EXHIBIT 10.17
MARINE MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT, made as of the 28TH day of OCTOBER, 1996, by
and between Showboat Marina Casino Partnership, an Indiana
Partnership ("Owner"), and Riverboat Services, Inc., an Indiana
corporation ("Manager");
W I T N E S S E T H :
WHEREAS, Owner owns or will own a riverboat gaming vessel,
which will include a casino; and
WHEREAS, Owner proposes to operate the Vessel in East
Chicago, Indiana pursuant to the Indiana Riverboat Gaming Act,
Title 4, Article 33, ET. SEQ. of the Indiana Code and on such
other rivers and waterways permitted by the Act or as may be
required for maintenance of the Vessel or for other purposes; and
WHEREAS, Manager has experience in the performance and
operations of marine management services for similar types of
vessels; and
WHEREAS, Owner is desirous of utilizing the services and
experience of Manager in connection with the non-gaming-related
operations of the Vessel, and Manager desires to render such
services, all upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, Owner and Manager agree as
follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. As used herein, the following terms shall
have the respective meanings indicated below:
ACT. The term "Act" shall mean the Indiana Riverboat Gaming
Act, Title 4, Article 33, ET. SEQ. of the Indiana Code, including
the amendments thereto and regulations promulgated thereunder.
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BUDGET. The term "Budget" shall mean, collectively, the
Initial Operating Budget and all Operating Budgets.
CORE MARITIME STAFF. The term "Core Maritime Staff" shall
have the meaning set forth in Section 3.04.2.
COMPLEX. The term "Complex" shall mean the Vessel and all
shoreside facilities relating to the Vessel.
EXECUTIVE STAFF. The term "Executive Staff" shall mean the
Vessel Master, Mate, Chief Engineer, First Assistant, and any
other executives of the Vessel as designated by the Manager.
GAMING AUTHORITIES. The term "Gaming Authorities" shall
mean any gaming regulatory authorities in the State of Indiana
authorized under the Act, including but not limited to the
Indiana Gaming Commission.
GROSS MARITIME PAYROLL. The term "Gross Maritime Payroll"
shall mean the direct salaries and wages paid to, or accrued for
the benefit of, any Executive Staff or Service Employee together
with all fringe benefits payable to, or accrued for the benefit
of such Executive Staff or Service Employee, including employer's
contributions required pursuant to any Legal Requirements, or
other employment taxes, pension fund contributions, group life
and accident and health insurance premiums, and profit sharing,
retirement, disability and other similar benefits.
IMPOSITIONS. The term "Impositions" shall mean all taxes,
assessments, water, sewer or other similar rents, rates and
charges, levies, license fees, permit fees, inspection fees and
other authorization fees and charges, which at any time may be
assessed, levied, confirmed or imposed on the Vessel or the
operation thereof.
INITIAL OPERATING BUDGET. The term "Initial Operating
Budget" shall mean the Operating Budget established for the
initial Operating Year, which begins with the Opening Date and
ends on December 31 of the same year.
INITIAL TERM. The term "Initial Term" shall have the
meaning set forth in Section 2.01.
LEGAL REQUIREMENTS. The term "Legal Requirements" shall
mean all public laws, statutes, ordinances, orders, rules,
regulations, permits, licenses, authorizations, directions and
requirements of all governments and government authorities, which
now or hereafter may be applicable to the gaming activities
conducted on the Vessel, including without limitation, the Act
and those relating to safety, environmental and health.
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MANAGEMENT FEE. The term "Management Fee" shall have the
meaning set forth in Section 6.01.
MANAGER. The term "Manager" shall mean Riverboat Services,
Inc., or the successor to Manager's interest pursuant to this
Agreement.
MAJOR CAPITAL IMPROVEMENTS. The term "Major Capital
Improvements" shall mean any program of capital improvements,
renovation or refurbishing involving an addition to the Vessel,
or renovation or refurbishing designed to substantially upgrade
or change the nature or image of the Vessel (as opposed to a
renovation or refurbishing which takes place as part of the
normal or cyclical upkeep of the Vessel). Major Capital
Improvements will be undertaken only at the request of Owner.
MARITIME STAFF. The term "Maritime Staff" shall include the
Executive Staff and the Service Employees employed by Riverboat
Services, Inc.
MARITIME SUPPLIES. The term "Maritime Supplies" shall mean
all maritime material, equipment and supplies purchased in
connection with the operation or maintenance of the Vessel during
the Operating Period, including but not limited to fuel, engine
room items, paint, etc.
OPERATING BUDGET. The Term "Operating budget" shall mean
the budget established for marine operations. Such budget shall
be established annually as set forth herein and become effective
on January 1 of each Operating Year during the term of this
Agreement.
OPERATING EQUIPMENT. The term "Operating Equipment" shall
mean all non-consumable and non-casino related equipment used in,
or held in storage for use in (or if the context so dictates,
required in connection with), the maritime operation of the
Vessel.
OPERATING PERIOD. The term "Operating Period" shall mean
the period beginning with the date the Vessel is staffed with a
Maritime Staff and ending upon the expiration or termination of
this Agreement.
OPERATING SUPPLIES. The term "Operating Supplies" shall
mean consumable items used in, or held in storage for use in (or
if the context so dictates, required in connection with), the
maritime operation of the Vessel, including fuel, cleaning
material and other items with respect to the Vessel.
OPERATING YEARS. The "Operating Years" shall coincide with,
and be identical with the calendar years, except that the first
Operating Year shall be a partial year beginning 90 days prior to
the Opening Date and ending on the following December 31, and if
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this Agreement shall be terminated effective on a date other than
December 31 in any year, then the partial year from January 1 of
the year in which such termination occurs to such effective date
of termination shall be treated as an Operating Year; references
to "full Operating Years" shall mean those Operating Years which
are co-extensive with full calendar years and shall exclude any
partial Operating Year at the beginning or the end of the term of
this Agreement.
OWNER. The term "Owner" shall mean the Showboat Marina
Casino Partnership an Indiana partnership, or the successor to
Owner's interest pursuant to this Agreement.
RENEWAL TERM. The term "Renewal Term" shall have the
meaning set forth in Section 2.02.
SERVICE EMPLOYEES. The term "Service Employees" shall mean
maritime service employees including deckhands and assistants to
the Executive Staff, but excluding dockside, casino, food,
beverage and gift shop personnel.
VESSEL. The term "Vessel" shall mean the gaming vessel
owned by Owner for the purpose of and licensed to conduct casino
gaming pursuant to the Act in East Chicago, Indiana.
1.02 REFERENCES. Except as otherwise specifically
indicated, all references to Article, Section and Subsection
numbers refer to Articles, Sections and Subsections of this
Agreement, and all references to Exhibits refer to the Exhibits
attached hereto. The words "herein", "hereof", "hereunder",
"hereinafter" and words of similar import refer to this Agreement
as a whole and not to any particular Section or Subsection
hereof. The terms "include" and "including" shall each be
construed as if followed by the phrase "without being limited
to". Unless expressly stated to the contrary, reference to any
Section includes the following Subsections thereof.
ARTICLE II
TERM - RENEWAL TERMS
2.01 THE TERM. The Initial Term of this Agreement shall
begin upon the date the Vessel is staffed with the Maritime Staff
and shall expire three (3) years from said date, subject to
Manager's renewal options under Section 2.02, or earlier
termination as provided hereafter.
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2.02. RENEWAL TERMS. Owner shall have the right to
extend the term of this Agreement for three successive periods of
three (3) years each, (the "Renewal Term") upon the same terms
and conditions as are herein contained. Owner may exercise its
rights of renewal by written notice to Manager given, with
respect to the first Renewal Term, not later than ninety (90)
days prior to the end of each prior Renewal Term. The phrase
"term of this Agreement", as used herein, shall mean the Initial
Term and any Renewal Term then in effect under this Section 2.02.
ARTICLE III
VESSEL OPERATION
3.01 MANAGER'S AUTHORITY AND RESPONSIBILITY. Manager shall
have the exclusive right and obligation to manage and operate the
marine aspects of the Vessel pursuant to the terms of this
Agreement, and Manager agrees that it shall establish internal
controls and administrative procedures in order to manage and
operate the Vessel as a first-class riverboat gaming vessel in
full compliance with all state and federal laws, including, but
not limited to, U.S. Coast Guard laws and regulations, taking
into account the size, location and character of the Vessel. In
connection therewith, Manager shall have the authority and
responsibility to (i) determine operating policy, standards of
operation, quality of service and maintenance requirements of the
Vessel; (ii) employ, train and supervise all Maritime Staff and
(iii) supervise and direct the purchases of all Maritime
Supplies. Owner agrees that it will cooperate reasonably with
Manager to permit and assist Manager in carrying out its duties
hereunder. The marine aspects of the Vessel shall include the
navigation, propulsion, steering, maintenance of hull,
superstructure and operating systems and docking means and
methods. In no event shall Manager have any authority or
responsibility for the casino gaming aspects of the Vessel which
means the casino, dockside, food and beverage services, and
retail gift shop.
3.02 GENERAL OPERATIONS. Based upon Manager's experience in
operating vessels, Manager will establish internal controls and
administrative procedures sufficient to ensure that the Vessel
will be operated in accordance with the appropriate standards.
In this regard, Manager will:
(i)establish screening, employment, training and supervisory
procedures with respect to the Maritime Staff to ensure that the
Vessel is operated in accordance with generally accepted
standards of the riverboat gaming industry;
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(ii) maintain the Vessel and all maritime equipment
contained therein in good order and repair;
(iii) establish procedures to make certain that all
material aspects of the maritime operation are conducted in an
orderly, controlled and secure manner;
(iv) ensure that the Vessel is adequately staffed and that
all Maritime Staff are properly trained and licensed, prior to
their employment as Maritime Staff and at all times during their
employment as such; and
(v) direct all Maritime Purchases to assure the proper
maintenance of the Vessel.
3.03 COMPLIANCE WITH ACT. Throughout the Operating Period,
Manager shall be responsible for ensuring that the marine aspects
of the Vessel are operated in accordance with the requirements
set forth in the Act and all other applicable Legal Requirements
that are supplied in writing to the Manager by the Operator or
its agent. Manager shall not be deemed to have knowledge of, nor
obligated to comply with, any requirements of any law (except
U.S. Coast Guard rules and regulations) which are not supplied to
him in writing by Owner. Manager and Owner agree that they will
cooperate with each other in order to ensure compliance with the
Act and with any and all directives of the Gaming Authorities and
the United States Coast Guard. In the event that Manager or
Owner become aware of any grounds for non-compliance under the
Act or receive notice from the Gaming Authorities regarding same,
such party agrees to promptly notify the other party hereto, and
Manager and Owner agree to cooperate fully in order to rectify
such non-compliance. Manager shall not be responsible for the
project's compliance with any requirements of the Act relating
exclusively to the operation of the casino gaming aspects of the
Vessel.
3.04 PERSONNEL.
3.04.1 GENERAL. Manager shall employ, discharge, promote
and supervise the Executive Staff of the Vessel, and shall
supervise, through said Executive Staff, the hiring, discharging,
promotion and work of all Service Employees. All members of the
Maritime Staff shall be properly qualified for their positions,
and the compensation payable to the Maritime Staff shall be
comparable to the compensation paid to the maritime employees of
other comparable vessels, taking into account the location, size
and character of the Vessel, it being understood that the Vessel
will at no time be placed at a competitive disadvantage with
respect to the employing and maintaining of its Maritime Staff.
3.04.2 CORE STAFFING OF VESSEL. The entire
Executive Staff and a contingent of the Service
Employees will be permanently assigned to the Vessel
and shall be known as the "Core Maritime
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Staff." During the term of this Agreement, Manager shall not
unreasonably assign any member of the Core Maritime Staff to any
other vessel.
3.04.3 MARITIME STAFF UNIFORMS AND APPAREL. Owner will
design and provide all Maritime Staff uniforms and other apparel.
In order to assure that the uniform design does not hinder the
Maritime Staff's performance of duties, the Manager shall approve
the design of uniforms to be worn by all the Maritime Staff.
3.04.4 MANAGER AS EMPLOYER. All Maritime Staff of the
Vessel shall be employees of Manager. Manager shall be
responsible for the accounting for and payment of all Gross
Maritime Payroll to such employees.
3.04.5 LABOR RELATIONS. Manager shall have the sole
discretion and authority to enter into negotiations, and approve
any agreements, with any labor union representing Maritime Staff,
or concerning any labor contract or collective bargaining
agreement. To the extent that any Maritime Staff are included in
or covered by any pension and/or retirement, disability, health,
welfare or other benefit plans pursuant to a collective
bargaining agreement or labor contract, Manager, as the employer
of such employees, shall be solely responsible for the
administration of any plan contributions and/or other obligations
or liabilities arising thereunder, provided, however that Manager
shall be reimbursed for said contributions, as provided
hereinafter.
3.05 SAFETY PROGRAM. Manager will institute a comprehensive
safety program covering all aspects of Vessel operations. The
safety program will require that Manager:
(a) prepare comprehensive manuals containing policies and
procedures and addressing safety aspects of Vessel
operations;
(b) provide Owner and U.S. Coast Guard with a Ship's
Station Xxxx and post same in accordance with U.S. Coast
Guard requirements;
(c) conduct safety meetings involving all Maritime Staff on
a regular basis not less than once per month;
(d) ensure that all Maritime Staff are properly trained in
fire-fighting and rescue techniques, and conduct fire and
rescue drills as required by the United States Coast Guard
in the State of Indiana;
(e) ensure that all Maritime Staff are adequately trained
in first aid treatment, including CPR;
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(f) design and implement a comprehensive drug policy,
including random and post-accident testing to conform with
Department of Transportation guidelines;
(g) maintain written records of all employee safety
training and safety meeting, to be included in the ship's
log; and
(h) provide appropriate safety instruction for all
employees of Owner and Manager aboard the Vessel.
3.06 ADDITIONAL RESPONSIBILITIES OF MANAGER. Manager shall,
as agent of Owner, perform the following additional
services, for the marine aspects of the Vessel during the
Operating Period:
(a) advise Owner relative to contracts for the furnishing
of utilities and maintenance and other service to the Vessel
as shall be reasonably necessary for the proper marine
operation and maintenance thereof;
(b) make maritime repairs, decorations, revisions,
alterations and improvements to the Vessel as shall be
reasonably necessary for the proper maintenance thereof in
good order, condition and repair;
(c) Purchase such Operating Equipment and Operating
Supplies as shall be reasonably necessary for the proper
maritime operation of the Vessel;
(d) apply for, and use its best efforts to obtain and
maintain, all licenses and permits required of the Owner or
Manager in connection with the operation and management of
the Vessel (other than gaming related licenses); Owner
agrees to execute and deliver any and all applications and
other documents as shall be reasonably required and to
otherwise cooperate, in all reasonable respects, with
Manager in applying for, obtaining and maintaining such
licenses and permits;
(e) use its best efforts to do, or cause to be done, all
such acts and things in and about the Vessel as shall be
reasonably necessary to comply with all Legal Requirements
and the terms of all insurance policies, and to discharge
any lien, encumbrance or charge on or with respect to the
Vessel and the operation thereof when such lien, encumbrance
or charge on or with respect to the vessel has been incurred
directly as a result of the conduct of the Manager.
3.07 PURCHASING OF GOODS AND SERVICES. Manager shall make
all purchases, and on behalf of Owner, enter into all Agreements
and Service Contracts, with regard to the Vessel. The obligation
for the payment for all such purchases, agreements and service
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contracts shall be exclusively that of Owner even if such
purchase is at the direction of the Manager. Furthermore,
Manager shall receive as compensation fifteen percent (15%) of
the gross cost of all Maritime Purchases as provided in Section
6.02.
3.08 REIMBURSEMENTS TO MANAGER. In addition to the
Management Fee provided for in Article VI, Manager shall be
entitled to be reimbursed for the following costs and expenses
incurred in rendering services to the Vessel within thirty (30)
days of providing Owner with an invoice therefor:
(a) the Gross Maritime Payroll paid by Manager and in
furtherance of Manager's responsibilities and duties
hereunder.
(b) expenses paid by Manager to all independent marine
service entities rendering marine services to the Vessel.
(c) reasonable expenses of all officers and employees of
Manager incurred in performing its duties hereunder in
connection with any phase of the operation of the Vessel.
(d) expenses paid by Manager for employee training by
independent third party trainers, necessary to comply with
applicable laws.
(e) Manager's expenditures of less than $5,000 which are
necessitated by an emergency.
3.09 ADVANCES BY OWNER. Notwithstanding the requirements of
Paragraph 3.08, regarding reimbursement to Manager, at Manager's
request, Owner shall advance to Manager a sum necessary to cover
the Gross Maritime Payroll for any pay period (not to be longer
than sixteen (16) days). In such event, Manager shall present
Owner with a properly documented invoice for said advance on or
before fifteen (15) days prior to the date on which Manager must
disburse the subject payroll and Owner shall advance the payroll
to Manager on or before three (3) days before it is due to be
disbursed by Manager.
3.10 DISPUTES BETWEEN THE PARTIES. Shipboard disputes
between the parties affecting the operation of the Vessel shall
be referred to the Master of the Vessel whose decision shall be
binding upon the parties for the duration of his shift.
3.11 The Master of the Vessel shall make all final decisions
regarding the safety of the Vessel and its operations including
the determination of adverse weather conditions which prevent the
Vessel from cruising.
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ARTICLE IV
BUDGET
4.01 INITIAL OPERATING BUDGETS. The Initial Operating
Budget (covering the initial Operating Year) will be submitted by
Manager for Owner's approval within ten (10) days of execution of
this Agreement. By execution of this Agreement, the Initial
Operating Budget are hereby approved by Owner and accepted by
Manager.
4.02 OPERATING BUDGETS. Beginning with the first full
Operating Year and continuing throughout the term of this
Agreement, Manager shall submit a proposed Operating Budget to
Owner for Owner's approval. The Operating Budget for a given
Operating Year shall be submitted to Owner no later than December
1st of the preceding Operating Year.
4.03 APPROVAL OF BUDGETS. Owner shall not unreasonably
withhold approval of any proposed Budget submitted to it by
Manager, and Owner shall use its best efforts to approve the
proposed budget by December 1st of the preceding Operating Year.
Subject to the foregoing, Owner's decision regarding the approval
or disapproval of all Budgets, in total or by line item, is final
and binding upon Manager.
4.04 BUDGET DEVIATIONS. Manager shall use its best efforts
to comply with the Budget. Manager shall attempt to obtain
Owner's approval for all expenditures in excess of the approved
Budget amounts on a line item category or total basis. Manager
may reallocate budgeted amounts among line items with Owner's
prior approval. Manager may recommend a revision of any Budget
item to Owner and Owner will not unreasonably withhold approval
for such revision. Any Budget revision sought by Manager must be
recommended to Owner at least thirty (30) days prior to the date
Manager desires the revision to be effective. However, should an
unanticipated or emergency expense arise, Manager may recommend a
Budget revision to Owner upon less than thirty (30) days notice.
Owner may revise any Budget as and when it deems such revision
necessary.
4.05 COMPONENTS OF OPERATING BUDGETS. The Operating
Budget(s) shall include Manager's estimate of all expenses
necessary to maintain and operate the Vessel, including Gross
Maritime Payroll, Operating Equipment, Operating Supplies and
Major Capital Replacements. The Operating Budget shall be
presented in a detailed, line item form, and where applicable,
shall show the preceding year's actual costs, in line item
detail.
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ARTICLE V
INSURANCE
5.01 POLICIES AND COVERAGE.
5.01.1 Owner shall obtain insurance, including Xxxxx Act
coverage, in the minimum amount of not less than Five Million
Dollars ($5,000,000), for the acts, omissions and injuries to
persons or property caused in whole or in part by the Maritime
Staff and/or Manager, its agents or employees. Manager shall be
named as an additional insured on the foregoing policies.
5.01.01 Owner shall procure at its own cost and expense,
including the cost of all deductibles, and continuously maintain
in force the following insurance coverages:
(a) Worker's Compensation Insurance covering all of the
agents, servants and employees of Owner and for all Maritime
Staff for all compensation and other benefits required by
applicable state and federal law or by governmental
authority on account of injury, death, sickness or disease.
Such insurance must include coverage for claims under the
United States Longshoremen's and Harbor Worker's Act and be
extended to cover operations anywhere the vessel operates;
(b) Comprehensive General Liability Insurance, with minimum
limits of $2,000,000 for any one accident and $2,000,000 for
property damage, to include coverage for the services to be
performed and for obligations and liabilities assumed and
undertaken by Owner under this Agreement;
(c) Full Form Protection and Indemnity Insurance on all
vessels and floating equipment owned, chartered, operated,
managed or otherwise used, possessed or controlled by Owner
including the Vessel and all ancillary vessels used in
connection with the operating of the Vessel. Such
Protection and Indemnity Insurance shall be in the amount
equal to the value of any vessels, but not less than
$5,000,000 used by owner to perform services, and shall
include liability for injury or death of the master and
members of the crew, employees of Owner or of Manager,
passengers and third-parties;
(d) Hull and Machinery Insurance in an amount equal to the
full value of each vessel and item of floating equipment
owned, chartered, operated, managed or otherwise used,
possessed or controlled by owner to perform services;
(e) Collision Liability Insurance for damage to vessels as
well as to fixed and floating objects shall be provided in
an
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amount equal to the actual value of the vessel but not less
than $5,000,000 each vessel.
5.01.02 All such insurance shall be carried in a company
or companies acceptable to Manager, and shall be maintained in
full force and effect during the term of any work performed under
the terms of this Agreement and work orders, invoices or
statements issued pursuant hereto. Such insurance shall not be
canceled, altered or amended without thirty (30) days prior
written notice having been furnished to Manager.
5.01.03 Owner will, at the commencement of this Agreement,
furnish Manager a certificate evidencing all policies and
endorsements required to be obtained by Owner under this
Agreement, and, if requested by Manager, shall furnish certified
copies of all such insurance policies. Owner further agrees that
should Owner fail to comply with any or all of the terms of this
Article, Owner will be liable to Manager as an insurer with the
terms of said insurance to be equivalent to the terms that
similar polices held by either Owner or Manager, and that this
contractual liability of Owner shall be insured under the
contractual liabilities coverage of its comprehensive general
liability insurance required in this Article. Owner shall be
liable for all deductible amounts on policies specified herein.
Further, Manager shall be indemnified by Owner for any loss or
payment by Manager due to Owner's failure to provide or maintain
the insurance coverage required under this agreement.
5.01.04 Each insurance policy required hereunder shall be
endorsed to name Manager as additional assured with no obligation
to pay premiums or deductibles, and each policy shall provide
that its coverage is primary under any insurance that may be
maintained by Manager. No "other insurance" or "as owner" or
"other than as owner" provision shall be applicable to Manager,
its affiliated and subsidiary companies or their underwriters by
virtue of having been named an additional assured under the
policies required hereunder, and this must and shall be specified
in each such policy. The provisions of this section shall not,
however, apply to Workers' Compensation Insurance required
herein.
5.01.05 Each insurance policy required hereunder shall
provide for waivers of subrogation in favor of Manager, its
affiliates and subsidiary companies, or any employee, agent or
Owner of Manager and against any person, firm or corporation for
whom Manager may be acting.
5.02 WAIVER OF LIABILITY. Neither Manager nor Owner
shall assert against the other, and do hereby waive
with respect to each other, or against any other
entity or person named as an additional insured
on any policies carried under this Article V, any
claims for any losses, damages, liability or expenses (including
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attorneys' fees) incurred or sustained by either of them on
account of injury to persons or damage to property arising out of
the ownership, development, construction, completion, operation
or maintenance of the Vessel, to the extent that the same are
covered by the insurance required under this Article V. Each
policy of insurance shall contain a specific waiver of
subrogation reflecting the provisions of this Section 5.02, or a
provision to the effect that the existence of the preceding
waiver shall not affect the validity of any such policy or the
obligation of the insurer to pay the full amount of any loss
sustained.
ARTICLE VI
MANAGEMENT FEE
6.01 MANAGEMENT FEE COMPUTATION. In consideration of
Manager's services during the Operating Period, Owner shall pay
to Manager a one time payment of One Hundred Thousand Dollars
($100,000) plus a management fee (the "Management Fee") payable
monthly, equal to fifteen percent (15%) of the Gross Maritime
Payroll. Owner agrees to pay monthly the Management Fee within
seven (7) days of the receipt of the invoice. If the Management
Fee is not paid within seven days of receipt of the invoice
therefore, interest on the unpaid amount shall accrue at the rate
of ten percent (10%) per annum until paid.
6.02 ADDITIONAL COMPENSATION.
In addition to the amounts payable pursuant to Section 6.01
hereof, Owner shall pay to Manager an amount equal to fifteen
percent (15%) of the gross purchase price, including all taxes,
fees, and charges, of all Maritime Purchases for the Vessel
during the Operating Period. This payment shall be in addition
to any other payments or compensation payable pursuant to this
agreement and shall be paid by Owner within seven (7) days of
receipt of an invoice for said purchases by Owner. Owner shall
pay interest on any amounts not paid within seven days of receipt
of an invoice therefore as provided in this section, which
interest shall accrue at the rate of ten percent (10%) per annum
until paid.
ARTICLE VII
ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS
7.01 EXPENDITURES. Manager shall pay such amounts and at
such times as are required in connection with the operation of
the Vessel, including, without limitation, the following:
(a) the Gross Maritime Payroll of the Maritime Staff;
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(b) all other costs and expenditures incurred or made in
connection with the authorized items under Section 3.08 and
all other expenditures which Manager is permitted or
required to make under any other provision of this
Agreement;
7.02 BOOKS AND RECORDS. Manager shall assist Owner in
keeping full and adequate books of account and such other records
as are necessary to reflect the results of operation of the
Vessel. For this purpose, Owner agrees that it will make
available to Manager all books, records and invoices pertaining
to the maritime aspects of the Vessel and any Major Capital
Improvements.
7.03 OWNER'S RIGHTS TO INSPECTION AND REVIEW. Manager shall
keep full and adequate books of account and such other records as
are necessary to evidence Manager's performance of services
hereunder. Manager shall accord to Owner, its accountants,
attorneys and agents, the right to enter its offices at all
reasonable times during the term of this Agreement for the
purpose of examining or inspecting Manager's offices or examining
and making extracts of the financial books and records relating
to the Vessel or for any other purpose which the Owner, in its
reasonable discretion, shall deem necessary or advisable, but
same shall be done without disruption to the operation and
business of Manager's offices.
ARTICLE VIII
TERMINATION RIGHTS
8.01 TERMINATION BY OWNER. If any one of the following
events shall occur:
(a) if Manager shall fail to keep, observe or perform any
material covenant, agreement, term or provision of this
Agreement to be kept, observed or performed by Manager, and
such failure shall continue for a period of 30 days after
notice thereof by Owner to Manager;
(b) if Manager declares bankruptcy or is deemed insolvent
by a court of competent jurisdiction;
(c) if a right of termination on the part of Owner shall
have arisen under Section 10.01, and Owner determines that
Maritime staff is no longer needed; and
(d) if the Vessel cannot cruise as a result of Manager's
failure to staff the Vessel to United States Coast Guard
specifications and such failure shall continue for a period
of 15 days.
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then Owner shall have the right to terminate this Agreement
upon 30 days written notice to Manager.
8.02 TERMINATION BY MANAGER. If any of the following events
shall occur:
(a) the Owner shall fail to keep, observe or perform any
other material covenant, agreement, term or provision of
this Agreement to be kept, observed or performed by Owner,
and such default shall continue for a period of 30 days
after notice thereof by Manager to the Owner; or
(b) if Owner fails to obtain, for any reason, all approvals
and licenses necessary for it to conduct gaming activities
on the Vessel; or if gaming is otherwise be suspended for a
period of 60 consecutive days;
the Manager shall have the right to terminate this Agreement upon
30 days written notice to Owner.
8.03 CURING DEFAULTS. Any default or failure by Manager
under clause (a) of Section 8.01, or by Owner under clause (a) of
Section 8.02, as the case may be, which is susceptible of being
cured shall not constitute a basis of termination if the nature
of such default shall not permit it to be cured within the grace
period allotted, provided that within such grace period either
Manager or Owner shall have commenced to cure such default and
shall proceed to complete the same with reasonable diligence.
8.04 EFFECT OF TERMINATION. The termination of this
Agreement under the provisions of this Article VIII shall not
affect the rights of the terminating party with respect to any
damages it has suffered as a result of any breach of this
Agreement, nor shall it affect the rights of either party with
respect to liability or claims accrued, or arising out of events
occurring, prior to the date of termination.
8.05 REMEDIES CUMULATIVE. Neither the right of termination,
nor the right to xxx for damages, nor any other remedy available
to either party hereunder shall be exclusive of any other remedy
given hereunder or now or hereafter existing at law or in equity.
ARTICLE IX
ASSIGNMENTS
9.01 ASSIGNMENTS. Manager or Owner shall not
assign this Agreement without the prior written
consent of the party hereto. It is understood
and agreed that any consent granted by the Owner to any
assignment under this Subsection 9. 01 shall not be deemed a
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waiver of the covenant herein contained against assignment in any
subsequent case.
9.02 SUCCESSOR AND ASSIGNS. Subject to the foregoing, this
Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective heirs, legal representatives,
successors and assigns.
9.03 REMEDIES. Any assignment by either party of this
Agreement in violation of the provisions of this Article IX shall
be null and void. In addition to any other remedies available to
the parties, the provisions of this Article IX shall be
enforceable by injunctive proceeding or by a suit for specific
performance.
ARTICLE X
DAMAGE OR DESTRUCTION
10.01 DAMAGE OR DESTRUCTION. If the Vessel shall be
damaged by fire or other casualty, then Owner, by written notice
to Manager given within 60 days after the occurrence of such
event, shall have the right to terminate this Agreement if Owner
does not elect to rebuild or substitute another Vessel, and
neither party shall have any further obligation to the other
party hereunder, except with respect to liability accruing, or
based upon events occurring, prior to the effective date of such
termination.
10.02 REINSTATEMENT. If following a termination under
Section 10.01 above, Owner shall decide, notwithstanding its
previous determination, to substitute another Vessel, then the
Manager may at its option elect to continue this agreement for
the remainder of the term hereof, which term shall automatically
be extended by the number of full years, plus one full year for
any partial year, elapsing between the date of termination and
the date of such reinstatement.
ARTICLE XI
LICENSE PROTECTION
11.01 MARITIME LICENSE. If at any time actions or
proposed actions, by Owner are contrary to established U.S. Coast
Guard regulations, rules or guidelines and such action, in
reasonable opinion of Manager jeopardizes any maritime license
held by Manager, then Manager may, but shall not be required to
terminate this agreement.
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ARTICLE XII
GENERAL PROVISIONS
12.01 INDEMNITIES.
12.01.1 MUTUAL INDEMNIFICATION. Owner and Manager shall
mutually indemnify and hold each other harmless from and against
any and all Claims which Owner or Manager may suffer, sustain or
incur arising from, or based upon the other party's negligence.
12.01.2 INDEMNIFIED PARTIES. The indemnities contained in
this Section 12.02 shall run to the benefit of both Manager and
Owner and their respective Affiliates and the directors,
officers, partners and employees of Manager and Owner and their
respective Affiliates.
12.02 NOTICES. Except as otherwise provided in this
Agreement, all notices, demands, consents, reports and other
communications (herein collectively, the "Notices") required or
permitted to be given hereunder, or which are to be given with
respect to this Agreement, shall be in writing, addressed to the
party to be so notified as follows:
If to Owner: Showboat Marina Casino Partnership
_____________________________
_____________________________
Attention: __________________
If to Manager: Riverboat Services, Inc.
_____________________________
_____________________________
Attention: __________________
With Copies to: Xxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Xx.
(000) 000-0000
(000) 000-0000 Fax
Notices may be mailed by United States registered or
certified mail, return receipt request, postage prepaid,
deposited in a United States post office or a depository for
the receipt of mail regularly maintained by the
post office. If so mailed, then such Notice shall
be deemed to have been received by the addressee on
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the third day following the date of such mailing. Such Notices
may also be delivered by hand, or by special courier, if
receipted for.
12.03 NO PARTNERSHIP OR JOINT VENTURE. Nothing
contained in this Agreement shall be construed to be or create a
partnership or joint venture between the Owner, its successors or
assigns, on the one part, and Manager, its successors and
assigns, on the other part.
12.04 AMENDMENT. This Agreement cannot be amended
except by another agreement in writing signed by the parties to
this Agreement, or their duly authorized agents.
12.05 UNDERSTANDINGS AND AGREEMENTS. This Agreement
constitutes all of the understandings and agreements of
whatsoever nature or kind existing between the parties with
respect to Manager's management of the Vessel.
12.06 HEADINGS. The Article and Section headings
contained herein are for convenience and reference only and are
not intended to define, limit or describe the scope or intent of
any provision of this Agreement.
12.07 SURVIVAL OF COVENANTS. Any covenant, term or
provision of this Agreement which, in order to be effective, must
survive the termination of this Agreement, shall survive any such
termination.
12.08 THIRD PARTIES. None of the obligations hereunder
of either party shall run to or be enforceable by any party other
than the parties to this Agreement or by a party deriving rights
hereunder as a result of an assignment permitted pursuant to the
terms hereof.
12.9 WAIVERS. No failure by Manager or Owner to insist upon
the strict performances of any covenant, agreement, term or
condition of this Agreement, or to exercise any right or remedy
consequent upon the breach thereof, shall constitute a waiver of
any such breach or any subsequent breach of such covenant,
agreement, or condition. No covenant, agreement, term or
condition of this Agreement and no breach thereof shall be
waived, altered or modified except by written instrument. No
waiver of any breach shall affect or alter this Agreement, but
each and every covenant, agreement, term and condition of this
Agreement shall continue in full force and effect with respect to
any other than existing or subsequent breach thereof.
12.10 PARTIAL INVALIDITY. Any provision of this
Agreement prohibited by law or by court decree in any
locality or state shall be ineffective to the extent
of such prohibition without in any way invalidating
or affecting the remaining provisions of this
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Agreement, or without invalidating or affecting the provisions of
this Agreement within the states or localities where not
prohibited or otherwise invalidated by law or by court decree.
Further, in the event that any provision of this Agreement shall
be held unenforceable by virtue of its scope, but may be made
enforceable by a limitation thereof, such provision shall be
deemed to be amended to the minimum extent necessary to render it
enforceable under the laws of the jurisdiction in which
enforcement is sought.
12.11 FORCE MAJEURE. If by reason of war, riots, civil
commotion, labor disputes, strikes, lockouts, inability to obtain
labor or materials, fire or other acts or elements, accidents,
government restrictions or appropriation or other causes, whether
like or unlike the foregoing, beyond the control of a party
hereto, such party is unable to perform in whole or in part its
obligations under this Agreement, then in such event such party
shall be relieved of those obligations to the extent it is so
unable to perform, and such inability to perform, so caused,
shall not make such party liable to the other. The provisions of
this Section 12.12 shall not be applicable to Section 7.02 or to
Article X.
12.12 APPLICABLE LAW. This Agreement shall be construed
and interpreted, and be governed by, the laws of the State of
Indiana.
Compliance with Indiana Gambing Statute and the Commission's
Rules. Manager hereby agrees to acquaint themselves with and
fully comply with the requirements, terms, conditions,
prohibitions and obligations of the Indiana Gaming Statute and
the Rules of the Indiana Gaming Commission as they may apply to
them.
Manager is fully aware and acknowledges that: The Indiana Gaming
Commission reserves the right to disapprove and cancel any
contract or transaction that does not comply with the Indiana
Gaming Statute or the Commission's rules or that does not
maintain the integrity of the industry.
Manager will fully cooperate with and voluntarily comply with all
requests and inquiries from the Indiana Gaming Commission or its
staff that relate, directly or indirectly, to this Agreement.
This Agreement may be disapproved or canceled by the Indiana
Gaming Commission.
IN WITNESS WHEREOF, the parties hereto have executed or
caused this Agreement to be executed as of the day and year first
above written.
Showboat Marina Casino Partnership
/s/ J. Xxxxx Xxxxxxx
By: J. Xxxxx Xxxxxxx
Title: CEO/Authorized Signator
Riverboat Services, Inc.
/s/ Xxxxxx Xxxxxxxxx
By: Xxxxxx Xxxxxxxxx
President
FIRST AMENDMENT TO
MARINE MANAGEMENT SERVICES AGREEMENT
This First Amendment to Marine Management Services Agreement
dated October 28, 1996, between Showboat Marina, Inc., and
Indiana corporation ("Owner") and Riverboat Services, Inc., an
Indiana corporation ("Manager") is entered into as of this 3rd
day of November, 1997.
WHEREAS, Owner and Manager have executed a Marine Management
Services Agreement dated October 28, 1996 (the "Agreement") for
the purpose of operating a vessel in East Chicago, Indiana; and
WHEREAS, Section 12.04 of the Agreement provided for the
amendment of the Agreement; and
WHEREAS, Owner and Manager desire to supplement and amend
the Agreement as hereinafter provided.
NOW THEREFORE, in consideration for the mutual benefit of
the parties hereto the Agreement is hereby supplemented and
amended as follows:
SECTION 1
Article I of the Agreement is hereby supplemented and
amended by adding the following definition:
"Agreement" shall mean the Marine Services Management
Agreement between Owner and Manager dated
October 28, 1996 as may be supplemented and amended
from time to time.
SECTION 2
Section 2.01 of the Agreement is hereby amended to read as
follows:
2.01 THE TERM. The Initial Term of this Agreement
shall begin upon the date the Vessel is staffed with
the Maritime Staff and shall expire five (5) years from
said date, subject to Manager's renewal option under
Section 2.02, or earlier termination as provided
hereafter.
SECTION 3
Section 2.02 of the Agreement is amended to read as follows:
2.02 RENEWAL TERMS. Manager shall have the right
to extend the term of this Agreement for two successive
periods of five (5) years each, (the "Renewal Term")
upon the same terms and conditions as are herein
contained. Manager may exercise its rights of renewal
by written notice to Owner given, with respect to the
first Renewal Term, not later than ninety (90) days
prior to the end of the Initial Term, and may exercise
the second Renewal Term rights by written notice to
Owner given not later than ninety (90) days prior to
the end of the prior Renewal Term. The phrase "term of
this Agreement", as used herein, shall man the Initial
Term and any Renewal Term then in effect under this
Section 2.02.
SECTION 4
Section 3.07 of the Agreement is hereby amended to read as
follows:
Section 3.07 PURCHASING OF GOODS AND SERVICES.
Manager shall make all purchases, and on behalf of
Owner, enter into all Agreements and Service Contracts,
with regard to the Vessel. The obligation for the
payment for all such purchases, agreements, and service
contracts shall be exclusively that of the Owner even
if such purchase is at the direction of the Manager.
SECTION 5
Article VI of the Agreement is hereby amended to read as
follows:
6.01 MANAGEMENT FEE. In consideration of
Manager's services during the Operating Period, Owner
shall pay to Manager a Management Fee of Sixty Thousand
($60,000) dollars per month, due and payable on the
first day of each month. If the Management Fee is not
paid within seven days of its becoming due, interest on
the unpaid amount shall accrue at the rate of ten
percent (10%) per annum until paid.
SECTION 6
The terms of this First Amendment to the Agreement are
effective on the date hereof. All other terms and provisions of
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed or
caused this Agreement to be executed as of the day and year first
above written.
Owner:
SHOWBOAT MARINA, INC.
By:/s/ J. Xxxxx Xxxxxxx
J. Xxxxx Xxxxxxx
Title: President & CEO
Manager:
RIVERBOAT SERVICES, INC.
/s/ Xxxxxx X. Xxxxxxxxx
By: Xxxxxx X. Xxxxxxxxx, President
