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EXHIBIT 2.(d)(2)
PREFERRED PROVIDER AGREEMENT
THIS PREFERRED PROVIDER AGREEMENT (this "Agreement") is executed as of the
16th day of October, 1996 by The Delta Queen Steamboat Co., a Delaware
corporation ("DQSC") and THI FQ L.P., a Delaware limited partnership (together
with any permitted assignee, "THI").
Preliminary Recitals
WHEREAS, DQSC is the sole owner of the stock of Great AQ Steamboat Co., a
Delaware corporation ("Great AQ") and also owns and operates, through various
subsidiaries, The Delta Queen Steamboat Co. cruise line (the "Cruise Line");
and
WHEREAS Great AQ, Blackland Vistas, Inc. ("BVI") and Thayer Hotel
Investments L.P. (an affiliate of THI) have entered into that certain Amended
and Restated Purchase Agreement dated as of August 19, 1996 (the "Purchase
Agreement") whereby Great AQ and BVI agreed to sell their interest in the
limited partnership which owns the Maison Dupuy Hotel, New Orleans, Louisiana
(the "Hotel") and THI agreed to buy such partnership interest; and
WHEREAS, in connection with the Cruise Line, DQSC has passengers embarking
or disembarking from New Orleans, Louisiana and as such requires the use of
hotel rooms in the Hotel; and
WHEREAS, the parties to the Purchase Agreement agreed to enter into this
Agreement setting forth the terms upon which DQSC will provide, and THI will
accept, business at the Hotel for a twenty-four (24) month period following the
Closing Date.
NOW, THEREFORE, the parties hereby AGREE to the following:
1. Preamble and Preliminary Recitals. The Preamble and Preliminary
Recitals set forth above shall be incorporated herein and made a part hereof.
2. Commitment to Provide Hotel Business. Following Closing under the
Purchase Agreement, DQSC agrees to use the Hotel as a preferred provider for at
least a twenty-four (24) month period, commencing on the date hereof and ending
on the second anniversary of the Closing Date (the "Term"). The period
commencing on the date hereof and terminating on October 15, 1997 shall be
referred to as "Year One" and the period commencing on October 16, 1997 and
ending on the last day of the Term shall be referred to as "Year Two". During
the Term and subject to the terms of this Agreement, DQSC agrees to provide, at
a minimum, business totaling $584,179 in each of Year One and Year Two (the
"Minimum Commitment"). Such Minimum Commitment may be satisfied by any
business in connection with the operation of the Cruise Line, including DQSC's
passengers, employees (including employees of affiliated entities) or other
persons booking through DQSC or its affiliated travel agency, Cruise America
Travel and shall include all room revenue.
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3. Room Rates/Terms.
(a) THI agrees to provide the hotel rooms at a rate of $85 per
night through December 31, 1997 and at a rate of $90 per night for any dates in
1998. Notwithstanding the foregoing, the retail rates shall be $140 per night
for the following dates in 1997 and $148 per night for the following dates in
1998:
(i) three-day period of the Sugar Bowl;
(ii) four-day period (Friday through Monday) prior to
Mardi Gras;
(iii) four-day period (Thursday through Sunday) for the first
weekend and three-day period (Friday through Sunday) for
the second weekend of The New Orleans Heritage Jazz
Festival; and
(iv) three-day period (Friday through Sunday) of the French
Quarter Festival.
(b) The rates described above are net, non-commissionable and
subject to all applicable taxes. Check-in time shall be 3:00 p.m. and
check-out time shall be 11:00 a.m. Early check-in and late check-out are
subject to hotel availability and require confirmation by the Front Desk
Manager. A full "American Style" breakfast shall be served, consistent with
existing practices, for DQSC's passengers at a rate of $13.00 per person for
1996 and 1997 and $14.00 per person for 1998, including taxes and gratuities.
The charge for baggage handling and parking shall be at rates consistent with
other French Quarter hotels of similar class. All other terms and conditions
shall be consistent with the Hotel's practices in effect at the given time.
4. Room Block Process.
(a) DQSC has previously provided THI with its room request setting
forth the desired room block for any given calendar day (any single block, a
"Room Block") for the balance of 1996 and 1997. No later than October 15,
1996, DQSC will provide its desired Room Blocks for the period of January 1,
1998 through the end of the Term. The Room Blocks for the balance of 1996 and
the first half of 1997 shall be deemed accepted. Within thirty (30) days
following the Closing Date, THI shall inform DQSC of the Room Blocks for the
second half of 1997 THI does not wish to honor and on or before January 15,
1997, THI shall inform DQSC of the Room Blocks for 1998 it does not wish to
honor.
(b) THI will hold and reserve all Room Blocks which it does not
reject in accordance with sub-paragraph (a) above. DQSC will regularly
review and revise the Room Block. Upon identifying that a Room Block is no
longer needed or can be reduced, DQSC will release such Room Block at its
earliest opportunity, but in no event later than sixty (60) days before the
commencement of such Room Block.
(c) From time to time DQSC may determine that additional space is
needed, in which case DQSC shall notify THI of an additional or increased Room
Block. THI shall have the right to accept any such requested Room Block by
giving notice to DQSC within two (2) business days after receiving the request.
THI acknowledges that it is DQSC's intent to keep all group business at the
same hotel. In the event THI cannot, or chooses not to, accommodate an entire
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group it shall be DQSC's prerogative to move the entire group to another hotel
and release the corresponding Room Block.
5. Cancellations and No-Shows. DQSC may cancel any given individual room
reservation, subject to the following: if a cancellation occurs more than 30
days prior to arrival, no penalty will be assessed; if less than 30 days but
more than 72 hours prior to arrival a cancellation occurs on more than 10% of
any Room Block, a charge equal to 50% of the room rate plus taxes for the
period of the Room Block will be assessed to DQSC; and, if 72 hours or less
prior to arrival a cancellation occurs on more than 10% of any Room Block, a
charge equal to the room rate plus taxes for the period of the Room Block will
be assessed to DQSC. No-shows will be considered canceled if arrival does not
occur on the date reserved and DQSC will be assessed one night's room rate plus
taxes. Notwithstanding the foregoing, cancellations resulting from force
majeure, Acts of God or other causes beyond the control of DQSC shall not
subject DQSC to liability under this Section 5.
6. Billing Procedures. THI will invoice DQSC for all rooms, including
taxes, no more than two (2) times per month, for all completed business.
Payment will be due within ten (10) days after receipt of the invoice.
7. DQSC's Failure to Satisfy the Minimum Commitment.
(a) Within sixty (60) days after the end of Year One and Year Two,
THI shall deliver to DQSC a statement in the form of Exhibit A, calculating the
shortfall, if any, from the Minimum Commitment for the period. DQSC shall
have the right to review and approve the statement, which approval shall not
be unreasonably withheld or delayed.
(b) In the event DQSC fails to satisfy the Minimum Commitment in
either Year One or Year Two, DQSC shall be obligated to THI for the
shortfall. Any shortfall, as computed in sub-paragraph (a) above, shall be
paid to THI by means of an offset against amounts due under the Participation
Agreement. To the extent the amounts due under the Participation Agreement do
not satisfy the liabilities under sub-paragraph (a), THI shall have any
remedies available at law against Great AQ or DQSC.
8. Standard of Hotel. THI agrees to maintain the Hotel, as a first-class
hotel generally consistent with the Hotel's current practices, although the
parties acknowledge that certain renovation and remodeling work will be
performed during the Term. In the event the service or accommodations at the
Hotel are deficient at any time during the Term, DQSC shall notify THI in
writing. If such deficiencies are material and THI fails or refuses to correct
such deficiencies within thirty (30) days of receiving notice, DQSC shall have
the right to terminate this Agreement and shall have no further obligations
hereunder.
9. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by the laws
of the State of Louisiana, without resort to the choice of law rules thereof.
(b) Headings; Exhibits. The headings of articles and sections of
this Agreement are inserted only for convenience; they are not to be construed
as a limitation of the scope of the
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particular provision to which they refer. All exhibits attached or to be
attached to this Agreement are incorporated herein by this reference.
(c) Notices. Notices and other communications required by this
Agreement shall be in writing and delivered by hand against receipt, sent by
recognized overnight delivery service, by certified or registered mail,
postage prepaid, with return receipt requested or facsimile and promptly
confirmed by first class U.S. mail. All notices shall be addressed as follows:
If to DQSC:
AMERICAN CLASSIC VOYAGES CO.
Two North Riverside Plaza, Suite 200
Chicago, Illinois 60606
Attention: Jordan B. Allen, Esq.
Senior Vice President and General Counsel
Fax No. 312/466-6151
If to THI:
THAYER HOTEL INVESTMENTS L.P.
410 Severn Avenue, Suite 314
Annapolis, Maryland 21403
Attention: Mr. William G. Moeckel
Attention: David J. Weymer, Esq.
Fax No. 410/268-1582
With a copy to:
HOGAN & HARTSON L.L.P.
555 13th Street, N.W.
Washington, DC 20004
Attention: Carol Weld King, Esq.
Fax No. 202/637-5910
or to such other address as may be designated by a proper notice. Notices
shall be deemed to be effective upon receipt (or refusal thereof) if personally
delivered or sent by recognized overnight delivery service, three (3) days
following the date of mailing if sent by certified mail, or upon receipt of
confirmation if sent by facsimile.
(d) Waiver. The failure of either party to insist on strict
performance of any of the provisions of this Agreement or to exercise
any right granted to it shall not be construed as a relinquishment or future
waiver; rather, the provision or right shall continue in full force. No waiver
of any provision or right shall be valid unless it is in writing and signed by
the party giving it.
(e) Partial Invalidity. If any part of this Agreement is
declared invalid by a court of competent jurisdiction, this Agreement
shall be construed as if such portion had never existed, unless this
construction would operate as an undue hardship on THI or DQSC or would
constitute a substantial deviation from the general intent of the parties as
reflected in this Agreement.
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(f) Entire Agreement. This Agreement, together with the other
writings signed by the parties and incorporated by reference and together with
any instruments to be executed and delivered under this Agreement, constitutes
the entire agreement between the parties with respect to the subject matter and
supersedes all prior oral and written understandings. Amendments to this
Agreement shall not be effective unless in writing and signed by the parties
hereto.
(g) Time is of the Essence. Time is of the essence with respect to
performance of all obligations under this Agreement.
(h) Waiver of Jury Trial. THI and DQSC each hereby waives any
right to jury trial in the event any party files an action relating to
this Agreement or to the transactions or obligations contemplated hereunder.
(i) Counterparts. This Agreement may be executed in any number of
counterparts which, when taken together, shall constitute a single, binding
instrument.
(j) Defined Terms. All defined terms not otherwise defined in this
Agreement shall have the meanings ascribed to such terms in the Purchase
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date indicated below.
THE DELTA QUEEN STEAMBOAT CO., AN ILLINOIS
CORPORATION
By: /s/ Jordan B. Allen
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Name: Jordan B. Allen
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Its: Vice President
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THI FQ L.P., A DELAWARE
LIMITED PARTNERSHIP
BY: THAYER HOTEL INVESTMENTS L.P.,
A DELAWARE CORPORATION
ITS: GENERAL PARTNER
By: /s/ David J. Weymer
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Name: David J. Weymer
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Its: Vice President
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EXHIBIT A
I. Minimum Commitment $584,179
II Business Provided During Period
TOTAL $ $_______
III. Business Rejected by THI
During Twelve Month Period $_______
IV. Cancellation/No-Show Charges
Paid During Twelve Month
Period $_______
V. Sum of II, III and IV $________
VI. Calculate Shortfall from
Minimum Commitment Subtract V
from I (if $0 or less, then
insert $0) $________
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