Exhibit 10.14
AMENDED AND RESTATED
BAREBOAT CHARTER AND OPTION TO PURCHASE
of the Casino Cruise Ship
PALM BEACH PRINCESS
THIS AMENDED AND RESTATED BAREBOAT CHARTER AND OPTION TO PURCHASE
("Charter") is made and entered into as of July 1, 2005 by and among Cruise
Holdings I, LLC, a Nevada limited liability company (hereinafter "CH I" or
"Owner"), the owner of the casino cruise ship PALM BEACH PRINCESS (hereinafter
the "Vessel"), Palm Beach Maritime Corporation, a Delaware corporation ("PBM"),
Palm Beach Empress, Inc., a Delaware corporation ("PBE," and together with PBM,
"Original Charterer"), ITG Vegas, Inc., a Nevada corporation ("ITGV" or
"Charterer"), as charterer of the Vessel, and ITG Palm Beach, LLC, a Delaware
limited liability company ("ITGPB").
W I T N E S S E T H:
WHEREAS, Owner and Original Charterer are parties to a Bareboat Charter and
Option to Purchase of the casino cruise ship Palm Beach Empress dated as of July
6, 2004 pursuant to which Owner chartered the Vessel to Original Charterer (the
"Original Charter"); and
WHEREAS, Original Charterer, ITGV and ITGPB are parties to a Sub-Bareboat
Charter of the casino cruise ship Palm Beach Empress pursuant to which Original
Charterer as owners pro hac vice and current charterers of the Vessel
sub-chartered the Vessel to ITGV and ITGPB (the "Original Sub-Charter"); and
WHEREAS, pursuant to a Loan and Security Agreement among Owner, Charterer
and certain of their affiliates (collectively, the "ITGV Borrowers") and PBE and
PBM and certain other affiliates of ITGV and ITGPB as guarantors (the "Loan
Agreement"), ITGV and ITGPB refinanced certain of their debt obligations to PDS
Gaming Corporation (the "Refinancing"); and
WHEREAS, in connection with the Refinancing, and pursuant to a Membership
Interest Purchase Agreement, PDS Gaming Corporation transferred all of the
membership interests in Owner to PBM; and
WHEREAS, in view of the foregoing, the parties desire to combine, amend and
restate the Original Charter and the Original Sub-Charter, all as set forth
herein.
NOW THEREFORE, upon the terms and conditions hereinafter set forth, Owner
agrees to charter and Charterer agrees to accept under charter the Vessel.
ARTICLE 1
DESCRIPTION OF VESSEL
The Vessel is an ocean-going casino cruise ship registered under Panamanian
flag, Patente No. 14348-84-E and IMO No. 8402937, built in Finland in 1964, and
more particularly described in Appendix A attached hereto.
ARTICLE 2
PERIOD OF CHARTER
A. The period of this Charter shall be for a period beginning as of the
date hereof and ending July 1, 2009 (hereinafter the "Charter Period"). This
Charter automatically supersedes and terminates the Bareboat Charter and
Bareboat Sub-charter.
B. At the end of the Charter Period, or upon the sooner termination of this
Charter for any reason, ITGV or ITGPB shall have the right to (i) purchase from
Owner the Vessel, or (ii) purchase from PBM all of the membership interests of
Owner pursuant to the terms and conditions set out in Article 19 hereof.
ARTICLE 3
MONTHLY CHARTER HIRE
A. Charterer shall pay to Owner charter hire ("Charter Hire") monthly in
advance on or before the first day of each calendar month commencing on the date
of delivery and continuing thereafter until termination of the Charter as
provided herein at the rate of Fifty Thousand Dollars ($50,000.00) per month or
pro rata for any part of a month, plus one percent (1%) of the ITGV Borrower's
Net Revenue (as defined in the Loan Agreement) from the operations of the
Vessel. Any Charter Hire paid in advance and not earned shall be promptly
refunded to Charterer by Owner. Payment of Charter Hire shall be made to Owner
by electronic funds transfer or as otherwise directed by Owner or, if no
directions are given by Owner, for the benefit of Owner at One E. 11th St.,
Riviera Beach, Florida 33404, and shall be deemed paid when it is received by
Owner or its designee. The first monthly Charter Hire payment shall be made on
or before August 1, 2005 and all subsequent payments shall be made on or before
the first day of each calendar month thereafter.
B. Notwithstanding the foregoing, Charterer shall not make any payment of
Charter Hire otherwise due hereunder with respect to any month unless and until
the conditions set forth in Section 14(a)(i) of the Loan Agreement have been
satisfied, including, without limitation, that a Contingent Event, as defined in
Section 1(h) of the Loan Agreement, has occurred; provided, however, that if
with respect to any month during the Charter Period Charterer is unable to make
a payment of Charter Hire for such month because such conditions have not been
satisfied, Charterer shall make an additional payment of Charter Hire for such
missed month during any subsequent month in which Charterer is permitted to make
a Charter Payment under Section 14 (w)(i) of the Loan Agreement; but shall not
make more than two Charter Hire payments in any given calendar month.
C. Charterer shall not make any deductions from the Charter Hire, except
with respect to the following:
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1. Time actually lost by reason of action or failure to act of Owner
or Owner's creditors or claimants other than Charterer or its affiliates, except
to the extent such delays were caused or contributed to by Charterer.
2. Any disbursements for Owner's account, provided Owner agrees in
writing.
3. Any previous overpayments of Charter Hire, excluding any
overpayments of Charter Hire concerning which a bonafide dispute may exist, but
in the latter event Owner shall furnish an adequate bank guarantee or other good
and sufficient security on request of Charterer.
4. Any sums to which Charterer is entitled under Article 12 herein.
D. ITGPB shall be jointly and severally liable with ITGV for payment of all
Charter Hire payments.
ARTICLE 4
ON-HIRE SURVEY
A. As the immediate prior sub-charterer of the Vessel, Charterer accepts
the Vessel As-Is And Where-Is and the parties agree not to require an on-hire
survey. Any damage or deficiencies in either the hull, equipment and/or
machinery affecting either the seaworthiness of the Vessel or its capability to
operate in its intended service or the maintenance of the Vessel's
classification society certificates or U. S. Coast Guard required documents,
certificates, or certifications required to operate in U.S. waters, if any,
discovered at any time prior to or during this Charter shall be the sole
responsibility of Charterer and any such damage or deficiency shall not in any
way alter, amend or excuse Charterer's obligations under this Charter.
B. Charterer's acceptance of the Vessel under this Charter shall constitute
an admission by Charterer of full performance by Owner of its obligations with
respect to the condition of the Vessel on Delivery per Article 5. Thereafter,
Charterer shall not be entitled to make or assert any claim against Owner on
account of agreement, representation or warranty, either express or implied,
with respect to the condition, seaworthiness or fitness of the Vessel. Failure
of Charterer to make an inspection of the Vessel and its appurtenances shall be
entirely at its own risk.
ARTICLE 5
DELIVERY OF THE VESSEL
A. The Vessel will be delivered by Owner hereunder to Charterer as is and
where is at the Port of Palm Beach, Florida as of the date hereof ("Delivery").
B. Representatives of Owner and Charterer shall jointly execute a
Certificate of Delivery and Acceptance, in the form attached hereto and marked
as Appendix B, acknowledging the delivery and receipt of the Vessel.
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C. At the time of Delivery the Vessel shall be fully classed by Det Norske
Veritas, free of all outstanding recommendations, and shall have all her
certificates, including those, if any, issued by the United States Coast Guard,
current and not extended. If any of the Vessel's classification or Coast Guard
certificates require renewal at the time of Delivery, such renewals shall be
paid for by Charterer. Charterer shall keep the Vessel's documentation and
classification certificates in full force and effect during the term of this
Charter or any extensions thereof, providing copies of such certificates to
Owner when issued, and shall renew all such certificates at the time of any
Redelivery under Article 13 whether or not due for renewal, unless otherwise
agreed to by the parties. Further, subject to the prior written approval of
Owner, such approval not to be unreasonably withheld, Charterer may change the
Vessel's classification society.
D. Concurrently with the Delivery of the Vessel hereunder, Owner shall
assign to Charterer all of its rights, title and interest in and to any
warranties and guaranties which Owner may have, provided that the same, if still
in effect, shall be reassigned to Owner upon Redelivery of the Vessel. If any
such warranty or guaranty is not fully assignable to Charterer, Owner shall
cooperate with Charterer to enforce its rights thereunder.
ARTICLE 6
USE AND OPERATION OF THE VESSEL
A. Charterer shall have the full use of the Vessel and, subject to the
trading limits of Article 23 hereof, may employ the Vessel in any lawful trade
or trades in accordance with the laws and regulations of the Vessel's flag state
and any country where the Vessel may be operated, as Charterer may from time to
time elect, and it agrees to comply with all Local, State, and Federal
Regulations pertaining to the operation of the Vessel in the United States.
B. During the Charter Period the Vessel shall be under the complete control
of Charterer, who shall have exclusive possession, control, and command of the
Vessel, subject to the terms hereof, and assumes full responsibility therefor,
including port charges, agencies, fines, assessments and penalties incurred due
to Charterer's use and operation of the Vessel. Nothing herein contained shall
be construed as constituting any implied restriction on Charterer's right,
during the Charter Period, consistent with this Charter, to employ the Vessel
for its own account or for the account of others, either on a voyage or time
charter basis, as Charterer may from time to time determine, provided however,
Charterer must first obtain written consent of Owner, which shall not be
unreasonably withheld or delayed, before entering into any voyage or time
charter other than in the ordinary course of business.
C. This Charter is a full and complete demise of the Vessel to Charterer.
From the time of delivery to the termination of the Charter, at its own expense,
Charterer shall either itself or through a maritime management or agency
contract, man, victual, navigate, including engaging other vessels and pilots,
operate, maintain in a good state of repair and in efficient operating
condition, insure and supply the Vessel. Charterer shall be responsible for all
charges and expenses of every kind and nature whatsoever incidental to
Charterer's use and operation of the Vessel under the Charter including without
limitation fuel, lubricating oil, and water. Charterer shall return the Vessel
to Owner at the expiration of this Charter in the same good order and condition
as when received, reasonable wear and tear excepted, in accordance with Article
13 herein.
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D. 1. Except for a lien for wages of a stevedores, wages for the crew of
the vessel, general average or salvage including contract salvage, and except
for maritime tort liens covered (subject to a reasonable deductible) by
insurance or protection and indemnity entry, Charterer will not create or suffer
to be continued any security interest, lien, encumbrance or charge on the Vessel
or any income therefrom. In due course, and in any event within thirty (30) days
after the same becomes due and payable, Charterer will pay or cause to be
discharged or make adequate provision for the payment or discharge of all claims
or demands which, if not paid or discharged, might result in the creation of a
security interest, lien, encumbrance or charge against the Vessel or any income
therefrom, and will cause the Vessel to be released or discharged from each such
security interest, lien, encumbrance or charge therefor.
2. If a complaint shall be filed against the Vessel or if the Vessel
shall be seized, arrested and/or taken into custody or sequestered by virtue of
any legal proceedings in any court, Charterer shall within ten (10) days
thereafter cause the Vessel to be released and discharged. Charterer shall
remain liable for the payment of Charter Hire throughout any of the foregoing
events.
E. Charterer agrees, at its expense, to drydock the Vessel for the purpose
of cleaning and painting the Vessel's bottom when necessary and making any
required repairs, inspections or surveys, but not less frequently than as
required by the applicable classification society rules, and when drydocking is
due, Charterer agrees to send the Vessel to a port where the Vessel can so
drydock, clean and paint. All expenses incidental to such drydocking and all
charges incurred in connection therewith shall be for Charterer's account,
regardless of whether Owner's repairs, if any, are concurrently made, provided
that Owner's repairs do not delay the operation of the Vessel or increase the
cost to Charterer.
F. Charterer will pay and discharge when and as due and payable, all taxes,
assessments, excises, levies, documentation and registration fees, duties, fines
and penalties and other governmental charges including without limitation,
sales, use, franchise, property, gross receipts and occupation taxes lawfully
imposed upon the Vessel or the ownership, use, operation, registration,
documentation or maintenance thereof during the term of the Charter or on any
Charter Hire or other amounts payable hereunder, other than taxes and other
charges imposed on or measured by the net income or capital of Owner.
G. Notwithstanding anything herein to the contrary, until such time as
Charterer has applied for and obtained an Alcoholic Beverage License from the
State of Florida, Palm Beach Maritime Corporation shall continue to conduct
certain operations and concessions necessary for the sale of alcoholic beverages
and shall be entitled to reimbursement from Charterer of the actual,
out-of-pocket costs incurred by Owner in connection therewith.
ARTICLE 7
CONTINUED REGISTRATION OF VESSEL
The Vessel shall be kept documented under the laws and flag of Panama
during the period of this Charter.
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ARTICLE 8
EQUIPMENT, OUTFIT AND FURNISHINGS
Charterer shall have the use, without extra cost, of all equipment (which
shall include equipment for cabin, crew, and galley, navigational aids, and
technical equipment, furnishings, furniture, and fittings) outfit, appliances,
tools, spare and replacement parts, non-consumable stores, crockery, linen,
etc., as may be on board or installed upon the Vessel (as confirmed by an
inventory conducted by Owner and Charterer) on delivery of the Vessel to
Charterer, but shall exclude all gaming devices and related equipment and
materials. The same or their substantial equivalent, excluding gaming devices
and related equipment and materials and all other equipment leased by Charterer
from third parties, shall be returned to Owner (as confirmed by an inventory
conducted by Owner and Charterer) on Redelivery of the Vessel in the same good
order and condition as when received, normal wear and tear excepted. Charterer
shall from time to time during the Charter period, replace such items of
equipment as shall be so damaged or worn as to be unfit for use. Should the
inventory at Redelivery show missing items of equipment, Charterer shall replace
the item or pay such excess to Owner.
ARTICLE 9
INVENTORY
Charterer owns and has paid for all inventory, including, without
limitation, all consumable stores on board the Vessel at the time of Delivery.
Accordingly, Owner is not entitled to any payment for the inventory, and
Charterer shall have the right to remove the inventory from the Vessel on or
prior to Redelivery and to retain ownership thereof.
ARTICLE 10
ALTERATIONS
A. From time to time after delivery of the Vessel into Charterer's service,
Charterer may make structural and other alterations to the Vessel, its
machinery, or electrical equipment, only with Owner's prior written approval,
which shall not be unreasonably withheld, provided the alterations to the Vessel
and its equipment are returned to their original state at or prior to the
termination of this Charter and Redelivery of the Vessel to Owner. Owner,
however, has the option to retain any alterations made by Charterer at a
mutually agreed price. In addition, leased equipment may be placed on board the
Vessel by Charterer. At the time of Redelivery, Owner has the right at Owner's
expense to continue the lease for such equipment should the lease permit or may
require Charterer to have such equipment removed. As to equipment otherwise
placed aboard the Vessel by Charterer, Charterer shall have the right to remove
same upon Redelivery, provided that if Owner desires to retain the equipment on
board the Vessel, it may purchase the equipment at a price to be agreed upon at
the time of Redelivery. Any additions or alterations permitted by this Article
are subject to approval by the Vessel's classification society and, if required,
the U. S. Coast Guard. Notwithstanding anything to the contrary contained in
this Charter, Charterer shall not have the right to remove any gaming equipment
other than in accordance with that certain Master Lease Agreement (Palm Beach
Princess and Empress II Gaming Equipment), dated as of July 6, 2004, between PDS
Gaming Corporation, as Lessor, and Charterer and ITGPB ("Master Lease"), as
lessee, without the prior written approval of PDS Gaming Corporation and Owner.
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B. Charterer's house colors are currently painted on the Vessel, and the
Vessel shall continue to be so painted during the term of this Charter.
Charterer shall have the right to rename the Vessel, and shall pay for all
associated costs therefor. Prior to Redelivery, Charterer shall rename the
Vessel at its expense in accordance with Owner's reasonable instructions.
However, Owner shall in no event have the right to the use of Charterer's
trademark following Redelivery.
C. The Vessel shall be kept painted and metal surfaces preserved at all
times, and Charterer shall maintain the Vessel in as good a condition as
delivered, normal wear and tear excepted.
ARTICLE 11
INSURANCE
A. 1. Charterer shall, at all times during the period of this Charter, at
its own cost and expense, carry and maintain on the Vessel insurance coverage
covering all marine and hull risks, including towers liability, war risk
insurance, protection and indemnity insurance, together with coverage for
pollution clean up costs and expenses including natural resource damage, third
party claims as well as any fines or civil penalties now or hereafter imposed
under all applicable Federal, State and Local laws, or the laws of any foreign
country or political subdivision thereof having jurisdiction over the Vessel,
and such crew insurance as is required, in order to completely protect Owner
from any and all liability or loss or damage to any party whomsoever. Such
insurance shall, at a minimum, be in the standard forms available in the
American and British insurance markets and further be in such form and in such
amounts and with such underwriters as Owner shall approve. Charterer agrees to
pay all deductibles and franchises provided for in said insurance policies.
2. The Vessel shall be covered by Hull and Machinery, Marine and War
Risk insurances in the amount of at least Fourteen Million Dollars
($14,000,000.00), during the entire duration of this Charter and shall include
an endorsement for acts of terror.
3. The Vessel shall be entered for Protection and Indemnity insurance
with a Protection and Indemnity Association or Club, or Charterer shall obtain
such liability insurance coverage, covering customary protection and indemnity
liabilities as outlined in this Article 11 in an amount not less than the value
of the Vessel, and covering pollution liability in the amount of Twenty-Five
Million ($25,000,000.00) Dollars, with a deductible for each accident of not
more than Twenty-Five Thousand ($25,000.00) Dollars and shall include an
endorsement for acts of terror.
4. Charterer will have Owner named as a co-insured or additional
insured in all policies of insurance including the waiver of subrogation of any
and all claims against Owner.
B. Notwithstanding anything herein to the contrary, in the event that any
of the insurance, to be provided by Charterer, by reason of an act, omission or
neglect of Charterer, shall not be kept in full force and effect, or for any
reason does not cover in full all losses, damages, claims and/or demands,
Charterer shall indemnify, defend and hold harmless Owner against all such
losses, claims and/or demands.
C. Losses under any insurance provided for in this Article shall be payable
as hereunder provided, and all policies shall contain clauses to the same
effect:
1. The proceeds of insurance for all losses, except for total or
constructive total loss, shall be payable to the satisfaction and discharge of
the liability or to the repair of damage in respect of which the insurance loss
has been paid or in reimbursement for monies theretofore applied.
2. In the event of an actual or constructive total loss of the Vessel,
the insurance proceeds shall be paid to Owner and shall be applied by Owner to
reduce any amounts due and payable by Charterer hereunder.
D. Charterer shall promptly furnish Owner with full information regarding
any casualty or other accident or damage to the Vessel involving an amount in
excess of Fifty Thousand Dollars ($50,000.00).
ARTICLE 12
INDEMNITIES
A. 1. CHARTERER SHALL ASSUME THE DEFENSE OF, INDEMNIFY AND HOLD HARMLESS
OWNER AGAINST ANY LIEN OR CLAIM OF WHATSOEVER NATURE ON THE VESSEL AND AGAINST
ANY CLAIMS OF THIRD PARTIES AGAINST OWNER OR THE VESSEL OF WHATSOEVER NATURE,
INCLUDING CLAIMS FOR PERSONAL INJURIES, DEATH OR PROPERTY DAMAGE AND WITHOUT
LIMITATION BY THIS ENUMERATION, PENALTIES OR FINES, EITHER CRIMINAL OR CIVIL
ARISING FROM VIOLATION OF THE LAWS OF THE UNITED STATES OR ANY STATE THEREOF OR
OF THE LAWS OF ANY COUNTRY OR SUBDIVISION THEREOF TO WHICH THE VESSEL MAY BE
SENT, WHETHER SUCH CLAIMS OR LIENS ARE FOUNDED OR UNFOUNDED PROVIDED SUCH LIEN
OR CLAIM SHALL HAVE ARISEN FROM THE USE, OPERATION OR CUSTODY OF THE VESSEL BY
CHARTERER, OR OUT OF ANY ACT OR NEGLECT ON CHARTERER'S PART OR ON THE PART OF
ITS EMPLOYEES, AGENTS, REPRESENTATIVES, OR CONTRACTORS. THE INDEMNITY SHALL
INCLUDE ALL REASONABLE COSTS PAYABLE OR INCURRED IN DEFENDING OR INVESTIGATING
SUCH CLAIMS OR LIENS.
2. SHOULD A SUIT OR ANY OTHER LEGAL PROCEEDING BE FILED AGAINST THE
VESSEL OR SHOULD THE VESSEL BE LEVIED AGAINST, ARRESTED OR TAKEN INTO CUSTODY BY
VIRTUE OF A LEGAL PROCEEDING ARISING OUT OF THE USE, OPERATION OR CUSTODY OF THE
VESSEL BY CHARTERER OR OUT OF ANY ACT OR NEGLECT ON CHARTERER'S PART OR ON THE
PART OF CHARTERER'S EMPLOYEES, AGENTS, REPRESENTATIVES, OR CONTRACTORS,
CHARTERER SHALL IMMEDIATELY NOTIFY OWNER OR OWNER SHALL IMMEDIATELY NOTIFY
CHARTERER AS THE CASE MAY BE, AND CHARTERER SHALL TAKE IMMEDIATE ACTION TO FREE
THE VESSEL FROM THE CLAIM, DEMAND OR LIEN THEREUPON PLACED AND OBTAIN THE
RELEASE OF THE VESSEL FROM CUSTODY OR ARREST.
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3. IN THE EVENT THAT CHARTERER FAILS TO FULFILL ITS OBLIGATIONS UNDER
THIS ARTICLE, OWNER MAY UNDERTAKE SAME AT THE EXPENSE OF CHARTERER.
B. 1. OWNER SHALL ASSUME THE DEFENSE OF, INDEMNIFY AND HOLD HARMLESS
CHARTERER AGAINST ANY LIEN OR CLAIM OF WHATSOEVER NATURE ON THE VESSEL AND
AGAINST ANY CLAIMS OF THIRD PARTIES AGAINST CHARTERER OR THE VESSEL OF
WHATSOEVER NATURE INCLUDING CLAIMS FOR PERSONAL INJURIES, DEATH OR PROPERTY
DAMAGE AND WITHOUT LIMITATION BY THIS ENUMERATION, PENALTIES OR FINES ARISING
FROM VIOLATION OF THE LAWS OF THE UNITED STATES OR ANY STATE THEREOF WHETHER
SUCH CLAIMS OR LIENS ARE FOUNDED OR UNFOUNDED PROVIDED SUCH LIEN OR CLAIM SHALL
HAVE ARISEN FROM THE USE, OPERATION OR CUSTODY OF THE VESSEL BY OWNER OR OUT OF
ANY ACT OR NEGLECT ON OWNER'S PART OR ON THE PART OF ITS EMPLOYEES, AGENTS,
REPRESENTATIVES OR CONTRACTORS. THE INDEMNITY SHALL INCLUDE ALL REASONABLE COSTS
PAYABLE OR INCURRED IN DEFENDING OR INVESTIGATING SUCH CLAIMS OR LIENS.
2. SHOULD A LIBEL BE FILED AGAINST THE VESSEL OR SHOULD THE VESSEL BE
LEVIED AGAINST, ARRESTED OR TAKEN INTO CUSTODY ALL DURING THE PERIOD OF THIS
CHARTER BY VIRTUE OF LEGAL PROCEEDING ARISING OUT OF THE USE, OPERATION OR
CUSTODY OF THE VESSEL BY OWNER OR OUT OF ANY ACT OR NEGLECT ON OWNER'S PART OR
ON THE PART OF OWNER'S EMPLOYEES, AGENTS, REPRESENTATIVES OR CONTRACTORS,
CHARTERER SHALL IMMEDIATELY NOTIFY OWNER AND OWNER SHALL TAKE IMMEDIATE ACTION
TO FREE THE VESSEL FROM THE CLAIM, DEMAND OR LIEN THEREUPON PLACED AND OBTAIN
THE RELEASE OF THE VESSEL FROM CUSTODY OR ARREST.
3. IN THE EVENT OWNER FAILS TO FULFILL ITS OBLIGATIONS UNDER THIS
ARTICLE, CHARTERER MAY UNDERTAKE SAME AT THE EXPENSE OF OWNER.
ARTICLE 13
TERMINATION AND REDELIVERY
A. In the event Charterer does not exercise its purchase option pursuant to
Article 19, upon termination of the Charter, the Charterer shall, at its
expense, redeliver the Vessel ("Redelivery") (unless lost or declared a
constructive total loss) to the Owner at any port identified by Owner provided
such port is at or within one hundred (100) nautical miles of the Port of Palm
Beach, Florida, or such other port mutually agreed upon.
B. Charter Hire shall continue until completion of the off-hire survey and
of all repairs, removals and restorations required to place the Vessel in the
same good order and condition in which it was at the time of commencement,
reasonable wear and tear excepted, and all other work required of the Charterer
herein. For purposes of this Article, the same good order
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and condition upon commencement is agreed as that set forth in the drydock
survey of the Vessel delivered to PBE prior to the date of the Original
Sub-Charter. All machinery, appliances, and appurtenances are to be placed in
good working order.
C. At the port of Redelivery, the Vessel shall be placed on drydock
selected by Charterer with the cost and expense thereof to be paid by the
Charterer and a joint off-hire survey shall be carried out by representatives of
the Owner and the Charterer to determine the condition of the Vessel. The cost
of drydocking for the purpose of conducting the off-hire survey shall be paid by
Charterer. The Charterer shall, at its expense, and on its time, make all such
repairs and do all such work as is found to be necessary to comply with this
Article 13. All drydocking charges incurred after completion of the off-hire
survey during the period required to perform repairs and otherwise to comply
with Article 13 shall be for Charterer's account. During same period, Owner
shall have the right to carry out repairs for its own account, provided that
Owner's work does not increase Charterer's expense.
D. The Vessel and its appurtenances shall be painted and Coast Guard, if
any, and Classification Society inspections are to be conducted at the time of
the off-hire survey, it being the intention of the parties that all certificates
issued by said agencies are to be renewed, free of all outstanding
recommendations, whether or not due.
E. Acceptance of the Vessel by the Owner shall be conclusive evidence of
Charterer's compliance with any and all of the Charterer's obligations under
this Charter with respect to Vessel's class and condition at the time of
Redelivery.
ARTICLE 14
EVENTS OF DEFAULT
Should Charterer fail to pay Charter Hire or any other payment hereunder
when due, or otherwise breach in any material respect any of its undertakings
herein, Charterer shall (except in accordance with Section 3B hereof) be deemed
to be in default. Owner may, after notifying Charterer in writing of the
default, and after giving Charterer thirty (30) days from the receipt of notice
to remedy any default (other than a Charter Hire or other payment default which
requires ten (10) days written notice), withdraw the Vessel from the service of
Charterer and immediately terminate this Charter. Any termination of this
Charter, as provided in this Article 14, shall be without prejudice to any claim
Owner may have against Charterer pursuant to this Charter, including cost of
Redelivery to the Port of Palm Beach, Florida; provided, however, that Charterer
shall, in such event, have the rights set forth in Article 19.
ARTICLE 15
REQUISITION OR SEIZURE OR FORFEITURE
A. Requisition of the use of the Vessel by any government or governmental
authority on a bareboat, time or voyage charter basis, or on any other basis not
involving requisition of title to or seizure or forfeiture of the Vessel, during
the Charter Period even though at the time of such requisition Charterer shall
have been deprived of, or limited in, the use of the Vessel to any extent and
for any duration, for whatever cause, shall not terminate or extend this
Charter. Charterer shall continue to make payment of Charter Hire without
interruption or abatement and
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shall remain liable for all other obligations under this Charter and shall be
entitled to the total amount of requisition charter hire and any other amount
payable with respect to such requisition. The foregoing provisions shall be
without prejudice to the rights of Owner and Charterer against other parties in
respect of any such charges or expenses. Owner undertakes, insofar as any such
rights are vested in it, to take at Charterer's request and expense all
reasonable steps to enforce such rights, and any sums recovered from other
parties in respect of such charges or expenses shall be retained by or payable
to Charterer.
B. In the event that title to the Vessel shall be requisitioned, or if the
Vessel should be seized by, or forfeited to, any government or governmental
authority, during the Charter Period, and such requisition, seizure or
forfeiture shall not result from any act or omission of Charterer (even though
at the time of such requisition or seizure or forfeiture Charterer shall have
been deprived of, or limited in, the use of the Vessel to any extent and for any
duration, for whatever cause), Charterer shall forthwith notify Owner of the
facts and circumstances of such requisition, seizure or forfeiture and this
Charter shall terminate. However, Owner shall be entitled to any and all
proceeds or amounts received from any governmental agency or authority
representing payment for charter hire and/or the value of the Vessel at the time
of requisition or seizure.
ARTICLE 16
INSPECTION BY OWNER
Owner or its authorized representative may inspect the Vessel at any time
during the currency of this Charter upon reasonable notice to Charterer and
provided such inspection does not delay the Vessel's employment.
ARTICLE 17
LIMITATIONS AND BENEFITS
Nothing contained herein shall be deemed to prohibit or deny to Owner or to
Charterer the benefit of any limitations of, and exemptions from, liability
accorded to the owners, bareboat charterers, and operators of Vessels by any
statute or rule or law in force at the time such benefit, limitation or
exemption is invoked.
ARTICLE 18
ASSIGNMENT AND SUB CHARTER
Neither Owner nor Charterer may assign this Charter nor may Charterer
sub-demise charter the Vessel, without the express written consent of Owner. The
parties to this Charter shall remain responsible for its performance in the
event of any assignment thereof.
ARTICLE 19
OPTION TO PURCHASE VESSEL
A. Upon termination of this Charter for any reason, but prior to any
Redelivery hereunder, ITGV or ITGPB may purchase the Vessel (together with
everything belonging to the Vessel, including the hull, machinery and tackle, as
well as all other associated and installed equipment which may be on board, but
excluding gaming devices and related equipment and
11
material) from Owner or may purchase all of the membership interests of Owner
(the "Membership Interests") from PBM upon the following terms and conditions.
B. The purchase price for the Vessel or the Membership Interests, if ITGV
or ITGPB elects to purchase either under this Article 19, shall be $17,500,000
(the "Purchase Option Exercise Price") (which was the appraised value of the
Vessel as of January 12, 2004 as set forth in that certain appraisal report
dated January 27, 2004 issued by Dufour Laskay & Strouse, Inc. and was the
Purchase Option Exercise Price for the Vessel under Article 19 of the Original
Sub-Charter).
C. ITGV or ITGPB may exercise this option to purchase by giving written
notice to Owner and PBM within ten (10) days after termination of this Charter
for any reason of its intent to purchase the Vessel or the Membership Interests
on a mutually acceptable closing date.
D. If ITGV or ITGPB elects to exercise the option to purchase the Vessel or
the Membership Interests (in either case, "Purchaser"), Owner or PBM, as the
case may be, must sell, and Purchaser must purchase, the Vessel, together with
everything belonging to such Vessel, including the hull, machinery and tackle,
as well as all other associated and installed equipment which may be on board,
excluding all gaming devices and related equipment and materials, or all of the
Membership Interests, as the case may be. Closing shall be set at a mutually
agreeable date and location for the consummation of the sale, which date shall
not be more than 90 days after the termination of this Charter for any reason,
and Charterer will continue to pay Charter Hire through the closing.
E. At closing, Purchaser shall pay to Owner or PBM, as the case may be, the
Purchase Option Exercise Price less credits for the following: (i) for the Net
Ship Investment (as defined in the Original Sub-Charter), an amount equal to
$7,244,254 except to the extent such Net Ship Investment shall be credited
toward payment of the purchase price for the casino cruise ship Big Easy; (ii)
for the Assignment Option Prepayments (as defined in the Original Sub-Charter)
made under the Original Sub-Charter, $0 (being that no payments were made); and
(iii) the aggregate amount of the principal payments made to PDS such Gaming
Corporation by the ITGV Borrowers under the Loan Agreement on account of the
portion of the debt relating to the Vessel as set forth on Schedule I hereto.
Payment shall be made as mutually agreeable between Owner or PBM, as the case
may be, and Purchaser, or in the absence of any such agreement, by electronic
transfer to Owner or PBM, in accordance with Owner's or PBM's written
instructions. Upon payment of the Purchaser Option Exercise Price less the
amounts to be credited as described above, all rights, title and interest in
said Vessel or in the Membership Interests shall pass to Purchaser.
F. At closing, (i) Owner shall furnish Purchaser an executed and notarized
Bill of Sale, in duplicate, transferring title to such purchaser and warranting
that the Vessel is free from all mortgages, liens and encumbrances of any kind
whatsoever (other than those, if any, arising out of Charterer's use, operation
or custody of the Vessel under this Charter and those existing prior to the date
hereof), or (ii) PBM shall furnish Purchaser an executed assignment, in
duplicate, transferring title to the Membership Interests to Purchaser and
warranting that such Membership Interests are free and clear from all mortgages,
liens and encumbrances of any kind whatsoever.
12
G. Passage of title from Owner or PBM to Purchaser shall constitute
acknowledgement by Purchaser that the Vessel is in a condition completely
acceptable to Purchaser, and Purchaser will thereafter have no warranty claim
against Owner or PBM for any defects in such Vessel, whether patent or latent,
it being specifically understood and agreed that subsequent to the parties'
inspection of the Vessel, as specified in Article 4, at the time of the on-hire
survey the sale of the Vessel is "as is, where is," with Purchaser relying
solely on its own examination and inspection of the Vessel at such survey, and
without any representation or warranty by Owner, expressed or implied, as to
seaworthiness, condition or suitability for any particular purpose, trade or
service, but with full warranty of title except for those mortgages, liens and
encumbrances of any kind whatsoever arising out of Charterer's prior use,
operation or custody of the Vessel under this Charter. Purchaser agrees to pay
any sales or use taxes, assessments or charges which may apply to the purchase
of the Vessel or the Membership Interests, except income or other taxes or
assessments based upon revenues, earnings or assets.
ARTICLE 20
GOVERNING LAW
The interpretation of this entire agreement shall be governed by the
Maritime Law of the United States of America and by the laws of the State of
Florida.
If any provision of this Charter is unenforceable under applicable law,
such provision shall be void and the other provisions hereof shall continue in
full force and effect. The parties shall use their best efforts to resolve by
agreement any problem which may arise as a result of any changes in applicable
law or regulations affecting performance of this Charter.
The terms and provisions of this Charter constitute the entire agreement
between the parties hereto and this Charter shall not be amended or
supplemented, or any term or provision thereof waived except in writing signed
by the party or parties to be bound thereby and no promise, agreement, warranty,
or representation not set forth herein or in such written amendment or
supplement shall be of any force or effect.
ARTICLE 21
JURISDICTION, WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES
A. Each of the parties irrevocably and unconditionally (i) agrees that any
legal suit, action or proceeding brought by a party hereto arising out of or
based upon this Charter, except for an in rem action against the Vessel, may be
brought in the United States District Court for the Southern District of Florida
("District of Florida"), (ii) waives, to the fullest extent it may effectively
do so, any objection with it may now or hereafter have to the laying of venue of
any such proceeding brought in the District of Florida, and any claim that any
such action or proceeding brought in the District of Florida has been brought in
an inconvenient forum, (iii) submits to the in personam jurisdiction of the
District of Florida in any suit, action or proceeding, and (iv) agrees that the
losing party shall pay to the prevailing party the attorneys' fees and expenses
incurred by the prevailing party in such action. If for any reason the District
of Florida lacks jurisdiction over a matter arising out of or based upon this
Charter, excluding any in rem action against the Vessel, the Circuit Court for
the State of Florida in Palm Beach County,
13
Florida ("Florida State Court") shall then have non-exclusive jurisdiction and
all other provisions of this Article 20 shall remain valid and enforceable in
such court.
B. Each of the parties agrees and acknowledges that any controversy that
may arise under this Charter, whether filed in the District of Florida, the
Florida State Court or otherwise, is likely to involve complicated and difficult
issues, and therefore each such party hereby irrevocably and unconditionally
waives any right such party may have to a trial by jury in respect of any
litigation directly or indirectly arising out of or relating to this Charter, or
the breach, termination or validity of this Charter.
C. Each of the parties hereby irrevocably and unconditionally waives any
right it may have to claim and receive an award for punitive damages for any
claim arising out of or relating to this Charter, or the breach, termination or
validity of this Charter.
ARTICLE 22
LOSS AFTER DELIVERY
A. If the Vessel becomes an actual total loss during any term of this
Charter and prior to any sale to Charterer, this Charter shall terminate as of
the date of the actual loss. If the Vessel becomes a constructive or compromised
total loss under the insurances, this Charter shall terminate, but payment of
Charter Hire shall continue until the underwriters or Charterer in the case of
self-insurance remit to Owner, the proceeds of said insurance.
B. No tender or abandonment of the Vessel to the underwriters as a
constructive total loss shall be made without the prior approval of Owner, which
approval will not be unreasonably withheld.
ARTICLE 23
LOG BOOKS
Charterer's crew shall maintain full and complete logs and at Owner's
request, Charterer shall furnish to Owner true copies of said logs.
ARTICLE 24
TRADING LIMITS
During any term of this Charter, the parties agree that the Vessel shall
have a trading limit of inland, tributary, coastal and nearby adjacent waters of
the United States East Coast; Bahamas; Gulf of Mexico; and Caribbean.
ARTICLE 25
BUSINESS POLICY PROVISIONS
Charterer agrees to comply with all laws and lawful regulations, including
any gaming laws, regulations, licenses or permits, applicable to any activities
carried out in the name of or representative of Charterer under this Charter.
Charterer agrees that all financial settlements and reports rendered to Owner
under this Charter will, to the best of its knowledge and belief, reflect
properly the facts about all activities and transactions handled for the account
of Charterer which
14
data may be relied upon as being complete and accurate in any further recording
and reporting made by Owner for whatever purpose. Charterer agrees to notify
Owner promptly upon discovery of any instances where Charterer fails to comply
with provisions above.
ARTICLE 26
ANTI-DISCRIMINATION PROVISIONS
During the performance of this Charter, and any and all supplements and
amendments hereunder to the extent applicable, Charterer agrees to comply with
requirements of the Federal Government as more particularly specified that both
parties understand Charterer is an Equal Opportunity Employer and will not
engage in any conduct or practice which violates any applicable law, order or
regulation prohibiting discrimination against any person by reason of race,
color, religion, national origin, sex or age or on account of being handicapped,
a disabled veteran or a veteran of the Vietnam era.
ARTICLE 27
NOTICES
Any written notice required or authorized to be given hereunder by either
party to the other may be given by postage prepaid letter or by telegram, cable,
telex, facsimile or other similar means,
TO OWNER:
Cruise Holdings I, LLC
One East 11th Street, Suite 500
Riviera Beach, Florida 33404
Telefax Number: 561-845-1201
Telephone Number: 561-845-2101
TO CHARTERER:
ITG Vegas, Inc.
One East 11th Street, Suite 500
Riviera Beach, Florida 33404
Telefax Number: 561-845-1201
Telephone Number: 561-845-2101
or to such other address or addresses as may from time to time be specified by
either party to the other in writing.
15
IN WITNESS WHEREOF, the parties hereto have executed this Charter as of the
13th day of July, 2005.
CHARTERER: OWNER:
ITG VEGAS, INC. CRUISE HOLDINGS I, LLC
By: By:
------------------------------------ -----------------------------
Francis X. Murray Francis X. Murray
Vice President President of Palm Beach
Maritime Corporation,
as Sole Member and Manager
ITG PALM BEACH, LLC
By:
------------------------------------
Francis X. Murray
Vice President of ITG Vegas, Inc.
as Sole Member and Manager
ORIGINAL CHARTERER:
PALM BEACH MARITIME CORPORATION
By:
------------------------------------
Francis X. Murray
President
PALM BEACH EMPRESS, INC.
By:
------------------------------------
Francis W. Murray
President
16
Appendix A
PALM BEACH PRINCESS
The PALM BEACH PRINCESS is the Ship and General Improvement at and on the
maritime vessel named the PALM BEACH PRINCESS, a Panamanian flag casino cruise
ship, Patente No. 14348-84-E and IMO No. 8402937, built in Finland in 1964, with
Call Letters 3FNQ2, of 6,659.00 gross registered tons and 2,499.00 net
registered tons, 97.03m of length, 16.40m of breadth and 7.91m of depth. General
Improvements shall mean all equipment and FF&E as defined in Section 1250 of the
United States Internal Revenue Service Publication 946, where the equipment and
FF&E is considered a structural component or critical operating component of the
vessel.
Appendix B
CERTIFICATE OF DELIVERY AND ACCEPTANCE
Cruise Holdings I, LLC, Owner, acting through its authorized agents, does hereby
deliver to ITG Vegas, Inc. the Panamanian flag vessel PALM BEACH PRINCESS,
Patente No. 14348-84-E and IMO No. 8402937 (hereinafter the "Vessel"), pursuant
to the terms of Bareboat Charter of the Casino Cruise Ship PALM BEACH PRINCESS
previously executed by the parties.
ITG Vegas, Inc. as Charterer, acting through its authorized agent, hereby
accepts physical delivery of the Vessel in accordance with the terms of the
aforesaid mentioned agreement at the time, date and place set forth herein.
Delivered and Accepted at hours Eastern Daylight Time s of this _____ day of
July, 2005 at Palm Beach, Florida.
Accepted: Delivered:
CHARTERER: OWNER:
ITG VEGAS, INC. CRUISE HOLDINGS I, LLC
By: By:
---------------------------- --------------------------------------
Francis X. Murray Francis X. Murray
Vice President President of Palm Beach Maritime
Corporation, as Sole Member and
Manager
ITG PALM BEACH, LLC
By:
----------------------------
Francis X. Murray
Vice President
SCHEDULE 1
AMORTIZATION SCHEDULE
Rate 15.30%
PBP Vessel
Date Sched. Balance Interest Principal* Investment Payment
----------- ------- -------- ---------- ---------- -------
07/06/2004 $ 14,000,000.00 $ - $(14,000,000.00) $(14,000,000.00) $ -
08/01/2004 14,000,000.03 152,580.82 (0.03) - 152,580.79
09/01/2004 14,000,000.03 178,500.00 - - 178,500.00
10/01/2004 14,000,000.03 178,500.00 - - 178,500.00
11/01/2004 14,000,000.03 178,500.00 - - 178,500.00
12/01/2004 14,000,000.03 178,500.00 - - 178,500.00
01/01/2005 14,000,000.03 178,500.00 - - 178,500.00
02/01/2005 14,000,000.03 178,500.00 - - 178,500.00
03/01/2005 14,000,000.03 178,500.00 - - 178,500.00
04/01/2005 14,000,000.03 178,500.00 - - 178,500.00
05/01/2005 14,000,000.03 178,500.00 - - 178,500.00
06/01/2005 14,000,000.03 178,500.00 - - 178,500.00
07/01/2005 14,000,000.03 178,500.00 - - 178,500.00
07/13/2005 14,000,000.03 - - - -
08/01/2005 13,786,737.23 178,500.00 213,262.80 - 391,762.80
09/01/2005 13,570,755.33 175,780.90 215,981.90 - 391,762.80
10/01/2005 13,352,019.66 173,027.13 218,735.67 - 391,762.80
11/01/2005 13,130,495.11 170,238.25 221,524.55 - 391,762.80
12/01/2005 12,906,146.12 167,413.81 224,348.99 - 391,762.80
01/01/2006 12,678,936.68 164,553.36 227,209.44 - 391,762.80
02/01/2006 12,448,830.32 161,656.44 230,106.36 - 391,762.80
03/01/2006 12,215,790.11 158,722.59 233,040.21 - 391,762.80
04/01/2006 11,979,778.63 155,751.32 236,011.48 - 391,762.80
05/01/2006 11,740,758.01 152,742.18 239,020.62 - 391,762.80
06/01/2006 11,498,689.87 149,694.66 242,068.14 - 391,762.80
07/01/2006 11,253,535.37 146,608.30 245,154.50 - 391,762.80
08/01/2006 11,005,255.15 143,482.58 248,280.22 - 391,762.80
09/01/2006 10,753,809.35 140,317.00 251,445.80 - 391,762.80
10/01/2006 10,499,157.62 137,111.07 254,651.73 - 391,762.80
11/01/2006 10,241,259.08 133,864.26 257,898.54 - 391,762.80
12/01/2006 9,980,072.33 130,576.05 261,186.75 - 391,762.80
01/01/2007 9,715,555.45 127,245.92 264,516.88 - 391,762.80
02/01/2007 9,447,665.98 123,873.33 267,889.47 - 391,762.80
03/01/2007 9,176,360.92 120,457.74 271,305.06 - 391,762.80
04/01/2007 8,901,596.72 116,998.60 274,764.20 - 391,762.80
05/01/2007 8,623,329.28 113,495.36 278,267.44 - 391,762.80
06/01/2007 8,341,513.93 109,947.45 281,815.35 - 391,762.80
07/01/2007 8,056,105.43 106,354.30 285,408.50 - 391,762.80
08/01/2007 7,767,057.97 102,715.34 289,047.46 - 391,762.80
09/01/2007 7,474,325.16 99,029.99 292,732.81 - 391,762.80
10/01/2007 7,177,860.01 95,297.65 296,465.15 - 391,762.80
11/01/2007 6,877,614.93 91,517.72 300,245.08 - 391,762.80
12/01/2007 6,573,541.72 87,689.59 304,073.21 - 391,762.80
01/01/2008 6,265,591.58 83,812.66 307,950.14 - 391,762.80
02/01/2008 5,953,715.07 79,886.29 311,876.51 - 391,762.80
03/01/2008 5,637,862.14 75,909.87 315,852.93 - 391,762.80
04/01/2008 5,317,982.08 71,882.74 319,880.06 - 391,762.80
05/01/2008 4,994,023.55 67,804.27 323,958.53 - 391,762.80
06/01/2008 4,665,934.55 63,673.80 328,089.00 - 391,762.80
07/01/2008 4,333,662.42 59,490.67 332,272.13 - 391,762.80
08/01/2008 3,997,153.82 55,254.20 336,508.60 - 391,762.80
09/01/2008 3,656,354.73 50,963.71 340,799.09 - 391,762.80
10/01/2008 3,311,210.45 46,618.52 345,144.28 - 391,762.80
11/01/2008 2,961,665.58 42,217.93 349,544.87 - 391,762.80
12/01/2008 2,607,664.02 37,761.24 354,001.56 - 391,762.80
01/01/2009 2,249,148.94 33,247.72 358,515.08 - 391,762.80
02/01/2009 1,886,062.79 28,676.65 363,086.15 - 391,762.80
03/01/2009 1,518,347.29 24,047.30 367,715.50 - 391,762.80
04/01/2009 1,145,943.42 19,358.93 372,403.87 - 391,762.80
05/01/2009 768,791.40 14,610.78 377,152.02 - 391,762.80
06/01/2009 386,830.69 9,802.09 381,960.71 - 391,762.80
07/01/2009 (0.02) 4,932.09 386,830.71 - 391,762.80
$ 6,920,695.17 $ 0.02 $(14,000,000.00) $ 20,920,695.19
=============== =============== =============== ===============
- --------------------------------------------------
* The ITG Borrowers have the right to defer up to $3,000,000 in principal
amount for the portion of the Refinancing not related to equipment.
20