EXHIBIT 10.07
EXECUTION COPY
ESCROW AND DISBURSEMENT AGREEMENT
By and Among
SHOWBOAT MARINA CASINO PARTNERSHIP
SHOWBOAT MARINA FINANCE CORPORATION
and
SHOWBOAT, INC.
(as Escrow Agent and Disbursement Agent)
and
AMERICAN BANK NATIONAL ASSOCIATION
(as Trustee)
dated as of
March 28, 1996
ESCROW AND DISBURSEMENT AGREEMENT
THIS ESCROW AND DISBURSEMENT AGREEMENT (this "AGREEMENT") is
dated as of March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ("SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), and Showboat, Inc., a Nevada
corporation ("SHOWBOAT"), as escrow agent and disbursement agent
(as applicable, the "ESCROW AGENT" and the "DISBURSEMENT AGENT").
RECITALS
A. FIRST MORTGAGE NOTES. The Company has issued
$140,000,000 aggregate principal amount of 13 1/2% First Mortgage
Notes due 2003 (the "FIRST MORTGAGE NOTES"). The First Mortgage
Notes are to be issued pursuant to the provisions of an Indenture
(the "INDENTURE") dated as of March 28, 1996 among the Company
and the Trustee. The proceeds from the issuance of the First
Mortgage Notes (net of any discounts and commissions, certain
expense reimbursements and certain reductions for the receipt of
immediately available funds) in the amount of $135.1 million (the
"NOTE PROCEEDS") will be deposited contemporaneously with the
execution of this Agreement into a segregated cash collateral
trust account to be maintained at National Westminster Bank, at
Freehold, New Jersey, Custody Account No. 35400008, in the name
of American Bank National Association, as Trustee, "Collateral
Account for Showboat Marina Casino Partnership and Showboat
Marina Finance Corporation" (the "ESCROW ACCOUNT"). The Escrow
Account and all balances and investments from time to time
therein shall be under the sole control and dominion of the
Trustee. In addition, the Indenture provides that (i) the
proceeds from the Capital Contribution, to the extent of cash
remaining, (ii) the Additional Project Financing, to the extent
of cash received, if any, (iii) any Insurance Proceeds received
on or prior to the date on which East Chicago Showboat first
becomes Operating, and (iv) any awards, payments or other
compensation or settlement in lieu thereof made in connection
with any taking of property or condemnation or eminent domain
proceeding whether actual or threatened ("CONDEMNATION
PROCEEDS"), will be deposited in the Escrow Account upon receipt
thereof by the Company. As used herein, the term "PROCEEDS"
shall refer to the Note Proceeds and the proceeds of any Capital
Contribution, Additional Project Financing and Insurance
Proceeds.
B. COLLATERAL AND COLLATERAL ASSIGNMENT. As security for
its obligations under the First Mortgage Notes and the Indenture,
the Company has granted security interests to the Trustee, for
the benefit of the holders from time to time of the First
Mortgage Notes (the "Holders"), in certain assets and has
collaterally assigned certain contracts to the Trustee. As
further security for its obligations under the First Mortgage
Notes and the Indenture, the Company has also granted a security
interest to the Trustee, for the benefit of the Holders of the
First Mortgage Notes, in all of its right, title and interest in
and to the Escrow Account, and any Proceeds or other amounts held
therein.
C. PURPOSE. The parties hereto have entered into this
Agreement in order to set forth the conditions upon which, and
the manner in which, funds will be disbursed from the Escrow
Account in order to permit the Company to design, develop,
construct, equip and open East Chicago Showboat.
D. COMPLETION GUARANTEE. Showboat, pursuant to the
Completion Guarantee, has guaranteed the completion of East
Chicago Showboat, up to a maximum of $30.0 million.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that (i) the recitals above are true and
correct and are by this reference incorporated herein as if fully
set forth herein and (ii) as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. In this Agreement, unless a
different meaning clearly appears from the context, the terms
defined in this Section 1 shall have the meanings herein
specified, such definitions to be equally applicable to both the
singular and plural forms of any of the terms defined:
"ADDITIONAL PROJECT FINANCING" means any funds, not
initially subject to this Agreement, which the Company
obtains prior to the date on which East Chicago Showboat
becomes Operating in accordance with the terms of the
Indenture through the incurrence of additional debt
(including, without limitation, loans or advances made to
the Company by Showboat, or capital contributions caused to
be made to the Company by Showboat, in each case under the
Completion Guarantee), but only to the extent that such
funds (a) are on deposit in the Escrow Account and (b) are
held by the Company free and clear of any claims of any
other parties whatsoever (other than Permitted Liens).
"ADDITIONAL REVENUE" means revenue (including, without
limitation, investment income accruing on funds in the
Escrow Account and the Segregated Account) generated by the
Company other than from the disposition of its assets or the
receipt of the proceeds of any Additional Project Financing,
but only to the extent that such revenue (a) is on deposit
in the Escrow Account and (b) is held by the Company free
and clear of any claims of any other parties whatsoever
(other than Permitted Liens); PROVIDED, HOWEVER, that as of
any date of measurement, Additional Revenue shall also
include investment income which the Company reasonably
determines will accrue on funds in the Escrow Account
through the date on which the Company reasonably anticipates
that East Chicago Showboat first will be Operating.
"AVAILABLE FUNDS" with respect to the Company means, at
any given time, the sum of (a) the Original Allocation less
disbursements theretofore made from the Escrow Account, (b)
Additional Revenue theretofore received, (c) Realized
Savings theretofore achieved, (d) Additional Project
Financing theretofore received, (e) Capital Lease Savings
theretofore achieved and (f) any undisbursed funds in the
Segregated Account.
"CAPITAL LEASE SAVINGS" means, with respect to any
personal property that the Company determines, subsequent to
the date hereof, to fund pursuant to Capital Lease
Obligations, the excess of the amount budgeted in the
Construction Budget for the purchase of such personal
property over the total amount of capital lease payments
required to be paid over the term of the capital lease
pursuant to the instrument or agreement governing such
capital lease; PROVIDED, HOWEVER, that Capital Lease Savings
for any line item shall be zero if (a) the total amount of
liabilities with respect to Capital Lease Obligations
incurred by the Company or any of its subsidiaries exceeds
$16,000,000 at any one time; (b) the Company fails to
allocate a sufficient amount in the Construction Budget to
make the capital lease payments, if any, required to be paid
pursuant to the terms of the instrument or agreement
governing such capital lease prior to the date
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on which East Chicago Showboat becomes Operating; or (c) the
Company fails to promptly deliver to the Disbursement Agent
a copy of the instrument or agreement governing the capital
lease.
"CLOSING FEES AND EXPENSES" means fees and expenses (a)
incurred by the Company in connection with the raising of
debt or equity to finance East Chicago Showboat and (b) paid
on or before the Closing Date. The Closing Fees and
Expenses are identified on EXHIBIT 1 to the Company's
Closing Certification as "Fees and Expenses."
"COMPANY'S CLOSING CERTIFICATION" means an Officers'
Certificate in the form attached hereto as EXHIBIT B-1.
"COMPLETION DATE" means October 1, 1997.
"CONSTRUCTION BUDGET" means an itemized schedule
setting forth on a line item basis all of the costs
(including anticipated Debt Financing Costs through the date
that the Company reasonably anticipates that East Chicago
Showboat first will be Operating) which the Company
anticipates to expend in connection with the financing,
design, development, construction, equipping and opening of
East Chicago Showboat, as such Construction Budget may be
amended from time to time pursuant to this Agreement;
PROVIDED, HOWEVER, that the Construction Budget does not and
shall not include (a) any expenses paid by the Company in
connection with East Chicago Showboat prior to the Closing
Date, or (b) to the extent not included within clause (a),
any expenses paid pursuant to paragraphs (a) through (h) of
the Initial Disbursements Certificate attached hereto as
EXHIBIT A. The Construction Budget as of the date hereof is
attached as EXHIBIT 1 to the Company's Closing
Certification. As more fully set forth in Section 6.2 of
this Agreement, at or before the first requested
disbursement from the Escrow Account following the Initial
Disbursements, the Company shall prepare a revised
Construction Budget utilizing the Project Cost Schedule in
the form attached hereto as EXHIBIT D, and the "Construction
Budget" thereafter shall consist of the line item
allocations set forth in column (iv) thereof under the
heading "Construction Budget."
"CONSTRUCTION EXPENSES" means expenses incurred in
connection with the construction of East Chicago Showboat in
accordance with the Construction Budget, excluding, however,
(a) any such Construction Expenses paid prior to the Closing
Date, (b) any Pre-Opening Expenses, (c) any Debt Financing
Costs and (d) any Closing Fees and Expenses.
"CONSTRUCTION SCHEDULE" means a schedule describing the
sequencing of the components of work to be undertaken in
connection with the construction of East Chicago Showboat,
which schedule (as the same may be amended) demonstrates
that East Chicago Showboat will be Operating on or before
the Completion Date.
"CONTRACTOR" means a contractor, subcontractor or
supplier of materials or services in connection with the
construction and design of East Chicago Showboat.
"CONTRACTS" means the contracts pertaining to the
construction of East Chicago Showboat, including, without
limitation, any contracts, subcontracts, licenses and
performance and payment bonds or guarantees.
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"DEBT FINANCING COSTS" means all premium, principal,
repayments, interest, Liquidated Damages and other amounts
payable or accrued from time to time under the First
Mortgage Notes or any Additional Project Financing.
"DISBURSEMENT AGENT" means Showboat, or such substitute
Disbursement Agent as may be designated in accordance with
Section 10 hereof.
"ESCROW AGENT" means Showboat, or such substitute
Escrow Agent as may be designated in accordance with Section
10 hereof.
"ESCROW AGENT STATEMENT" shall mean a statement in form
and substance satisfactory to the Disbursement Agent
prepared by the Escrow Agent setting forth in reasonable
particularity the balance of funds in the Escrow Account and
the manner in which such funds are invested.
"FINAL PLANS" with respect to any particular work or
improvement means Plans which (a) have received final
approval from all governmental authorities required to
approve such Plans prior to completion of the work or
improvements; and (b) contain sufficient specificity to
permit the completion of the work or improvement.
"INITIAL DISBURSEMENTS CERTIFICATE" means an Officer's
Certificate from the Company in the form attached hereto as
EXHIBIT A.
"INITIAL CONSTRUCTION BUDGET" means the line items
identified on the budget attached as EXHIBIT 1 to the
Company's Closing Certification and the corresponding
entries listed thereon under the heading "Available Amount"
(except that the Initial Construction Budget shall not
include the "Fees and Expenses" line item listed thereon and
the corresponding amount listed in the Available Amount
column. The Initial Construction Budget also specifies
(under the entry for "Additional Revenue" within the Debt
Financing Costs category) the Additional Revenue which the
Company reasonably anticipates it will earn as investment
income on funds in the Escrow Account through the date that
the Company reasonably anticipates that East Chicago
Showboat first will be Operating.
"INITIAL PROPERTY" means the real property located in
East Chicago, Indiana, leased by the City of East Chicago,
Indiana Department of Redevelopment to Showboat Partnership,
under the Redevelopment Project Lease, on which the Company
will construct at least part of the Minimum Facilities.
"INSURANCE PROCEEDS" means the proceeds from any
insurance covering an Event of Loss received by or on behalf
of the Company prior to the date on which East Chicago
Showboat becomes Operating or any such proceeds required to
be deposited into the Escrow Account pursuant to the terms
of the Indenture and/or the Mortgages.
"MORTGAGES" means (i) that certain Leasehold Mortgage,
Assignment of Rents and Security Agreement executed by
Showboat Partnership encumbering Showboat Partnership's
interest in the Redevelopment Project Lease and the
leasehold estate created thereby, in favor of the Trustee,
on behalf of the Holders of the First Mortgage Notes, (ii)
that certain First Preferred Ship Mortgage in the form
attached as an Exhibit to the Indenture to be executed by
the Company
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to encumber the Casino vessel in favor of the Trustee, on
behalf of the Holders of the First Mortgage Notes, and (iii)
all liens and security interests granted by the Company in
accordance with the terms of the Indenture, by executing and
filing security agreements and financing statements in the
applicable state, under the Uniform Commercial Code adopted
by such state, to encumber property utilized in the
construction of East Chicago Showboat.
"OFFICERS' CERTIFICATE" means a certificate signed by
two officers, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or
the principal accounting officer.
"ORIGINAL ALLOCATION" means the Note Proceeds less the
Initial Disbursements listed in paragraphs (a) through (h)
of the Initial Disbursements Certificate.
"PERMITTED DISBURSEMENTS" shall mean the disbursements
from the Escrow Account pursuant to Sections 3.2, 3.3 or 3.4
hereof.
"PLANS" means the plans, specifications, working
drawings, change orders, correspondence and related items
that collectively: (a) provide for and detail the manner of
construction of improvements which contain at least the
Minimum Facilities; (b) call for construction that will
permit East Chicago Showboat to be Operating on or prior to
the Completion Date; (c) call for construction which will
cause East Chicago Showboat to be completed for a total cost
consistent with the Construction Budget and the line items
set forth therein; and (d) to the extent such Plans are
amended, such Plans that continue to represent a logical
evolution consistent with previous Plans, as the same may be
amended, modified or supplemented from time to time, and, if
required, submitted to and approved by the appropriate
gaming or regulatory authorities.
"PRE-OPENING EXPENSES" means expenses of the type
described on EXHIBIT K attached hereto.
"PROJECT ARCHITECT" means, (i) Showboat, for so long as
Showboat continues serving as Disbursement Agent under this
Agreement, and, in the event that Showboat ceases to serve
as Disbursement Agent hereunder, (ii) as applicable, (a) The
Hillier Group and (b) Rodney Lay & Associates, Inc., and, in
each case, their respective successors identified by notice
to the Disbursement Agent.
"PROJECT COST SCHEDULE" means an itemized schedule in
the form of EXHIBIT D hereto.
"PROJECT MANAGER" means, (i) Showboat, for so long as
Showboat continues serving as Disbursement Agent under this
Agreement, and, in the event that Showboat ceases to serve
as Disbursement Agent hereunder, (ii) as applicable, (a)
Tonn & Blank, Incorporated, (b) KLM and (c) Atlantic Marine,
Inc., and, in each case, their respective successors
identified by notice to the Disbursement Agent.
"PROPERTY" means the Initial Property.
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"REALIZED SAVINGS" means the excess of the amount
budgeted in the Construction Budget for a line item over the
amount of funds expended or owed by the Company to complete
the tasks set forth in such line item and for the materials
and services used to complete such tasks; PROVIDED, HOWEVER,
that: (a) Realized Savings for any line item shall be
deemed to be zero if such savings are obtained in a manner
that materially detracts from the overall quality and
amenities of East Chicago Showboat being constructed by the
Company as reasonably determined by the Project Architect,
and (b) Realized Savings for each line item shall in all
cases be deemed to be zero until (i) the Company completes
all work and improvements covered by the line item, or (ii)
the Company satisfies or reasonably provides for in all
material respects the obligations arising out of the
completion of that line item. For purposes of clause (ii)
of the immediately preceding sentence, the Company shall be
deemed to have satisfied or reasonably provided for in all
material respects the obligations arising out of the
completion of a particular line item if (A) the Company
entered into Contracts providing for the completion of all
tasks set forth in such line item and for all materials and
services required for such tasks for a guaranteed fixed or
maximum price, with payment and performance bonds (or other
assurances) satisfactory to the Disbursement Agent for each
such Contract, (B) copies of such Contracts and related
bonds (or other assurances) have been delivered to the
Disbursement Agent, and (C) the Disbursement Agent has
concluded that such Contracts and bonds (or other
assurances) provide reasonable assurance that the work
involved in the line item will be completed by a specified
date consistent with the timely construction of East Chicago
Showboat and for a cost less than or equal to the aggregate
guaranteed fixed or maximum prices in such Contracts. In
determining whether the Contracts and bonds (or other
assurances) meet the foregoing test, the Disbursement Agent
may rely upon such factual certificates of the Company, the
Project Architect and the Project Manager as the
Disbursement Agent deems reasonably appropriate.
"REMAINING COSTS" means, at any given time, the amount
necessary to pay, through completion, all theretofore unpaid
costs (including Retainage Amounts and Debt Financing Costs)
to be incurred or payable in connection with the
construction of East Chicago Showboat through the date that
the Company reasonably anticipates that East Chicago
Showboat first will be Operating.
"RETAINAGE AMOUNTS" means, at any given time, amounts
which have accrued and are owing under the terms of a
Contract for work or services already provided but which at
such time (and in accordance with the terms of the Contract)
are being withheld from payment to the Contractor until
certain subsequent events (e.g., completion benchmarks) have
been achieved under the Contract.
"REVIEWING AGENT" means Showboat, any successor
thereto, and any replacement thereof.
"SEGREGATED ACCOUNT" means a segregated cash collateral
trust account the balance of which shall not exceed $5.0
million at any one time to be maintained at National City
Bank, in East Chicago, Indiana, Custody Account No.
501755883, in the name of Showboat, as Escrow Agent, as
agent/bailee for American Bank National Association, as
Trustee.
"TITLE INSURER" means, collectively, Chicago Title
Insurance Company and Stewart Title Guaranty Company.
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"TITLE POLICY" means the lender's policy or policies of
title insurance to be provided by the Title Insurer to the
Trustee with respect to the Initial Property, together with
all endorsements thereto.
1.2 INDENTURE DEFINED TERMS. In addition, the
following terms shall have the respective meanings assigned to
such terms in the Indenture:
CASH EQUIVALENTS
CASINO
CASINO VESSEL CONSTRUCTION CONTRACT
CLOSING DATE
COLLATERAL DOCUMENTS
COMBINED CASH FLOW
COMPLETION GUARANTEE
EAST CHICAGO SHOWBOAT
EVENT OF LOSS
FIRST PREFERRED SHIP MORTGAGE
LIEN
MINIMUM FACILITIES
OFFICER
OPERATING
PURCHASE DATE
PROJECT
REDEVELOPMENT PROJECT LEASE
REPURCHASE OFFER
1.3 INDEX OF ADDITIONAL DEFINED TERMS. In addition,
the terms listed in the left column below shall have the
respective meanings assigned to such terms in the Section of this
Agreement listed opposite such terms in the right column below:
Section of
DEFINED TERM DEFINITION
ACCOUNT 16.2
AGENT 16.2
AGREEMENT Introduction
COLLATERAL 16.2
COMPANY Introduction
CONDEMNATION PROCEEDS Introduction
DISBURSEMENT AGENT Introduction
DISBURSEMENT AUTHORIZATION 3.1
DISBURSEMENT REQUEST 5.2
DISPUTED AMOUNTS 6.2(h)
ESCROW ACCOUNT A of Recitals
ESCROW ACCOUNT COLLATERAL 16.1
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ESCROW AGENT Introduction
EVENT OF DEFAULT 6.3
FINANCE CORPORATION Introduction
FIRST MORTGAGE NOTES A of Recitals
INDENTURE A of Recitals
INITIAL DISBURSEMENTS 6.1
NOTE PROCEEDS A of Recitals
PAYING AGENT 3.3
PAYMENT DATE 3.3
PAYMENT REQUEST 3.3
PRE-CLOSING DISBURSEMENTS 6.4
PROCEEDS A of Recitals
SHOWBOAT Introduction
SHOWBOAT PARTNERSHIP Introduction
TRUSTEE Introduction
2. ESTABLISHMENT OF ESCROW ACCOUNT.
2.1 APPOINTMENT OF ESCROW AGENT. The Trustee hereby
appoints the Escrow Agent, and the Escrow Agent hereby accepts
appointment, to act as the Trustee's agent, on behalf of the
Holders of the First Mortgage Notes, for purposes of perfecting
the pledge, assignment and security interest in the Collateral as
set forth in Section 16.1 of this Agreement, and the Escrow Agent
hereby accepts such appointment. By executing and delivering
this Agreement, the Escrow Agent hereby acknowledges its receipt
of the Note Proceeds and the proceeds of the remaining Capital
Contribution.
2.2 ESTABLISHMENT OF ESCROW ACCOUNT. Concurrently
with the execution and delivery hereof and for so long as this
Agreement is in full force and effect, the Company shall
establish and maintain the Escrow Account and the Segregated
Account. The Escrow Account and the Segregated Account shall,
and the Company hereby acknowledges and agrees that the Escrow
Account and the Segregated Account shall, at all times remain
under the exclusive dominion and control of the Trustee. Funds
in the Escrow Account shall be held in trust and not commingled
with any ordinary deposit or commercial bank account. The Escrow
Agent shall note in its records that all funds and other assets
in the Escrow Account have been pledged to the Trustee and that
the Escrow Agent is holding such items as agent for the Trustee.
Accordingly, all such funds and assets shall not be within the
bankruptcy "estate" (as such term is used in 11 U.S.C. Sec. 541)
of the Escrow Agent. All such funds and all earnings accruing from
time to time thereon shall be held in the Escrow Account until
disbursed in accordance with the terms hereof or until
transferred to such other Escrow Account as the Trustee and the
Company may direct the Escrow Agent to establish. All funds
contained in the Escrow Account shall be invested in cash and
Cash Equivalents (as defined in the Indenture) as are specified,
from time to time, by the Company in writing pending disbursement
of such funds pursuant to this Agreement; PROVIDED, HOWEVER, that
the Escrow Agent shall not invest any such funds in any
investment unless such investment is described in Section 16.3 of
this Agreement and the Escrow Agent has taken the actions
described in Section 16.3 of this Agreement with respect to such
investment. If no such instructions are received by the Escrow
Agent after request, such funds shall be invested in Cash
Equivalents (provided that the requirements set forth in Section
16.3 of this Agreement with respect to such investment have been
satisfied). Concurrently with the execution and delivery hereof,
the Company shall deliver all of the
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Proceeds to the Escrow Agent for deposit into the Escrow Account,
subject to the security interest granted to the Trustee pursuant
to Section 16.1 hereof.
3. DISBURSEMENTS FROM ESCROW.
3.1 CONDITION TO DISBURSEMENT. Except as provided in
Section 3.3, 3.4, 6.1, 10.2.1 or 16.3(g) hereof, the Escrow Agent
shall disburse funds from the Escrow Account only to the extent
and in the manner directed by the Disbursement Agent in a written
authorization (each, a "DISBURSEMENT AUTHORIZATION") delivered by
the Disbursement Agent to the Escrow Agent in the form of EXHIBIT
H attached hereto, which shall be accompanied by the Disbursement
Request in the form of EXHIBIT C attached hereto delivered by the
Company pursuant to this Agreement.
3.2 METHOD OF DISBURSEMENT. Upon receipt of a
Disbursement Authorization as set forth in Section 3.1 above, the
Escrow Agent shall disburse funds from the Escrow Account as
specified in the Disbursement Authorization. Such disbursement
shall be effected within five (5) business days of receipt
thereof.
3.3 PAYMENTS ON FIRST MORTGAGE NOTES. Ten (10) days
prior to the date that (i) any payment is due on the First
Mortgage Notes, or (ii) in connection with any Repurchase Offer,
the Purchase Date, the Company shall deliver to the Escrow Agent
and the Trustee a Payment Request in the form of EXHIBIT I
attached hereto (each, a "PAYMENT REQUEST") describing the amount
required to be paid, the paying agent appointed pursuant to the
Indenture (the "PAYING AGENT") to which the Escrow Agent should
transfer funds in order to effect the payment, and the day (the
"PAYMENT DATE") upon which such payment is due and payable. If
the Company fails to deliver timely such Payment Request, then
the Trustee may deliver such Payment Request to the Escrow Agent.
On the Payment Date, the Escrow Agent shall disburse to the
Paying Agent the amounts described in the Payment Request as due
and payable on that date. The Company acknowledges that the
failure of either notice referenced in this Section 3.3 to be
delivered to the Escrow Agent shall not in any way exonerate or
diminish the Company's obligation to make all payments under the
Indenture and the First Mortgage Notes as and when due.
3.4 TRANSFER OF FUNDS TO THE TRUSTEE. Upon the
receipt of written notice executed by the Trustee, which
certifies that an Event of Default has occurred and is continuing
and that the Trustee is entitled to the funds in the Escrow
Account and the Segregated Account, the Escrow Agent shall
deliver to the Trustee all funds in the Escrow Account and the
Segregated Account, other than amounts then permitted to be
disbursed under clauses (i), (ii) and (iii) of Section 6.2.1
hereof. Notwithstanding anything to the contrary in this
Agreement, in the event that the Company fails to make any
payment of any amount when due or fails to timely perform any of
its obligations under the Casino Vessel Construction Contract,
then the Escrow Agent shall, upon receipt of a written request
executed by the Trustee, disburse from the Escrow Account any
amounts necessary in the reasonable judgment of the Trustee to
cure such payment or performance default.
4. AMENDMENTS TO CONSTRUCTION BUDGET; REVIEWING AGENT.
4.1 CONSTRUCTION BUDGET AMENDMENT PROCESS.
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(a) The Construction Budget for East Chicago
Showboat may be amended from time to time in the manner set forth
herein. The Company shall have the right from time to time to
amend the Construction Budget to amend the amounts allocated for
specific line item components of the work required to complete
East Chicago Showboat. Any such amendment shall be in writing
and shall identify with particularity the line item to be
increased, the amount of the increase, and the Realized Savings,
Additional Revenue, Capital Lease Savings, previously unallocated
reserves in the Construction Budget, previously allocated
reserves which are permitted to be reduced pursuant to this
Section 4.1 and/or any Additional Project Financing, which funds
represent Available Funds (but excluding Retainage Amounts),
which the Company proposes will be utilized to pay for such
increase. Construction line items may be reduced only upon
obtaining Realized Savings or Capital Lease Savings. Unallocated
reserves may be reduced by allocation to other line items. Any
amounts of Available Funds so identified for use in connection
with a particular line item thenceforth shall be deemed dedicated
to the particular line item, unless and until the Construction
Budget is amended to reduce the amounts budgeted for such line
item.
(b) The Company shall submit the Construction
Budget amendment to the Disbursement Agent by an Officers'
Certificate in the form of EXHIBIT E hereto, together with the
Project Manager's and Project Architect's certification as
provided in EXHIBITS 1 and 2, respectively, to the Construction
Budget Amendment Certificate. Upon submission of such Officers'
Certificate to the Disbursement Agent, together with the Project
Manager's and Project Architect's certificate (and if the line
item "unallocated reserve" on such Construction Budget is zero,
together with a copy of a review letter from the Reviewing Agent
in the form of SCHEDULE 4 to EXHIBIT E hereto with respect to
such amendment), such amendment shall become effective hereunder,
and the Construction Budget for East Chicago Showboat shall
thereafter be as so amended.
4.2 CONTRACT AMENDMENT PROCESS. The Company shall
have the right from time to time to amend any Contract to change
the scope of the work and the Company's payment obligations
thereunder. Any such amendment shall be in writing and shall
identify with particularity all changes being made. Each such
amendment shall be effective when and only when: (a) the Company
and the Contractor have executed and delivered the Contract
Amendment (with the effectiveness thereof subject only to
satisfaction of the conditions in clauses (b) and (c) below);
(b) the Company has submitted the Contract amendment to the
Disbursement Agent and the Trustee by an Officers' Certificate in
the form attached hereto as EXHIBIT F, together with the Project
Manager's and Project Architect's certification as provided in
EXHIBITS 1 and 2, respectively, to the Contract Amendment
Certificate; and (c) the Disbursement Agent has acknowledged its
receipt of the materials referenced in clause (b) above, as
contemplated in the form of Contract Amendment Certificate.
4.3 REVIEW BY REVIEWING AGENT; PROJECT COST SCHEDULE.
(a) The Company shall engage the Reviewing Agent, at
the Company's expense, to review all Disbursement Requests and
all disbursements from the Segregated Account (and, to the extent
required by Section 4.1 above, all Construction Budget Amendment
Certificates). In order to facilitate such review, the Company
shall provide to the Reviewing Agent (i) concurrently with the
submission to the Disbursement Agent of any Disbursement Request,
a copy of the same and all materials provided in connection
therewith, and (ii) within 15 days after submission to the
Disbursement Agent of any Disbursement Request, a Project Cost
Schedule updated to include payments made with the disbursements
pursuant to the Disbursement Request. Concurrently with the
delivery of each such Project Cost Schedule to the Reviewing
Agent, the Company also shall provide a copy to the Disbursement
Agent.
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(b) The Company shall cause the Reviewing Agent,
within 60 days after the submission of each Disbursement Request
to the Disbursement Agent, to provide the Disbursement Agent with
a certificate relating to said Disbursement Request in the form
of EXHIBIT G attached hereto.
(c) The Company covenants to promptly cure any cost
overrun for any line item (taking into account any applicable
reserves) by (i) providing sufficient funds to cover in full such
cost overrun from any of the following (but in each case only to
the extent that the same have not previously been expended or
dedicated (including Retainage Amounts) to the payment of items
contained in the Construction Budget): (A) the amount equal to
the Original Allocation, (B) the unspent Additional Revenue,
(C) the Realized Savings, (D) any Additional Project Financing or
(E) Capital Lease Savings; and (ii) effecting a Construction
Budget Amendment to dedicate such funds to the line item in
question.
(d) From and after the date, if any, upon which the
unallocated reserves have been reduced to zero, the Company shall
cause the Reviewing Agent, within 45 days after the submission of
each Construction Budget Amendment Certificate, to review the
Construction Budget Amendment Certificate and all supporting
documentation for the purpose of obtaining from the Reviewing
Agent a review letter in the form of SCHEDULE 4 to EXHIBIT E
attached hereto.
(e) The Project Cost Schedule further shall set forth
(i) the actual investment income earned on the funds held in the
Escrow Account and the Segregated Account through the date of
such Project Cost Schedule, and (ii) the additional amount of
investment income which the Company reasonably anticipates will
accrue on the funds held in the Escrow Account and the Segregated
Account from the date of the Project Cost Schedule through the
date that the Company reasonably anticipates that East Chicago
Showboat first will be Operating. If at any time the Company
submits a Project Cost Schedule pursuant to this paragraph and
the Company can no longer reasonably anticipate that the
Additional Revenue earned (and anticipated to be earned through
the date that the Company reasonably anticipates that East
Chicago Showboat first will be Operating) from investments of
funds in the Escrow Account and the Segregated Account will equal
the amount of such Additional Revenue anticipated as of the date
the Initial Disbursements are made (as set forth in the Initial
Construction Budget), then
(i) if the total amount of such Additional
Revenue at such date earned or anticipated to be earned is less
than the total amount of such Additional Revenue anticipated as
of the date the Initial Disbursements are made, then the
Available Funds shall be deemed reduced by the amount of such
deficiency and the Company, as a condition to the next
Disbursement Request, shall reallocate unallocated reserves,
provide additional Available Funds or otherwise amend the
Construction Budget so that the total Project Costs do not exceed
total Available Funds; or
(ii) if the total amount of such Additional
Revenue at such date earned or anticipated to be earned is
greater than the total amount of such Additional Revenue
anticipated as of the date the Initial Disbursements are made,
then the Available Funds shall be deemed increased by the amount
of such excess, but only as and when such excess is actually
earned and deposited into the Escrow Account.
5. DUTIES OF DISBURSEMENT AGENT. The Disbursement Agent
agrees, for the benefit of the Trustee and the Holders of the
First Mortgage Notes, that the Disbursement Agent shall perform
the following duties pursuant to this Agreement:
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5.1 FINAL DISBURSEMENT OF FUNDS TO THE COMPANY
FOLLOWING OPERATING DATE. If the Company provides written
certification to the Disbursement Agent that (a) East Chicago
Showboat commenced Operating on or before the Completion Date,
and East Chicago Showboat continues to be Operating as of the
date of the certification, (b) funds remain in the Escrow Account
and/or the Segregated Account as of the date of the
certification, and (c) as of the date of the certification, East
Chicago Showboat shall have generated at least $5.0 million of
Combined Cash Flow in one fiscal quarter as certified by the
Company, then the Disbursement Agent shall, upon the direction of
the Company, pursuant to a Disbursement Authorization in the form
of EXHIBIT H attached hereto, direct the Escrow Agent to disburse
all remaining funds in the Escrow Account and the Segregated
Account, if any, to the Company; PROVIDED, HOWEVER, that the
Disbursement Agent shall direct the Escrow Agent to retain funds
in the Escrow Account in an amount sufficient to pay any then
unpaid Retainage Amounts as provided in Section 6.2.1(iii)
herein.
5.2 DISBURSEMENT REQUESTS AND DISBURSEMENTS.
(a) The Company shall have the right from time to
time during the term of this Agreement to submit to the
Disbursement Agent a request for the disbursement of funds from
the Escrow Account in the form of EXHIBIT C hereto (a
"DISBURSEMENT REQUEST"), together with the schedules and exhibits
attached thereto. The Disbursement Agent shall approve each
Disbursement Request subject to its satisfaction of the
conditions set forth in Section 6 hereof. Such approval shall be
evidenced by the Disbursement Agent's delivery to the Escrow
Agent of the Disbursement Authorization. The Disbursement Agent
shall notify the Company and the Reviewing Agent as soon as
reasonably possible (and in any event within two (2) business
days after the Disbursement Agent reaches its conclusion) if any
Disbursement Request is disapproved and the reason(s) therefor.
(b) Provided that a Disbursement Request is not
disapproved by the Disbursement Agent, within three (3) business
days following submission of a Disbursement Request, the
Disbursement Agent (by delivery of the Disbursement Authorization
to the Escrow Agent) shall authorize the Escrow Agent to disburse
the funds requested in such Disbursement Request.
5.3 PERIODIC INSPECTION AND REVIEW OF PROJECT. The
Disbursement Agent shall exercise commercially reasonable efforts
and utilize commercially prudent practices in the performance of
its duties hereunder consistent with those of similar
institutions disbursing disbursement control funds. Commencing
upon execution and delivery hereof, the Disbursement Agent shall
have the right to meet periodically at reasonable times, however
no less frequently than quarterly, upon no less than three (3)
business days' notice, with representatives of the Company, the
Project Architect, the Project Manager and such other employees,
consultants or agents as the Disbursement Agent shall reasonably
request to be present for such meetings. The Disbursement Agent
may perform, and the Company agrees to provide the Disbursement
Agent reasonable access to the Property to enable the
Disbursement Agent to perform, such inspections and tests of East
Chicago Showboat as it deems reasonably appropriate in the
performance of its duties hereunder. In addition, the
Disbursement Agent shall have the right at reasonable times upon
prior notice to review all information (including Contracts)
supporting the amendments to the Construction Budget, amendments
to any Contracts, the Company's Disbursement Requests and any
certificates in support of any of the foregoing, to inspect
materials stored at East Chicago Showboat, to review the
insurance required pursuant to the terms of the Indenture, to
confirm receipt of endorsements from the Title Insurer insuring
the continuing priority of the lien of the Mortgages as security
for each advance of funds from the Escrow Account hereunder, and
to examine
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the Plans and all shop drawings relating to East Chicago
Showboat. The Disbursement Agent is authorized to contact any
Contractor for purposes of confirming receipt of progress
payments. The Disbursement Agent shall be entitled to examine,
copy and make extracts of the books, records, accounting data and
other documents of the Company, including, without limitation,
bills of sale, statements, receipts, conditional and
unconditional lien releases, contracts or agreements, which
relate to any materials, fixtures or articles incorporated into
East Chicago Showboat. From time to time, at the request of the
Disbursement Agent, the Company shall make available to the
Disbursement Agent a Project Cost Schedule and/or a Construction
Schedule for East Chicago Showboat. Upon the completion of the
foundation for any building within East Chicago Showboat, the
Disbursement Agent shall obtain and provide to the Trustee, on a
building-by-building basis, a commitment from the Title Insurer
evidencing the Title Insurer's unconditional commitment to issue
a CLTA 102.5 or similar endorsement to the Title Policy insuring
that said building is located entirely within the Property then
leased by the Company and does not encroach upon any easement or
other restrictions, encumbrances or rights of ways affecting said
property, and shall deliver such commitment and other
endorsements and assurances to the Trustee. The Company agrees
to cooperate with the Disbursement Agent in assisting the
Disbursement Agent to perform its duties hereunder and to take
such further steps as the Disbursement Agent reasonably may
request in order to facilitate the Disbursement Agent's
performance of its obligations hereunder.
5.4 DISBURSEMENT AGENT'S DUTY TO REPORT EVENT OF
DEFAULT. The Disbursement Agent shall, within five Business
Days, upon becoming aware of any Default or Event of Default,
deliver to the Trustee a statement specifying such Default or
Event of Default.
6. CONDITIONS PRECEDENT TO DISBURSEMENT.
6.1 INITIAL DISBURSEMENTS. Upon satisfaction of the
conditions described below in this Section 6.1, the Escrow Agent
shall make the disbursements described in the Initial
Disbursements Certificate (the "INITIAL DISBURSEMENTS") in the
form of EXHIBIT A attached hereto. The conditions to the Initial
Disbursement shall consist of the following:
(a) The Escrow Agent shall have received the Note
Proceeds and the proceeds of the remaining Capital Contribution;
(b) The Escrow Agent shall have received the
Initial Disbursements Certificate, and the Escrow Agent shall
have received confirmation from the Trustee and the Disbursement
Agent that they each have received the Initial Disbursements
Certificate;
(c) The Escrow Agent shall have received the
Closing Certifications from the Disbursement Agent and the
Trustee, in the form of EXHIBITS B-2 and B-3 attached hereto,
respectively; and
(d) The Escrow Agent shall have received the
Company's Closing Certification from the Company in the form of
EXHIBIT B-1 attached hereto.
6.2 CONDITIONS TO OTHER DISBURSEMENTS. The
Disbursement Agent's approval of any disbursements from the
Escrow Account other than the Initial Disbursements and the Pre-
Closing Disbursements (described in Section 6.4) shall be subject
to the following conditions:
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(a) The Company shall have submitted to the
Disbursement Agent a Disbursement Request as provided for herein
pertaining to the amounts requested for disbursement, together
with a completed SCHEDULE 1 in the form contemplated thereby and
the certifications of the Project Manager and the Project
Architect in the form of EXHIBITS 1 and 2 to the Disbursement
Request.
(b) The Disbursement Agent shall have received
copies of all Contracts identified by the Company to be material
to East Chicago Showboat (which the Company agrees shall include
all Contracts with a total contract amount in excess of $75,000)
and, with respect to each such Contract: (i) if such Contract
contemplates any payments thereunder in excess of $75,000, a
consent substantially in the form attached hereto as EXHIBIT J
signed by the third-party contractor under each such Contract;
and (ii) copies of such performance and payment bonds as the
Company may require to be provided to the Company pursuant to any
Contract. Such bonds shall name the Company and the Trustee as
additional insureds or obligees and shall be in full force and
effect.
(c) The Disbursement Agent shall have received
copies of all Plans which, as of the date of the Disbursement
Request, constitute Final Plans. The Disbursement Agent may rely
upon the certification of the Company set forth in the
Disbursement Request in order to establish satisfaction of this
condition.
(d) The total payments by the Company with
respect to each line item component described on the Construction
Budget (plus any Retainage Amounts held for such line item) after
giving effect to the requested disbursements shall not exceed the
amount budgeted on the Construction Budget for such line item.
Further, to the extent the work or payment required in connection
with any line item has not yet been completed, there shall be no
reason to believe that the estimated cost to complete such work
or payment will exceed the difference between: (i) the amount
budgeted for such line item on the Construction Budget; and (ii)
the sum of (A) the total payments theretofore disbursed with
respect to such line item and (B) any Retainage Amounts then held
with respect to such line item.
(e) The Disbursement Request on its face has been
completed as to the information required therein and the required
attachments, if any, are attached and the Disbursement Agent
shall not have become aware of any material error, inaccuracy,
misstatement or omission of fact in a Disbursement Request or an
exhibit or attachment thereto or information provided by the
Company upon the request of the Disbursement Agent.
(f) The Disbursement Agent shall have received a
copy of the Reviewing Agent's certificate in the form of
EXHIBIT G hereto with respect to all prior Disbursement Requests
more than 60 days old, and no such certificate shall have
reported any exceptions to the procedures set forth therein.
(g) (i) For so long as Showboat or any
wholly owned subsidiary thereof shall serve as the Disbursement
Agent under this Agreement, the Disbursement Agent is not aware
that an Event of Default exists and is continuing.
(i) For so long as any entity other than
Showboat or any wholly owned subsidiary thereof shall serve as
the Disbursement Agent under this Agreement, the Disbursement
14
Agent is not aware (from the facts set forth in any Disbursement
Request or any certificate from the Project Manager or the
Project Architect or the Reviewing Agent or any notice from the
Trustee or the Company) that an Event of Default exists and is
continuing.
(h) The Disbursement Agent shall have received a
commitment from the Title Insurer, attached to the Disbursement
Request, evidencing the Title Insurer's unconditional commitment
to issue an endorsement to the Title Policy in the form of a CLTA
122 Endorsement or other similar endorsement insuring the
continuing priority of the Mortgages as security for each advance
of funds from the Escrow Account that (i) since the previous
disbursement from the Escrow Account, there has been no change in
the condition of title unless permitted by the Indenture, and
(ii) there are no intervening liens or encumbrances which may
then or thereafter take priority over the Mortgages (other than
(i) such intervening liens or encumbrances securing amounts
("DISPUTED AMOUNTS") the payment of which is being disputed in
good faith by the Company and to which the Company has provided,
upon the request of the Trustee, reasonable security to prevent
the forfeiture or loss of all or any portion of the Property, or
any impairment in the priority of the lien of the Mortgages, as a
result of an adverse decision in such contest, and (ii) preferred
maritime liens, so long as the Disbursement Agent has received
confirmation from the Trustee that (A) the Title Insurer has
delivered to the Trustee an endorsement to the Title Policy
insuring against loss to the holders of the First Mortgage Notes
due to the priority of such lien or encumbrance, and (B) if
covered by the Completion Guarantee, Showboat has delivered to
the Trustee written confirmation that if the Company is
determined by a court of appropriate jurisdiction to be obligated
to pay any of the Disputed Amounts, and the Company fails to pay
or otherwise provide for the payment of such Disputed Amounts
within 30 days after entry of the court's decision establishing
the obligation of the Company, then Showboat shall pay or
otherwise provide for payment of such Disputed Amount to the
party entitled thereto within the ensuing 30-day period). Upon
completion of any foundation for any building within East Chicago
Showboat, the Title Insurer shall have issued, on a building-by-
building basis, its foundation endorsement insuring that such
foundation is constructed wholly within the boundaries of the
Property then leased by the Company.
(i) The respective amounts deposited into the
Segregated Account pursuant to all previous Disbursement Requests
shall have been paid to the respective parties identified on
SCHEDULE 1 of each such previous Disbursement Request.
(j) Each Disbursement Request shall designate the
portion thereof that is being requested to pay (i) Construction
Expenses and (ii) Pre-Opening Expenses.
(k) With respect to that portion of a
Disbursement Request that is identified as being made to pay
Construction Expenses, SCHEDULE 1 to the Disbursement Request
also shall itemize for each line item and for each party to whom
payment is requested with respect to such line item, the
following: (i) the name of the payee to be paid, (ii) the
current payment requested, (iii) the increase or decrease in
accrued but unpaid Retainage Amount for such payee since the last
Disbursement Request (after giving effect to the payment
contemplated by the Disbursement Request); (iv) the total amount
contemplated to be payable to such payee under the terms of its
applicable Contract through completion of all work and delivery
of all materials contemplated by the Contract (I.E., the total
contract amount); (v) the total payments made to such payee under
its applicable Contract as of the Closing Date; (vi) the total
payments made to such payee since the Closing Date (after giving
effect to the payment contemplated by the Disbursement Request);
(vii) the sum of all payments made to such payee (after giving
effect to the payment contemplated by the Disbursement Request)
(I.E., the sum of (v) and (vi)
15
above); (viii) the aggregate accrued Retainage Amounts which
shall continue to be owed with respect to such Contract (after
giving effect to the payment contemplated by the Disbursement
Request); and (ix) the percentage of the work actually completed,
or the materials actually delivered, under the Contract through
the date for which payment is made hereunder (expressed as a
percentage of the total work and materials contemplated by the
Contract through completion). To the extent that the
Disbursement Request includes a request for funds to pay
Construction Expenses, the Disbursement Request also shall be
accompanied by duly executed conditional lien releases, in form
and substance satisfactory to the Disbursement Agent, from all
Contractors identified as having provided the work, materials
and/or services giving rise to such Construction Expenses, and
covering in full such work, materials and/or services.
(l) With respect to each Construction Expense
identified for payment on a previous Disbursement Request, the
Disbursement Agent shall have received duly executed
acknowledgements of payment and unconditional (except as to
Retainage Amounts) lien releases, in form and substance
satisfactory to the Disbursement Agent, from all Contractors
identified on the previous Disbursement Request for payment of
Construction Expenses, and acknowledging the receipt by such
Contractor of the respective "Current Payment Amounts" listed on
the previous Disbursement Requests as payable to such Contractor.
6.2.1 In the event that the Disbursement Agent
determines that condition (g) described above is not satisfied in
respect of any Disbursement Request for any month and so long as
such condition is not satisfied, the Disbursement Agent shall not
authorize any disbursement of funds from the Escrow Account
pursuant to a Disbursement Request or from the Segregated Account
other than the following:
(i) if all other conditions in Section 6
hereof (including those stated in Section 6.1
hereof) are met, payments in respect of work
completed or materials purchased on or prior to
the date that the Disbursement Agent determined
that condition (g) was not satisfied and has so
notified the Issuer and the Project Manager in
writing. Each such disbursement shall be
accompanied by a certificate from the Project
Manager that such work was completed prior to such
date, or an invoice dated prior to such date for
any materials purchased prior to such date;
(ii) payments not to exceed $5,000,000 in the
aggregate to prevent the condition of East Chicago
Showboat from deteriorating or to preserve any
work completed on East Chicago Showboat as
certified to be reasonably necessary by the
Project Manager; PROVIDED, HOWEVER, that the
limitations set forth in this subparagraph (ii)
may be increased or decreased by the Trustee, in
the exercise of its reasonable discretion, by
written notice to the Disbursement Agent; and
(iii) if such condition continues for a
period of three (3) consecutive months or more, at
the request of the Company, Retainage Amounts for
work completed, provided that the Company and the
Project Manager certify that the conditions for
paying such amounts (other than completion of East
Chicago Showboat) are met.
6.3 EVENTS OF DEFAULT. The occurrence of any of the
following specified events shall be an Event of Default ("EVENT
OF DEFAULT") hereunder.
16
6.3.1 The occurrence and continuance of an
"Event of Default," as defined in the Indenture, under the
Indenture.
6.3.2 The inability of the Project Manager or
the Project Architect to deliver their respective certificate (in
the form of EXHIBIT 1 and EXHIBIT 2 to EXHIBIT C attached hereto,
respectively) with any Disbursement Request, or their respective
certificates (in the form of EXHIBIT 1 and EXHIBIT 2 to EXHIBIT E
attached hereto, respectively) with any Construction Budget
Amendment Certificate, and any such failure continues for 30 days
without being cured.
6.3.3 The delivery by the Reviewing Agent
pursuant to Section 4.3 hereof of a certificate reporting an
exception with respect to any prior Disbursement Request, and
such exception shall continue for a period of 30 days without
being cured, or the failure of the Reviewing Agent to deliver (a)
with respect to any Disbursement Request, the letter required
pursuant to Section 4.3(b) of this Agreement, and such failure
shall continue for a period of 30 days without being cured, or
(b) with respect to any Construction Budget Amendment
Certificate, the letter required pursuant to Section 4.3(d) of
this Agreement, and such failure shall continue for a period of
30 days without being cured.
6.3.4 Any representation, warranty,
certification or statement by the Company, the Project Architect,
the Project Manager or the Disbursement Agent in this Agreement,
or any certificate, request, budget or statement delivered
pursuant to this Agreement, shall be untrue in any material
respect on the date given or made, and such untruthfulness
continues for a period of 30 days without being cured.
6.3.5 Any time that the Available Funds are
less than the amount required in the Construction Budget to cause
East Chicago Showboat to become Operating on or before the
Completion Date and such deficiency continues for a period of 30
days without being cured.
6.3.6 The failure to deliver any documents
required by Section 3 and any such failure continues for 30 days
without being cured.
6.3.7 The occurrence of an event of default
under the Casino Vessel Construction Contract.
6.4 PRE-CLOSING DISBURSEMENT. Upon satisfaction of
the conditions described below in this Section 6.4, the Escrow
Agent shall make the disbursements described in the Pre-Closing
Disbursement Certificate (the "PRE-CLOSING DISBURSEMENT") in the
form of EXHIBIT N attached hereto. The conditions to the Pre-
Closing Disbursement shall consist of the following:
(a) The Escrow Agent shall have received the
proceeds of the remaining Capital Contribution; and
(b) The Escrow Agent shall have received the Pre-
Closing Disbursements Certificate.
17
7. LIMITATION OF LIABILITY.
7.1 LIMITATION OF DISBURSEMENT AGENT'S LIABILITY. The
Disbursement Agent's responsibility and liability under this
Agreement shall be limited as follows: (a) the Disbursement
Agent does not represent, warrant or guarantee to the Trustee or
the holders of the First Mortgage Notes the performance of the
Company, the Project Architect, the Project Manager, any
contractor, subcontractor or provider of materials or services in
connection with the construction of East Chicago Showboat
(PROVIDED, HOWEVER, that the foregoing shall not in any way limit
or impair Showboat's obligations under the Completion Guarantee);
(b) the Disbursement Agent shall have no responsibility to the
Company, the Trustee or the Holders of the First Mortgage Notes
as a consequence of performance by the Disbursement Agent
hereunder except for any gross negligence or willful misconduct
of the Disbursement Agent; (c) the Company shall remain solely
responsible for all aspects of its business and conduct in
connection with East Chicago Showboat, including but not limited
to the quality and suitability of the Plans, the supervision of
the work of construction, the qualifications, financial condition
and performance of all architects, engineers, contractors, subcon
tractors, suppliers, consultants and property managers, the
accuracy of all applications for payment, and the proper
application of all disbursements; (d) the Disbursement Agent is
not obligated to supervise, inspect or inform the Company, the
Trustee or any third party of any aspect of the construction of
East Chicago Showboat or any other matter referred to above; and
(e) the Disbursement Agent owes no duty of care to the Company to
protect against, or to inform the Company of, any negligent,
faulty, inadequate or defective design or construction of East
Chicago Showboat. The Disbursement Agent shall have no duties or
obligations hereunder except as expressly set forth herein, shall
be responsible only for the performance of such duties and
obligations, shall not be required to take any action otherwise
than in accordance with the terms hereof and shall not be in any
manner liable or responsible for any loss or damage arising by
reason of any act or omission to act by it hereunder or in
connection with any of the transactions contemplated hereby,
including, but not limited to, any loss that may occur by reason
of forgery, false representations, the exercise of its
discretion, or any other reason, except for its gross negligence
or willful misconduct.
7.2 LIMITATION OF ESCROW AGENT'S LIABILITY. The
Escrow Agent's responsibility and liability under this Agreement
shall be limited as follows: (a) the Escrow Agent does not
represent, warrant or guarantee to the Trustee or the holders of
the First Mortgage Notes the performance of the Company, the
Project Architect, the Project Manager, any contractor,
subcontractor or provider of materials or services in connection
with construction of East Chicago Showboat; (b) the Escrow Agent
shall have no responsibility to the Company, the Trustee or the
holders of the First Mortgage Notes as a consequence of
performance by the Escrow Agent hereunder except for any gross
negligence or willful misconduct of the Escrow Agent or failure
to account for funds held on deposit; (c) the Company shall
remain solely responsible for all aspects of its business and
conduct in connection with East Chicago Showboat, including, but
not limited to, the quality and suitability of the Plans, the
supervision of the work of construction, the qualifications,
financial condition and performance of all architects, engineers,
contractors, subcontractors, suppliers, consultants and property
managers, the accuracy of all applications for payment, and the
proper application of all disbursements; (d) the Escrow Agent is
not obligated to supervise, inspect or inform the Company, the
Trustee or any third party of any aspect of the construction of
East Chicago Showboat or any other matter referred to above; and
(e) the Escrow Agent owes no duty of care to the Company to
protect against, or to inform the Company of, any negligent,
faulty, inadequate or defective design or construction of East
Chicago Showboat. The Escrow Agent shall have no duties or
obligations hereunder except as expressly set forth herein, shall
be responsible only for the performance of such duties and
obligations, shall not be required to take any action otherwise
than in
18
accordance with the terms hereof and shall not be in any manner
liable or responsible for any loss or damage arising by reason of
any act or omission to act by it hereunder or in connection with
any of the transactions contemplated hereby, including, but not
limited to, any loss that may occur by reason of forgery, false
representations, the exercise of its discretion, or any other
reason, except for its gross negligence or willful misconduct or
failure to account for funds on deposit.
8. INDEMNITY AND INSURANCE.
8.1 INDEMNITY OF DISBURSEMENT AGENT. The Company,
jointly and severally, indemnifies, holds harmless and will
defend the Disbursement Agent and its officers, directors, agents
and employees, from and against any and all claims, actions,
obligations, liabilities and expenses, including defense costs,
investigative fees and costs, legal fees, and claims for damages,
arising from the Disbursement Agent's performance of its
obligations under this Agreement, except to the extent that such
liability, expense or claim is attributable to the gross
negligence or willful misconduct of the Disbursement Agent.
8.2 INDEMNITY OF ESCROW AGENT. The Company, jointly
and severally, indemnifies, holds harmless and will defend the
Escrow Agent and its officers, directors, agents and employees,
from and against any and all claims, actions, obligations,
liabilities and expenses, including defense costs, investigative
fees and costs, legal fees, and claims for damages, arising from
the Escrow Agent's performance of its obligations under this
Agreement, except to the extent that such liability, expense or
claim is attributable to the gross negligence or willful
misconduct of the Escrow Agent or the Escrow Agent's failure to
account for funds on deposit.
8.3 INSURANCE. The Disbursement Agent, at its sole
cost and expense, shall purchase and maintain throughout the term
of this Agreement, comprehensive general liability insurance,
with minimum limits of $2,000,000 combined single limit per
occurrence, covering all bodily injury and property damage
arising out of the performance of its obligations under this
Agreement. The policy required by this Section shall provide for
thirty (30) days' prior written notice to the Trustee and the
Company of cancellation or a material change. If any of such
insurance is written on a claims made form, following termination
of this Agreement, coverage shall survive for the maximum
reporting period available at each anniversary date of such
insurance, or not less than five (5) years, whichever is greater.
The limits of coverage required above shall not in any way limit
the liability of the Company under Sections 8.1 or 8.2 hereof.
Notwithstanding the foregoing, Showboat shall not be obligated to
purchase a separate insurance policy in order to fulfill its
obligations as Disbursement Agent under this Section 8.3, but
rather shall be entitled to utilize its existing insurance policy
or policies, with any necessary amendments, in order to fulfill
such obligations.
9. TERMINATION. This Agreement shall terminate
automatically thirty (30) days following disbursement of all
funds remaining in the Escrow Account and the Segregated Account,
unless sooner terminated pursuant to Section 10 hereof; PROVIDED,
HOWEVER, that (a) the obligations of the Company under Section 8
of this Agreement shall survive termination of this Agreement;
and (b) if, following an Event of Loss, there exist Net Loss
Proceeds that (in accordance with Section 4.11 of the Indenture)
are deliverable to the Trustee and are eligible for distribution
to the Company for rebuilding, repair or construction, then, at
the option of the Trustee, the Company and the Disbursement Agent
shall execute and deliver to the Trustee such documentation as
the Trustee reasonably deems appropriate in order to cause (i)
the Trustee to possess a first priority perfected security
interest in said funds, and (ii) the
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Disbursement Agent to administer the disbursement of said funds
for such rebuilding, repair or construction pursuant to
disbursement control procedures substantially akin to those set
forth herein.
10. SUBSTITUTION OR RESIGNATION.
10.1 SUBSTITUTION OF THE DISBURSEMENT AGENT OR
RESIGNATION.
10.1.1 In the event that the Disbursement Agent
shall fail to fulfill its obligations under this Agreement, or
shall, through gross negligence or willful misconduct, take any
action that adversely affects the rights of the Trustee, the
Holders of the First Mortgage Notes, or the Company, the Trustee,
on behalf of the Holders of the First Mortgage Notes, or the
Company shall each, in addition to any rights each might have at
law or equity, have the right, upon the expiration of thirty (30)
days following delivery of written notice of substitution to the
Disbursement Agent and the Company, to cause the Disbursement
Agent to be relieved of its duties hereunder and to select a
substitute disbursement agent to serve hereunder. The
Disbursement Agent may resign at any time upon thirty (30) days'
written notice to all parties hereto. Such resignation shall
take effect upon receipt by the Disbursement Agent of an
instrument of acceptance executed by a successor disbursement
agent and consented to by the other parties hereto. Upon
selection of such substitute disbursement agent, the Trustee, the
Company, the Escrow Agent and the substitute disbursement agent
shall enter into an agreement substantially identical to this
Agreement and, thereafter, the Disbursement Agent shall be
relieved of its duties and obligations to perform hereunder,
except that the Disbursement Agent shall transfer to the
substitute disbursement agent upon request therefor originals of
all books, records, and other documents in the Disbursement
Agent's possession relating to this Agreement. In the event that
the agency relationship between the Disbursement Agent and the
Title Insurer is terminated, then Title Insurer shall have the
right to become the Disbursement Agent hereunder upon notice to
the parties hereto and execution and delivery to the parties of a
written assumption of all of the Disbursement Agent's obligations
hereunder.
10.1.2 The Escrow Agent acknowledges and agrees
that the Trustee and the Company shall have the right to change
the party acting as the "Disbursement Agent" pursuant to this
Agreement, and the Trustee and the Company agree to provide
written notice to the Escrow Agent of any such change. From and
after the Escrow Agent's receipt of such notice, the Escrow Agent
shall treat the new party identified by the Trustee and the
Company to serve as the Disbursement Agent as the Disbursement
Agent hereunder.
10.2 SUBSTITUTION OF ESCROW AGENT OR RESIGNATION.
10.2.1 The Trustee and the Company shall each
have the right, upon the expiration of thirty (30) days following
delivery of written notice of substitution to the Escrow Agent
and the Company, to cause the Escrow Agent to be relieved of its
duties hereunder and to select a substitute escrow agent to serve
hereunder. The Escrow Agent may resign at any time upon thirty
(30) days' written notice to all parties hereto. Such
resignation shall take effect upon receipt by the Escrow Agent of
an instrument of acceptance executed by a successor escrow agent
and consented to by the other parties hereto. Upon selection of
such substitute escrow agent, the Company, the Trustee, the
Disbursement Agent and the substitute escrow agent shall enter
into an agreement substantially identical to this Agreement and,
thereafter, the Escrow Agent shall be relieved of its duties and
obligations to perform hereunder, except that the Escrow Agent
shall transfer to the substitute escrow agent upon request
therefor all funds and Cash Equivalents maintained by the Escrow
Agent hereunder and originals of all
20
books, records, plans and other documents in the Escrow Agent's
possession relating to such funds or Cash Equivalents or this
Agreement.
10.2.2 The Disbursement Agent acknowledges and
agrees that the Trustee and the Company shall each have the right
to change the party acting as "Escrow Agent" pursuant to this
Agreement, and the Trustee and the Company agree to provide
written notice to the Disbursement Agent of any such change.
From and after Disbursement Agent's receipt of such notice,
Disbursement Agent shall treat the new party identified by
Trustee and the Company to serve as the Escrow Agent as the
Escrow Agent hereunder.
10.3 SUBSTITUTION OF REVIEWING AGENT. The Disbursement
Agent, the Escrow Agent and the Trustee acknowledge and agree
that the Company shall have the right to change the party acting
as the Reviewing Agent by written notice to the Reviewing Agent
and the Company and the other parties hereto; PROVIDED, HOWEVER,
that any substitute Reviewing Agent selected by the Company shall
be an independent certified public accounting firm of national
standing. From and after the Disbursement Agent's, the Escrow
Agent's and the Trustee's receipt of such notice, the
Disbursement Agent, the Escrow Agent and the Trustee shall treat
the new party identified by the Company to serve as the Reviewing
Agent as the Reviewing Agent hereunder.
11. NOTICE TO DISBURSEMENT AGENT AND ESCROW AGENT. The
Company shall deliver to the Disbursement Agent and Escrow Agent,
within five (5) business of the date on which any Officer (as
defined in the Indenture) becomes aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or
proposes to take with respect thereto.
12. ESCROW ACCOUNT STATEMENT. Upon the request of the
Company or the Disbursement Agent from time to time, the Escrow
Agent shall deliver to the Company and the Disbursement Agent a
statement prepared by the Escrow Agent in a form satisfactory to
the Disbursement Agent and the Company setting forth with
reasonable particularity the balance of funds then in the Escrow
Account and the manner in which such funds are invested;
PROVIDED, HOWEVER, that the Escrow Agent shall not be required to
provide such statements more often than weekly.
13. NOTICE. The parties hereto irrevocably instruct the
Escrow Agent that on the first date upon which the balance in the
Escrow Account is reduced to zero, the Escrow Agent shall deliver
to the Trustee and the Disbursement Agent a notice that the
balance in the Escrow Account has been reduced to zero.
14. MISCELLANEOUS.
14.1 WAIVER. Any party hereto may specifically waive
any breach of this Agreement by any other party, but no such
waiver shall be deemed to have been given unless such waiver is
in writing, signed by the waiving party and specifically
designates the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
14.2 INVALIDITY. If for any reason whatsoever, any one
or more of the provisions of this Agreement shall be held or
deemed to be inoperative, unenforceable or invalid in a
particular case or in all cases, such circumstances shall not
have the effect of rendering any of the other provisions of
21
this Agreement inoperative, unenforceable or invalid, and the
inoperative, unenforceable or invalid provision shall be
construed as if it were written so as to effectuate, to the
maximum extent possible, the parties' intent.
14.3 NO AUTHORITY. Neither the Disbursement Agent nor
the Escrow Agent shall have any authority to, and neither the
Disbursement Agent nor the Escrow Agent shall, make any warranty
or representation or incur any obligation on behalf of, or in the
name of, the Trustee.
14.4 ASSIGNMENT. This Agreement is personal to the
parties hereto, and the rights and duties of any party hereunder
shall not be assignable except with the prior written consent of
the other parties hereto. In any event, this Agreement shall
inure to and be binding upon the parties and their successors and
permitted assigns.
14.5 BENEFIT. The parties hereto, the holders from
time to time of the First Mortgage Notes, and their respective
successors and assigns, but no others, shall be bound hereby and
entitled to the benefits hereof.
14.6 TIME. Time is of the essence for each provision
of this Agreement.
14.7 CHOICE OF LAW. The existence, validity,
construction, operation and effect of any and all terms and
provisions of this Agreement shall be determined in accordance
with and governed by the substantive laws of the State of New
York, without giving effect to its conflicts of law principles.
14.8 ENTIRE AGREEMENT; AMENDMENTS. This Agreement
contains the entire agreement among the parties with respect to
the subject matter hereof and supersedes any and all prior
agreements, understandings and commitments, whether oral or
written. This Agreement may be amended only by a writing signed
by duly authorized representatives of all parties.
14.9 NOTICES. All notices, requests, approvals,
consents and other communications required or permitted to be
made hereunder shall, except as otherwise provided herein, be in
writing and may be delivered personally or sent by telegram,
telecopy, facsimile, telex, first class mail or overnight
courier, postage prepaid, to the parties hereto addressed as
follows:
To the Escrow Agent:
Showboat, Inc.
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
Telephone: (609) 487-2000
Facsimile: (609) 823-7811
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To the Disbursement Agent:
Showboat, Inc.
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
Telephone: (609) 487-2000
Facsimile: (609) 823-7811
With a copy to:
Kummer Kaempfer Bonner & Renshaw
3800 Howard Hughes Parkway
Las Vegas, Nevada 89104
Attention: John N. Brewer, Esq.
Telephone: (702) 792-7000
Facsimile: (702) 796-7181
Showboat, Inc.
3720 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89104
Attention: Mark A. Clayton, Esq.
Telephone: (702) 650-1200
Facsimile: (702) 791-3410
To the Trustee:
American Bank National Association
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Telephone: (612) 229-2600
Facsimile: (612) 229-6415
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To the Company:
Showboat Marina Casino Partnership
Showboat Marina Finance Corporation
2001 East Columbus Drive
East Chicago, Indiana 46312
Attention: Vice President - Finance
and Administration
Telephone: (219) 392-1111
Facsimile: (219) 736-2334
With copies to:
Kummer Kaempfer Bonner & Renshaw
3800 Howard Hughes Parkway
Las Vegas, Nevada 89104
Attention: John N. Brewer, Esq.
Telephone: (702) 792-7000
Facsimile: (702) 796-7181
Ice Miller Donadio & Ryan
One American Square, 31st Floor
Indianapolis, Indiana 46204
Attention: Stephen J. Hackman, Esq.
Telephone: (317) 236-2100
Facsimile: (317) 236-2219
To the Reviewing Agent:
Showboat, Inc.
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey
R. Craig Bird
Telephone: (609) 487-2000
Facsimile: (609) 823-7811
With a copy to:
Kummer Kaempfer Bonner & Renshaw
3800 Howard Hughes Parkway
Las Vegas, Nevada 89104
Attention: John N. Brewer, Esq.
Telephone: (702) 792-7000
Facsimile: (702) 796-7181
24
Such notices, requests and other communications sent as provided
above shall be effective when received by the addressee thereof,
unless sent by registered or certified mail, postage prepaid, in
which case they shall be effective exactly five (5) business days
after being deposited in the United States mail. The parties
hereto may change their addresses by giving notice thereof to the
other parties hereto in conformity with this section.
14.10 COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
14.11 CAPTIONS. Captions in this Agreement are for
convenience only and shall not be considered or referred to in
resolving questions of interpretation of this Agreement.
14.12 RIGHT TO CONSULT COUNSEL. Each of the
Disbursement Agent, the Escrow Agent, the Reviewing Agent and the
Trustee may, if any of them deems it necessary or appropriate,
consult with and be advised by counsel in respect of their duties
hereunder. Each of the Disbursement Agent, the Escrow Agent, the
Reviewing Agent and the Trustee shall be entitled to rely upon
the advice of its counsel in any action taken in its respective
capacity hereunder and shall be protected from any liability of
any kind for actions taken in reasonable reliance upon such
counsel's opinion. The Company, jointly and severally, agrees to
pay all such reasonable counsel fees.
15. ARBITRATION. Any controversy between the parties
hereto involving the construction or application of any of the
terms, covenants, or conditions of this Agreement shall be
submitted to arbitration on the request of any party to this
Agreement, and such arbitration shall comply with and be governed
by the provisions of the United States Arbitration Act (Title 9,
U.S.Code) and the Commercial Rules of the American Arbitration
Association. The arbitrator(s) in any such arbitration shall
have the power to order and grant all remedies permitted at law
or in equity, including, without limitation, provisional and
equitable remedies. The exercise by a party of non-judicial or
self-help remedies permitted by law or equity shall not
constitute a waiver by that party of its right to compel
arbitration of controversies hereunder.
16. GRANT OF SECURITY INTEREST.
The Company hereby irrevocably pledges, assigns and
sets over to the Trustee, and grants to the Trustee, for the
benefit of the Holders of the First Mortgage Notes, a first
priority continuing security interest in all of the Company's
right, title and interest in and to all of the following, whether
now owned or existing or hereinafter acquired or created
(collectively, the "ESCROW ACCOUNT COLLATERAL");
(a) the Escrow Account and the Segregated
Account;
(b) all funds from time to time held in the
Escrow Account and the Segregated Account, including, without
limitation, the Proceeds and all certificates and instruments, if
any, from time to time, representing or evidencing the Escrow
Account, the Segregated Account, or the Proceeds;
25
(c) all Cash Equivalents, whether the same shall
constitute certificated securities, uncertificated securities,
investment property, instruments, general intangibles or
otherwise, held by or registered in the name of the Escrow Agent
or the Trustee or any of their respective nominees and all
certificates and instruments, if any, from time to time
representing or evidencing Cash Equivalents;
(d) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Trustee or
the Escrow Agent for or on behalf of the Company in substitution
for or in addition to any or all of the then existing Escrow
Account Collateral;
(e) all interest, dividends, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of the then existing Escrow Account Collateral; and
(f) all proceeds of the foregoing including,
without limitation, cash proceeds.
16.2 DEFINITIONS. For purposes of this Section 16, the
following terms shall have the following meanings:
"AGENT" means the Escrow Agent with respect to the
Escrow Account, the Segregated Account and the Escrow Account
Collateral.
"ACCOUNT" means the Escrow Account and the
Segregated Account with respect to the Escrow Agent.
"COLLATERAL" means the Escrow Account Collateral
with respect to the Escrow Agent.
16.3 SAFEKEEPING OF COLLATERAL. The Company and the
Trustee hereby irrevocably instruct the Agent, with respect to
its respective Account and Collateral, as follows:
(a) To the extent it is within its power, the
Agent at all times shall maintain all of the Collateral free and
clear of all liens, encumbrances, security interests, safekeeping
or other charges, demands and claims of any nature whatsoever now
or hereafter existing, in favor of anyone other than the Trustee
(or the Agent, as agent for the Trustee);
(b) With respect to any cash in the Account, the
Agent shall at all times, as agent/bailee for the Trustee,
maintain dominion and control over, and possession of, such cash
until such time as such cash is disbursed from the Account in
accordance with the terms of this Agreement;
(c) With respect to any certificated securities,
as a condition to acquiring any such securities: (i) the Agent
shall confirm that the Agent does not have any knowledge of any
other claims of any other person or entity in or to the
securities; (ii) the Agent shall cause any such securities to be
issued in the name of, or endorsed to, the Company, and the Agent
shall receive from the Company an endorsement in blank pertaining
to the securities; (iii) the Agent at all times shall maintain
dominion and control over, and possession of, said securities
until such time as the securities are sold for cash, at
26
which time all proceeds shall be held in accordance with clause
(b) of this Section 16.3; and (iv) the Agent at all times shall
designate in its records that it is holding said securities as
agent for the Trustee, as trustee under the Indenture;
(d) With respect to any uncertificated securities
(other than uncertificated securities issued by the federal
government or an agency or instrumentality thereof), as a
condition to acquiring any such securities: (i) the Agent shall
confirm that the Agent does not have any knowledge of any other
claims of any other person or entity in or to the securities;
(ii) the Agent (A) shall cause the Company to execute a letter
substantially in the form of EXHIBIT L attached hereto addressed
to the issuer (or the transfer agent for the issuer, if
applicable) pertaining to the securities, shall deliver said
letter to the issuer of the securities (or the transfer agent for
the issuer, if applicable), and shall have received back from the
issuer (or the transfer agent for the issuer, if applicable) a
copy of said letter signed by the issuer of the securities (or
the transfer agent for the issuer, if applicable), or (B) shall
have taken such alternative steps as are necessary or appropriate
in order to cause the Trustee to enjoy a continuous first
priority perfected security interest in the securities; and (iii)
the Agent shall at all times designate in its records that it is
holding said securities as agent for the Trustee, as trustee
under the Indenture. For purposes of determining the steps to be
taken under clause (ii)(B) of this Section 16.3(d), the Agent may
rely upon an opinion of counsel to the Company or the Agent (the
expense of which shall be paid by the Company) specifying (A)
that such counsel is familiar with the laws applicable to the
perfection of security interests in said securities and (B) the
steps required to perfect and maintain a first priority security
interest in favor of the Trustee in said securities;
(e) With respect to any uncertificated securities
issued by the federal government or an agency or instrumentality
thereof, as a condition to acquiring any such securities: (i)
the Agent shall confirm that the Agent does not have any
knowledge of any claims of any other person or entity in or to
the securities; (ii) the Agent shall have taken such steps as are
necessary and appropriate in order to cause the Trustee to enjoy
a continuous perfected first priority security interest in said
securities. For purposes of determining the foregoing steps, the
Agent may rely upon an opinion of counsel to the Company or the
Agent (the expense of which shall be paid by the Company)
specifying (A) that such counsel is familiar with the laws
applicable to the perfection of security interests in said
securities and (B) the steps required to perfect and maintain a
first priority security interest in favor of the Trustee in said
securities;
(f) The Agent shall take any other steps from
time to time requested by Trustee to confirm and maintain the
priority of the security interests in the Collateral; and
(g) The Agent shall immediately disburse all
funds held in the Account to the Trustee and transfer title to
all other Collateral held by the Agent hereunder to the Trustee
upon written notice by the Trustee to the Agent that an Event of
Default has occurred and is continuing under the Indenture.
16.4 REMEDIES. In addition to any rights and remedies
provided in the Indenture, the First Mortgage Notes and the other
Collateral Documents, upon an Event of Default as defined in the
Indenture and for so long as such Event of Default is continuing
the Trustee may exercise any or all of the following remedies,
successively or concurrently and in such order as the Trustee
elects:
27
(a) The Trustee may deliver some or all of the
notices contemplated by Section 16.3(g) above.
(b) The Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it and subject to the
restrictions imposed by the Indiana Riverboat Gambling Act, to
the extent applicable, all the rights and remedies of a secured
party under the UCC or other applicable law, and the Trustee may
also upon obtaining possession of the Collateral as set forth
herein, without notice to the Company except as specified below,
sell the Collateral or any part thereof in one or more parcels at
one or more public or private sales, at any exchange, broker's
board or at any of the Trustee's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as
the Trustee may deem commercially reasonable. The Company
acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such
sale were a public sale. The Company agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days'
notice to the Company of the time and place of any public sale or
the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having
been given. The Trustee may adjourn any public or private sale
from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each purchaser
at any such sale shall acquire the property sold free and clear
of any claim or right of the Company, the Escrow Agent or the
Disbursement Agent.
(c) Any cash that is Collateral held by the
Trustee and all cash proceeds received by the Trustee in respect
of any sale of, collection from, or other realization upon all or
any part of the Collateral shall be applied (after payment of any
and all amounts payable to the Trustee under the Indenture)
against the obligations for the ratable benefit of the Holders of
the First Mortgage Notes. Any surplus of such cash or cash
proceeds held by the Trustee and remaining after payment in full
of all the obligations shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive such surplus or as
a court of competent jurisdiction may direct.
(d) The Company hereby irrevocably appoints the
Trustee as its attorney-in-fact effective upon and during the
continuance of an Event of Default with full power of
substitution to do any act which the Company is obligated hereby
to do, to exercise such rights as the Company might exercise with
respect to the Collateral and to execute and file in the
Company's name any financing statements and amendments thereto
required or advisable to protect the Trustee's rights or security
interest hereunder. Such appointment and power of attorney shall
be irrevocable and coupled with an interest.
16.5 It shall be a term and condition of the Escrow
Account, notwithstanding any term or condition to the contrary in
any other agreement relating to the Escrow Account and except as
otherwise provided by the provisions of this Agreement, that no
amount (including, without limitation, interest on or other
proceeds of the Escrow Account or on any Cash Equivalents) shall
be paid or released to or for the account of, or withdrawn from
the Escrow Account by or for the account of, the Company or any
other person or entity other than the Trustee or its designated
agent.
16.6 TRANSFERS AND OTHER LIENS. The Company agrees
that it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Escrow Account Collateral or (ii) create
or permit to exist any lien upon or with respect to any of the
Escrow Account Collateral, except for the security interest under
this Agreement.
28
16.7 AGENCY. Each Agent shall act solely as the
Trustee's agent in connection with its duties under this Section
16, notwithstanding any other provision contained in this
Agreement, without any right to receive compensation from the
Trustee and without any authority to obligate the Trustee or to
compromise or pledge its security interest hereunder. The
Company acknowledges and agrees that in no event shall the
Trustee or the Holders of the First Mortgage Notes be liable for,
nor shall the obligations of the Company under the Indenture and
the First Mortgage Notes be affected or diminished as a
consequence of, any action or inaction of an Agent with respect
to the Escrow Account or the Escrow Account Collateral.
16.8 WAIVER OF SETOFF RIGHTS. The Escrow Agent and the
Disbursement Agent hereby acknowledge the Trustee's security
interest as set forth above and waive any security interest or
other lien in the Escrow Account Collateral and further waive any
right to set off the Escrow Account Collateral now or in the
future against any indebtedness of the Company to the Escrow
Agent or the Disbursement Agent. The waivers set forth in this
Section 16.8 are of rights which may exist now or arise hereafter
in favor of the Escrow Agent or the Disbursement Agent in their
individual capacities, and not of any such rights which may exist
now or arise hereafter in favor of the Escrow Agent or the
Disbursement Agent in their capacities as agents for the Trustee.
Nothing in this Section 16.8 shall be construed as waiving,
limiting or diminishing any rights of the Trustee vis-a-vis the
Company.
16.9 COOPERATION. Each Agent is hereby directed to
cooperate with the Trustee in the exercise of its rights in the
Collateral provided for herein. The Trustee will take all
necessary action to preserve and protect the security interest
created hereby as a lien and encumbrance upon the Collateral and,
upon demand, the Company and each Agent will execute and deliver
to the Trustee such instruments and documents as the Trustee may
deem reasonably necessary or advisable to confirm or perfect the
rights of the Trustee under this Agreement and the Trustee's
interest in the Collateral.
16.10 SECURED OBLIGATIONS. This Agreement secures
the due and punctual payment and performance of all obligations
and indebtedness of the Company, whether now or hereafter
existing, under the First Mortgage Notes and the Indenture
including, without limitation, interest accrued thereon after the
commencement of a bankruptcy, reorganization, dissolution,
winding-up or similar proceeding involving the Company, to the
extent permitted by applicable law.
17. CONSOLIDATION OF SHOWBOAT'S CAPACITIES UNDER THIS
AGREEMENT.
17.1 SATISFACTION OF OBLIGATIONS. For so long as
Showboat or any wholly owned subsidiary thereof as provided in
Section 17.3 below continues to serve as the Disbursement Agent
under this Agreement:
(a) all certificates, letters and other documents that
would otherwise be required to be executed and delivered to
the Disbursement Agent by the Company (except in connection
with disbursements to be made pursuant to Section 3.3 of
this Agreement), the Project Architect, the Project Manager,
the Reviewing Agent or any other party required to deliver a
certificate to the Disbursement Agent under this Agreement
before any disbursement, Construction Amendment, or Contract
Amendment would be authorized under this Agreement, shall be
deemed to have been executed and delivered to the
Disbursement Agent upon execution and delivery by the
Disbursement Agent to the Escrow Agent (with a copy
delivered to the Trustee) of the Showboat Disbursement
Certificate attached hereto as EXHIBIT M.
29
17.2 COMBINED REPRESENTATIONS AND WARRANTIES BY
SHOWBOAT. Showboat
hereby represents and warrants that, by executing and delivering
each Showboat Disbursement Certificate to the Escrow Agent:
(a) all representations and warranties that, in the absence
of Section 17.1 would otherwise have been required to have
been made by the Company, the Project Architect, the Project
Manager, the Reviewing Agent, or any other party that would
otherwise be required to deliver a certificate or other
document to the Disbursement Agent before a Disbursement
Authorization could be made, are true and correct;
(b) it has undertaken all of the duties, including the duty
of inquiry, assigned to the applicable party that would
otherwise be required to deliver a certificate or other
document to the Disbursement Agent in the absence of Section
17.1; and
(c) it has in its possession the documentation that would
otherwise, in the absence of Section 17.1, have been
maintained by the Company, the Project Architect, the
Project Manager, the Reviewing Agent or any other party
required to deliver a certificate or other document to the
Disbursement Agent under this Agreement, and such
documentation may be inspected upon reasonable notice by the
Trustee.
17.3 DELEGATION OF DUTIES OF ESCROW AGENT AND
DISBURSEMENT AGENT. For so long as Showboat continues to serve
as the Escrow Agent and the Disbursement Agent under this
Agreement, Showboat may delegate its duties as such to any wholly
owned subsidiary of Showboat; PROVIDED that Showboat shall remain
liable for all duties of the Escrow Agent and Disbursement Agent
hereunder.
18. SEGREGATED ACCOUNT.
18.1 RIGHTS OF THE COMPANY AND DISBURSEMENT AGENT TO
SEGREGATED ACCOUNT. The Segregated Account shall be a segregated
cash collateral trust account, the balance of which shall not
exceed $5.0 million at any time, to be maintained at National
City Bank, in East Chicago, Indiana, Custody Account No.
501755883, in the name of Showboat, as Escrow Agent, as
agent/bailee for American Bank National Association, as Trustee.
Notwithstanding the foregoing and subject to Section 3.4 hereof,
all funds deposited and held in the Segregated Account shall
belong to the Company and, pending disbursement in accordance
with this Agreement, shall be invested in cash or Cash
Equivalents; provided, however, that the Disbursement Agent shall
not invest any such funds in any investment unless such
investment is described in Section 16.1 of this Agreement and the
Disbursement Agent has taken the actions described in Section
16.3 with respect to such investment. Pursuant to Section 16.1
of this Agreement, the Company has granted to the Trustee (for
the benefit of the Holders of the First Mortgage Notes) a
perfected first priority security interest in the Segregated
Account, and the Disbursement Agent shall hold the Segregated
Account and the funds therein, under the sole dominion and
control of such Disbursement Agent, as agent/bailee for the
Trustee (for the benefit of Holders of the First Mortgage Notes).
Funds in the Segregated Account shall be disbursed solely in
accordance with the terms and conditions of this Agreement.
Further, the Disbursement Agent shall note in its records that
all funds and other assets in the Segregated Account have been
pledged to the Trustee, and that the Disbursement Agent is
holding such items as agent for the Trustee. Accordingly, such
funds shall not be within the bankruptcy "estate" (as such term
is used in 11 U.S.C. 541) of the Disbursement Agent. The
Company
30
hereby authorizes the Disbursement Agent to make disbursements on
its behalf in accordance with this Agreement.
18.2 DISBURSEMENTS FROM SEGREGATED ACCOUNT. Promptly
following the deposit of funds into the Segregated Account
pursuant to paragraph (i) of the Initial Disbursements
Certificate or in connection with a Disbursement Authorization,
the Disbursement Agent shall pay the respective "Current Payment
Amounts" to the payees identified on SCHEDULE 1 to the
Disbursement Request giving rise to the Disbursement
Authorization or replenish the Segregated Account; PROVIDED that
no disbursements shall be made to the Segregated Account that
would cause the balance therein to exceed $5.0 million at any one
time. In addition, the Disbursement Agent will promptly pay any
payee requested by the Project Manager pursuant to a payment
request in the form of EXHIBIT I, provided that such funds are
then available in the Segregated Account.
18.3 RIGHT TO SUBSTITUTE SEGREGATED ACCOUNT. The
Company and the Disbursement Agent from time to time shall have
the right to designate a substitute account to serve as the
Segregated Account, PROVIDED that no such substitute account
shall become the "Segregated Account" until (a) the Company shall
have taken all steps deemed necessary or appropriate by the
Trustee in order to cause the Trustee to enjoy a first priority
perfected security interest in such substituted Segregated
Account, (b) the depositary financial institution at which the
substitute account is located shall have acknowledged in a manner
satisfactory to the Trustee that the rights of the Trustee in
such account are senior to those of the financial institution,
and (c) the Escrow Agent and the Trustee shall have received
notice of the location and account number of such new substitute
account.
[SIGNATURE PAGES FOLLOW]
31
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the day first above written.
THE ESCROW AGENT: SHOWBOAT, INC.,
A Nevada corporation
By: /s/ R. Craig Bird
Name: R. Craig Bird
Title: Executive Vice President -
Finance and Administration
By:
Name:
Title:
THE DISBURSEMENT AGENT: SHOWBOAT, INC.,
a Nevada corporation
By: /s/ R. Craig Bird
Name: R. Craig Bird
Title: Executive Vice President -
Finance and Administration
THE TRUSTEE: 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
THE COMPANY: 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: /s/ J. Keith Wallace
Name: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By: /s/ Mark J. Miller
Name: Mark J. Miller
Title: Treasurer
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
Before me, a Notary Public in and for said County and
State, personally appeared R. Craig Bird, the authorized signatory
of Showboat, Inc., a corporate organized and existing under the
laws of the State of Nevada, 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 28th day of
March, 1996.
Elizabeth T. McNamee /s/ Elizabeth T. McNamee
Notary of Public, State of New York Signature
No. 01MC5047948
Qualified in Suffolk County Elizabeth T. McNamee
Commission Expires August 14, 1997 Printed Notary Public
My Commission Expires: County of Residence:
______________________ New York
35
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.
Colleen D. Schwab /s/ Colleen D. Schwab
Notary Public - Minnesota Signature
My Comm. Expires Jan. 31, 2000
Colleen D. Schwab
Printed Notary Public
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
Nevada 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 28th day of
March, 1996.
/s/ Richard J. Lesniak
Signature
Richard J. Lesniak
Notary Public State of Indiana
Lake County
My Commission Exp. Apr. 13, 1998
Printed Notary Public
My Commission Expires: County of Residence:
______________________ ____________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
Before me, a Notary Public in and for said County and
State, personally appeared Mark J. Miller, the authorized
signatory of Showboat Marina Finance Corporation, a corporation
organized and existing under the laws of the State of Nevada, 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 28th day of
March, 1996.
Elizabeth T. McNamee /s/ Elizabeth T. McNamee
Notary of Public, State of New York Signature
No. 01MC5047948
Qualified in Suffolk County Elizabeth T. McNamee
Commission Expires August 14, 1997 Printed Notary Public
My Commission Expires: County of Residence:
______________________ New York
TABLE OF EXHIBITS
EXHIBIT
A. Form of Initial Disbursements Certificate
B-1. Form of Company's Closing Certification
B-2. Form of Disbursement Agent's Closing Certification
B-3. Form of Trustee's Closing Certification
C. Form of Disbursement Request
D. Project Cost Schedule
E. Form of Construction Budget Amendment Certificate
F. Form of Contract Amendment Certificate
G. Form of Reviewing Agent Letter
H. Form of Disbursement Authorization
I. Form of Payment Request
J. Form of Consent to Collateral Assignment of Contract
K. Pre-Opening Expenses
L. Form of Letter to Issuer (or Transfer Agent) of
Uncertificated Securities
M. Form of Showboat Disbursement Certificate
N. Form of Pre-Closing Disbursement Certificate
37
EXHIBIT A TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF INITIAL DISBURSEMENTS CERTIFICATE
Showboat Marina Casino Partnership
Showboat Marina Finance Corporation
2001 East Columbus Drive
East Chicago, Indiana 46312
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
Showboat, Inc., as Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Initial Disbursements Certificate
Ladies and Gentlemen:
This Initial Disbursements Certificate is delivered to
you pursuant to that certain Escrow and Disbursement
Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT") dated
March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ("SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with
Showboat Partnership, the "COMPANY"), American Bank National
Association, a national banking association, as trustee (the
"TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc. ("SHOWBOAT"), a
Nevada corporation, as disbursement agent (the "DISBURSEMENT
AGENT"), and as escrow agent (the "ESCROW AGENT").
Capitalized terms used herein shall have the meanings
assigned to such terms in the Escrow and Disbursement
Agreement.
The Company hereby irrevocably instructs the Escrow
Agent to disburse the following sums to the following
parties:
(a) $___________ to Showboat, pursuant to instructions
provided to the Escrow Agent by Showboat, as reimbursement
of certain amounts advanced to the Company prior to the date
hereof.
(b) $ __________ to Kummer Kaempfer Bonner & Renshaw,
counsel to the Company, as payment of certain legal fees
incurred in connection with the issuance of the First
Mortgage Notes;
(c) $___________ to Ice Miller Donadio & Ryan, special
Indiana counsel to the Company, as payment of certain legal
fees incurred in connection with the issuance of the First
Mortgage Notes;
38
(d) $___________ to Winston & Strawn, special
Admiralty counsel to the Company, as payment of certain
legal fees incurred in connection with the issuance of the
First Mortgage Notes;
(e) $ __________ to R.R. Donnelley, as payment for
certain printing and engraving fees incurred in connection
with the issuance of the First Mortgage Notes;
(f) $___________ to _____________, as payment of
certain fees and expenses incurred in connection with
serving as surety for the Payment and Performance Bond.
(g) $5,000,000 to the Segregated Account.
[SIGNATURE PAGE FOLLOWS]
39
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE CORPORATION, a
Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
40
EXHIBIT B-1 TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF COMPANY'S CLOSING CERTIFICATION
Showboat Marina Casino Partnership
Showboat Marina Finance Corporation
2001 East Columbus Drive
East Chicago, Indiana 46312
_____ __, 1996
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Showboat, Inc., as Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Company's Closing Certification
Ladies and Gentlemen:
This Closing Certification is delivered to you pursuant to
that certain Escrow and Disbursement Agreement (the "ESCROW AND
DISBURSEMENT AGREEMENT") dated March 28, 1996 by and among
Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc. as disbursement agent
(the "DISBURSEMENT AGENT"), and as escrow agent (the "ESCROW
AGENT"). Capitalized terms used herein shall have the meanings
assigned to such terms in the Escrow and Disbursement Agreement.
The Company hereby certifies to each of you as follows:
1. As of the date hereof, there is no reason to believe
that the date on which East Chicago Showboat will become
Operating will not occur on or prior to the Completion Date.
2. The "Available Amount" column of the Initial
Construction Budget attached hereto as EXHIBIT 1 constitutes the
Construction Budget presently in effect for the Construction;
PROVIDED, HOWEVER, that the Initial Construction Budget shall not
include the "Fees and Expenses" line item or the corresponding
amounts listed under the "Available Amount" column with respect
thereto.
1
3. Said Initial Construction Budget accurately sets forth
the anticipated Construction Expenses through completion of the
construction of East Chicago Showboat and the various components
of East Chicago Showboat identified thereon as line items, all
within the respective line item amounts listed.
4. Said Initial Construction Budget also accurately sets
forth (a) all anticipated Pre-Opening Expenses which the Company
is expected to incur in order for East Chicago Showboat to begin
Operating on or before the Completion Date, and (b) all
anticipated Debt Financing Costs payable through the date that
the Company reasonably anticipates that East Chicago Showboat
first will be Operating and to provide a reserve to cover any
additional Debt Financing Costs that will accrue but will not yet
be payable as of such date, all within the line item allocations
established for those components set forth in the Initial
Construction Budget.
5. As of the date hereof, there are sufficient Available
Funds to pay for the anticipated costs described in paragraphs 2,
3 and 4 above, and, after giving effect to the Initial
Disbursements, the Company does not believe that any other
expenses will need to be incurred by the Company in order to
cause East Chicago Showboat to be Operating on or before the
Completion Date.
6. There is no Default or Event of Default existing under
the Indenture.
The foregoing representations, warranties and certifications
are true and correct and the Disbursement Agent is entitled to
rely on the foregoing in authorizing and making the Initial
Disbursements.
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
2
EXHIBIT 1 TO EXHIBIT B-1
INITIAL CONSTRUCTION BUDGET
The following table sets forth the initial construction budget
for the construction of East Chicago Showboat through its
expected opening date of July 1, 1997 (in millions):
AVAILABLE AMOUNT:
Casino vessel $ 46.0
Gaming and other equipment 17.2
Preopening expenses 11.0
Interest<F1> 16.6
Breakwater 16.4
Garage 15.8
Furniture, fixtures & equipment 11.9
Contingency 11.5
Pavilion 10.5
Design and development fees 16.0
Economic development incentives 5.9
Site improvements and infrastructure 5.6
Offering discounts and expenses 5.6
Bankroll and working capital 5.0
Total Available Amount $195.0
<FN>
<F1> Interest is net of interest income anticipated to be
earned on the funds in the Escrow Account. Assumes
interest income of 4.0% on the cash balance in the
Escrow Account.
</FN>
1
EXHIBIT 2 TO EXHIBIT B-1
FORM OF PROJECT MANAGER'S CLOSING CERTIFICATION
_____ __, 1996
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Showboat, Inc., as Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Company's Closing Certification
Project Manager's Closing Certification
Ladies and Gentlemen:
Showboat, Inc., a Nevada Corporation (the "PROJECT MANAGER")
hereby certifies to each of you as follows:
1. We have reviewed the above referenced Company Closing
Certification from the Company and that certain Escrow and
Disbursement Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT")
dated March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ("SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), Showboat, Inc., a Nevada corporation
("SHOWBOAT") and as escrow agent (the "ESCROW AGENT"), as
disbursement agent (the "DISBURSEMENT AGENT"), and American Bank
National Association, as trustee (the "TRUSTEE") under the
Indenture, to the extent necessary to understand the defined
terms contained herein and in the Company's Closing Certification
that is incorporated by reference from the Escrow and
Disbursement Agreement, and to provide the certification
contained herein.
2. The Project Manager hereby certifies and confirms the
accuracy of the certifications in paragraphs 1 and 3 of the above-
referenced Company's Closing Certification.
2
3. The Project Manager hereby certifies that to the best
of its knowledge, East Chicago Showboat with the Minimum
Facilities may be constructed in accordance within the Initial
Construction Budget identified in the Company's Closing
Certification.
The foregoing representations, warranties and certifications
are true and correct and you each are entitled to rely on the
foregoing in connection with the Initial Disbursements.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Escrow and Disbursement
Agreement.
Showboat, Inc.,
a Nevada corporation
By:
Name: R. Craig Bird
Title: Executive Vice President - Finance and Administration
3
EXHIBIT 3 TO EXHIBIT B-1
FORM OF PROJECT ARCHITECT'S CLOSING CERTIFICATION
March 28, 1996
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Showboat, Inc., as Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Company's Closing Certification
Project Architect's Closing Certification
Ladies and Gentlemen:
Showboat, Inc., a Nevada Corporation (the "PROJECT
ARCHITECT") hereby certifies to each of you as follows:
1. The Project Architect has reviewed the above referenced
Company's Closing Certification from the Company and that certain
Escrow and Disbursement Agreement (the "ESCROW AND DISBURSEMENT
AGREEMENT") dated March 28, 1996 by and among Showboat Inc., a
Nevada corporation ("SHOWBOAT"), as escrow agent (the "Escrow
Agent"), and as disbursement agent (the "DISBURSEMENT AGENT"),
American Bank National Association, as trustee (the "TRUSTEE")
under the Indenture, Showboat Marina Casino Partnership, an
Indiana general partnership (the "PARTNERSHIP"), and Showboat
Marina Finance Corporation, ("FINANCE CORPORATION" and, together
with the Partnership, the "COMPANY"), to the extent necessary to
understand the defined terms contained herein and in the
Company's Closing Certification that are incorporated by
reference from the Escrow and Disbursement Agreement, and to
provide the certification contained herein.
2. The Project Architect hereby certifies and confirms the
accuracy of the certifications in paragraphs 1 and 3 of the above-
referenced Company's Closing Certification.
3. The Project Architect hereby certifies that to the best
of its knowledge, East Chicago Showboat with the Minimum
Facilities may be constructed in accordance within the Initial
Construction Budget identified in the Company's Closing
Certification.
4
The foregoing representations, warranties and certifications
are true and correct and you each are entitled to rely on the
foregoing in connection with the Initial Disbursements.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Escrow and Disbursement
Agreement.
Showboat, Inc.,
a Nevada corporation
By:
Name: R. Craig Bird
Title: Executive Vice President - Finance and Administration
5
EXHIBIT B-2 TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF DISBURSEMENT AGENT'S CLOSING CERTIFICATION
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
_________ __, 1996
Showboat, Inc., Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Disbursement Agent's Closing Certification
Ladies and Gentlemen:
This Closing Certification is delivered to you pursuant to
that certain Escrow and Disbursement Agreement (the "ESCROW AND
DISBURSEMENT AGREEMENT") dated March 28, 1996 by and among
AGENT"), Showboat, Inc., a Nevada corporation ("SHOWBOAT"), as
escrow agent (the "ESCROW AGENT"), and disbursement agent (the
"DISBURSEMENT AGENT"), American Bank National Association, as
trustee (the "TRUSTEE") under the Indenture (as defined therein),
Showboat Marina Casino Partnership, an Indiana general
partnership (the "PARTNERSHIP"), and Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with the Partnership, the "COMPANY"). Capitalized terms
used herein shall have the meanings assigned to such terms in the
Escrow and Disbursement Agreement.
The Disbursement Agent hereby certifies to each of you as
follows as contemplated by Section 6.1 (c) of the above-
referenced Escrow and Disbursement Agreement:
1. The Escrow Account has been established as contemplated
by the Escrow and Disbursement Agreement.
2. The Disbursement Agent has obtained and has in effect
insurance of the type required by Section 8.3 of the Escrow and
Disbursement Agreement.
3. The Disbursement Agent has received from the Company
(a) an executed Initial Disbursements Certificate, and (b) an
executed Closing Certification in the form attached to the Escrow
and Disbursement Agreement as Exhibit B-1, together with closing
certifications from the Project Manager and the Project Architect
in the form called for thereby.
The foregoing representations, warranties and certifications
are true and correct and you each are entitled to rely on the
foregoing in connection with the Initial Disbursements.
6
Showboat Inc.,
a Nevada Corporation
By:
Name: R. Craig Bird
Title: Executive Vice President - Finance and Administration
7
EXHIBIT B-3 TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF TRUSTEE'S CLOSING CERTIFICATION
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
_____ __, 1996
Showboat, Inc., Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Trustee's Closing Certification
Ladies and Gentlemen:
This Closing Certification is delivered to you pursuant to
that certain Escrow and Disbursement Agreement (the "ESCROW AND
DISBURSEMENT AGREEMENT") dated March 28, 1996 by and among
Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc., as escrow agent (the
"ESCROW AGENT"), and as disbursement agent (the "DISBURSEMENT
AGENT"). Capitalized terms used herein shall have the meanings
assigned to such terms in the Escrow and Disbursement Agreement.
The Trustee hereby certifies to each of you as follows as
contemplated by Section 6.1 (c) of the above-referenced Escrow
and Disbursement Agreement:
1. The Trustee has received from the Company an executed
Initial Disbursements Certificate and an executed Closing
Certification in the form attached to the Escrow and Disbursement
Agreement as Exhibit B-1, together with closing certifications
from the Project Manager and the Project Architect in the form
called for thereby.
2. The Trustee has received from the Title Insurer the
Title Policy required to be in effect under the terms of the
Escrow and Disbursement Agreement as of the date of the Initial
Disbursements.
The foregoing representations, warranties and certifications
are true and correct and you each are entitled to rely on the
foregoing in connection with the Initial Disbursements.
AMERICAN BANK NATIONAL ASSOCIATION,
a national banking association, as
Trustee
By:
Name:
Title:
8
EXHIBIT C TO ESCROW AND DISBURSEMENT AGREEMENT
DISBURSEMENT REQUEST AND CERTIFICATE
[Letterhead of the Company]
__________, 199__
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Disbursement Request No. ____________ under Escrow and
Disbursement Agreement
Amount Requested: $_____________
Ladies and Gentlemen:
This Disbursement Request and certificate is delivered to
you pursuant to that certain Escrow and Disbursement Agreement
(the "ESCROW AND DISBURSEMENT AGREEMENT") dated March 28, 1996 by
and among Showboat, Inc., a Nevada corporation, as escrow agent
(the "ESCROW AGENT"), and as disbursement agent (the
"DISBURSEMENT AGENT"), American Bank National Association, as
trustee (the "TRUSTEE") under the Indenture (as defined therein),
Showboat Marina Casino Partnership, an Indiana general
partnership (the "PARTNERSHIP"), and Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with the Partnership, the "COMPANY"). Capitalized terms
used herein shall have the meanings assigned to such terms in the
Escrow and Disbursement Agreement.
The Company hereby requests that you, in your capacity as
Disbursement Agent under the Escrow and Disbursement Agreement,
authorize the Escrow Agent to make a disbursement of
$______________ (the "DISBURSEMENT") to the parties identified on
SCHEDULE 1 attached hereto and in the respective amounts listed
for such parties on SCHEDULE 1 under the column "CURRENT PAYMENT
AMOUNT."
In connection with the requested Disbursement, the Company
signing below hereby represent, and certify as follows:
1. With respect to amounts requested on SCHEDULE 1 for
Construction Expenses, SCHEDULE 1 accurately lists, for each line
item and for each party to whom payment is requested with respect
to such line item, the following: (i) the name of the payee to
be paid, (ii) the current payment requested, (iii) the increase
or decrease in accrued but unpaid Retainage Amount for such payee
since the last Disbursement Request (after giving effect to the
payment contemplated by the Disbursement Request); (iv) the total
amount contemplated to be payable to such payee under the terms
of its applicable Contract through completion of all work and
delivery of all materials contemplated by the Contract (i.e., the
total contract amount); (v) the total payments made to such payee
under its applicable Contract as of the Issue Date; (vi) the
total payments made to such payee since the Issue Date (after
giving effect to the payment contemplated by this Disbursement
Request); (vii) the sum of all payments made to such payee (after
giving effect to the payment contemplated by this Disbursement
Request) (i.e., the sum of (v) and (vi) above); (viii) the
aggregate accrued Retainage Amounts which shall continue to be
owed with respect to such Contract (after giving effect to the
payment contemplated by the Disbursement Request); and (ix) the
percentage of the work actually completed, or the materials
actually delivered, under the Contract through the date for which
1
payment is made hereunder (expressed as a percentage of the total
work and materials contemplated by the Contract through
completion).
2. The construction performed as of the date hereof is in
accordance with the Plans for East Chicago Showboat and the
disbursement is appropriate in light of the percentage of
construction completed and the amount of stored materials. As of
the date hereof, there is no reason to believe that the date on
which East Chicago Showboat will become Operating will not occur
on or prior to the Completion Date.
3. With respect to amounts requested on SCHEDULE 1 for Pre-
Opening Expenses, all such Pre-Opening Expenses have been
incurred and are payable in accordance with the Indenture, and
all of the conditions set forth in EXHIBIT K to the Escrow and
Disbursement Agreement to the disbursement and payment of said
amounts have been satisfied.
4. Appropriate evidence of lien releases, if required by
Section 6.2(k) or 6.2(l) of the Escrow and Disbursement
Agreement, and title insurance endorsements, if required by
Section 6.2(h) of the Escrow and Disbursement Agreement, have
been received for all work, materials and/or services performed
and/or delivered in connection with East Chicago Showboat. In
addition all Title Policies required pursuant to the Escrow and
Disbursement Agreement have been received. The lien releases and
the title endorsements, to the extent applicable, are attached
hereto.
5. The Construction Budget presently in effect is dated
_________________ and includes all amendments through
Construction Budget Amendment No. ___. Said Construction Budget
accurately sets forth the anticipated Construction Expenses
through completion of construction of East Chicago Showboat and
the various components of East Chicago Showboat identified
thereon as line items, all within the respective line item
amounts listed.
6. The Construction Budget continues to accurately set
forth (a) all anticipated Pre-Opening Expenses which the Company
will need to incur in order the commence Operating East Chicago
Showboat on or before the Completion Date, and (b) all
anticipated Debt Financing Costs payable through the date that
the Company reasonably anticipates that East Chicago Showboat
first will be Operating and to provide a reserve to cover any
additional Debt Financing Costs that will accrue but will not yet
be payable as of such date, all within the line item allocations
established for those components set forth in the Construction
Budget.
7. After giving effect to the requested disbursement from
the Escrow Account, there are sufficient Available Funds to pay
for the anticipated costs described in paragraphs 6 and 7 above,
and the Company does not believe that any other expenses will
need to be incurred by the Company in order to cause East Chicago
Showboat to be Operating on or before the Completion Date.
8. There is no Event of Default under the Indenture or any
event, omission or failure of a condition which would constitute
an Event of Default under the Indenture after notice or lapse of
time or both.
9. As of the date hereof, the Company submitted to the
Disbursement Agent all Plans which, as of the date hereof,
constitute Final Plans. Further, all disbursements requested
under this Disbursement Request are for the Payment of
Construction Expenses incurred for work consistent with Plans
which the Company reasonably believes ultimately will become
Final Plans and which will permit the Company to complete
construction of East Chicago Showboat on or before the Completion
Date.
10. [ ] Check this box if this Disbursement is for the
purchase of real estate. (If so checked, the undersigned will
deliver a copy of the amended Collateral Documents evidencing
that the Lien (as defined in the Indenture) of the Trustee has
been amended to include such real estate).
2
The foregoing representations, warranties and certifications
are true and correct and Disbursement Agent is entitled to rely
on the foregoing in authorizing and making the Disbursement.
Attached to this Disbursement Request are certificates from
the Project Manager and Project Architect.
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
3
Schedule 1 to Disbursement Request and Certificate
Date:________________
CONSTRUCTION EXPENSES
Line Item:
(i) Payee (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) % of
Current Increase/ Total Payments Payments Total Aggregate Contract
Payment Decrease in Amount Under Under Payments Accured and Work
Amount Retainage Payable Contract Contract to Date Unpaid Completed
Amount Since Under Prior to From and [(iv)+(v)] Retainage
Last Contract Issue After Issue Amounts for
Disbursement Terms Date Date Contract
Request
Total for
Line Item
Line Item:
Total for
Line Item
Line Item:
Total for
Line Item
PRE-OPENING EXPENSES
Line Item:
(i) Payee (ii) Current Payment Amount
1
Total for
Line Item
Line Item:
Total for
Line Item
2
EXHIBIT 1 TO EXHIBIT C
CERTIFICATE OF PROJECT MANAGER
(DISBURSEMENT REQUEST)
___________, 199__
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Disbursement Request No. __________
Under Escrow and Disbursement Agreement
Certificate of Project Manager
Ladies and Gentlemen:
The Project Manager hereby certifies as follows:
1. The Project Manager has reviewed the above referenced
Disbursement Request and that certain Escrow and Disbursement
Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT") dated March
28, 1996 by and among Showboat Marina Casino Partnership, an
Indiana general partnership ("SHOWBOAT PARTNERSHIP"), Showboat
Marina Finance Corporation, a Nevada corporation ("FINANCE
CORPORATION" and, together with Showboat Partnership, the
"COMPANY"), American Bank National Association, a national
banking association, as trustee (the "TRUSTEE") under the
Indenture (as defined in the Escrow and Disbursement Agreement)
and Showboat, Inc., a Nevada Corporation ("SHOWBOAT"), as escrow
agent (the "ESCROW AGENT"), and as disbursement agent (the
"DISBURSEMENT AGENT") to the extent necessary to understand the
defined terms contained herein and in the Disbursement Request
that are incorporated by reference from the Escrow and
Disbursement Agreement, and to provide the certification
contained herein. Capitalized terms used herein shall have the
meanings assigned to such terms in the Escrow and Disbursement
Agreement.
2. The Project Manager hereby certifies and confirms the
accuracy of the certifications in paragraphs 1, 2, 5, 6 and 9 of
the above-referenced Disbursement Request.
3. The Project Manager hereby certifies that to the best
of its knowledge, East Chicago Showboat with the Minimum
Facilities may be constructed in accordance with the Construction
Budget presently in effect.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent is
entitled to rely on the foregoing in authorizing and making the
Disbursement.
Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Escrow and
Disbursement Agreement.
3
Showboat, Inc.,
a Nevada corporation
By:
Name:
Title:
4
EXHIBIT 2 TO EXHIBIT C TO ESCROW AND DISBURSEMENT AGREEMENT
CERTIFICATE OF PROJECT ARCHITECT
(DISBURSEMENT REQUEST)
_______, 199__
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
Re: Disbursement Request No. __________
Under Escrow and Disbursement Agreement
Certificate of Project Architect
Ladies and Gentlemen:
The Undersigned, (the "Project Architect) hereby certifies
as follows:
1. We have reviewed the above referenced Disbursement
Request and that certain Escrow and Disbursement Agreement
(the "ESCROW AND DISBURSEMENT AGREEMENT") dated March 28, 1996 by
and among Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), to the extent
necessary to understand the defined terms contained herein and in
the Disbursement Request that are incorporated by reference from
the Escrow and Disbursement Agreement, and to provide the
certification contained herein, American Bank National
Association, a national banking association, as trustee (the
"TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc., a Nevada Corporation
("SHOWBOAT"), as escrow agent (the "ESCROW AGENT"), and as
disbursement agent (the "DISBURSEMENT AGENT"). Capitalized terms
used herein shall have the meanings assigned to such terms in the
Escrow and Disbursement Agreement.
2. We hereby certify and confirm the accuracy of the
certifications contained in paragraphs 2 and 9 of the above-
referenced Disbursement Request.
3. We hereby certify that, to the best of our knowledge,
East Chicago Showboat with the Minimum Facilities may be
constructed in accordance with the Construction Budget presently
in effect.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent is
entitled to rely on the foregoing in authorizing and making the
Disbursement.
Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Escrow and
Disbursement Agreement.
5
a Project Architect
By:
Name:
Title:
By:
Name:
Title:
6
EXHIBIT D TO ESCROW AND DISBURSEMENT AGREEMENT
PROJECT COST SCHEDULE
Prepared as of : _____________, 199__
CONSTRUCTION EXPENSES
(i) (ii) (iii) (iv) (v) (vi) (vii)
Line Item Total Excluded Construction Costs Paid Accrued and Available
Estimated Costs <F2> Budget<F3> to Date Unpaid Amount<F6>
Costs<F1> Since Issue Retainage
Date<F4> Amounts to
Date<F5>
PRE-OPENING EXPENSES
(i) Line Item (ii) Total (iii) (iv) (v) Costs (vi) (vii)
Estimated Excluded Construction Paid to Accrued and Available
Costs<F1> Costs <F2> Budget<F3> Date Since Unpaid Amount<F6>
Issue Retainage
Date<F4> Amounts to
Date<F5>
1
DEBT FINANCING COSTS
UNALLOCATED RESERVES
TOTAL
<FN>
<F1> Includes "Excluded Costs" (column iii) under line item.
<F2> Represents (a) expenses paid by the Colmpany in connection
with East Chicago Showboat prior to the Issue Date, and (b)
to the extent not covered by clause (a), any expenses paid
pursuant to Initial Disbursemnts.
<F3> Excludes "Excluded Costs" (column(iii), but includes
Retainage Amounts accrued but unpaid as of Issue Date).
<F4> Include Retainage Amounts, as and when paid.
<F5> Include Retainage Amounts accrued as of Issue Date, to the
extent still unpaid.
<F6> Represents amounts presently allocated to Line Item that
have not yet been disbursed or retained to cover Retainage
Amounts.
</FN>
2
Additional Revenue Anticipated (as of Issue
Date, as noted on Intial Constructin Budget)
to be earned From Investments in Escrow Account $
Additional Revenue Earned From Investments in
Escrow Account as of the Date of this Project
Cost Schedule $
Additional Revenue Anticipated to be Earned,
From investments in Escrow Account, from the
Date of this Project Cost Schedule Through the
Date East Chicago Showboat Anticipated to be
Operating $
The undersigned hereby confirms the accuracy of the above Project
Cost Schedule as of the date for which it has been prepared.
Date:_____________, 199__
THE COMPANY: SHOWBOAT MARINA CASINO PARTNERSHIP,
an Indiana general partnership
By: SHOWBOAT INDIANA INVESTMENT LIMITED
PARTNERSHIP, a Nevada limited partnership
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:
Name:
Title:
SHOWBOAT MARINA FINANCE CORPORATION
By:
Name:
Title:
3
EXHIBIT E TO ESCROW AND DISBURSEMENT AGREEMENT
CONSTRUCTION BUDGET AMENDMENT CERTIFICATE
[Letterhead of the Company]
Date: _______, 1996
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Amendment No. ___________ to Construction Budget
Under Escrow and Disbursement Agreement
Construction Budget Amendment Certificate
Ladies and Gentlemen:
The Company requests that the Construction Budget for East
Chicago Showboat be amended as set forth on SCHEDULE 1 to this
certificate. This certificate is delivered pursuant to that
certain Escrow and Disbursement Agreement (the "ESCROW AND
DISBURSEMENT AGREEMENT") dated March 28, 1996 by and among
Showboat, Inc., a Nevada corporation ("SHOWBOAT"), as escrow
agent (the "ESCROW AGENT"), and as disbursement agent (the
"DISBURSEMENT AGENT"), American Bank National Association, as
trustee (the "TRUSTEE") under the Indenture (as defined therein),
Showboat Marina Casino Partnership, an Indiana general
partnership (the "PARTNERSHIP"), and Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with the Partnership, the "COMPANY"). Capitalized terms
used in this certificate that are otherwise not defined shall
have the meaning assigned in the Escrow and Disbursement
Agreement.
In connection with the requested Construction Budget
amendment, the Company hereby represents, warrants and certifies
as follows:
1. The proposed amendment is reasonably necessary in
order to complete the work represented by such line
item in the Construction Budget that is amended.
2. Funding to pay the costs represented by any line
item increase is available from Realized Savings,
Additional Revenue, Capital Lease Savings and/or
Additional Project Financing to the extent not
previously expended or dedicated (including Retainage
Amounts) to the payment of items contained in the
Construction Budget, from the allocation of otherwise
unallocated reserves in the Construction Budget or from
the reduction of allocated reserves pursuant to the
terms and conditions of the Escrow and Disbursement
Agreement and, in each case, as set forth on SCHEDULE 1
hereto.
3. The Construction Budget in effect immediately
prior to the proposed amendment is attached to this
Construction Budget Amendment Certificate as SCHEDULE
2, and the Construction Budget which will be in effect
upon effectiveness of the proposed amendment is
attached to this Construction Budget Amendment as
SCHEDULE 3.
1
4. Immediately following the proposed amendment: (i)
the Construction Budget will continue to provide for
construction of improvements which are substantially
consistent with the Minimum Facilities; (ii) the
Construction Budget will continue to call for
construction which will permit the date on which East
Chicago Showboat becomes Operating to occur on or prior
to the Completion Date; (iii) the Construction Budget
will continue to reasonably establish the line item
components of the work required to be undertaken in
order to complete construction of East Chicago
Showboat, and will continue to reasonably establish the
cost of completing each line item component of such
work; and (iv) the Remaining Costs will not exceed the
Available Funds.
5. The construction performed as of the date hereof
is in accordance with the Plans and the disbursement is
appropriate in light of the percentage of construction
completed and the amount of stored materials. The
undersigned have no reason to believe that the date on
which East Chicago Showboat will become Operating will
not occur on or prior to the Completion Date.
6. After giving effect to the proposed amendment, the
Construction Budget accurately sets forth the
anticipated Construction Expenses through completion of
the construction of East Chicago Showboat and the
various lien item components thereof identified on the
Construction Budget, all within the line item
allocations established for those components set forth
in the Construction Budget.
7. After giving effect to the proposed amendment, the
Construction Budget accurately sets forth all
anticipated Pre-Opening Expenses which the Company will
need to incur in order to commence Operating East
Chicago Showboat on or before the Completion Date, and
all anticipated Debt Financing Costs which will be
payable or which will accrue through the date that the
Company reasonably anticipates that East Chicago
Showboat first will be Operating and to provide a
reserve to cover any additional Debt Financing Costs
that will accrue but will not yet be payable as of such
date, all within the respective line items established
for those items in the Construction Budget.
8. After giving effect to the proposed amendment,
there are sufficient Available Funds to pay for the
anticipated costs described in paragraphs 6 and 7 above
and the Company does not believe that any other
expenses will need to be incurred by the Company in
order to cause East Chicago Showboat to be Operating on
or before the Completion Date.
9. There is no Event of Default under the Indenture
or any event, omission or failure of a condition which
could constitute an Event of Default under the
Indenture after notice or lapse of time or both.
10. If the line item "UNALLOCATED RESERVES" is zero in
the Construction Budget for East Chicago Showboat,
SCHEDULE 1 to this Construction Budget amendment has
been reviewed by the Reviewing Agent in accordance with
the Escrow and Disbursement Agreement and attached as
SCHEDULE 4 hereto is a copy of the Reviewing Agent's
review letter.
The undersigned certifies that the Construction Budget
amendment contemplated hereby is permitted pursuant to the Escrow
and Disbursement Agreement and the Indenture, and all conditions
precedent thereto have been met.
2
Attached to this Construction Budget Amendment Certificate
are certificates from the Project Manager and the Project
Architect.
THE COMPANY: SHOWBOAT MARINA CASINO PARTNERSHIP,
an Indiana general partnership
By: SHOWBOAT MARINE PARTNERSHIP, an
Indiana general partnership, its
general partner
By: SHOWBOAT INDIANA INVESTMENT LIMITED
PARTNERSHIP, a Nevada limited
partnership
By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner
By:
Name:
Title:
SHOWBOAT MARINA FINANCE CORPORATION
By:
Name:
Title:
3
SCHEDULE 1 TO CONSTRUCTION BUDGET AMENDMENT
Amendment No. __ to Construction Budget.
I. Increases to Line Items:
The following line item is increased: ________________________
Old Amount of Line Item: ________________________
Amount of Increase: ________________________
New Total For Line Item: ________________________
Source of Funds For Increase:
Source Amount
Realized Savings _______________1
Additional Revenue _______________2
Previously Unallocated Reserve _______________
Additional Project
Financing _______________2
Capital Lease Savings _______________3
Total _______________
II. Decreases to Line Items:
The following line item is
decreased: ________________________________
Old Amount of Line Item: ________________________________
Amount of Decrease: ________________________________
New Amount of Line Item: ________________________________
Reason For Decrease of Line Item:
___ Realized Savings1
___ Decrease of Unallocated Reserves
___ Decrease of Allocated Reserves
___ Capital Lease Savings3
_______________________________
1. Source and documentation (receipts for purchased goods or
contracts for fixed price) for Realized Savings are
attached.
2. Attached deposit slip into the Escrow Account to evidence
additional funds.
3. Documentation (leases for goods leased pursuant to
capital leases) for Capital Lease Savings are attached.
1
III. New Construction Budget Totals
a. The total Construction Budget for the
Project is now: $_____________
b. The amount disbursed to date for the
Project is now: $_____________
c. Remaining amounts to be spent: $_____________
d. Available Funds for Project: $_____________
Item d should be greater than or equal to item c.
2
SCHEDULE 2 TO CONSTRUCTION BUDGET AMENDMENT CERTIFICATE
EXISTING CONSTRUCTION BUDGET
The following table sets forth the existing construction budget
for East Chicago Showboat (in millions):
CONSTRUCTION BUDGET:
Casino vessel $ 46.0
Gaming and other equipment 17.2
Preopening expenses 11.0
Interest<F1> 16.6
Breakwater 16.4
Garage 15.8
Furniture, fixtures & equipment 11.9
Contingency 11.5
Pavilion 10.5
Design and development fees 16.0
Economic development incentives 5.9
Site improvements and infrastructure 5.6
Offering discounts and expenses 5.6
Bankroll and working capital 5.0
Total $195.0
<FN>
<F1> Interest is net of interest income anticipated to be
earned on the funds in the Escrow Account. Assumes
interest income of 4.0% on the cash balance in the
Escrow Account.
</FN>
1
SCHEDULE 3 TO CONSTRUCTION BUDGET AMENDMENT CERTIFICATE
REVISED CONSTRUCTION BUDGET
2
SCHEDULE 4 TO CONSTRUCTION BUDGET AMENDMENT CERTIFICATE
FORM OF REVIEWING AGENT'S LETTER
_________, 199_
_______________________
_______________________
_______________________
_______________________
Dear ____________:
At your request, we are submitting this proposal to perform
certain agreed upon procedures relating to the Budget Amendment
Certificate to be submitted as part of an Officer's Certificate
pursuant to Section 4.1 of that certain Escrow and Disbursement
Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT") dated March
28, 1996 by and among Showboat, Inc., a Nevada corporation
("SHOWBOAT"), as escrow agent (the "ESCROW AGENT") and as
disbursement agent (the "DISBURSEMENT AGENT"), American Bank
National Association, as trustee (the "TRUSTEE") under the
Indenture (as defined therein), Showboat Marina Casino
Partnership, an Indiana general partnership (the "PARTNERSHIP"),
and Showboat Marina Finance Corporation, a Nevada corporation
("FINANCE CORPORATION" and, together with the Partnership, the
"COMPANY"). Capitalized terms used in this certificate that are
otherwise not defined shall have the meaning assigned in the
Escrow and Disbursement Agreement.
It is our understanding that the purpose of these special
procedures is to verify the information listed on Schedule 1 to
Budget Amendment (an example of such schedule is shown as
Schedule 1 to Exhibit E of the aforementioned Escrow and
Disbursement Agreement), trace such information to the
Construction Budget and recalculate the schedule for mathematical
accuracy, and report any exceptions noted to the Company and the
Disbursement Agent responsible for disbursing the funds pursuant
to the Escrow and Disbursement Agreement. It is our further
understanding that these special procedures are to be performed
and our report thereon rendered timely such that it can be
attached to the Officer's Certificate to the Disbursement Agent.
We expect our report will read generally as follows:
We have performed the procedures enumerated below as
requested by the management of Showboat Marina Casino
Partnership relating to amendments to the Construction
Budget and in particular to the schedule attached to the
Budget Amendment Certificate prepared for such purpose.
These procedures were performed solely to assist the Company
in complying with the terms of the Escrow and Disbursement
Agreement, and to provide independent verification of
accounting information included as part of Schedule 1 to the
Budget Amendment. This report is intended solely for your
information and that of the Escrow Agent.
Our procedures were as follows:
(a) We compared the accounting information included in
Schedule 1 to the Budget Amendment to the accounting records
of the Company and to the Construction Budget and found it
to be in agreement except . . .
1
(b) We recalculated the information submitted for
mathematical accuracy and are in agreement except . . .
These agreed-upon procedures are substantially less in scope
than an audit, the objective of which is the expression of
an opinion on the selected financial information.
Accordingly, we do not express such an opinion.
Based on the application of the procedures referred to
above, nothing came to our attention that caused us to
believe that the accounting information included in the
aforementioned Schedule 1 to the Budget Amendment, prepare
by the Company, was unsupported by the accounting records of
the Company or the Construction Budget, except as noted.
Had we performed additional procedures, or had we made an
audit of the selected financial information, other matters
might have come to our attention that would have been
reported to you.
The aforementioned work and related report is anticipated to be
performed and rendered for each Amendment to the Construction
Budget made within the construction periods of East Chicago
Showboat.
Our fees for the special procedures work will be billed at our
standard rate, plus reimbursable expenses, and submitted for
payment upon completion of each such amendment.
If the aforementioned is in accordance with our understanding,
please sign and return the enclosed copy of this engagement
letter in the attached return envelope.
We look forward to working with you on this important engagement.
Very truly yours,
Accepted By:
_____________________________________
Authorized Signature
2
EXHIBIT 1 TO EXHIBIT E
CERTIFICATE OF PROJECT MANAGER
CONSTRUCTION BUDGET AMENDMENT
________, 199__
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Amendment No. ____ to Construction Budget
Construction Budget Amendment Certificate, dated _____,
199__
Under Escrow and Disbursement Agreement
Certificate of Project Manager
Ladies and Gentlemen:
Showboat, Inc., a Nevada corporation (the "PROJECT MANAGER")
hereby certifies as follows:
1. The Project Manager has reviewed the above referenced
Construction Budget Amendment Certificate and that certain Escrow
and Disbursement Agreement (the "ESCROW AND DISBURSEMENT
AGREEMENT") dated March 28, 1996 by and among Showboat Marina
Casino Partnership, an Indiana general partnership (the "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement) and Showboat, Inc. ("SHOWBOAT"), as escrow agent (the
"ESCROW AGENT") and as disbursement agent (the "DISBURSEMENT
AGENT") to the extent necessary to understand the defined terms
contained herein and in the Construction Budget Amendment
Certificate that are incorporated by reference from the Escrow
and Disbursement Agreement, and to provide the certification
contained herein, Capitalized terms used herein shall have the
meanings assigned to such terms in the Escrow and Disbursement
Agreement.
2. The Project Manager hereby certifies and confirms the
accuracy of the certifications in paragraphs 1, 3, 5 and 6 of the
above-referenced Construction Budget Amendment Certificate.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent
and the Reviewing Agent are entitled to rely on the foregoing in
authorizing and making the amendment to the Construction Budget.
________________,
as Project Manager
By:
Name:
Title:
3
EXHIBIT 2 TO EXHIBIT E
CERTIFICATE OF PROJECT ARCHITECT
CONSTRUCTION BUDGET AMENDMENT
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Amendment No. ___ to Construction Budget
Construction Budget Amendment Certificate, dated _____,
199__
Under Escrow and Disbursement Agreement
Certificate of Project Architect
Ladies and Gentlemen:
The undersigned, as project architect (the "PROJECT
ARCHITECT"), hereby certifies as follows:
1. The Project Manager has reviewed the above referenced
Construction Budget Amendment Certificate and that certain Escrow
and Disbursement Agreement (the "ESCROW AND DISBURSEMENT
AGREEMENT") dated March 28, 1996 by and among American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement), Showboat, Inc. ("SHOWBOAT") as escrow
agent (the "ESCROW AGENT") and disbursement agreement
("DISBURSEMENT AGENT"), Showboat Marina Casino Partnership, an
Indiana general partnership (the "SHOWBOAT PARTNERSHIP"),
Showboat Marina Finance Corporation, a Nevada corporation
("FINANCE CORPORATION" and, together with Showboat Partnership,
the "COMPANY"), to the extent necessary to understand the defined
terms contained herein and in the Construction Budget Amendment
Certificate that are incorporated by reference from the Escrow
and Disbursement Agreement, and to provide the certification
contained herein, . Capitalized terms used herein shall have the
meanings assigned to such terms in the Escrow and Disbursement
Agreement.
2. We hereby certify and confirm the accuracy of the
certifications contained in paragraphs 1, 3, 5 and 6 of the above-
referenced Construction Budget Amendment Certificate.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent
and the Reviewing Agent are entitled to rely on the foregoing in
authorizing and making the amendment to the Construction Budget.
Showboat, Inc.,
as Project Manager
By:
Name:
Title:
4
EXHIBIT F TO ESCROW AND DISBURSEMENT AGREEMENT
CONTRACT AMENDMENT CERTIFICATE
[Letterhead of Company]
_______, 199__
Showboat Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
American Bank National Association, Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Re: Amendment No. ___ to Contract dated __________
(the "CONTRACT") between Showboat Marina Casino
Partnership and ________________ ("CONTRACTOR")
Contract Amendment Certificate
Ladies and Gentlemen:
The Company requests that the above-referenced Contract be
amended as set forth on SCHEDULE 1 to this certificate. This
certificate is delivered pursuant to that certain Escrow and
Disbursement Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT")
dated March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement) and Showboat, Inc., a Nevada Corporation ("SHOWBOAT"),
as escrow agent (the "ESCROW AGENT") and as disbursement agent
(the "DISBURSEMENT AGENT"). Capitalized terms used in this
certificate that are not otherwise defined shall have the meaning
assigned in the meaning assigned in the Escrow and Disbursement
Agreement.
In connection with the requested Contract amendment, the
Company hereby represents, warrants and certifies as follows:
1. After giving effect to such amendment (and any
related amendment to the Construction Budget):
(a) The Construction Budget will continue to
call for construction of improvements constituting
the at least the Minimum Facilities;
(b) If the amendment will effect a reduction
in the scope of the work to be performed by
Contractor, then the work eliminated from the
scope of work either (i) is not necessary for the
completion of the Minimum Facilities, or (ii) to
the extent necessary for the completion of the
Minimum Facilities, will be completed by the
contractors set forth below under the new or
amended contracts described below. Each such
contractor is competent to perform the
1
work called for by the new or amended contract in
exchange for the payments contemplated thereby.
WORK CONTRACTOR CONTRACT
__________ __________ __________
(c) The Company will continue to be able to
complete the work within the line items pertaining to
the Contract: (i) in a timely manner so as to permit
the date on which East Chicago Showboat becomes
Operating to occur on or prior to the Completion Date;
and (ii) within the aggregate amounts specified for the
line item on the Construction Budget.
2. After giving effect to the proposed amendment (and
any related amendment to the Construction Budget), the
Construction Budget accurately sets forth the
anticipated Construction Expenses through completion of
the construction of East Chicago Showboat and the
various components of East Chicago Showboat, all within
the line item allocations established for those
components set forth in the Construction Budget.
3. After giving effect to the proposed amendment (and
any related amendment to the Construction Budget), the
Construction Budget accurately sets forth all
anticipated Pre-Opening Expenses which the Company will
need to incur in order to commence Operating East
Chicago Showboat on or before the Completion Date, and
all anticipated Debt Financing Costs which will be
payable or which will accrue through the date that the
Company reasonably anticipates that East Chicago
Showboat first will be Operating and to provide a
reserve to cover any additional Debt Financing Costs
that will accrue but will not yet be payable as of such
date, all within the respective line items established
for those items in the Construction Budget.
4. There is no Event of Default or any event,
omission or failure of a condition which could
constitute an Event of Default after notice or lapse of
time or both.
The undersigned certifies that this Contract Amendment
Certificate is authorized hereby is permitted pursuant to the
Escrow and Disbursement Agreement and the Indenture, and all
conditions precedent thereto have been met.
Attached to this Contract Amendment Certificate are
certificates from the Project Manager and the Project Architect.
2
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
______________________________ hereby certifies that it has
received the above Contract Amendment Certificate and the
certifications of the Project Manager and the Project Architect
attached thereto.
DATE:_____________________ ______________________________
By:
Name:
Title:
1
SCHEDULE 1 TO CONTRACT AMENDMENT CERTIFICATE
COPY OF EXECUTED CONTRACT AMENDMENT)
2
EXHIBIT 1 TO EXHIBIT F
CERTIFICATE OF PROJECT MANAGER
CONTRACT AMENDMENT
______, 199__
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Amendment No. ___ to Contract dated __________
(the "CONTRACT") between Showboat Marina Casino
Partnership, and ________________ ("CONTRACTOR")
Contract Amendment Certificate dated _____, _____
Certificate of Project Manager
Ladies and Gentlemen:
The undersigned, as project manager (the "PROJECT MANAGER"),
hereby certifies as follows:
1. The Project Manager has reviewed the above referenced
Contract Amendment Certificate and that certain Escrow and
Disbursement Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT")
dated March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement) and Showboat, Inc., a Nevada Corporation ("SHOWBOAT"),
as escrow agent (the "ESCROW AGENT") and as disbursement agent
(the "DISBURSEMENT AGENT"), to the extent necessary to understand
the defined terms contained herein and in the Contract Amendment
Certificate that are incorporated by reference from the Escrow
and Disbursement Agreement, and to provide the certification
contained herein.
2. We hereby certify and confirm the accuracy of the
certifications in paragraphs 1 and 2 of the above-referenced
Contract Amendment Certificate.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent is
entitled to rely on the foregoing in authorizing and making the
amendment to the Contract.
Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Escrow and
Disbursement Agreement.
Showboat, Inc.,
as Project Manager
By:
Name:
Title:
3
EXHIBIT 2 TO EXHIBIT F
CERTIFICATE OF PROJECT ARCHITECT
CONTRACT AMENDMENT
_________, 1996
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Amendment No. ___ to Contract dated __________
(the "CONTRACT") between Showboat Marina Casino
Partnership, and ________________ ("CONTRACTOR")
Contract Amendment Certificate dated _____, 199_
Certificate of Project Architect
Ladies and Gentlemen:
The undersigned, as project architect (the "PROJECT
ARCHITECT"), hereby certifies as follows:
1. The Project Architect has reviewed the above referenced
Contract Amendment Certificate and that certain Escrow and
Disbursement Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT")
dated March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement) and Showboat, Inc., a Nevada Corporation ("SHOWBOAT"),
as escrow agent (the "ESCROW AGENT") and as disbursement agent
(the "DISBURSEMENT AGENT"), to the extent necessary to understand
the defined terms contained herein and in the Contract Amendment
Certificate that are incorporated by reference from the Escrow
and Disbursement Agreement, and to provide the certification
contained herein.
2. We hereby certify and confirm the accuracy of the
certifications contained in paragraphs 1 and 2 of the above-
referenced Contract Amendment Certificate.
The foregoing representations, warranties and
certifications are true and correct and the Disbursement Agent
and the Reviewing Agent are entitled to rely on the foregoing in
authorizing and making the amendment to the Contract.
Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Escrow and
Disbursement Agreement.
Showboat, Inc.,
as project architect
By:
Name:
Title:
4
EXHIBIT G TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF REVIEWING AGENT LETTER CONFIRMING
PROCEDURES ON DISBURSEMENT REQUEST
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Disbursement No. ___, dated __________, 199_,
Under Escrow and Disbursement Agreement
Ladies and Gentlemen:
We have performed the procedures enumerated below as
requested by the Company in connection with the above-referenced
Disbursement, pursuant to section 4.3 of that certain Escrow and
Disbursement Agreement (the "ESCROW AND DISBURSEMENT AGREEMENT")
dated March 28, 1996 by and among Showboat Marina Casino
Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement) and Showboat, Inc., a Nevada Corporation ("SHOWBOAT"),
as escrow agent (the "ESCROW AGENT") and as disbursement agent
(the "DISBURSEMENT AGENT"). Capitalized terms used herein and
not otherwise defined shall have the meaning ascribed to them in
the Escrow and Disbursement Agreement.
These procedures were performed solely to assist the Company
in complying with the terms of the Escrow and Disbursement
Agreement and to provide independent verification of the nature
of the construction disbursements made for East Chicago Showboat
for which the Company has requested disbursements relating to the
period noted. This report is intended solely for your
information and that of the Escrow Agent.
Our procedures were as follows:
(a) We selected all disbursements made at the request of
the Company individually in excess of $5,000, relating
to disbursement No. __________, dated __________, 199_.
(b) We selected, on a judgmental basis, a sample of 20% of
those disbursements at the request of the Company
individually less than $5,000.
(c) We read the documentation supporting the disbursements
noted in (a) and (b), and compared the documentation to
the disbursement and to the construction budget
category and found the disbursement had documentation
to support the nature of the disbursement, the
disbursement was appropriately categorized against the
construction budget classification, and total
disbursements to date, in such category, did not exceed
the budgeted amount for such category, except as
follows:
These agreed-upon procedures are substantially less in scope
than an audit, the objective of which is the expression of an
opinion on the selected financial information. Accordingly, we
do not express such an opinion.
5
Based on the application of the procedures referred to
above, nothing came to our attention that caused us to believe
that the disbursements in the schedules prepared by the Company
that summarize the construction disbursements for East Chicago
Showboat for disbursement No. ______________, dated
_________________ 199_, lacked supporting documentation or were
improperly categorized against the construction budget line
items, except as noted. Had we performed additional procedures,
or had we made an audit of the selected financial information,
other matters might have come to our attention that would have
been reported to you.
Showboat, Inc.,
a Nevada corporation
By:
Name:
Title:
6
EXHIBIT H TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF DISBURSEMENT AUTHORIZATION
[Letterhead of Disbursement Agent]
Date: [Draw Date], 199_
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Re: Disbursement Authorization
Ladies and Gentlemen:
This Disbursement Authorization is delivered to you
pursuant to that certain Escrow and Disbursement Agreement (the
"ESCROW AND DISBURSEMENT AGREEMENT") dated March 28, 1996 by and
among Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc., a Nevada Corporation
("SHOWBOAT"), as escrow agent (the "ESCROW AGENT") and as
disbursement agent (the "DISBURSEMENT AGENT"). Capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to them in the Escrow and Disbursement Agreement.
Pursuant to Section 3 of the Escrow and Disbursement Agreement,
you are hereby authorized and directed to disburse from the
Escrow Account funds in the amount of $______________.
[IF THIS DISBURSEMENT AUTHORIZATION IS THE FINAL
DISBURSEMENT OF FUNDS TO THE COMPANY PURSUANT TO SECTION 5.1 OF
THE ESCROW AND DISBURSEMENT AGREEMENT, ADD THE FOLLOWING
SENTENCE: In addition, pursuant to Section 5.1 of the Escrow and
Disbursement Agreement, the Disbursement Agent hereby directs the
Escrow Agent to retain funds in the Escrow Account in an amount
equal to $______________ in order to pay the Retainage Amounts
pursuant to Section 6.2.1 of the Escrow and Disbursement
Agreement.]
We certify that we have received, reviewed and approved
a Disbursement Request of the Company and that the disbursement
authorized hereby is permitted pursuant to the Escrow and
Disbursement Agreement.
1
Please confirm the transfer described above by
returning a notice of confirmation to the undersigned at the
address set forth above.
as Disbursement Agent
By:
Name:
Title:
2
EXHIBIT I TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF PAYMENT REQUEST
[Letterhead of Company]
Date: [Draw Date], 199_
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
American Bank National Association, as Trustee
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Payment Request
Ladies and Gentlemen:
This Payment Request is delivered to you pursuant to
that certain Escrow and Disbursement Agreement (the "ESCROW AND
DISBURSEMENT AGREEMENT") dated March 28, 1996 by and among
Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc., a Nevada Corporation
("SHOWBOAT"), as escrow agent (the "ESCROW AGENT") and as
disbursement agent (the "DISBURSEMENT AGENT").
Pursuant to Section 3.3 of the Escrow and Disbursement
Agreement, you are hereby directed to pay to _________________
(the "PAYING AGENT") on _______________________ (the "PAYMENT
DATE") funds in the amount of $_________________ from the Escrow
Account maintained by you in the name of the Company. The
undersigned hereby certifies that payments in an amount equal to
such sums will be due and payable on the First Mortgage Notes on
the Payment Date.
Please confirm the transfer described above by
returning a notice of confirmation to the undersigned at the
address set forth above.
3
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
cc: American Bank National Association, as Trustee under the
Indenture
1
EXHIBIT J TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF CONSENT TO COLLATERAL ASSIGNMENT OF CONTRACT
CONTRACTING PARTY'S CONSENT TO ASSIGNMENT
THIS CONTRACTING PARTY'S CONSENT TO ASSIGNMENT (this
"CONSENT")is made as of _____________, 199_, by
,a(the "CONTRACTING PARTY"), whose address is
,for the benefit of American Bank National Association (the
"TRUSTEE"), whose address is 101 East 5th Street, St. Paul,
Minnesota 55101, Attention: Corporate Trust Department.
RECITALS
A. FIRST MORTGAGE NOTES. Pursuant to that certain
Indenture dated as of March 28, 1996, by and among Showboat
Marina Casino Partnership, an Indiana general partnership, and
Showboat Marina Finance Corporation, a Nevada corporation, and
the Trustee, as trustee (the "INDENTURE"), the Company has issued
$140,000,000 principal amount of their 13 1/2% First Mortgage
Notes due 2003 (the "FIRST MORTGAGE NOTES"). All defined terms used
herein and not otherwise defined, shall have the meanings set
forth in the Indenture, or the Escrow and Disbursement Agreement,
as applicable. The proceeds of the First Mortgage Notes have
been deposited into an escrow account maintained by the Escrow
Agent pursuant to that certain Escrow and Disbursement Agreement
(the "ESCROW AND DISBURSEMENT AGREEMENT") dated March 28, 1996 by
and among Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc., a Nevada Corporation
("SHOWBOAT"), as escrow agent (the "ESCROW AGENT") and as
disbursement agent (the "DISBURSEMENT AGENT").
B. SECURITY. The Company must use certain proceeds of the
First Mortgage Notes disbursed pursuant to the Escrow and
Disbursement Agreement for the construction or operation of East
Chicago Showboat. Contracting Party and the Company are parties
to that certain dated
, 199___ (the "CONTRACT") relating to construction or operation
of East Chicago Showboat. The Company has executed an assignment
of contracts and documents, collaterally assigning all of the
Company's right, title and interest in and to, among other
things, the Contract (the "COLLATERAL ASSIGNMENT"), dated as of
_______, 1996, in favor of Trustee.
CONSENT
NOW THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Contracting Party agrees
as follows:
1. CONSENT TO ASSIGNMENT. Pursuant to the Contract,
Contracting Party has performed or supplied, or agreed to perform
or supply, certain services, materials or documents in connection
with the Property or East Chicago Showboat. Contracting Party
hereby consents to the assignment thereof by the Company to
Trustee as provided in the Collateral Assignment and this
Consent.
1
2. COMPANY'S DEFAULT UNDER CONTRACT. If the Company
defaults under the Contract, before exercising any remedy,
Contracting Party shall deliver to Trustee at its address set
forth above, by registered or certified mail, postage prepaid,
return receipt requested, written notice of such default,
specifying the nature of the default and the steps necessary to
cure the same. If the Company fails to cure the default within
the time permitted under the Contract, then Trustee shall have an
additional 30 days after the expiration of the time permitted
under the Contract (but in no event less than an additional 30
days after the receipt by Trustee of the said notice from
Contracting Party) within which Trustee shall have the right, but
not the obligation, to cure such default. Contracting Party's
delivery of such a notice of default to Trustee and Trustee's
failure to cure the same within the said additional period shall
be conditions precedent to the exercise of any right or remedy of
Contracting Party arising by reason of such default, except that
Contracting Party shall not be required to continue performance
under the Contract for the said additional period, unless and
until Trustee agrees to pay Contracting Party for that portion of
the work, labor and materials rendered during the said period.
3. COMPANY'S DEFAULT UNDER LOAN DOCUMENTS. If
Trustee gives written notice to Contracting Party that the
Company has defaulted under the Loan Documents and requests that
Contracting Party continue its performance under the Contract,
Contracting Party shall thereafter perform for Trustee under the
Contract in accordance with its terms, so long as Contracting
Party shall be paid pursuant to the Contract for all work, labor
and materials rendered thereunder, including payment of any sums
due to Contracting Party for work performed up to and including
the date of the Company's default.
4. PERFORMANCE FOR TRUSTEE. If Trustee (a) cures any
default by the Company pursuant to Paragraph 2 above, (b) gives
written notice to Contracting Party that the Company has
defaulted under the Collateral Documents pursuant to Paragraph 3
above, (c) becomes the owner of East Chicago Showboat,
(d) undertakes to complete the construction of East Chicago
Showboat pursuant to its rights under the Collateral Documents,
or (e) following an Event of Default, otherwise requires the
performance of Contracting Party's obligations under the Contract
or the use of any plans and specifications, drawings, surveys or
other materials or documents previously prepared or provided by
Contracting Party pursuant to the Contract, then in any such
event, so long as Contracting Party has received and continues to
receive the compensation required under the Contract related
thereto, Trustee shall have the right to obtain performance from
Contracting Party of all of its obligations under the Contract,
and to use all such plans and specifications, drawings, surveys
and other materials and documents, and the ideas, designs and
concepts contained therein, in connection with the completion of
East Chicago Showboat, without the payment of any additional fees
or charges to Contracting Party.
5. AMENDMENTS AND CHANGE ORDERS. Contracting Party
agrees that it will not modify, amend, supplement or in any way
join in the release or discharge of Contracting Party's
obligations under the Contract unless (a) such change is
commercially reasonable, and (b) the Disbursement Agent under the
Escrow and Disbursement Agreement or the Trustee has consented to
such change in writing, and Contracting Party agrees that it will
not perform any work pursuant to any change order or directive
unless the same is issued and executed in accordance with the
terms and conditions of the Contract.
6. LIST OF SUBCONTRACTING PARTIES. Upon the written
request of the Trustee or the Disbursement Agent at any time and
from time to time, Contracting Party shall furnish to the Trustee
and the Disbursement Agent a current list of all persons with
whom Contracting Party has entered into subcontracts or other
agreements related to the rendering of work, labor or materials
under the Contract, together with a statement as to the status of
each such subcontract or agreement, and the respective amounts,
if any, owed by Contracting Party related thereto.
7. REPRESENTATIONS AND WARRANTIES. Contracting Party
represents and warrants to the Trustee and the Disbursement Agent
that (a) it is duly licensed to conduct its business in the
jurisdiction contemplated by the Contract, and will at all times
maintain its license in full force and effect throughout the term
thereof, (b) the Contract has not been amended, modified or
supplemented except as set forth therein, (c) the
2
Contract constitutes a valid and binding obligation of
Contracting Party and is enforceable in accordance with its
terms, (d) there have been no prior assignments of the Contract,
and (e) all covenants, conditions and agreements of the Company
and Contracting Party contained in the Contract have been
performed as required therein, except for those that are not due
to be performed until after the date hereof.
APPLICATION OF FUNDS. Nothing herein imposes or
shall be construed to impose upon Trustee any duty to direct the
application of any proceeds of the First Mortgage Notes, and
Contracting Party acknowledges that Trustee is not obligated to
Contracting Party or any of its subcontracting parties,
materialmen, suppliers or laborers.
ACKNOWLEDGMENT OF INDUCEMENT. Contracting Party
is executing this consent to induce the purchasers of the First
Mortgage Notes to purchase the First Mortgage Notes. Contracting
Party understands that the purchasers of the First Mortgage Notes
would not advance such funds and make such purchases but for
Contracting Party's execution and delivery hereof.
IN WITNESS WHEREOF, Contracting Party has executed this
Consent as of the date first above written.
CONTRACTING PARTY:
________________________
a_______________________
By:
Name:
Title:
3
EXHIBIT K TO ESCROW AND DISBURSEMENT AGREEMENT
PRE-OPENING EXPENSES
The Pre-Opening Expenses are described in the Attachment to
this Exhibit K. The attachment further sets forth several line
items of Pre-Opening Expenses and the respective maximum amounts
which may be drawn under the line items for expenses incurred
during the sequential calendar months from ___________ through
___________. No disbursement may be made for a particular line
item category for expenses incurred in that category in any given
calendar month in excess of the maximum set forth for the line
item and the calendar month; PROVIDED, HOWEVER, that: (a) if the
Company incurs less expenses under a line item for a given
calendar month than the maximum set forth for that line item and
calendar month, then the difference can be re-allocated to a
later calendar month for the same line item and thereby increase
the maximum expenditures for the line item in the specified later
calendar month; and (b) if at any time all of the work, services
and materials contemplated under a line item have been completed
and the aggregate expense through said completion is less than
the figure listed for the line item under the column entitled
"Total," then the difference may be re-allocated to other line
items in the Construction Budget (including line items which are
not "Pre-Opening Expenses"). All re-allocations pursuant to the
foregoing shall be made by Construction Budget Amendments
pursuant to the process set forth in the Escrow and Disbursement
Agreement.
1
EXHIBIT L TO ESCROW AND DISBURSEMENT AGREEMENT
_____________, 199__
[INSERT NAME AND ADDRESS OF ISSUER OR TRANSFER AGENT FOR THE
ISSUER, AS APPLICABLE]
_______________________________________
_______________________________________
Attention: _____________________
Re: Pledge of securities of [INSERT NAME OF ISSUER] (the
"ISSUER")
Gentlemen and Ladies:
This letter shall provide you with irrevocable instructions
concerning securities (the "SECURITIES") of beneficial
interest of _______________ [INSERT NAME OF ISSUER] to be held in
account no. (the "ACCOUNT") and
registered in the name of the undersigned (the "SECURITYHOLDER").
The undersigned hereby certifies and agrees as follows:
1. The Securityholder has pledged and granted a
security interest in the Securities, together with all interest,
dividends, gains and other income thereon and reinvestments
thereof, together with all right, title and interest of
Securityholder in the Account with respect to the foregoing (the
"PLEDGE"), to American Bank National Association (the "TRUSTEE")
in its capacity as trustee under that certain Indenture dated as
of March 28, 1996, by and among Showboat Marina Casino
Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), and American Bank National
Association, a national banking association, as trustee (the
"TRUSTEE") (the "INDENTURE") pertaining to the 13 1/2% First
Mortgage Notes due 2003. In such capacity, the Trustee is
referred to herein as the "PLEDGEE."
2. The Securityholder hereby represents to you that:
(a) the Pledgee has designated _____________ [INSERT NAME OF
AGENT] (the "AGENT") to serve as the Pledgee's designee and agent
in order to perfect the security interest in favor of the
Pledgee; and (b) the Securityholder has not granted any security
interest, right or claim in the Securities or the Account to any
person other than the Pledgee.
3. Accordingly, the Securityholder hereby irrevocably
directs you to make such notations in the records pertaining to
the Securities and the Account as are necessary to reflect the
Pledge, including the registration of the Securities and the
Account in the name of [INSERT SHOWBOAT MARINA CASINO PARTNERSHIP
OR SHOWBOAT MARINA FINANCE CORPORATION, AS APPROPRIATE] and the
registration of the Pledge of the Securities in the following
name:
"___________________ [INSERT NAME OF AGENT],
as agent for American Bank National Association,
in the latter's capacity as trustee under that
certain Indenture dated as of March 28, 1996, by
and among Showboat Marina Casino Partnership, an
Indiana general partnership, Showboat Marina
Finance Corporation, a Nevada corporation, and
American Bank National Association, a national
banking association, as trustee, pertaining to the
13 1/2% First Mortgage Notes due 2003"
4. The Securityholder hereby further irrevocably
directs you to reinvest any and all dividends or distributions
from net investment income and capital gains in additional
Securities of the Issuer, subject to the Pledge. In addition,
the Securityholder hereby irrevocably instructs you,
notwithstanding any contrary instructions from the
Securityholder, to follow only instructions received from the
Agent, furnished in writing, concerning (a)
1
the payment or reinvestment of dividends or distributions and (b)
the redemption, transfer, sale or any other disposition or
transaction concerning the Securities or the interest, dividends,
gains and other income thereon.
5. The Securityholder also irrevocably authorizes and
directs you to send all notices, statements and all other
communications concerning the Securities or the Account to the
following address or such other address as may be specified in
written instructions from the Agent: [INSERT NAME AND ADDRESS OF
AGENT]
[INSERT NAME OF AGENT], AS AGENT FOR [INSERT NAME OF TRUSTEE]
[INSERT ADDRESS OF AGENT]
Attn:
Re: Showboat Marina Casino
Partnership, and
Showboat Marina Finance
Corporation
6. The Securityholder agrees that neither you, the
Issuer or any of their respective partners, trustees, officers,
employees or affiliates (collectively, the "Issuer Affiliates")
shall be liable for complying in good faith with the instructions
contained herein or failing to comply with any contrary or
inconsistent instructions that may subsequently be issued by the
Securityholder. The Securityholder further agrees to hold
harmless and indemnify each of the Issuer Affiliates against any
claim or loss arising out of any actions or omissions taken by
any person in reliance on or compliance with the instructions and
authorizations contained herein.
7. The Securityholder agrees that the instructions
contained herein may be revoked by the Securityholder only upon
the receipt by you of the Agent's written consent to such
revocation or written notification from the Agent that the Pledge
has been terminated.
Very truly yours,
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
2
GUARANTEE OF SIGNATURE
Authorized Signature
By: Address:
Title:
Dated: Dated:
The undersigned hereby confirms the following for the
benefit of the above-referenced Pledgee and Agent:
(i) The undersigned is [CHECK APPROPRIATE BOX]
[ ] The Issuer of the Securities, and the Issuer
has been organized under the laws of a
jurisdiction which has adopted Article 8 of
the Uniform Commercial Code pertaining to
investment securities, and said laws
accordingly permit the undersigned to register
a pledge of the Securities in favor of the
Pledgee by taking the steps referenced in
numbered paragraph 3 of the above letter.
[ ] The transfer agent for the Issuer of the
Securities, and the Issuer has been organized
under the laws of a jurisdiction which has
adopted Article 8 of the Uniform Commercial
Code pertaining to investment securities, and
said laws accordingly permit the undersigned
to register a pledge of the Securities in
favor of the Pledgee by taking the steps
referenced in numbered paragraph 3 of the
above letter.
(ii) The undersigned agrees to comply with the
instructions set forth in the above letter. The
Pledge has been registered on ______________,
199_ [INSERT DATE].
(iii) Immediately after registration of the Pledge,
there were no liens, restrictions or adverse
claims (as to which the undersigned has a duty
to disclose under the Uniform Commercial Code)
to the Securities, other than the Pledge.
Date: _____________________, 199_
1
EXHIBIT M TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF SHOWBOAT DISBURSEMENT AUTHORIZATION (SHOWBOAT DISBURSEME
NT CERTIFICATE)
[Letterhead of Showboat]
Date: ______, 199_
Showboat, Inc., Disbursement Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
America Bank National Association
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Showboat Certificate
Ladies and Gentlemen:
This certificate (the "SHOWBOAT DISBURSEMENT
CERTIFICATE") is delivered to you pursuant to that certain Escrow
and Disbursement Agreement (the "ESCROW AND DISBURSEMENT
AGREEMENT") dated March 28, 1996 by and among Showboat Marina
Casino Partnership, an Indiana general partnership ( "SHOWBOAT
PARTNERSHIP"), Showboat Marina Finance Corporation, a Nevada
corporation ("FINANCE CORPORATION" and, together with Showboat
Partnership, the "COMPANY"), American Bank National Association,
a national banking association, as trustee (the "TRUSTEE") under
the Indenture (as defined in the Escrow and Disbursement
Agreement), Showboat, Inc. ("SHOWBOAT"), a Nevada corporation, as
escrow agent (the "ESCROW AGENT") and as disbursement agent (the
"DISBURSEMENT AGENT"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the
Escrow and Disbursement Agreement.
DISBURSEMENT
Pursuant to Section 3 and Section 17 of the Escrow and
Disbursement Agreement, you are hereby authorized and directed to
disburse from the Escrow Account funds in the amount of
$______________.
[IF THIS DISBURSEMENT AUTHORIZATION IS THE FINAL
DISBURSEMENT OF FUNDS TO THE COMPANY PURSUANT TO SECTION 5.1 OF
THE ESCROW AND DISBURSEMENT AGREEMENT, ADD THE FOLLOWING
SENTENCE: In addition, pursuant to Section 5.1 of the Escrow and
Disbursement Agreement, we hereby direct you to retain funds in
the Escrow Account in an amount equal to $______________ in order
to pay the Retainage Amounts pursuant to Section 6.2.1 of the
Escrow and Disbursement Agreement.]
AMENDMENTS TO CONSTRUCTION BUDGET OR TO CONTRACTS
We hereby certify that the attached Construction Budget
Amendment or Contract Amendment, as the case may be, is
effective.
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Showboat hereby makes to the Escrow Agent and the
Trustee the representations and warranties set forth in Section
17.2 of the Escrow and Disbursement Agreement. All such
representations and warranties are true and correct on the date
hereof.
Showboat, pursuant to Section 17 of the Escrow and
Disbursement Agreement, hereby certifies that the disbursement,
Construction Budget Amendment and/or Contract Amendment, as the
case may be, authorized hereby is permitted under the Escrow and
Disbursement Agreement.
Please confirm the transfer described above by
returning a notice of confirmation to the undersigned at the
address set forth above.
Showboat, Inc.
By:
Name:
Title:
2
EXHIBIT N TO ESCROW AND DISBURSEMENT AGREEMENT
FORM OF PRE-CLOSING DISBURSEMENT CERTIFICATE
Showboat Marina Casino Partnership
Showboat Marina Finance Corporation
2001 East Columbus Drive
East Chicago, Indiana 46312
March 28, 1996
Showboat, Inc., as Escrow Agent
c/o Showboat Development Company
6601 Ventnor Avenue
Suite 105
Ventnor, New Jersey 08406
Attention: R. Craig Bird
American Bank National Association
101 East 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: Pre-Closing Disbursements Certificate
Ladies and Gentlemen:
This Pre-Closing Disbursement Certificate is delivered to
you pursuant to that certain Escrow and Disbursement Agreement
(the "ESCROW AND DISBURSEMENT AGREEMENT") dated March 28, 1996 by
and among Showboat Marina Casino Partnership, an Indiana general
partnership ( "SHOWBOAT PARTNERSHIP"), Showboat Marina Finance
Corporation, a Nevada corporation ("FINANCE CORPORATION" and,
together with Showboat Partnership, the "COMPANY"), American Bank
National Association, a national banking association, as trustee
(the "TRUSTEE") under the Indenture (as defined in the Escrow and
Disbursement Agreement) and Showboat, Inc. ("SHOWBOAT"), a Nevada
corporation, as disbursement agent (the "DISBURSEMENT AGENT"),
and as escrow agent (the "ESCROW AGENT"). Capitalized terms used
herein shall have the meanings assigned to such terms in the
Escrow and Disbursement Agreement.
The Company hereby irrevocably instructs the Escrow Agent to
disburse the following sums to the following parties:
(a) $__________ to Chicago Title Insurance Company, as
payment of certain title insurance premiums and other costs
incurred in connection with the issuance of the First Mortgage
Notes; and
(b) $___________ to Stewart Title Guaranty Company, as
payment of certain title insurance premiums and other costs
incurred in connection with the issuance of the First Mortgage
Notes.
[SIGNATURE PAGE FOLLOWS]
1
THE COMPANY: 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: J. Keith Wallace
Title: President and Chief
Executive Officer
SHOWBOAT MARINA FINANCE CORPORATION, a
Nevada corporation
By:
Name: Mark J. Miller
Title: Treasurer
2