortgage, simultaneously therewith execute, acknowledge and
deliver to the Mortgagee a preferred ship mortgage in the form of
this Mortgage, subject to no additional prior Liens.
(c) To the extent permitted by Applicable Law, the form
of any mortgage to be delivered to the Mortgagee pursuant to this
Section 1.02 shall be subject to such changes, additions or
modifications resulting from any changes in Applicable Law as of
the date hereof, as is deemed necessary or appropriate, in the
sole discretion of the Mortgagee, in order to establish and
maintain a perfected preferred ship mortgage in the Vessel and to
entitle the Mortgagee to the same rights and benefits as if such
mortgage were executed and delivered as of the date hereof
subject to no prior Liens, except Permitted Liens.
SECTION 1.03. The Vessel shall, and the Shipowner
covenants that it will, at all times comply with in all material
respects, shall not permit the Vessel to be operated contrary to,
all applicable laws, treaties and conventions, and rules and
regulations issued thereunder and will not engage in any unlawful
trade or violate any law or carry any cargo that will expose any
of the Vessel to penalty, forfeiture or capture, and will not do,
or suffer or permit to be done, anything which can or may
injuriously affect the documentation of the Vessel under the laws
and regulations of the United States of America and will at all
times keep the Vessel duly documented thereunder. The Shipowner
shall do everything necessary to establish and maintain this
Mortgage as a first preferred ship mortgage on the Vessel,
subject to no prior Liens, except Permitted Liens, and execute
and deliver any amendments, addenda or assignments to this
Mortgage as Mortgagee from time to time may require in its sole
judgment.
SECTION 1.04. The Shipowner shall, at the Shipowner's
expense, at all times maintain the Vessel in thorough repair and
working order, ordinary wear and tear excepted, and shall make
all proper renewals and replacements. The Mortgagee shall have
the right at any time, on reasonable notice, to inspect or survey
the Vessel to ascertain its condition and to satisfy itself that
the Vessel is being properly repaired and maintained, and the
Shipowner shall cause to be made all such repairs, without
expense to the Mortgagee, as such inspection or survey may show
to be required to the satisfaction of the Vessel's salvage
association, classification society, the United States Coast
Guard, or any other federal, state or local regulatory agency, as
the case may be. The Shipowner shall also permit the Mortgagee
to inspect the
4
<PAGE>
Vessel's rough and smooth logs, whenever requested, on reasonable
notice, and shall furnish the Mortgagee with full information
regarding any casualties or other material accidents or damage to
the Vessel. The Shipowner shall further permit the Mortgagee to
inspect the Vessel's papers and examine the Shipowner's accounts
and related papers, and at the request of the Mortgagee, certify
monthly that all wages and other claims whatsoever which might
have given rise to a Lien upon the Vessel shall have been paid,
subject to this Mortgage.
SECTION 1.05. The Shipowner will pay and discharge, or
cause to be paid and discharged, when due and payable from time
to time, all taxes, assessments, governmental charges, fines and
penalties lawfully imposed on the Vessel or any income therefrom.
SECTION 1.06. The Shipowner will not change the flag or
home port of the Vessel without the prior written consent of the
Mortgagee, and any such written consent to any one change of the
flag or home port shall not be construed to be a waiver of this
provision with respect to any subsequent proposed change of the
flag or home port. The Shipowner shall not permit the Vessel to
leave the continental United States of America.
SECTION 1.07. The Shipowner will not sell, lease,
mortgage, demise, charter or consent to the sale, mortgage,
demise, charter, or transfer of the Vessel, or any interest
therein, without the prior written consent of the Mortgagee. Any
such written consent to any one sale, lease, mortgage, demise,
charter or transfer shall not be construed to be a waiver of this
provision with respect to any subsequent proposed sale, lease,
mortgage, demise, charter or transfer, and any such subsequent
proposed sale, mortgage, lease, demise, charter or transfer of
the Vessel (or any interest therein) shall be subject to the
provisions of this Mortgage and the Lien hereof.
SECTION 1.08.
(a) Neither the Shipowner nor any charterer, operator or
master of the Vessel nor any other person or entity has and/or
shall have any right, power or authority to create, incur or
permit to be placed or imposed upon the Vessel, or any part
thereof, any Liens, other than (i) maritime liens for crew's
wages from a current voyage or salvage (which shall be discharged
promptly and, in any event, within forty-five (45) days unless
Shipowner causes any Liens asserted against the Vessel to be
discharged forthwith and such Liens are being contested in
appropriate proceedings diligently conducted, so long as such
proceedings do not involve a significant risk of sale, forfeiture
or loss of the Vessel or interest therein), (ii) the Firstar
Mortgage (as such term is defined in the Intercreditor Agreement)
and any financing statements filed in connection therewith, and
(iii) this Mortgage (collectively the "Permitted Liens").
(b) The Shipowner will exhibit and will cause to be
retained at all times, a certified copy of this Mortgage and of
any amendments or supplements hereto or assignments hereof, on
board the Vessel and will cause such certified copy to be
exhibited on demand, to any person or entity having business with
the Vessel and to any representative of the Shipowner, the
Mortgagee or any assignee thereof. Unless otherwise approved by
the Mortgagee, a notice reading as follows, printed in plain type
of such size that each paragraph of reading matter shall cover a
space not less than six (6) inches wide by nine (9) inches high,
and framed under glass, shall be placed and kept prominently
displayed on the Vessel:
5
<PAGE>
NOTICE OF MORTGAGE
This Vessel is owned by Showboat Marina Casino Partnership
and is covered by a preferred ship mortgage in favor of Firstar
Bank of Minnesota, N.A., successor-in-interest to American Bank
National Association ("Firstar"), as mortgagee. Under the terms
of said mortgage, no owner, operator, charterer, cargo owner,
subcharterer or the master of this Vessel, or any other person or
entity, has the right, power or authority to create, incur or
permit to exist on this Vessel any lien whatsoever other than
liens for crew's wages from the current voyage and salvage or
otherwise permitted by such mortgage. Firstar has consented to
this Mortgage pursuant to the Intercreditor Agreement.
Shipowner shall change at Shipowner's cost such notice to
reflect the identity of any successor Mortgagee.
SECTION 1.09.
(a) The Shipowner will, at its own expense, when and so
long as this Mortgage shall be outstanding, carry all necessary
insurance on and with respect to the Vessel and its operation
(and all additions, improvements and replacements made in and to
the Vessel, or any part thereof) and keep them insured, by
financially sound and reputable insurers of a character usually
insuring entities engaged in the same or similar business and
similarly situated as Shipowner, against loss or damages of all
kinds and in the amounts customarily insured against by such
entities or as the Mortgagee shall from time to time reasonably
require.
(b) If the Mortgagee takes possession of the Vessel, the
insurance policy or policies and any unearned or returned
premiums thereon shall, at the option of the Mortgagee, become
the sole property of the Mortgagee upon the Mortgagee's crediting
the amount of any unearned premium upon the obligations of the
Mortgagor secured hereby; provided, however, that nothing in this
provision shall impose upon the Mortgagee any duty to determine
the adequacy of any insurance.
(c) In the event of any insured loss which is not
greater than $100,000, the Shipowner shall have the sole right to
settle any and all losses and claims. In the event of any
insured loss in excess of $100,000, Mortgagee may but shall not
be obligated to make proof of loss if such proof of loss is not
promptly made by the Shipowner, and the payment for any such loss
shall be made by the insurer directly to Mortgagee or its
assigns.
(d) In the event the Shipowner fails to provide,
maintain, keep in force or deliver and furnish to Mortgagee the
policies of insurance required by this Section, Mortgagee may,
after providing at least three (3) days prior written notice to
the Shipowner, procure such insurance for risks covering
Mortgagee's interest, and the Shipowner will pay all premiums
thereon promptly upon demand by Mortgagee, and until such payment
is made by the Shipowner the amount of all such premiums together
with a late charge on such amount equal to four percent (4%) of
the amount past due or any part thereof, as reimbursement for
administrative costs and not as a penalty, which amount
6
<PAGE>
shall be secured by this Mortgage.
(e) During the continuance of (i) a taking or
requisition of the use of the Vessel by any United States
government or governmental body, or (ii) a charter of the use of
the Vessel by any United States government or governmental body,
the provisions of this Section shall be deemed to have been
complied with in all respects if such United States government or
governmental body shall have agreed to reimburse the Shipowner
for loss or damage resulting from the risks indicated in this
Section, or if the Shipowner shall be entitled to just
compensation therefor. In the event of any taking, requisition,
charter or loss contemplated by this Section 1.09(e), the
Shipowner shall promptly furnish to the Mortgagee a Shipowner's
Certificate stating that such taking, requisition, charter or
loss has occurred and that the United States government or
governmental body in question has agreed to reimburse the
Shipowner for loss or damage resulting from the risks indicated
in Section 1.09(a) or that the Shipowner is entitled to just
compensation therefor. All amounts received by the Shipowner
from the United States government or governmental body as a
result of any taking, requisition, charter or loss contemplated
by this Section shall be paid to Mortgagee or its assigns.
(f) The Shipowner shall not, without the prior written
consent of the Mortgagee, do any act, or voluntarily suffer or
permit any act to be done, whereby any insurance required by this
Section 1.09 shall or may be suspended, impaired or defeated, or
suffer or permit the Vessel to engage in any voyage, to carry any
cargo, or engage in any other activity not permitted under the
policies of insurance then in effect without procuring insurance
satisfactory to the Mortgagee covering the Vessel in all respects
for such voyage, the carriage of such voyage or such activity.
(g) In the event that any claim or Lien is asserted
against the Vessel for loss, damage or expense which is covered
by insurance hereunder, and it is necessary for the Shipowner to
obtain a bond or supply other security to prevent arrest,
detention or attachment of the Vessel or to obtain the release of
the Vessel from arrest, detention or attachment on account of
said claim or Lien, the Mortgagee, at the written request of the
Shipowner may, but it shall not be required to, assign all of its
right, title and interest in and to said insurance covering such
loss, damage or expense, to any person, firm or corporation
executing a surety or guaranty bond or other agreement to save or
to release the Vessel from such arrest, detention or attachment
as collateral security to indemnify against liability under said
bond or other agreement.
(h) At Mortgagee's option, all policies of required
insurance shall either have attached thereto a lender's loss
payable endorsement for the benefit of Mortgagee in form
satisfactory to Mortgagee and shall name Mortgagee as an
additional insured and loss payee. The Shipowner shall deliver
to the Mortgagee copies of the original policies evidencing
insurance maintained under this Section, together with any
certificates covering such policies.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHIPOWNER
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The Shipowner hereby represents, warrants and further
covenants to and for the benefit of Mortgagee as follows:
SECTION 2.01. The Shipowner is a partnership organized,
validly existing and in good standing under the laws of the State
of Indiana and has all requisite organizational power and
authority and the legal right to own and operate its properties
and to carry on its business as presently conducted. The
Shipowner has all requisite organizational power and authority to
enter into this Mortgage and to carry out the transactions
contemplated hereby.
SECTION 2.02.
(a) The execution and delivery by the Shipowner of this
Mortgage (together with the Declaration of citizenship attached
hereto as Exhibit B) and the consummation by the Shipowner of the
transactions contemplated hereby have been duly and validly
authorized by all necessary organizational action on the part of
the Shipowner. This Mortgage has been duly and validly executed
and delivered by the Shipowner. This Mortgage is a valid and
binding obligation of the Shipowner enforceable against the
Shipowner in accordance with its terms, except that
enforceability may be limited by (i) equitable principles, (ii)
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights, (iii) limitations
imposed by applicable laws upon the enforceability of rights to
indemnification, and (iv) commercial reasonableness.
(b) The execution, delivery and performance by the
Shipowner of this Mortgage and the consummation of the
transactions contemplated hereby, do not (i) violate any
provision of the organizational documents, if any, of the
Shipowner, or any charter of the Vessel (ii) conflict with,
result in a breach of or constitute (or, with the giving of
notice or lapse of time, or both, constitute) a default under, or
require the approval or consent of any Person (other than those
consents previously obtained) pursuant to, any material note,
bond, mortgage or any franchise, license, permit, agreement or
other instrument or obligation of the Shipowner or violate any
provision of Applicable Law binding on the Shipowner, or (iii)
result in the creation or imposition of any Lien upon any of the
Shipowner's assets except for Liens created under this Mortgage.
Except for filings and recordings in connection with the
perfection of Liens created by this Mortgage, the Lease and
Schedules, no Governmental Approval (other than those consents
previously obtained) is or will be required in connection with
the execution, delivery and performance by the Shipowner of this
Mortgage or the consummation of the transactions contemplated
hereby.
SECTION 2.03. The Shipowner is a citizen of the United
States within the meaning of Section 2 of the Shipping Act of
1916, as amended.
SECTION 2.04. The Shipowner is the sole owner and is
lawfully possessed of the whole (100%) of the Vessel, free from
any security interests, liens, charges or encumbrances other than
this Mortgage and Liens permitted hereunder. Upon filing of this
Mortgage with the U.S. Coast Guard, this Mortgage shall
constitute a valid and perfected preferred ship mortgage in favor
of the Mortgagee
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subject to no prior Liens other than Permitted Liens. The
Shipowner will warrant and defend title to and possession of the
Vessel and every part thereof against, and will hold harmless the
Mortgagee from and against, any and all claims and demands of any
persons arising as the result of any Lien, charge or encumbrance
on the Vessel, provided that the foregoing shall not apply to
Permitted Liens.
ARTICLE III
DEFAULTS AND REMEDIES
SECTION 3.01. The occurrence and continuance of one or
more of the following events shall constitute an "Event of
Default";
(a) The Shipowner shall fail to pay any payment of Rent
due or to become due under the Lease or the Schedules when due
and payable subject to the terms of the Lease and the Schedules;
(b) Any representation or warranty made in, under or
pursuant to this Mortgage shall have been false or misleading in
any materially adverse respect as of the date on which such
representation or warranty was made;
(c) This Mortgage, at any time after its execution and
delivery and due recording with the United States Coast Guard for
any reason, shall cease to constitute a valid and perfected
preferred ship mortgage;
(d) Shipowner shall fail to pay when due any amount
required to be paid by Shipowner under this Mortgage or timely to
observe, perform or discharge any obligation, term, condition,
covenant or agreement contained herein or in the Lease or an
event of default shall occur under the Lease, and any such
failure or default shall remain unremedied according to the terms
thereof;
(e) With respect to Sections 1.09(a), 1.09(e) and 3.05
hereof, the Shipowner shall fail timely to observe, perform or
discharge its obligations contained therein and any such failure
shall remain unremedied for five (5) days after written notice to
the Shipowner by Mortgagee;
(f) Any "Event of Default" as defined in the Lease shall
have occurred and be continuing thereunder; or
(g) The Shipowner shall remove or attempt to remove the
Vessel beyond the limits of the United States of America.
SECTION 3.02. If any Event of Default shall have occurred
and be continuing:
(a) The Mortgagee may declare all aggregate rent then
accrued and unpaid, together
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with the balance of any rent for the entire term of the Lease,
and all additional lease charges due under the Lease, together
with all other amounts owing to the Mortgagee under this Mortgage
to be forthwith due and payable.
(b) The Mortgagee may exercise all of the rights and
remedies in foreclosure and otherwise given to mortgagees by laws
of the United States of America or other applicable provisions of
law, including but not limited to, the law of any jurisdiction in
which the Vessel may be found.
(c) The Mortgagee may bring suit at law, in equity or in
admiralty, as it may be advised, to recover judgment for any and
all amounts due under the Lease, this Mortgage or otherwise and
collect the same out of any property of Shipowner, whether
covered by this Mortgage or otherwise.
(d) The Mortgagee may take and enter into possession of
the Vessel at any time wherever the same may be, without legal
process and without being responsible for loss or damage, and the
Shipowner or other person in possession forthwith upon demand of
the Mortgagee shall surrender to the Mortgagee possession of the
Vessel and the Mortgagee may, without being responsible for loss
or damage, hold, lay up, lease, charter, operate or otherwise use
the Vessel for such time and upon such terms as it may deem to be
for its best advantage, and demand, collect and retain, subject
to Permitted Liens, all hire, freights, earnings, issues,
revenues (excluding gaming revenues), income, profits, return of
premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect to
any of the Vessel or in respect of any insurance thereon from any
person or entity whomsoever.
(e) The Mortgagee may take and enter into possession of
the Vessel at any time, wherever the same may be, without legal
process, or if it seems desirable to the Mortgagee and without
being responsible for loss and damage, with or without taking
possession of the Vessel, sell the Vessel, whether in whole or in
component parts, at any place and at such time as the Mortgagee
may specify and in such manner as the Mortgagee may deem
advisable, free from any claim by the Shipowner in admiralty, in
equity, at law or by statute, after first giving notice of the
time and place of sale with a general description of the property
in the following manner:
(i) By publication of such notice for six (6)
consecutive days (except Sunday) in a daily English
language newspaper of general circulation published in the
county in which the sale takes place or as designated by a
United States District Court having jurisdiction in the
circumstance; and
(ii) By sending a similar notice to the Shipowner
by registered mail on the date of first publication to the
Shipowner at the address first specified hereinabove.
(f) The Mortgagee may exercise all rights, privileges
and remedies in foreclosure or otherwise given the Mortgagee
under this Mortgage and by the Lease.
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SECTION 3.03. Any sale of the Vessel and/or their
component parts made pursuant to 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 Shipowner therein and thereto (other than the
right of the Shipowner to receive monies upon the application of
funds in accordance with the terms of this Mortgage, and shall
bar the Shipowner and 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 the
application of the proceeds thereof. In case of any such sale,
any holder of the Lease, whether by assignment or otherwise,
shall be entitled, for the purpose of making settlement or
payment for the property purchased, to use and apply the
indebtedness evidenced under the Lease in order that there may be
credited against the amount remaining due and unpaid thereon the
sums payable out of the net proceeds of such sale to such holder
after allowing for the costs and expenses of sale and other
charges; and thereupon such holder shall be credited, on account
of such purchase price, with the net proceeds that shall have
been credited upon the Lease. At any such sale, any holder under
the Lease, whether by assignment or otherwise, may bid for and
purchase such property and upon compliance with the terms of sale
may hold, retain and dispose of such property without further
accountability therefor.
SECTION 3.04. The Mortgagee is hereby irrevocably
appointed attorney-in-fact of the Shipowner during the existence
and occurrence of an Event of Default to execute and deliver to
any purchaser aforesaid, and is hereby vested with full power and
authority to make, in the name and in behalf of the Shipowner,
subject to the Intercreditor Agreement, a good conveyance of the
title to the Equipment on the Vessel and/or its component parts
so sold. In the event of the sale of the Vessel and/or its
component parts, under any power herein contained, the Shipowner
will, if and when required by the Mortgagee, execute such form of
conveyance of the Vessel and/or its component parts as the
Mortgagee may direct or approve.
SECTION 3.05.
(a) The Mortgagee is hereby irrevocably appointed
attorney-in-fact of the Shipowner during the existence of any
Payment Default or Event of Default to demand, collect, receive,
compromise and sue for, in the name of the Shipowner, so far as
may be permitted by law and subject only to Permitted Liens, all
freight, hire, earnings, issues, revenues (including without
limitation any gaming revenues), income and profits of the Vessel
and all amounts due from underwriters under any insurance thereon
as payment of losses or as return premiums or otherwise, salvage
awards and recoveries, recoveries in general average or
otherwise, and all other sums thereafter due or to become due in
respect of the Vessel, or in respect of any insurance thereon,
from any person or entity whomsoever, and to make, give and
execute in the name of the Shipowner acquittances, receipts,
releases or other discharges for the same, whether under seal or
otherwise, and to accept and endorse in the name of the Shipowner
all checks, notes, drafts, warrants, agreements and other
instruments in writing with respect to the foregoing, and the
Shipowner authorizes the Mortgagee to take any such action.
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(b) If any legal proceedings shall be taken to enforce
any right under this Mortgage, the Mortgagee shall be entitled as
a matter of right to the appointment of a receiver of the Vessel
and of the freights, hire, earnings, issues, revenues (excluding
any gaming revenues), income and profits due or to become due and
arising from the operation thereof.
SECTION 3.06. In the event that the Vessel shall be
arrested, attached or detained by a marshal or other officer of
any court of law, equity or admiralty jurisdiction or by any
government or other authority, the Shipowner shall within
twenty-four (24) hours thereafter notify the Mortgagee in writing
by telegram, facsimile or reputable overnight courier confirmed
by letter by First Class U.S. Mail, and shall use its best
efforts to obtain the release of the Vessel from arrest,
attachment or detention within fifteen (15) days from the date of
arrest, attachment or detention. In the event the Shipowner
shall not have obtained the release of the Vessel from arrest,
attachment or detention within fifteen (15) days from the date of
arrest, attachment or detention, the Shipowner does hereby
authorize and empower the Mortgagee, in the name of the
Shipowner, or its successors or assigns, to apply for and receive
possession of and to take possession of the Vessel with all the
rights and powers that the Shipowner, 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 an appointee or appointees,
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. The Shipowner
authorizes and empowers the Mortgagee or its appointees or any of
them to appear in the name of the Shipowner, its successors and
assigns, in any court where a suit is pending against the Vessel
because or on account of any alleged Lien against the Vessel from
which the Vessel has not been released and to take such actions
and/or proceedings as the Mortgagee or its appointees or any of
them may deem proper towards the defense of such suit and the
purchase, satisfaction or discharge of such Lien, and all
expenditures to the extent reasonably made or incurred by them or
any of them for the purpose of such defense or purchase,
satisfaction or discharge shall constitute an additional
indebtedness which shall be secured by this Mortgage in like
manner and extent as if the amount and description-thereof were
written herein.
SECTION 3.07. 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 given herein, given to the Mortgagee
pursuant to the Lease 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. The exercise of
any right or remedy shall not constitute an election of remedies
by Mortgagee. No delay or omission by the Mortgagee in the
exercise of any right or power or in the pursuit of any remedy
accruing or above provided shall impair any such right, power or
remedy. No provision of this Mortgage or the Lease shall be
deemed to constitute a waiver by the Mortgagee of the preferred
status of this Mortgage given by Chapter 313 of Title 46 of the
United States Code, and any provision of this Mortgage which
would otherwise constitute such a waiver shall to such extent be
of no force and effect.
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To the fullest extent that it may lawfully so agree, the
Shipowner covenants and agrees it shall not at any time insist
upon, claim, plead, or take the benefit or advantage of any
appraisement, valuation, stay, extension, moratorium, or
redemption law now or hereafter in force in order to prevent,
delay or hinder the enforcement of this Mortgage or the exercise
by the Mortgagee of any of the remedies set forth in this Article
III or the taking of possession of the Vessel by any purchaser at
any sale held pursuant to this Mortgage; and the Shipowner, for
itself and all who may claim through it, as far as it or they now
or hereafter lawfully may do so, hereby waives the benefit of all
such laws.
SECTION 3.08. In case the Mortgagee shall have proceeded
to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been
determined adversely to the Mortgagee, then, and in every such
case, the Shipowner and the Mortgagee shall be restored to their
former positions and rights hereunder with respect to the
property subject or intended to be subject to this Mortgage, and
all rights, remedies and powers of the Mortgagee shall continue
as if no such proceedings had been taken.
SECTION 3.09. The gross proceeds of the sale of the Vessel
by the Mortgagee under any of the powers herein specified and any
and all other monies received by the Mortgagee pursuant to or
under the terms of this Mortgage or in any proceedings hereunder,
the application of which has not elsewhere been specifically
provided for herein or in the Lease shall be held by the
Mortgagee and shall be applied as follows:
First: To the payment of all costs and expenses
incurred by the Mortgagee in the exercise or
administration of its rights and remedies hereunder,
including the expenses of any sale, the expenses of any
retaking, attorneys fees, court costs, and any other
expenses or advances made or incurred by the Mortgagee
in the administration or protection of its rights or
the pursuit of its remedies hereunder;
Second: To the payment of all unpaid payments of rent
due and to become due for the entire term of the Lease
and all other sums or charges due under the terms of
the Lease, together with interest thereon, and to the
payment of all other sums secured hereby, in such order
of application as the Mortgagee may elect;
Third: To the payment of any surplus thereafter
remaining to the Shipowner, or its successors or
assigns, or as a court of competent jurisdiction may
direct.
In the event that the proceeds are insufficient to pay the
amounts specified in the subclauses "First" and "Second" above,
the Mortgagee shall be entitled to collect the balance from the
Shipowner or any other person or entity liable therefor.
SECTION 3.10. If the Shipowner shall make default in the
observance or performance of any of the covenants, conditions or
agreements in this Mortgage on its part to be performed or
observed,
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the Mortgagee may in its sole discretion do all acts and make all
expenditures necessary to remedy such default, including, without
limitation of the foregoing, purchase of insurance, payment of
taxes, claims and assessments, and entry upon the Vessel to make
repairs, and the Shipowner shall promptly reimburse the
Mortgagee, with interest at the rate of twelve and one-half
percent (12.5%) for any and all expenditures so made or incurred
and, until the Shipowner has so reimbursed the Mortgagee for such
expenditures, the amount thereof shall be a debt due from the
Shipowner to the Mortgagee and payment thereof shall be secured
by the lien of this Mortgage in like manner and extent as if the
amount and description thereof were written herein; but the
Mortgagee, though privileged so to do, shall be under no
obligation to make any such expenditures nor shall the making
thereof relieve the Shipowner of any default in that respect.
SECTION 3.11. Until an Event of Default shall have
occurred and be continuing, the Shipowner shall be suffered and
permitted to retain title to and possession of the Vessel.
SECTION 3.12. Mortgagee may, if it so elects, seek the
appointment of a receiver or keeper to take possession of the
Vessel and to enforce any of Mortgagee's remedies with respect to
such appointment without prior notice or hearing. The rights,
remedies and powers of any receiver appointed by a court shall be
as ordered by the court.
ARTICLE IV
CERTAIN AGREEMENTS
SECTION 4.01. Regardless of the occurrence of a Default or
Event of Default, the Shipowner agrees to pay to the Mortgagee
any and all advances, charges, costs and expenses, including the
fees and expenses of attorneys and any experts or agents,
incurred by the Mortgagee, and this Mortgage shall also secure
the repayment of such sums, in connection with (a) the
administration of this Mortgage (b) the protection of its
priority in the Vessel, including the discharging of any prior or
junior Lien or adverse claim against the Vessel or any part
thereof that is not permitted hereby, (c) the custody,
preservation or sale of, collection from, or other realization
upon, the Vessel, (d) the exercise or enforcement of any of the
rights, powers or remedies of the Mortgagee under this Mortgage,
the Lease or under Applicable Law, or (e) the failure by the
Shipowner to perform or observe any of the provisions hereof.
All such amounts and all other amounts payable hereunder shall be
payable on demand, together with interest at the rate of twelve
and one-half percent per annum.
SECTION 4.02. All of the covenants, promises, stipulations
and agreements of the Shipowner contained in this Mortgage shall
bind the Shipowner and its successors and assigns and shall inure
to the benefit of the Mortgagee and its respective successor and
assigns. In the event of any assignment of this Mortgage, the
term "Mortgagee", as used in this Mortgage, shall be deemed to
include any such assignee.
SECTION 4.03. This Mortgage may be executed in any number
of
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counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
SECTION 4.04. If any provision of this Mortgage is deemed
to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability
of the remaining provisions of this Mortgage.
SECTION 4.05. For purposes of the Ship Mortgage Act, the
total principal amount of the debt secured by this Mortgage is
$11,000,000.00, plus interest, expenses and fees and performance
of the foregoing Mortgage covenants. The discharge amount is the
same as the total amount.
SECTION 4.06.
(a) All notices and other communications under this
Mortgage shall be in writing and shall be given in the manner set
forth in the Lease. Unless otherwise specified in a notice given
in accordance with the foregoing provisions of this Section,
notices and other communications shall be given to the parties
hereto at their respective addresses (or to their respective
telecopier numbers) indicated in the Preliminary Mortgage Data
section hereof.
(b) Mortgagee shall promptly execute, deliver and
acknowledge (if acknowledgment is appropriate) any necessary or
proper instruments of termination, satisfaction or release to
evidence the release of this Mortgage as and when permitted to be
released pursuant to the Indenture or hereunder.
(c) Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Lease.
SECTION 4.07. WAIVER OF TRIAL BY JURY. THE SHIPOWNER AND
THE MORTGAGEE HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION UNDER THIS MORTGAGE OR ANY ACTION ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY
INITIATES SUCH ACTION OR ACTIONS.
THE SHIPOWNER SPECIFICALLY AGREES THAT IT HAS READ AND
FULLY UNDERSTANDS EACH OF THE FOREGOING WAIVERS CONTAINED IN THIS
MORTGAGE AND THAT SUCH WAIVERS ARE KNOWINGLY MADE, WITHOUT
DURESS, ARE NEGOTIATED AND BARGAINED FOR TERMS OF THIS AGREEMENT,
AND ARE MATERIAL INDUCEMENTS TO THE MORTGAGEE, WITHOUT WHICH THE
LEASE WOULD NOT HAVE BEEN EXTENDED BY THE MORTGAGEE OR TO THE
SHIPOWNER.
SECTION 4.08. PAYMENTS SET ASIDE. Notwithstanding
anything to the contrary herein contained, this Mortgage shall
continue to be effective or be reinstated, as the case may be, if
at any
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time any payment, or any part thereof, on the Lease or any other
obligation secured hereby is rescinded, invalidated, declared to
be fraudulent or preferential or otherwise required to be
restored or returned by the Mortgagee in connection with any
bankruptcy, reorganization or similar proceeding involving the
Shipowner, any other party liable with respect to the Lease or
any other obligation secured hereby or otherwise, if the proceeds
of any such payment are required to be returned by the Mortgagee
under any such circumstances. Without limiting the generality of
the foregoing, if prior to any such rescission, invalidation,
declaration, restoration or return, this Mortgage shall have been
released or terminated, this Mortgage shall be reinstated in full
force and effect, and such prior cancellation or surrender shall
not diminish, discharge or otherwise affect the obligations of
the Shipowner in respect of this Mortgage.
SECTION 4.09. POWER OF ATTORNEY. The Shipowner hereby
irrevocably appoints the Mortgagee, and its employees, agents and
permitted assigns as the Shipowner's true and lawful attorneys-in-
fact, with full power of substitution, to do all things required
to be done by the Mortgagee under this Mortgage and to do all
things that the Mortgagee may deem necessary or advisable to
assure the attachment, perfection and first priority of this
Mortgage (other than Permitted Liens) or otherwise to exercise
the rights and remedies of the Mortgagee hereunder or carry out
the intent of this Mortgage. Without limitation, the Mortgagee
and its officers and agents shall be entitled to do all of the
following, as fully as the Shipowner might:
(a) to sign the name of the Shipowner on any documents
necessary for the documentation or redocumentation of the Vessel
or any successor vessel of the Vessel and to take all actions
necessary to document or redocument such Vessel with the United
States Coast Guard or other appropriate Governmental Authority;
and
(b) to sign in the name of the Shipowner on all or any
mortgage described in Section 1.02 and to file such mortgage with
the United States Coast Guard or other appropriate Governmental
Authority, and to take such other action as Mortgagee, in its
sole discretion, may elect in order to establish and maintain the
Lien in the Vessel as a preferred ship mortgage upon the Vessel
(subject to no prior Liens other than Permitted Liens) and all
additions, improvements and replacements made in or to such
vessel, or any part thereof.
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IN WITNESS WHEREOF, the parties have caused this Mortgage
to be duly executed as of the day and year first above written.
MORTGAGOR/SHIPOWNER:
SHOWBOAT MARINA CASINO PARTNERSHIP,
an Indiana general partnership
By: SHOWBOAT MARINA PARTNERSHIP, an
Indiana general partnership, its
general partner
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada
limited partnership, its general
partner
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:______________________________
Name:_______________________
Title:______________________
STATE OF INDIANA )
) SS
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ___
day of _________, 1997 by ________________, the _________________
of _________________________ on behalf of Showboat Marina Casino
Partnership, an Indiana general partnership.
______________________________
Notary Public
My Commission Expires:_______________
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MORTGAGEE:
PDS FINANCIAL CORPORATION,
a Minnesota corporation
By:_______________________________
Its:______________________________
STATE OF ___________________ )
)
COUNTY OF __________________ )
The foregoing instrument was acknowledged before me this ___
day of _____________, 1997 by _______________________________, the
_________________ of PDS Financial Corporation, a Minnesota
corporation, on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:________________
18
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INTERCREDITOR AGREEMENT
This Intercreditor Agreement ("Agreement") is entered into
as of the 21st day of February, 1997, by and among PDS Financial
Corporation, a Minnesota corporation ("PDS"), Showboat Marina
Casino Partnership, an Indiana Partnership ("Showboat") and
Firstar Bank of Minnesota, N.A., a national banking association,
as trustee ("Firstar").
RECITALS
A. Showboat, with its partnership address at 400 East
Chicago Avenue, East Chicago, Indiana 46312, upon documentation
of the Vessel (as such term is hereinafter defined), will have
purchased the M/V _________________________, Official Vessel
Number __________ (the "Vessel"). Firstar is the bond trustee
for certain financing involving Showboat and Showboat's
affiliates (the "Firstar Financing") in connection with the
purchase of the Vessel and completion of improvements thereto.
The Firstar Financing is secured by a certain Preferred Ship
Mortgage (the "Firstar Mortgage") encumbering the Vessel.
Subject to certain conditions, PDS intends to provide Showboat
with certain lease financing in connection with certain Equipment
(as such term is hereinafter defined) to be located on the Vessel
and used in connection with the gaming operations to be conducted
by Showboat on the Vessel (the "PDS Financing"). The PDS
Financing will be secured by a Preferred Ship Mortgage against
the Vessel which such lien shall attach and be limited to the
Equipment (the "PDS Mortgage").
B. The parties hereto acknowledge that the execution and
delivery of this Agreement is a condition precedent to PDS's
willingness to provide the PDS Financing to Showboat.
AGREEMENT
1. CONSENT. Firstar hereby consents to the execution and
delivery by Showboat of the PDS Mortgage.
2. DEFINITIONS. Except as otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings
set forth below:
"PDS Debt" shall mean all indebtedness and liabilities
of Showboat to PDS under, secured by or pursuant to: (a) the PDS
Financing; (b) the PDS Mortgage; (c) all fees and reimbursement
of expenses payable with respect to the PDS Mortgage; and (d) any
and all extensions, renewals, amendments and modifications with
respect to the PDS Financing and/or the PDS Mortgage.
"Equipment" shall mean all equipment described on
Attachment "A" hereto.
"Firstar Debt" shall mean all indebtedness and
liabilities of Showboat to Firstar including but not limited to
payments of principal and accrued interest under, secured by or
pursuant to: (a) the Firstar Financing; (b) the Firstar
Mortgage; (c) all fees and reimbursement of expenses payable with
respect to the Firstar Financing and/or the Firstar Mortgage; and
(d) any and all extensions, renewals, amendments and
modifications with respect to the Firstar Financing and/or the
Firstar Mortgage.
"PDS Event of Default" shall have the meaning set forth
in the PDS Mortgage.
<PAGE>
"Firstar Event of Default" shall have the meaning set
forth in that certain Indenture dated March 28, 1996 between
Showboat, Showboat Marina Finance Corporation and Firstar.
3. PRIORITY OF LIENS.
a. Except as otherwise expressly provided in this
Agreement, any security interest or lien that Firstar now has or
hereafter acquires in the Equipment, whether now existing or
hereafter arising, is and shall be subordinate and inferior in
every respect to any security interest or lien in the Equipment,
whether now existing or hereafter arising, that PDS now has or
hereafter acquires under the PDS Debt. The priorities specified
herein are applicable irrespective of the time or order or
recordation of preferred ship mortgages, the attachment or
perfection of security interests, the time or order of filing of
financing statements or whether any Equipment is in the
possession of PDS, Firstar or Showboat.
b. At a foreclosure sale of the Vessel, Firstar
shall, if permitted by a court having jurisdiction of such
foreclosure proceedings, credit bid the obligations owed under
the PDS Debt, and if Firstar is the purchaser of the Vessel at a
foreclosure sale confirmed by the court having jurisdiction of
the foreclosure sale, Firstar shall hold the Equipment in trust
for PDS and shall promptly after receiving possession of the
Vessel (i) notify PDS that it has possession of the Vessel, (ii)
provide PDS access to the Vessel to remove the Equipment, and
(iii) execute and deliver to PDS any documents or instruments as
PDS may reasonably request to transfer title to the Equipment to
PDS.
c. In holding the Equipment in trust for PDS:
(i). PDS shall be obligated to insure the
Equipment against all damage, destruction, or other risk at PDS's
sole cost and expense; and
(ii). Firstar shall not incur an obligation as
bailee with respect to the condition of the Equipment unless PDS
and Firstar reach a different agreement in writing. PDS agrees
to remove the Equipment from the Vessel within 30 days following
notification from Firstar with respect to possession of the
Vessel. If PDS fails to remove the Equipment within such 30-day
period, Firstar, shall have the right to remove the Equipment and
store the same and PDS agrees to reimburse Firstar for all costs
and expenses relating to such removal and storage, plus interest
at the rate of two percent over the prime rate as published in
the Wall Street Journal, until paid.
d. If it is necessary for PDS to bid at a foreclosure
sale to protect its interests in the Equipment, then, if
permitted by a court having jurisdiction over the foreclosure
sale of the Vessel, PDS and Firstar may, but shall not be
required to, jointly credit bid the obligations owed by Showboat
under and pursuant to: (a) the PDS Debt; and (b) the Firstar
Debt, and if they are the successful purchasers of the Vessel as
a result of such credit bid, then upon confirmation of such
foreclosure sale by the court: (a) Firstar shall provide PDS
access to the Vessel to remove the Equipment which removal shall
begin within 30 days of PDS receiving notice and shall be
promptly completed; (b) Firstar shall execute and deliver any
documents or instruments as PDS may reasonably request to
transfer title to the Equipment to PDS; (c) PDS shall execute and
deliver documents or instruments to transfer title to the Vessel
without the Equipment to Firstar. The parties acknowledge and
agree that if the court having jurisdiction of the foreclosure
sale refuses to permit the joint bid pursuant to this paragraph,
each party shall have the right to bid at the foreclosure sale to
protect its
2
<PAGE>
own interest.
e. Firstar and PDS shall not allege, institute,
assert, or in any way assist or cooperate with the allegation,
institution or assertion that the joint bid set forth in
paragraph 3.d above shall not be permitted by the court having
jurisdiction of the foreclosure sale.
4. DAMAGE TO VESSEL DURING REPOSSESSION OF EQUIPMENT. The
parties acknowledge that some items of the Equipment are attached
to the Vessel and that removal of such Equipment from the Vessel
by PDS may leave holes or disconnected conduit or other
electrical connections in the Vessel and may otherwise cause
damage to the Vessel. Notwithstanding the foregoing, PDS will
use reasonable care not to damage the Vessel as a result of its
removal of the Equipment and will repair any major damage to the
Vessel that is caused as a result of the removal of the Equipment
from the Vessel. The term "major damage" shall mean any
collective damage to the Vessel caused as a result of removal of
the Equipment in excess of $5000.00 in the aggregate.
5. LEGEND; FURTHER ASSURANCES.
a. The parties shall cause each instrument or
document which now or hereafter evidences all or any portion of
the PDS Debt or the Firstar Debt to be conspicuously marked with
the following legend:
"This instrument is subject to the terms of an
Intercreditor Agreement dated as of February ____,
1997."
b. Upon request, Firstar and PDS will execute all
documents and instruments reasonably necessary to evidence or
carry out the provisions of this Agreement.
6. NO IMPAIRMENT OF SHOWBOAT'S OBLIGATIONS. Nothing
contained in this Agreement shall impair, as between
Showboat, PDS and Firstar, the obligations of Showboat, which
are unconditional and absolute, to pay the PDS Debt and the
Firstar Debt as and when all or any portion thereof shall
become due and payable in accordance with its terms or
prevent Firstar or PDS from exercising all of their rights,
powers and remedies provided by agreement, applicable law or
otherwise in accordance with the terms hereof. Nothing in
this Agreement shall impair Firstar's or PDS's rights under
any other security interest, lien or mortgage in any other
property of Showboat. This Agreement is solely for the
benefit of Firstar and PDS and is not for the benefit of
Showboat, any guarantor or any other third party.
7. DOCUMENTATION OF VESSEL; FILING OF PDS MORTGAGE.
Showboat shall cause, as soon as practicable after
construction has been sufficiently completed to permit such
actions (but in no event later than five (5) business days
after title to the Vessel has been conveyed to Showboat), the
Vessel to be a newly documented United States vessel with the
United States Coast Guard, and to file and perfect the PDS
Mortgage. Showboat shall also cause, as soon as practicable
after filing of the PDS Mortgage with the United States Coast
Guard, Financing Statements to be filed with respect to the
Equipment with the Secretary of State of Indiana and the
Office of the Lake County Recorder. In no event shall the
Vessel be titled under the laws of any state, including the
State of Indiana.
3
<PAGE>
8. PRIORITY OF LIENS. Firstar and PDS have or will
forthwith take preferred ship mortgages pursuant to 46 U.S.C.
Section 31322, and nothing contained in this agreement is
intended to or shall be construed or shall operate to prevent
said mortgages from constituting "preferred" mortgages as
that term is defined in 46 U.S.C. Section 31322. Upon the
execution of this Agreement, Firstar and PDS agree that any
maritime lien presently held by Firstar or PDS against the
Vessel shall not constitute a "preferred maritime lien," as
that term is defined in 46 U.S.C. Section 31303(5) and that
the preferred status of any such "preferred maritime lien,"
if any, is hereby waived as a means to insure that: (a) upon
proper filing of the PDS Mortgage with the appropriate United
States Coast Guard authorities, the PDS Mortgage shall be
senior to all liens on the Vessel but such lien shall only be
utilized to secure its interest in the Equipment; and (b)
upon proper filing of the Firstar Mortgage with the
appropriate United States Coast Guard authorities, the
Firstar Mortgage shall be senior to all liens on the Vessel
except for the PDS Mortgage; all pursuant to 46 U.S.C.
Section 31322.
9. DURATION. This Agreement is of a continuing
nature, and it shall continue in force so long as any portion
of the Firstar Debt or PDS Debt remains unpaid; provided,
however, this Agreement shall terminate at such time as the
PDS Debt is paid in full, so long as such termination or
payment does not result in or constitute a breach or
violation of this Agreement; provided, further, however, this
Agreement shall still be in effect if any payment, or any
part thereof, on any such indebtedness, obligations or
liabilities is rescinded or otherwise must be restored or
returned upon the bankruptcy of Showboat, or upon or as a
result of the appointment of a conservator of Showboat, or
otherwise, all as though such payments had not been made.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon Firstar and PDS and their respective successors
and assigns; provided that this Agreement shall not be
assignable by Firstar and PDS except in conjunction with the
assignment of the PDS Debt or the Firstar Debt, as the case
may be, and the assumption by the assignee, in writing, of
the terms and provisions of this Agreement. Firstar and PDS
will provide the other parties with prompt written notice of
any assignment of the Firstar Debt or the PDS Debt,
respectively and a copy of the document whereby the assignee
shall have agreed to be bound by the terms and provisions of
this Agreement.
11. GOVERNING LAW; REMEDIES. This Agreement shall in
all respects be governed by, and construed and enforced in
accordance with, Federal Admiralty Law and to the extent not
within Admiralty jurisdiction the laws of the State of
Indiana, except for its rules relating to the conflicts of
law. The parties acknowledge that the provisions of this
Agreement are unique and money damages may not provide an
adequate remedy for any breach thereof, and each party may
seek specific performance and other equitable remedies for
any breaches under this Agreement.
12. AMENDMENT AND WAIVERS. Except as otherwise
provided herein, this Agreement may be changed, modified or
waived only by a written document signed by Firstar and PDS.
No delay or failure by any party to exercise any right, power
or remedy hereunder shall affect or operate as a waiver
hereunder.
13. NOTICES.
a. All notices to be given under this Agreement
must be in writing and will be effective only when given at
the addresses and to the attention of the persons stated
below, or at such
4
<PAGE>
other address or to the attention of such other person as the
recipient has previously designated in writing to the sending
party. No party is obligated to give any other party any
notices under this Agreement except as expressly set forth
herein.
b. Any communication or notice so addressed and
mailed shall be deemed to be given three days after mailing.
Any communication or notice otherwise delivered shall be
deemed to be given when answered-back if telexed, when
receipt is acknowledged if telecopied, or personally
delivered.
14. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties and supersedes all prior
agreements and understandings, oral and written, between the
parties hereto with respect to the subject matter hereof and
the transactions contemplated hereby.
15. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto on
separate counterparts each of which, when so executed and
delivered, shall be an original, and all such counterparts
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
FIRSTAR BANK OF MINNESOTA, PDS FINANCIAL CORPORATION,
N.A., a national banking a Minnesota corporation
association
By:_______________________ By:_______________________
Its:______________________ Its:______________________
SHOWBOAT MARINA
CASINO PARTNERSHIP,
an Indiana general
partnership
By: SHOWBOAT MARINA PARTNERSHIP,
an Indiana general partnership,
its general partner
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP,
a Nevada limited partnership,
its general partner
By: SHOWBOAT INDIANA, INC.,
a Nevada corporation,
its general partner
By:____________________________
Name:_____________________
Title:____________________
5
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the consolidated
financial statements of Showboat Marina Casino Partnership for the quarter
ended March 31, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0001013788
<NAME> SHOWBOAT MARINA CASINO PARTNERSHIP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 620
<SECURITIES> 25,581
<RECEIVABLES> 1,175
<ALLOWANCES> 0
<INVENTORY> 622
<CURRENT-ASSETS> 29,023
<PP&E> 140,116
<DEPRECIATION> 0
<TOTAL-ASSETS> 193,075
<CURRENT-LIABILITIES> 7,839
<BONDS> 150,984
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 193,075
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,045
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (332)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
