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EXHIBIT 10.16
DEVELOPMENT AGREEMENT
STATE OF LOUISIANA
PARISH OF CALCASIEU
BE IT KNOWN, that on the date hereinafter set forth, before the
undersigned Notaries public, duly commissioned and qualified in and for
the state and parish aforesaid, and in the presence of the undersigned
competent witnesses, personally came and appeared ST. CHARLES GAMING
COMPANY, INC., a Louisiana corporation (herein called "St. Charles"),
herein represented by Edward R. McMurphy, its duly authorized
president, and the CALCASIEU PARISH POLICE JURY (hereinafter called the
"Parish"), herein represented by Ray Campbell, its duly authorized
president, who declared that:
ST. CHARLES is the owner of a riverboat gaming vessel
currently known as the "Crown Casino" (the "Casino").
ST. CHARLES is currently licensed (the "License") to
operate the Casino in the State of Louisiana by the Louisiana
Riverboat Gaming Enforcement Division of the Gaming
Enforcement Section of the Office of State Police, Department
of Public Safety and Corrections (the "Division").
ST. CHARLES has received the approval of the Louisiana
Riverboat Gaming Commission (the "Commission") to locate the
berthing site for its Casino at a location in the
unincorporated area of Calcasieu Parish, Louisiana commonly
known as the "Burton Shell Yard" (the "Site").
ST. CHARLES has requested that the Parish cooperate with
and assist St. Charles in its efforts to locate the Casino at
the Site and develop the Site as the location for the Casino
and related entertainment and dining facilities.
NOW, THEREFORE, for and in consideration of the mutual and
dependent agreements of the Parish and St. Charles hereinafter set
forth, St. Charles and the Parish agree to the following:
ARTICLE I
MONETARY OBLIGATIONS OF ST. CHARLES
Section 1.1. Initial Cash Payment. St. Charles shall pay to the
Parish the cash sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00)
on the Opening Date (as hereinafter defined) of the Casino at the Site
(the "Initial Cash Payment"). The term "Opening Date" shall mean the
first (1st) date a revenue-paying customer is admitted to the Casino at
the Site.
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Section 1.2. Annual Cash Payments. St. Charles shall pay to the
Parish the cash sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00)
in each consecutive twelve (12) month period from and after the Opening
Date for so long as St. Charles continues to operate the Casino at the
Site (the "Annual Cash Payment"). The Annual Cash Payment shall be
payable in equal quarterly installments of TWO HUNDRED FIFTY THOUSAND
AND NO/100 ($250,000.00) DOLLARS, commencing on the first (1st) day of
the second month immediately following the Opening Date, and continuing
on the first (1st) day of each third month thereafter for so long as
St. Charles continues to operate the Casino at the Site. Such Annual
Cash Payments may be shared with other governmental authorities, in the
Parish's discretion, which are affected or impacted by the operation of
the Casino.
Section 1.3. Payment of Certain Sums. St. Charles hereby
unconditionally agrees to pay to the Parish the Initial Cash Payment
and the Annual Cash Payments for a minimum of six (6) years, when due
as specified in Paragraphs 1.1 and 1.2 hereof, up to the aggregate sum
of SEVEN MILLION AND NO/100 ($7,000,000.00) DOLLARS, which aggregate
sum shall be payable by St. Charles notwithstanding the cessation of
the operation of the Casino by St. Charles at the Site at any time
during its first six (6) years of operations.
Section 1.4. Legally Mandated Boarding Fees. In accordance with
Section 552A of the Louisiana Riverboat Economic Development and Gaming
Control Act (the "Act"), St. Charles shall pay to the Parish a fee of
$2.50 per passenger boarding the Casino (the "Boarding Fee Payment"),
for so long as the Casino is located and operated at the Site. The
Boarding Fee Payment shall be paid monthly, on or before the twentieth
(20th) day of each month for boardings during the prior month. St.
Charles and the Parish may, in the future, agree to a substitute for
the Boarding Fee Payment. Such substitute payment may take the form of
a payment based upon a mutually agreed upon percentage of the St.
Charles' gross gaming revenues (as defined in the Act) generated by the
Casino.
ARTICLE II
INFRASTRUCTURE EXPENDITURES, SPECIFICATIONS
Section 2.1. Payment. St. Charles shall pay or cause to be paid
to or spent for the benefit of the Parish and other state, local and
federal authorities, the costs of the initial infrastructure, capital
and other public safety improvements (collectively, the "Offsite
Improvements") in the vicinity of the Site which are necessitated by
the location of the Casino at the Site, including without limitation,
traffic lights, street lights, road construction, water, sewer and
other utility improvements. The Offsite Improvements shall be subject
to the mutual agreement of St. Charles, the Parish and all other
applicable governmental entities.
Section 2.2. Specifications. All such Offsite Improvements shall
be designed and constructed pursuant to and in accordance with Parish
building code or other applicable standards and completed in a good and
workmanlike manner, with due dispatch. During the course of all work
pursuant to this Article, St. Charles shall comply with all current
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federal, state, Parish and applicable municipal laws, ordinances and
regulations in the construction of the Offsite Improvements and apply
for all applicable federal, state, Parish and applicable municipal
permits. In connection herewith, St. Charles shall timely submit all
infrastructure improvement plans affecting Parish roads to the Parish
Engineer.
ARTICLE III
SITE IMPROVEMENTS TO BE MADE BY ST. CHARLES
Section 3.1. St. Charles shall use its best efforts to commence
and complete the following improvements (the "Improvements") to the
Site:
(a) a slip in which the Casino shall be moored during
those periods of time when not cruising;
(b) a terminal building, including a restaurant(s), a
gift shop, passenger and patron amenities, and administrative
offices and other related facilities; and
(c) a multi-level parking garage and adequate surface
parking facilities, together with appropriate landscaping and
outdoor amenities for patrons and passengers.
Section 3.2. Dependent on market factors, the availability of
financing and the satisfactory completion and positive analysis of
marketing studies, it is the further intent of St. Charles to construct
a hotel on a tract of land adjacent to the Site.
Section 3.3. The Improvements shall be constructed by St.
Charles in accordance with designs, plans and specifications prepared
for, and approved by, St. Charles, in its sole discretion, provided,
however, all of such Improvements shall be built in accordance with
applicable laws and regulations and pursuant to applicable federal,
state and Parish permits.
ARTICLE IV
ANNEXATION
St. Charles agrees to lawfully oppose the annexation of the Site
by any municipality or other governmental authority and use its best
efforts to persuade its landlord to also oppose the annexation of the
Site by any governmental municipality or other governmental authority.
ARTICLE V
OBLIGATIONS OF THE PARISH
The Parish hereby agrees to cooperate with and assist St. Charles
to the fullest possible extent and in an expeditious manner in its
efforts to develop the Site and operate
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the Casino, provided, however, such cooperation and assistance shall
not interfere with or impair the Parish from setting or making Parish
policy. Furthermore, the Parish shall assist St. Charles in the
coordination of all applicable federal, state and local authorities and
adjacent municipalities to resolve access, infrastructure and other
issues arising during the course of St. Charles' development of the
Site and operation of the Casino.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF ST. CHARLES
The obligations of St. Charles set forth herein are and shall be
subject to the opening of the Casino for business at the Site and the
receipt by St. Charles of any and all required approvals from all
regulatory authorities having jurisdiction over St. Charles, the
operations of the Casino and the location of the Casino at the Site,
including without limitation, the Commission, the Division and the U.S.
Army Corp of Engineers.
ARTICLE VII
GOVERNING LAW/VENUE
This Agreement shall be governed by the laws of the State of
Louisiana. This Agreement is enforceable in the Fourteenth Judicial
District Court, Parish of Calcasieu, State of Louisiana.
ARTICLE VIII
BENEFIT - SUCCESSORS AND ASSIGNS
This Agreement and the rights and obligations contained herein
shall be binding upon, and inure to the benefit of, the respective
successors and assigns of the parties hereto.
ARTICLE IX
ATTORNEYS' FEES
In the event of a judicial proceeding brought by one party to this
Agreement against the other party to this Agreement for enforcement or
for breach of any provision of this Agreement, the prevailing party in
such judicial proceeding shall be entitled to reimbursement from the
unsuccessful party of all costs and expenses, including reasonable
attorneys' fees incurred in connection with such judicial proceeding.
ARTICLE X
RENEGOTIATION OF MONETARY OBLIGATIONS
Section 9.1. St. Charles and the Parish acknowledge and agree
that the obligations of St. Charles set forth in Section 1.2 hereof are
based upon, and the parties have acted in
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reliance upon, the competitive situation with respect to casino gaming
in Calcasieu Parish and elsewhere, and the current taxes and fees
assessed by the State of Louisiana on riverboat casino gaming. In
recognition that such competitive factors may change subsequent to the
date hereof, and the State of Louisiana may increase fees and taxes
impacting the riverboat casino gaming industry, St. Charles and the
Parish agree that the obligations of St. Charles set forth in Section
1.2 hereof shall be subject to renegotiation by St. Charles and the
Parish in the event of the occurrence of any of the following:
(a) if a riverboat, barge and/or a land-based casino (a
"Competitive Casino") is allowed within a one hundred (100)
mile radius of Calcasieu Parish, excepting only the two (2)
riverboats operated by Players International, Inc. in Lake
Charles, Louisiana, and the land-based casino operated by
Grand Casino, Inc. in Kinder, Louisiana; or
(b) if a Competitive Casino is allowed in the State of
Texas that has a material adverse impact on St. Charles; or
(c) if the State of Louisiana increases, or passes
legislation to increase, fees or taxes impacting the
riverboat casino gaming industry in the State of Louisiana or
laws change that directly or indirectly prohibit St. Charles
from lawfully operating the Casino at the Site.
Section 9.2. In the event of the occurrence of any of the
matters set forth in Section 9.1 hereof, St. Charles and the Parish
agree to renegotiate in good faith the financial obligations of St.
Charles as set forth in Section 1.2 hereof.
Section 9.3. In the event of the occurrence of any of the
matters set forth in Section 9.1 hereof, the Parish, in its sole
discretion, may choose to reduce the Boarding Fee Payments set forth in
Section 1.4 hereof.
ARTICLE XI
APPROVALS
St. Charles and the Parish each represent and warrant to the other
that the execution of this Agreement has been fully authorized by all
necessary action, corporate or otherwise, in order that the terms
hereof constitute their respective legal, valid and binding
obligations.
ARTICLE XII
MODIFICATION AND AMENDMENT
This Agreement shall not be amended or otherwise modified in any
manner except by an instrument in writing executed by both parties
hereto.
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ARTICLE XIII
UNDERSTANDINGS AND AGREEMENTS
This Agreement contains the entire agreement between the parties
with respect to the matters contained herein and supersedes all prior
agreements.
ARTICLE XIV
NOTICES
All notices, demands and requests which may be given or which are
required to be given by any party to the others, shall be in writing
and shall be deemed effective when either: (a) personally delivered to
the intended recipient; (b) sent by certified or registered mail,
return receipt requested, addressed to the intended recipient at the
address specified below; (c) delivered in person to the address set
forth below for the party to which the notice was given; (d) deposited
into the custody of a nationally recognized overnight delivery service
such as Federal Express Corporation, Airborne, Emery or Purolator,
addressed to such party at the address specified below; or (e) sent by
facsimile, telegram or telex, provided that receipt for such facsimile,
telegram or telex is verified by the sender and followed by a notice
sent in accordance with one of the other provisions set forth above.
Notices shall be effective on the date of delivery or receipt or, if
delivery is not accepted, on the earlier of the date that delivery is
refused or three (3) days after the date the notice is mailed. For
purposes of this Section, the addresses of the parties for all notices
are as follows (unless changes by similar notice in writing are given
by the particular person whose address is to be changed):
If to St. Charles, to St. Charles Gaming Company, Inc.,
2415 West Northwest Highway, Suite 103, Dallas, Texas 75220;
Attention: Edward R. McMurphy, President;
With a copy to: T. J. Falgout, III, Stumpf & Falgout,
1400 Post Oak Boulevard, Suite 400, Houston, Texas 77056;
If to the Parish, to the Calcasieu Parish Police Jury,
PO Box 1583, Lake Charles, Louisiana 70602-1583; Attention:
President;
With a copy to: Mark McMurry, Parish Administrator,
Calcasieu Parish Police Jury, PO Box 1583, Lake Charles,
Louisiana 70602-1583.
Any party hereto may designate a different address by notice given to
the other party.
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ARTICLE XV
SEVERABILITY
If any provision of this Agreement is held to be invalid, illegal
or unenforceable, that shall not affect or impair, in any way, the
validity, legality or enforceability of the remainder of this
Agreement.
THUS DONE AND SIGNED in ____________________________, _____________
_______, in the presence of the undersigned competent witnesses, on
this __________ day of June, 1995.
WITNESSES: ST. CHARLES GAMING COMPANY,
INC.
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By:
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Name:
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Title:
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NOTARY PUBLIC
THUS DONE AND SIGNED in Lake Charles, Louisiana, in the presence
of the undersigned competent witnesses, on this ____________ day of June, 1995.
WITNESSES: CALCASIEU PARISH POLICE JURY
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By:
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Ray Campbell, President
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NOTARY PUBLIC