EXHIBIT 10.05
MANAGER'S CONSENT AND SUBORDINATION
OF MANAGEMENT AGREEMENT
THIS MANAGER'S CONSENT AND SUBORDINATION OF MANAGEMENT
AGREEMENT (this "AGREEMENT"), dated as of March 28, 1996, made
between SHOWBOAT MARINA PARTNERSHIP, an Indiana general
partnership, with an office located at 2001 East Columbus Drive,
East Chicago, Indiana 46312 ("MANAGER") and American Bank
National Association, a national banking association
("MORTGAGEE").
W I T N E S S E T H :
WHEREAS, Showboat Marina Casino Partnership
("MORTGAGOR"), an Indiana general partnership and Showboat Marina
Finance Corporation ("FINANCE CORPORATION"), a Nevada corporation
have issued those certain 13 1/2% First Mortgage Notes due 2003
(the "FIRST MORTGAGE NOTES") in the aggregate principal amount of
$140,000,000 pursuant to that certain Indenture (the
"INDENTURE"), dated as of March 28, 1996, among Mortgagor,
Finance Corporation and Mortgagee, as trustee;
WHEREAS, the proceeds of the First Mortgage Notes are
to be used to finance, in part, the design, development,
construction, equipping, and opening of East Chicago Showboat
Casino (as defined in the Leasehold Mortgage (hereinafter
defined));
WHEREAS, Mortgagor is the holder of the leasehold
estate in and to that certain parcel of real property more
particularly described on EXHIBIT A attached hereto and made a
part hereof (the "PROPERTY"); and
WHEREAS, the First Mortgage Notes are secured, in
part, by a certain Leasehold Mortgage, Assignment of Rents and
Security Agreement, dated as of the date hereof (the "LEASEHOLD
MORTGAGE"), made by Showboat Marina Casino Partnership, as
mortgagor, to mortgagee (such mortgagee, and any successor and/or
assign thereof are hereinafter referred to as "MORTGAGEE"), which
Leasehold Mortgage covers Mortgagor's leasehold interest in the
Property.
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Mortgagee to accept the Leasehold Mortgage and
the other Loan Documents (as defined in the Indenture), Manager
hereby represents, warrants, covenants and agrees for the benefit
of Mortgagee as follows:
1. DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the
Leasehold Mortgage.
2. MANAGER'S REPRESENTATIONS. Manager warrants and
represents to Mortgagee, as of the date hereof, that the
following are true and correct:
(a) Manager has agreed to act as manager of the
Property pursuant to the Management Agreement, dated as of March
1, 1996, between Mortgagor and Manager (the "MANAGEMENT
AGREEMENT"). Manager has delivered a true, correct and complete
copy of the Management Agreement to Mortgagee.
(b) The entire agreement between Manager and
Mortgagor for the management of the Property is evidenced by the
Management Agreement.
(c) The Management Agreement constitutes the
legal, valid and binding agreement of Manager, enforceable in
accordance with its terms, and Manager has or will obtain prior
to the date East Chicago Showboat Casino becomes Operating full
authority under all state and local laws and regulations to
perform all of its obligations under the Management Agreement.
(d) Mortgagor is not in default in the
performance of any of its obligations under the Management
Agreement and all payments and fees required to be paid by
Mortgagor to Manager thereunder have been paid to the date
hereof.
3. MANAGER'S AGREEMENTS. Notwithstanding the terms
of the Management Agreement, Manager hereby consents to and
covenants and agrees as follows:
(a) NO TERMINATION OF MANAGEMENT AGREEMENT.
Subject to the terms of the Indenture and this Agreement, Manager
shall not terminate the Management Agreement without first
obtaining Mortgagee's written consent. Manager shall promptly
deliver written notice to Mortgagee of any default under the
Management Agreement which provides Manager with the right to
terminate the Management Agreement.
(b) SUBORDINATION OF MANAGEMENT AGREEMENT TO
LIEN OF LEASEHOLD MORTGAGE. Except as provided in this Agreement,
the Management Agreement and any and all liens, rights and
interests (whether choate or inchoate and including, without
limitation, all mechanic's and materialmen's liens under
applicable law) owed, claimed or held, by Manager in and to the
Property, are and shall be at all times and in all respects
subordinate and inferior to the liens and security interests
created or to be created for the benefit of Mortgagee, its
successors and assigns, securing the repayment of the First
Mortgage Notes including, without limitation, those created under
the Leasehold Mortgage covering, among other things, the
Property, and filed or to be filed of record in the public
records maintained for the recording of mortgages in the
jurisdiction where the Property is located, and all renewals,
extensions, increases, supplements, amendments, modifications
and replacements thereof. Manager expressly acknowledges and
agrees that upon any payment or distribution of cash, securities
or other property to any creditors of Mortgagor in a liquidation
(total or partial), reorganization or dissolution of Mortgagor,
whether voluntary or involuntary, or in a bankruptcy,
reorganization, insolvency, receivership, assignment for the
benefit of creditors, marshalling of assets or similar
proceeding, the payment of the management fee under the
Management Agreement shall be subordinated in right of payment to
the prior payment in full in cash of all payments of principal
of, interest on and Liquidated Damages (as defined in the
Indenture) with respect to the First Mortgage Notes excluding,
however, management fees which are incurred or arise after the
date that Mortgagee provides Manager with the notice set forth in
paragraph 3(g) hereof.
(c) MORTGAGEE'S RIGHT TO TERMINATE. Upon the
occurrence and continuance of an Event of Default under the
Leasehold Mortgage or any default under the Management Agreement
which provides the Manager with the right to terminate the
Management Agreement, Manager shall, at the request of Mortgagee,
its successors or assigns, continue performance, on behalf of
Mortgagee, or its successors or assigns, of all of Manager's
obligations under the terms of the Management Agreement with
respect to the Property, provided Mortgagee sends to Manager the
notice set forth in paragraph 3(g) hereof and performs or causes
to be performed the obligations of Mortgagor to Manager under the
Management Agreement accruing or arising from and after, and with
respect to the period commencing
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upon, the effective date of such notice. Upon, or at any time
after an Event of Default and continuance thereof under the
Leasehold Mortgage, Mortgagee shall have the right to terminate
the Management Agreement by giving Manager thirty (30) days'
prior written notice of such termination, in which event Manager
shall resign as manager of the Property effective upon the end of
such thirty (30) day period and Mortgagee shall neither be bound
nor obligated to perform the covenants and obligations of
Mortgagor under the Management Agreement. Without limiting
Manager's rights against Mortgagor, Manager agrees not to look to
Mortgagee for payment of any accrued but unpaid management fees
relating to the Property accruing prior to the effective date of
the notice set forth in paragraph 3(g) hereof or those which may
occur prior to any notice of termination if such notice is prior
to the notice set forth in paragraph 3(g) hereof.
(d) FURTHER ASSURANCES. Manager further agrees
to (i) execute such affidavits and certificates as Mortgagee
shall reasonably require to further evidence the agreements
herein contained, (ii) on reasonable request from Mortgagee,
furnish Mortgagee with copies of such information as Mortgagor is
entitled to receive under the Management Agreement, and (iii)
cooperate with Mortgagee's representative in any inspection of
all or any portion of the Property.
(e) ASSIGNMENT OF LEASES AND RENTS. Manager
acknowledges that, as further security for the First Mortgage
Notes, Mortgagor has assigned to Mortgagee all of Mortgagor's
right, title and interest in and to all of the leases now or
hereafter affecting the Property entered into by Mortgagor as
lessor together with any and all rents in connection therewith
(the "ASSIGNMENT"). Manager hereby agrees that upon receipt of
written notice from Mortgagee that an Event of Default has
occurred and is continuing under the Leasehold Mortgage, Manager
shall thereafter deliver to Mortgagee, for application in
accordance with the terms and conditions of the Assignment, all
income and proceeds relating to the Property then being held by
Manager, and all rents, security deposits (upon compliance with
any requirements of applicable law with respect thereto) and
other income and proceeds received from and after the date
thereof from any and all tenants or other parties occupying or
using any portion of the Property.
(f) NO JOINT VENTURE. Mortgagee has no
obligation to Manager with respect to the Leasehold Mortgage or
other Collateral Documents and Manager shall not be a third party
beneficiary with respect to any of Mortgagee's obligations to
Mortgagor set forth in the Collateral Documents. The
relationship of Mortgagee to Mortgagor is one of a creditor to a
debtor and Mortgagee is not a joint venturer or partner of
Mortgagor.
(g) MORTGAGEE NOT OBLIGATED UNDER MANAGEMENT
AGREEMENT. Manager further agrees that nothing herein shall
impose upon Mortgagee any obligation for payment or performance
in favor of Manager under the Management Agreement, unless
Mortgagee notifies Manager in writing after an Event of Default
under the Leasehold Mortgage or any default under the Management
Agreement that provides Manager with the right to terminate the
Management Agreement, that (i) Mortgagee has elected to assert
Mortgagor's rights under the Management Agreement with respect to
the Property and assume its obligations thereunder and (ii)
Mortgagee agrees to pay Manager the sums due Manager with respect
to the Property under the terms of the Management Agreement from
and after the effective date of Mortgagee's notice to Manager.
(h) MORTGAGEE'S RELIANCE ON REPRESENTATIONS.
Manager has executed this Agreement in order to induce Mortgagee
to accept the Leasehold Mortgage and the Collateral Documents
with full knowledge that Mortgagee shall rely upon the
representations, warranties and agreements herein
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contained, and that but for this instrument and the
representations, warranties and agreements herein contained,
Mortgagee would not take such actions.
(i) GOVERNED BY COLLATERAL DOCUMENTS. Manager
agrees that until such time as the Leasehold Mortgage shall be
released in accordance with its terms and those of the Collateral
Documents, Manager shall comply with all of Mortgagor's
obligations under the Leasehold Mortgage with respect to the
Property, notwithstanding anything contained in the Management
Agreement to the contrary. Manager confirms that it has received
copies of the Leasehold Mortgage and other Collateral Documents
and is fully familiar with the terms thereof.
(j) SUCCESSORS AND ASSIGNS. Manager agrees that
this Agreement and Manager's obligations hereunder shall be
binding upon Manager and its successors and assigns and shall
inure to the benefit of Mortgagee and its successors and assigns.
Manager shall not assign all or any of its rights, obligations or
interests in and to the Management Agreement without the prior
written consent of Mortgagee or except in accordance with the
terms of the Indenture.
4. MORTGAGOR CONSENT. Mortgagor has joined herein
to evidence its consent to the terms, covenants and
conditions contained in this Agreement.
NO FURTHER TEXT ON THIS PAGE
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their duly authorized
representatives, as of the day and year first above written.
MANAGER:
SHOWBOAT MARINA PARTNERSHIP, an
Indiana general partnership
By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada
limited partnership, its
general partner
By: SHOWBOAT INDIANA, INC., a
Nevada corporation, its
general partner
By: /s/ J. Keith Wallace
Name: J. Keith Wallace
Title: President and Chief
Executive Officer
MORTGAGOR:
SHOWBOAT MARINA CASINO 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: /s/ J. Keith Wallace
Name: J. Keith Wallace
Title: President and Chief
Executive Officer
MORTGAGEE:
AMERICAN BANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ Frank P.Leslie III
Name: Frank P. Leslie III
Title: Vice President
By: /s/ Thomas M. Korsman
Name: Thomas M. Korsman
Title: Vice President
STATE OF INDIANA )
SS:
COUNTY OF LAKE )
Before me, a Notary Public in and for said County and State,
personally appeared J. Keith Wallace, the authorized signatory of
Showboat Marina Partnership, a general partnership organized and
existing under the laws of the State of Indiana, and acknowledged
the execution of the foregoing instrument as such authorized
signatory acting for and on behalf of said partnership.
Witness my hand and Notarial Seal this 28 day of March,
1996.
/s/
Signature
Printed Notary Public
My Commission Expires: County of Residence:
STATE OF INDIANA )
SS:
COUNTY OF LAKE )
Before me, a Notary Public in and for said County and State,
personally appeared J. Keith Wallace, the authorized signatory of
Showboat Marina Casino Partnership, a general partnership
organized and existing under the laws of the State of Indiana,
and acknowledged the execution of the foregoing instrument as
such authorized signatory acting for and on behalf of said
partnership.
Witness my hand and Notarial Seal this 28 day of March,
1996.
/s/
Signature
Printed Notary Public
My Commission Expires: County of Residence:
STATE OF MINNESOTA)
) SS:
COUNTY OF RAMSEY )
Before me, a Notary Public in and for said County and State,
personally appeared Frank P. Leslie III and Thomas M. Korsman the
authorized signatories of American Bank National Association, a
national banking association, and acknowledged the execution of
the foregoing instrument as such authorized signatories acting
for and on behalf of American Bank National Association.
Witness my hand and Notarial Seal this 28th day of March,
1996.
/s/ Colleen D. Schwab
Signature
Colleen D. Schwab
Printed Notary Public
EXHIBIT A
LEGAL DESCRIPTION
That part of Fractional Section 22, and Fractional Section 15,
Township 37 North, Range 9, West of the Second Principal Meridian
in Lake County, Indiana, more particularly described as follows:
Commencing at Point "G" on the Southeasterly bulkhead line
(established by the U.S. Government permits of March 27, 1908,
October 15, 1929, and July 5, 1932), said point also being on the
Southwesterly right-of-way line of Aldis Avenue extended, (said
point being established by a "T" rail set in concrete); thence
along the Southwesterly line of Aldis Avenue South 46 degrees
46'06" East (assumed record bearing), 1376.00 feet to Point "R"
on Plat of Survey prepared by the County Surveyor of Lake County,
Indiana, dated July 3, 1958, said point being the POINT OF
BEGINNING, said Point being at the intersection of the centerline
of vacated Lake Place and the Southwesterly right-of-way lien of
Aldis Avenue;
thence along the centerline of vacated Lake Place North 43
degrees 15'00" East a distance of 66.30 feet to Point "Q" on the
northeasterly right-of-way line of Aldis Avenue;
thence North 35 degrees 15'53" East a distance of 134.74 feet,
(measured North 34 degrees 53'04" East, 134.78 feet);
thence North 87 degrees 48'17" East a distance of 79.47 feet;
thence North 45 degrees 33'40" East a distance of 100.50 feet;
thence North 27 degrees 26'34" East a distance of 102.39 feet;
thence North 35 degrees 50'46" East a distance of 100.24 feet;
thence North 43 degrees 17'00" East a distance of 100.18 feet;
thence North 73 degrees 22'05" East a distance of 92.36 feet;
thence South 88 degrees 52'08" East a distance of 85.40 feet;
thence South 45 degrees 50'45" East a distance of 106.63 feet;
thence South 28 degrees 53'00" East a distance of 115.60 feet;
thence South 29 degrees 55'11" East a distance of 84.42 feet;
thence South 20 degrees 54'05" East a distance of 100.04 feet;
thence South 19 degrees 45'23" East a distance of 100.01 feet;
thence South 15 degrees 10'45" East a distance of 100.24 feet;
thence South 13 degrees 49'39" East a distance of 64.28 feet;
thence South 09 degrees 56'52" East a distance of 113.06 feet;
thence South 04 degrees 06'11" East a distance of 100.97 feet;
thence South 13 degrees 30'52" West a distance of 101.43 feet;
thence South 12 degrees 57'25" West a distance of 101.27 feet;
thence South 28 degrees 36'02" East a distance of 100.89 feet;
thence South 36 degrees 52'10" East a distance of 100.32 feet;
thence South 44 degrees 18'16" East a distance of 100.12 feet;
thence South 63 degrees 14'35" East a distance of 107.70 feet;
thence South 83 degrees 56'42" East a distance of 90.42 feet;
thence North 03 degrees 16'06" East a distance of 100.05 feet;
thence North 36 degrees 03'33" East a distance of 38.83 feet;
thence South 30 degrees 27'20" East a distance of 37.74 feet;
thence South 03 degrees 35'32" East a distance of 100.40 feet;
thence South 01 degrees 33'00" West a distance of 100.00 feet;
thence South 02 degrees 24'49" West a distance of 112.44 feet;
thence South 06 degrees 04'10" East a distance of 58.35 feet;
thence South 08 degrees 43'41" East a distance of 182.27 feet to
a point on the Southwesterly line of Aldis Avenue extended;
thence Southeasterly along the Southwesterly line of Aldis Avenue
South 46 degrees 46'06" East a distance of 15.24 feet;
thence South 01 degrees 46'06" East a distance of 325.27 feet to
a brass plug in concrete found at Point "C" on the Northeasterly
right-of-way of vacated Baltimore Street;
thence Northwesterly along the Northeasterly right-of-way line of
vacated Baltimore Street North 46 degrees 46'06" West a distance
of 1285.87 feet, (1284.97 feet measured);
thence South 43 degrees 13'54" West a distance of 15.90 feet
(15.81 feet measured);
thence North 55 degrees 51'36" West a distance of 465.73 feet;
thence North 43 degrees 15'00" East a distance of 319.49 feet on
the Southwesterly line of Aldis Avenue extended;
thence Northwesterly along the Southwesterly line of Aldis Avenue
extended North 46 degrees 46'06" West a distance of 330.00 feet
to the POINT OF BEGINNING, containing 27.23 acres, more or less,
all in East Chicago, Lake County, Indiana.