EXHIBIT 10.04
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made,
entered into, and effective as of this 13 day of October, 1995
(the "Effective Date"), by and between the ST. LOUIS COUNTY PORT
AUTHORITY, a public body corporate and politic of the State of
Missouri ("Landlord"), SOUTHBOAT LIMITED PARTNERSHIP, a Missouri
limited partnership ("Tenant"), SHOWBOAT, INC., a Nevada
corporation ("Guarantor") and parent company of Showboat Lemay,
Inc, a Missouri corporation and Tenant's general partner, and
BOATMEN'S TRUST COMPANY, a Missouri corporation (the "Escrow
Agent");
WITNESSETH, THAT:
WHEREAS, Landlord and Tenant have entered into a
certain Lease and Development Agreement dated as of the date
hereof (the "Lease"), a copy of which is attached hereto as
EXHIBIT A; and
WHEREAS, terms defined in the Lease and used herein
shall have the same meaning herein as so defined; and
WHEREAS, the Lease provides as follows:
(a) the parties shall establish an Escrow
with Boatmen's Trust Company as Escrow Agent;
(b) Tenant shall deposit into the Escrow the
$500,000 Acceptance Fee and the $750,000 Security
Deposit, and Guarantor shall deposit into the
Escrow the Rent Guarantee and the Completion
Guaranty;
(c) not later than 120 days after the
Effective Date, Tenant shall direct Escrow Agent
to release the Acceptance Fee to Landlord or
Tenant shall cancel the Lease;
(d) upon termination of the Lease due to the
failure of any of the Conditions during the Due
Diligence Period, the Acceptance Fee and the
Security Deposit shall be released to Tenant and
the Guarantees shall be released to Guarantor;
(e) upon the occurrence of the Commencement
Date, the Guarantees shall be released to Landlord
and the Security Deposit shall be returned to
Tenant;
(f) in the event that prior to the Commencement Date
Tenant shall withdraw or abandon Tenant's
application for Gaming Licensure or for
any Site Permits, or otherwise abandon the
Project, Landlord, as Landlord's sole remedy,
shall retain the Security Deposit as liquidated
damages and not as a penalty, the parties not
being able to determine Landlord's actual damages
prior to the Commencement Date; and
WHEREAS, Escrow Agent has agreed to serve as Escrow
Agent under the Lease in accordance with the terms of this
Agreement;
NOW THEREFORE, for and in consideration of the premises
and mutual covenants and agreements of the parties contained
herein, Landlord, Tenant, Guarantor and Escrow Agent hereby agree
as follows:
1. APPOINTMENT OF ESCROW AGENT. Landlord, Tenant and
Guarantor hereby appoint Escrow Agent to serve as Escrow Agent in
accordance with the provisions of the Lease and this Escrow
Agreement, and Escrow Agent hereby accepts such appointment and
agrees to hold in trust, administer, and dispose of the Tenant's
and Guarantor's deliveries in accordance with this Escrow
Agreement. Escrow Agent acknowledges receipt from Tenant of its
$1,000 fee for service as Escrow Agent during the first twelve
(12) months of this Agreement; Escrow Agent's fee for services
rendered during each subsequent twelve (12) month period or
portion thereof this Agreement remains in effect, if any, shall
be borne by Tenant but shall not exceed $1,000 for each such
subsequent twelve (12) month period or portion thereof.
2. ESTABLISHMENT OF ESCROW. Landlord and Tenant shall
maintain the Escrow established with Escrow Agent until the
Commencement Date or such earlier date as Tenant cancels the
Lease pursuant to Section 2(b) or 3(d). In the event Tenant
cancels the Lease pursuant to Section 2(b) or 3(d) thereof,
Tenant shall deliver written notice of such election to Landlord
and Escrow Agent.
3. ESCROW DEPOSITS. Tenant agrees to deposit into Escrow,
not later than 5 business days after the Effective Date, the
$500,000 cash Acceptance Fee and the $750,000 Security Deposit in
cash or in the form of a 6-month (or longer) irrevocable letter
of credit in the stated amount of $750,000 issued by a bank or
financial institution acceptable to Landlord permitting draws by
the Escrow Agent (and deposit into the Escrow of the resulting
cash) upon unilateral presentation to the issuer by the Escrow
Agent of Landlord's certificate of abandonment pursuant to
Section 6 hereof. Tenant may substitute in place of
any cash deposit it may have made a letter of credit meeting the
requirements of the initial letter of credit. Funds shall be
deposited into the Escrow Account by wire transfer to Boatmen's
National Bank of St. Louis, ABA No. 000000000, for credit to
Boatmen's Trust Company, Account Number 100700004888, for credit
to Southboat Escrow. Escrow Agent agrees to acknowledge receipt
and custody of the Rent Guarantee and Completion Guarantee of
Guarantor when delivered to Escrow Agent by Guarantor or
Landlord.
4. RELEASE OF ESCROW TO TENANT. Within 5 business
days after cancellation of the Lease in accordance with the provisions
of Section 2(b) or Section 3(d) thereof, or within 5 business
days after the occurrence of the Commencement Date, Landlord
shall deliver its certificate to Escrow Agent, and Escrow Agent
shall be authorized and directed, under the terms of this Escrow
Agreement, to immediately release (i) to Tenant the cash or
letter of credit deposited in the Escrow by Tenant, and (ii) to
Guarantor, the Guarantees.
5. RELEASE OF ACCEPTANCE FEE TO LANDLORD. In
the event the Lease is not timely cancelled by Tenant pursuant to
Section 2(b) thereof, Tenant shall direct the Escrow Agent in
writing to release the Acceptance Fee from the Escrow and deliver
it to Landlord. In the event Tenant fails to direct Escrow Agent
to deliver the Acceptance Fee to Landlord on or before the
expiration of the Due Diligence Period, whether or not Tenant has
satisfied or waived all or any of the Conditions, the Lease shall
be void and of no further force or effect, and Landlord shall
deliver written notice to the Escrow Agent to release the
Acceptance Fee and the Security Deposit to Tenant, and to release
the Guarantees to Guarantor, and no party shall have any further
obligation or liability to the other under the Lease; provided,
however, that if Tenant shall have withdrawn or abandoned
Tenant's application for Gaming Licensure or for any Site Permits
or otherwise abandoned the Project, Landlord shall be entitled to
recover the Security Deposit as liquidated damages for such
withdrawal or abandonment, as provided in Section 6.
6. RELEASE OF SECURITY DEPOSIT TO LANDLORD. If
Land lorddelivers a certificate to Escrow Agent and to Tenant
stating thatTenant has with drawn or abandoned Tenant's
application for Gaming Licensure or for any Site Permits, or
otherwise abandoned the Project, or that Tenant has failed to
renew or replace any letterof credit deposited in the Escrow
within 30 days prior to its stated expiration date, Escrow Agent
shall draw down any letterof credit deposited with Escrow Agent
and place the funds received pursuant to such draw into the
Escrow for disposition by the parties in accordance with the
provisions hereof. UnlessTenant shall contest the validity or
propriety of Landlord'snotice by delivery of written notice to
Escrow Agent within 10days after Escrow Agent's receipt of
instructions to release theSecurity Deposit to Landlord, Escrow
Agent shall be deemedauthorized and directed to deliver the
Security Deposit toLandlord, to deliver all other funds to
Tenant, and theGuarantees to Guarantor. If Tenant shall timely
contestLandlord's notice, as provided in this Section 6, Escrow
Agentshall deposit the funds and documents held by it into the
clerkof the St. Louis County Circuit Court for disposition by
theCourt in accordance with the provisions of Section 16 hereof.
7. INVESTMENT OF FUNDS. All funds held on deposit by
the Escrow Agent shall be invested as directed in writing by
Tenant in any securities of or guaranteed by the U.S. Government
or any instrumentality thereof, including without limitation
money market funds investing in U. S. Government obligations (the
"Permitted Investments"), and all interest earned thereon shall
belong and be paid to Tenant, quarterly or monthly,
notwithstanding any contrary disposition of the funds held in
Escrow.
8. NO IMPLIED DUTIES. The duties of Escrow Agent
shall be as expressed under this Agreement and Escrow Agent shall
have no implied duties. The permissive right or power to take
any action shall not be construed as a duty to take action under
any circumstances and Escrow Agent shall not be liable except in
the event of its gross negligence or willful misconduct.
9. NO RISK OF ESCROW AGENT'S FUNDS. Escrow Agent
shall not be obligated to risk its own funds in the
administration of the account and shall have a lien against any
funds, securities or other property in its possession or control
(the "Escrow Account") for its fees, expenses and advancements.
Escrow Agent need not take any action under the Agreement which
may involve it in any expense or liability until indemnified to
its satisfaction for any expense or liability it reasonably
believes it may incur.
10. NO RECITALS BY ESCROW AGENT. Any recitals
contained in the Agreement shall be deemed to be those of the
principals and not those of Escrow Agent.
11. NO SURETY. Unless specifically required by the
Agreement, Escrow Agent shall not be required to give any bond or
surety or report to any Court despite any statute, custom or rule
to the contrary.
12. NOTICES. Any notice to or demand shall be given
by being deposited, certified mail, postage prepaid, in the
United States mail, addressed (until another address is filed in
writing) to each of the parties as follows:
To Escrow Agent: Boatmen's Trust Company
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
To Guarantor: Showboat, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: H. Xxxxxxx Xxxxx
To Tenant: Showboat Development Company
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
With a copy to: Xxxxxx Kaempfer Xxxxxx Xxxxxxx
Seventh Floor
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
To Landlord: St. Louis County Port Authority
Economic Council of St. Louis
County
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Director of Real Estate
With a copy to: Economic Council of St. Louis
County
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
St. Louis County
00 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: County Counselor
13. ACTION ON INSTRUCTIONS. Escrow Agent shall be
protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram, or other paper
or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons.
14. USE OF AGENTS OR RECEIVERS. Escrow Agent may
execute any of the duties under the Agreement by or through
agents or receivers.
15. RESIGNATION OF ESCROW AGENT. Escrow Agent may at
any time resign from the position created in the Agreement by
giving thirty (30) days written notice by registered or certified
mail to the parties to the Agreement and such resignation shall
take effect at the end of such thirty days or upon earlier
appointment of a successor.
16. INTERPLEADER. In the event Escrow Agent becomes
involved in litigation by reason hereof, it is hereby authorized
to deposit with the clerk of the court in which the litigation is
pending any and all funds, securities, or other property held by
it pursuant hereto, less its fees, expenses and advances, and
thereupon shall stand fully relieved and discharged of any
further duties hereunder. Also, in the event Escrow Agent is
threatened with litigation by reason hereof, it is hereby
authorized to implead all interested parties in any court of
competent jurisdiction and to deposit with the clerk of such
court any such funds, securities, or other property held by it
pursuant hereto, less its fees, expenses and advances, and
thereupon shall stand fully relieved and discharged of any
further duties hereunder.
17. ENGAGEMENT OF COUNSEL. Escrow Agent may engage
legal counsel, who may not be counsel for any party to the
Agreement, and shall not be liable for any act or omission taken
or suffered pursuant to the opinion of such counsel. The fees
and expenses of such counsel shall be deemed to be a proper
expense for which Escrow Agent will have a lien against the
Escrow Account.
18. DUTIES LIMITED TO AGREEMENT. Unless specifically
required by the terms of the Agreement, Escrow Agent need not
take notice of or enforce any other document or relationship,
including, without limiting the generality of the foregoing, any
contract, settlement, arrangement, plan, assignment, pledge,
release, decree or the like, but its duties shall be solely as
set out in the Agreement.
19. INDEMNIFICATION OF ESCROW AGENT. The parties to
the Agreement (other than Escrow Agent) hereby agree, jointly and
severally, to indemnify and save harmless the Trust company from
and against any loss, liability or expense reasonably incurred,
without negligence or bad faith on its part, arising out of or in
connection with the Agreement, including the expense of defending
itself against any claim or liability in the premises. This
indemnity agreement shall survive the termination of the
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Lease as the date first above written.
LANDLORD:
ST. LOUIS COUNTY PORT AUTHORITY
By:_/s/_______________________
Name:
Title:
APPROVED AS TO FORM
_/s/_________________________
General Counsel, Economic Council
of St. Louis County
TENANT:
SOUTHBOAT LIMITED PARTNERSHIP
By: SHOWBOAT XXXXX, INC.
By:_/s/___________________________
Name: H. Xxxxxxx Xxxxx
Title: Secretary
GUARANTOR:
SHOWBOAT, INC.
By:_/s/__________________________
Name: H. Xxxxxxx Xxxxx
Title: Secretary
ESCROW AGENT:
BOATMEN'S TRUST COMPANY
By:_/s/_______________________
Name:
Title:
