Escrow Agreement among Mercantile Bank National Association, President Riverboat Casino - Missouri, Inc., and U.S. Title Guaranty Company, Inc.

Summary

This agreement, dated January 18, 2000, is between Mercantile Bank National Association, President Riverboat Casino - Missouri, Inc., and U.S. Title Guaranty Company, Inc. It establishes an escrow account to secure the obligations of President Casinos, Inc. under a guaranty related to a loan. The casino company must deposit certain funds annually, which the escrow agent holds and may release to the bank if there is a default. The agreement outlines the conditions for deposits, disbursements, and termination of the escrow, as well as the escrow agent’s duties and compensation.

EX-10.36.2 4 0004.txt EXHIBIT 10.36.2 ESCROW AGREEMENT THIS ESCROW AGREEMENT is made as of the 18th day of January, 2000, by and among MERCANTILE BANK NATIONAL ASSOCIATION, a national banking association ("Bank"), PRESIDENT RIVERBOAT CASINO - MISSOURI, INC., a Missouri corporation ("Company"), and U.S. TITLE GUARANTY COMPANY, INC., a Missouri corporation, as escrow agent (the "Escrow Agent"). RECITALS A. Bank has entered into a Loan Agreement of even date herewith with The Port Authority of the City of St. Louis ("Borrower") and Borrower's obligations thereunder are guarantied by President Casinos, Inc. pursuant to a Guaranty of even date herewith. B. As further security for Guarantor's obligations under the Guaranty, Company has agreed to place certain monies on deposit with Escrow Agent for the benefit of Bank. C. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in that certain Relocation Funding Agreement dated as of January 18, 2000 (the "Relocation Funding Agreement") among the City of St. Louis, Missouri, Borrower and Company. NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I APPOINTMENT OF ESCROW AGENT The Escrow Agent is hereby appointed to act as Escrow Agent hereunder and agrees to accept and to hold the Escrow Deposit (as defined in Article II hereof) in accordance with the terms hereof. ARTICLE II ESTABLISHMENT OF ESCROW Fifteen days after the end of each fiscal commencing March 15, 2000 and continuing until the payment in full of all Guarantor's Obligations and release of the Guaranty, Company shall deposit with the Escrow Agent the lesser of (i) a sum equal to two percent (2%) of the Adjusted Gross Receipts in excess of Sixty Million Dollars ($60,000,000) received or accrued by Company in connection with the Gaming Operations during Company's immediately preceding fiscal year and (ii) Three Hundred Thousand Dollars ($300,000) (such amount, as so deposited, being collectively referred to as the "Escrow Deposit"), to be held by the Escrow Agent in escrow pending release pursuant to Article V hereof. Company's fiscal year presently commences on March 1 of each calendar year and ends on February 28/29 of each calendar year and Company may not change its fiscal year without the express written consent of 192 Bank. Upon full disbursement of all amounts to be advanced under the Note in the principal amount of $2,400,000 executed by the Borrower, any amounts in the Escrow Deposit in excess of 30% of the outstanding principal balance of the Note, shall be returned to the Company. ARTICLE III DECLARATION OF ESCROW The Escrow Agent hereby declares and agrees that it will hold and distribute the Escrow Deposit, together with any interest earned thereon, in accordance with and subject to the express provisions of this Escrow Agreement. ARTICLE IV ESCROW PERIOD Unless sooner terminated as provided in Section 7.03 hereof, the term of this escrow shall commence immediately upon execution and delivery of this Escrow Agreement and shall expire upon termination pursuant to Section 6.02 hereof. ARTICLE V DISTRIBUTION OF ESCROW DEPOSIT 5.01 Distribution of Escrow Deposit to Bank. The Escrow Deposit shall be released to Bank free and clear of any interest of Company upon the presentation to the Escrow Agent, with a copy to Company, of a written statement by Bank as follows: "A default has occurred in respect of Guarantor's Obligations under that certain Guaranty dated as of January 18, 2000 executed by President Casinos, Inc. for the benefit of Mercantile Bank National Association ("Bank"). The sum of Dollars ($ ) is now due and owing to Bank, which sum represents the lesser of (i) the amount of the Escrow Deposit and (ii) the amount due in respect of Guarantor's Obligations, including, without limitation, the amount of all Borrower's Liabilities then due and payable to Bank (as such terms are defined in the Guaranty)." Such disbursement(s) may be made at any time and from time to time, up to the amount of the Escrow Deposit. 5.02 Manner of Disbursement. The said Escrow Deposit shall be held in escrow by the Escrow Agent as assurance for performance of Guarantor's Obligations and shall be disbursed by the Escrow Agent as follows: following Bank's delivery of the written statement contemplated by Section 5.01 above, the Escrow Agent shall pay the Escrow Deposit (or such lesser amount as may be requested by Bank) to Bank within five (5) business days of receipt by the Escrow Agent of such written statement. 5.03 Security Interest. This Agreement is intended to provide additional security for the payment and performance of Guarantor's Obligations, as defined in the Guaranty. Accordingly, Company hereby grants, pledges, transfers and assigns to Bank a continuing security interest in and right of set-off against the following, whether now existing or hereafter acquired or arising: all of Company's right, title and interest, in, to and under (i) the Escrow Deposit and all instruments, securities, documents, accounts, general 2 193 intangibles, money and other property and contents therein and thereof, and all rights relating thereto and proceeds therefrom and thereof, including, without limitation, the deposits constituting the Escrow Deposit from time to time and all earnings thereon at any time or from time to time in the possession or control of Escrow Agent, (ii) all books and records relating to the types and items of property described in the foregoing clause (i), and (iii) all proceeds (whether cash or non-cash, and including, without limitation, insurance proceeds) and products of the property described in the foregoing clause (i), and all replacements and substitutions therefor and all additions and accessions thereto (collectively, the "Collateral"). Bank shall have all the rights and remedies of a secured party under the Uniform Commercial Code and any other applicable law. Company will promptly execute such financing statements, continuation statements and other documents as may be reasonably necessary or convenient to perfect, continue or otherwise evidence said security interest and pay all expenses and fees for the preparation and filing thereof. Escrow Agent hereby acknowledges receipt of notice of Bank's security interest in the Collateral. Company acknowledges that Bank required delivery of the Guaranty as a condition precedent to entering into the Loan Agreement and the Relocation Funding Agreement and that Company has a financial interest in Bank entering into such agreements. Company further acknowledges that Bank has relied upon the security granted hereunder in accepting the Guaranty. ARTICLE VI PROVISIONS CONCERNING THE ESCROW AGENT 6.01 Compensation. Upon receipt by Bank and Company of the Escrow Agent's written notice itemizing its reasonable fees and out-of-pocket expenses incurred in performing its duties hereunder, the Escrow Agent shall be entitled to payment of such fees and reimbursement for such expenses. Such payment and reimbursement obligations shall be paid by Company. 6.02 Termination of this Escrow. This Escrow Agreement shall terminate upon payment in full of all amounts. Any remaining balance of the Escrow Deposit shall be disbursed to the Company. 6.03 Duties of the Escrow Agent. This Escrow Agreement sets forth the duties and obligations of the Escrow Agent with respect to any and all matters pertinent to its acting as such hereunder. The Escrow Agent shall not have duties or responsibilities under this Escrow Agreement other than those specifically set forth herein and shall act only in accordance with the provisions hereof. 6.04 Liability of the Escrow Agent. Neither the Escrow Agent nor any of its officers, directors, shareholders, partners, employees or agents shall be liable to Bank or Company or any other person or entity for or in respect of any loss, claim, damage, liability or expense resulting from or arising out of any act or failure to act by it in connection with this Escrow Agreement, other than for any loss, claim, damage, liability or expense which shall be finally adjudicated to be the result of gross negligence or willful bad faith on the part of the Escrow Agent or any such officers, directors, partners, employees or agents. Bank and Company agree to indemnify Escrow Agent for any loss or damages arising from acting as Escrow Agent hereunder except for 3 194 conduct constituting gross negligence or willful misconduct of Escrow Agent. 6.05 Deposit of Escrow Deposit with Court. Notwithstanding anything herein to the contrary, in the event of any disagreement between any of the parties to this Escrow Agreement, or between them and any other person, resulting in adverse claims or demands being made against the Escrow Deposit, or in the event the Escrow Agent in good faith is in doubt as to what action it should take hereunder, the Escrow Agent may be discharged of its duties and obligations hereunder upon its deposit, at any time after written notice to Banks and Company, of the Escrow Deposit with a court of competent jurisdiction. The parties hereto hereby submit to the personal jurisdiction of any such court, waive any and all right to contest the jurisdiction of such court, and consent to service of process by hand delivery or mail delivery thereof to their respective addresses set forth in Section 7.02 hereof. 6.06 Investment of Escrow Deposit. The Escrow Agent shall cause the Escrow Deposit from time to time to be invested and reinvested in such short-term, high-grade securities, interest-bearing bank accounts, bank certificates of deposit or bank repurchase agreements as Company, in its discretion, deems suitable, and all interest thereon shall be added to the Escrow Deposit. ARTICLE VII MISCELLANEOUS 7.01 Entire Agreement. This Escrow Agreement has been entered into pursuant to the Guaranty and as such embodies the entire agreement and understanding among the parties hereto relating to the escrow created hereunder and may not be changed orally, but only by an instrument in writing signed by all the parties hereto. 7.02 Notices. All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when delivered, if delivered in person or by telecopy, or when received, if mailed by first-class mail or express delivery service, postage or other fee prepaid, with return receipt requested, addressed to each party hereto as follows: (a) If to Bank: Mercantile Bank National Association One Mercantile Center St. Louis, Missouri 63101 Attention: James B. Lally copy to: Bryan Cave LLP 211 North Broadway, Suite 3600 St. Louis, Missouri 63102-2750 Attention: Linda M. Martinez, Esq. (b) If to Company: 4 195 President Riverboat Casino-Missouri, Inc. 802 N. 1st Street St. Louis, Missouri 63102 Attention: James A. Zweifel copy to: Thompson Coburn LLP One Mercantile Center St. Louis, Missouri 63101 Attention: Fred E. Arnold, Esq. (c) If the Escrow Agent, to: U.S. Title Guaranty Company, Inc. 8135 Forsyth St. Louis, Missouri 63105 Attention: Mr. Robert Rodgers or at such other address as any party may designate by means of notice given in accordance with this Section 7.02. 7.03 Headings. The article and section headings contained in this Escrow Agreement have been inserted for convenience only and shall not modify, define, limit or expand the express provisions of this Escrow Agreement. 7.04 Governing Law. This Escrow Agreement shall be governed by and construed in accordance with the substantive laws of the State of Missouri as applied to contracts made and performed within the State of Missouri without regard to its conflicts of law principles. 7.05 Binding on Successors and Assigns. This Escrow Agreement shall be binding upon the parties hereto and their respective successors and assigns, provided that the Escrow Agent may not assign its obligations hereunder without the consent of Bank and Company. 7.06 Counterparts. This Escrow Agreement may be executed in any number of counterparts, each of which shall be deemed as original, but all of which together shall constitute one and the same agreement, and it shall not be necessary, in proving the due execution and delivery of this Escrow Agreement, to produce or account for more than one such counterpart. IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the day and year first written. BANK: MERCANTILE BANK NATIONAL ASSOCIATION By: /s/ James B. Lally ------------------------------------ Name: James B. Lally 5 196 ------------------------------------ Title: Vice President ------------------------------------ COMPANY: PRESIDENT RIVERBOAT CASINO-MISSOURI, INC. By: /s/ James A. Zweifel ------------------------------------ Name: James A. Zweifel ------------------------------------ Title: Exec. V.P. & CFO ------------------------------------ ESCROW AGENT: U.S. TITLE GUARANTY COMPANY, INC. By: /s/ Robert G. Rodgers ------------------------------------ Name: Robert G. Rodgers ------------------------------------ Title: Vice President ------------------------------------ 6