Project Development Agreement

EXHIBIT 10.10


________________________________________________________________


HAMMOND RIVERBOAT GAMING PROJECT
DEVELOPMENT AGREEMENT


BY AND AMONG


CITY OF HAMMOND, INDIANA


CITY OF HAMMOND, DEPARTMENT OF REDEVELOPMENT


EMPRESS CASINO HAMMOND CORPORATION


________________________________________________________________


DATED AS OF JUNE 21, 1996


TABLE OF CONTENTS
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PAGE
---- RECITALS .................................................................. 1


AGREEMENT ................................................................. 3


ARTICLE I DEFINITIONS ........................................... 3


ARTICLE II SUBLEASE .............................................. 16


Section 2.01. Entry Into Sublease .................................. 16
Section 2.02. Terms of Sublease .................................... 16
Section 2.03. Nondisturbance ....................................... 16
Section 2.04. Consideration ........................................ 16


ARTICLE III DEMOLITION ............................................ 17
Section 3.01. Failure to Obtain License ............................ 17
Section 3.02. Termination of License or Non-Operation............... 17
Section 3.03. Demolition Bond....................................... 18
Section 3.04. Developer's Option to Preserve Project Facilities..... 18
Section 3.05. Maintenance of Project Pending Demolition............. 19


ARTICLE IV ACQUISITION OF LAND OR INTERESTS IN LAND............... 20
Section 4.01. GLM Parcels and GLM Condemnation...................... 20
Section 4.02. ILRED Parcels and ILRED Condemnation.................. 20
Section 4.03. CSX Parcel 26 and Parcel 6............................ 20
Section 4.04. Conrail Parcel 49..................................... 20
Section 4.05. EJ&E Parcels.......................................... 20
Section 4.06. NIPSCO Parcels B1 and B2.............................. 21
Section 4.07. NIPSCO Parcels 32 and 35.............................. 21
Section 4.08. NIPSCO Accretion Parcel............................... 22
Section 4.09. NIPSCO Overpass Parcels............................... 22
Section 4.10. NIPSCO Railway Parcel................................. 22
Section 4.11. Withdrawal from Classification........................ 22


ARTICLE V DEVELOPER PAYMENTS TO THE CITY OR FOR THE BENEFIT
OF THE CITY............................................ 24
Section 5.01. Annual Payment........................................ 24
Section 5.02. Accounting for Annual Payment......................... 25
Section 5.03. Parking Payment....................................... 26
Section 5.04. Accounting for Parking Payment........................ 26
Section 5.05. Incubator Program..................................... 27
Section 5.06. Not For Profit Contributions.......................... 27
Section 5.07. Housing Program....................................... 28


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Section 5.08. Security Payment....................................... 29
Section 5.09. Reimbursement of Expenses.............................. 29
Section 5.10. Late Fees.............................................. 29
Section 5.11. Nature of Payments..................................... 29
Section 5.12. Completion of Clipper Commitment....................... 30


ARTICLE VI CONSTRUCTION............................................ 31
Section 6.01. Overpass Facilities.................................... 31
Section 6.02. Change Orders to Overpass Plans and Specifications..... 31
Section 6.03. Completion of Overpass Facilities...................... 31
Section 6.04. Sewer Facilities....................................... 31
Section 6.05. Change Orders to Sewer Plans and Specifications........ 31
Section 6.06. Completion of Sewer Facilities......................... 32
Section 6.07. Parking Garage......................................... 32
Section 6.08. Change Orders to Parking Plans and Specifications...... 32
Section 6.09. Completion of Parking Facilities....................... 33
Section 6.10. Rail Relocation........................................ 33
Section 6.11. Plans and Specifications for Rail Relocation........... 33
Section 6.12. Completion of Rail Relocation.......................... 33
Section 6.13. Guest Facilities....................................... 33
Section 6.14. Change Orders to Guest Plans and Specifications........ 33
Section 6.15. Completion of Guest Facilities......................... 34
Section 6.16. Docking Facilities..................................... 34
Section 6.17. Plans and Specifications for Docking Facilities........ 34
Section 6.18. Completion of Docking Facilities....................... 35
Section 6.19. Hotel Facilities....................................... 35
Section 6.20. Approval for Hotel Facilities.......................... 35
Section 6.21. Completion of Hotel Facilities......................... 35
Section 6.22. Commercial Facilities.................................. 35
Section 6.23. Infrastructure Facilities.............................. 36
Section 6.24. Plans and Specifications for Infrastructure Facilities. 36
Section 6.25. Completion of Infrastructure Utilities................. 36
Section 6.26. Plans and Specifications for Helipad Facilities........ 36
Section 6.27. Completion of Helipad Utilities........................ 37
Section 6.28. Private Rights......................................... 37
Section 6.29. Dedication............................................. 37
Section 6.30. Alterations and Modifications to City Facilities....... 38
Section 6.31. Approval of Site Plan.................................. 38
Section 6.32. Approval of Signage Plan............................... 38
Section 6.33. Lakefront Improvements................................. 39
Section 6.34. Pedestrian Overpass.................................... 39
Section 6.35. Railroad Street........................................ 39
Section 6.36. Perimeter Road......................................... 39


ARTICLE VII PAYMENT FOR DELAYS IN CONSTRUCTION...................... 41


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Section 7.01. Delay Payments....................................... 41
Section 7.02. Nature of Damages.................................... 41
Section 7.03. Limitations on Delay Payments........................ 41


ARTICLE VIII ADDITIONAL COVENANTS OF THE
DEVELOPER CONCERNING CONSTRUCTION..................... 42
Section 8.01. Hazardous Materials; Environmental Matters........... 42
Section 8.02. Project Supervision and Direction.................... 43
Section 8.03. Project Partnership Committee........................ 43
Section 8.04. MBE/WBE.............................................. 43
Section 8.05. Areas Affected by Work............................... 44
Section 8.06. Project Documents.................................... 44
Section 8.07. Project Safety....................................... 44
Section 8.08. Drug Free Workplace.................................. 44
Section 8.09. Parking Demands...................................... 44
Section 8.10. Labor Objectives..................................... 45
Section 8.11. Permits and Compliance with Applicable Laws.......... 46
Section 8.12. Site Maintenance..................................... 46
Section 8.13. Construction Warranties.............................. 46
Section 8.14. Utility Services During Construction................. 46
Section 8.15. Erosion Control...................................... 46
Section 8.16. Access to Work....................................... 46
Section 8.17. Bond and Surety Requirements......................... 47
Section 8.18. Liens................................................ 47
Section 8.19. Insurance............................................ 47


ARTICLE IX REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
Section 9.01. Organization and Existence........................... 51
Section 9.02. Power and Authority.................................. 51
Section 9.03. Due Authorization.................................... 51
Section 9.04. Due Execution........................................ 51
Section 9.05. No Violation......................................... 51
Section 9.06. No Consents Required................................. 51
Section 9.07. Financial Information................................ 51
Section 9.08. No Material Non-Arm's-Length Transactions............ 52
Section 9.09. No Litigation........................................ 52
Section 9.10. All Material Information Supplied.................... 52
Section 9.11. Taxes................................................ 52
Section 9.12. Financial Capacity To Complete Project............... 53
Section 9.13. Survival of Representations and Warranties........... 53


ARTICLE X HAMMOND PORT AUTHORITY PROVISIONS..................... 54
Section 10.01. Entry into Port Agreement............................ 54
Section 10.02. Refinancing of Bonds................................. 54
Section 10.03. Passenger Payment.................................... 54


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Section 10.04. Slip Fees............................................. 54
Section 10.05. Marina Payments....................................... 54


ARTICLE XI REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE CITY.............................. 56
Section 11.01. Power and Authority................................... 56
Section 11.02. Due Authorization..................................... 56
Section 11.03. Due Execution......................................... 56
Section 11.04. No Violation.......................................... 56
Section 11.05. Operation of Project.................................. 57
Section 11.06. No Consents Required.................................. 57
Section 11.07. No Litigation......................................... 57
Section 11.08. Support of Developer.................................. 57
Section 11.09. Legal Conditions Precedent to City and Redevelopment
Commission Obligations................................ 58
Section 11.10. Survival of Representations and Warranties............ 58
Section 11.11. Eminent Domain........................................ 59


ARTICLE XII AFFIRMATIVE COVENANTS OF THE DEVELOPER................. 60
Section 12.01. Conduct of Business................................... 60
Section 12.02. Compliance with Applicable Laws, Sublease, and
Contracts............................................. 60
Section 12.03. Payment of Taxes and Claims........................... 60
Section 12.04. Site Visit............................................ 60
Section 12.05. Notice of Developments Affecting the Representations
and Warranties........................................ 60
Section 12.06. Financial and Other Information....................... 61
Section 12.07. Certificate of Suitability............................ 61
Section 12.08. Maintenance........................................... 61
Section 12.09. Vendors and Suppliers................................. 61
Section 12.10 Marketing............................................. 62
Section 12.11. Gamblers Addiction Program............................ 62
Section 12.12. Employment and Wages Following Construction........... 62
Section 12.13. Boat Safety Provisions and Emergency Preparedness..... 63
Section 12.14. Title Insurance and Surveys........................... 63
Section 12.15. Operation............................................. 63
Section 12.16. Maintenance........................................... 63
Section 12.17. Non-Competition....................................... 63


ARTICLE XII NEGATIVE COVENANTS OF THE DEVELOPER.................... 65
Section 13.01 Limit on Developer Assignment or Reorganization....... 65
Section 13.02. Prohibited Activities................................. 65
Section 13.03. Substitution of Boat.................................. 65


ARTICLE XIV AFFIRMATIVE COVENANTS OF THE CITY...................... 66
Section 14.01. Further Support....................................... 66


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Section 14.02. Notice of Developments Affecting
Representations and Warranties...................... 66
Section 14.03. Additional Burden................................... 66
Section 14.04. Empress Drive and Address........................... 66
Section 14.05. Waterworks Parcel................................... 66
Section 14.06. City Services....................................... 66
Section 14.07. Litigation Cooperation.............................. 67


ARTICLE XV CONDITIONS PRECEDENT.................................. 68
Section 15.01. Conditions Precedent................................ 68
Section 15.02. No Other Conditions Precedent....................... 68


ARTICLE XVI DEFAULT AND REMEDIES.................................. 69
Section 16.01. Events of Default................................... 69
Section 16.02. Extensions Upon Developer Default................... 69
Section 16.03. City Remedies....................................... 70
Section 16.04. Certain Events of Default Specified................. 70
Section 16.05. Preservation of Agreement Upon Certain
Developer Defaults.................................. 71
Section 16.06. City Default........................................ 71
Section 16.07. Extensions Upon City Default........................ 71
Section 16.08. Developer Remedies.................................. 72
Section 16.09. Preservation of Agreement Upon Certain
City Defaults....................................... 72


ARTICLE XVII TERM OF AGREEMENT AND TERMINATION..................... 73


ARTICLE XVIII MISCELLANEOUS......................................... 74
Section 18.01. No Agency, Partnership or Joint Venture............. 74
Section 18.02. Negotiated Document................................. 74
Section 18.03. Compliance with Laws................................ 74
Section 18.04. Force Majeure Events................................ 74
Section 18.05. Exhibits............................................ 74
Section 18.06. Captions............................................ 75
Section 18.07. Number and Gender................................... 75
Section 18.08. Notices............................................. 75
Section 18.09. Prior Agreements; Entire Agreement.................. 76
Section 18.10. Survival............................................ 76
Section 18.11. Counterparts........................................ 76
Section 18.12. Binding Effect...................................... 76
Section 18.13. Time of the Essence................................. 76
Section 18.14. Costs of Proceedings................................ 76
Section 18.15. Severability........................................ 77
Section 18.16. Non-Waiver.......................................... 77
Section 18.17. Governing Law....................................... 77
Section 18.18. No Third-Party Beneficiaries........................ 77
Section 18.19. Jurisdiction and Consent to Suit.................... 77


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Section 18.20. Confidentiality....................................... 78
Section 18.21. Standards for Consent................................. 78


ARTICLE XIX DISPUTE RESOLUTION AND TERMINATION...................... 79
Section 19.01. Alternative Dispute Resolution........................ 79
Section 19.02. Arbitration........................................... 79
Section 19.03. Actions During Pendency of Dispute.................... 80


ARTICLE XX DEVELOPER'S INDEMNIFICATION OBLIGATIONS................. 82
Section 20.01. Environmental indemnification......................... 82
Section 20.02. Construction Claims Indemnification................... 82
Section 20.03. Classification Withdrawal Indemnification............. 83
Section 20.04. Performance of Work Indemnification................... 83
Section 20.05. Erosion Control Indemnification....................... 83
Section 20.06. General Indemnification............................... 84
Section 20.07. Indemnification; Control and Counsel.................. 84
Section 20.08. Limitations on the Developer's Indeminification
Obligations........................................... 85


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HAMMOND RIVERBOAT GAMING PROJECT
DEVELOPMENT AGREEMENT


______________________________________


This HAMMOND RIVERBOAT GAMING PROJECT DEVELOPMENT AGREEMENT, made as of this 21st day of June, 1996 (the "Agreement), by and among the City of Hammond, Indiana, a municipal corporation (the "City"), the City of Hammond, Department of Redevelopment (the "Redevelopment Commission"), and Empress Casino Hammond Corporation (the "Developer"), WITNESSES THAT:


RECITALS
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A. The State of Indiana has authorized various gaming activities to take place in and on duly licensed riverboats operating on Lake Michigan from Hammond, Indiana, by adoption of the Riverboat Gambling Act, Indiana Code (S) 4- 33 et seq. (such Act, as more particularly defined in Article I below, is hereinafter referred to as the "Act");


B. On or about August 26, 1993, the City issued a Request for Qualifications seeking proposals from experienced and qualified developers for the development of a riverboat gaming facility and related improvements to be located on Lake Michigan and in Hammond, Indiana (the "'Request");


C. The Developer submitted a Response to a Request for Qualifications dated September 8, 1993 (the "Response"), responding to the Request and was thereafter interviewed through a competitive and comparative process by a specialty constituted committee composed of citizens of Hammond, Indiana, and the Mayor of the City (the "Mayor"), and representatives of the Mayor,


D. The City and the Developer entered into a letter of intent dated September 20, 1993 (the "Letter Of Intent") concerning the proposed development of a riverboat gaming facility and related improvements (such riverboat gaming facility and related improvements, as more particularly defined in Article I below, is hereinafter referred to as the "Project") to be located on Lake Michigan and in Hammond, Indiana, and the Letter of Intent supplemented the Response and summarized certain major features of the Project and the proposed partnership for the development and sharing in the benefits of the Project;


E. The Developer submitted an application for an owner's license (such license, particularly defined in Article I below, is hereinafter referred to as the "License") to own a riverboat that operates on Lake Michigan from Hammond, Indiana;


F. The Developer has been awarded a Certificate of Suitability dated as of November 17, 1995 (the "Certificate") by the Indiana Gaming Commission that will result in the issuance of a License to the Developer upon the satisfaction and completion of certain terms and conditions set forth in the Certificate;


G. The Letter of Intent contemplated that, in the event of and following the award of the Certificate by the Indiana Gaming Commission, the City and the Developer would enter into an agreement setting forth in a definitive way their respective rights and obligations with respect to the development, ownership and operation of the Project;


H. In accordance with Indiana Code (S) 36-7-14, the City has an established Department of Redevelopment that is controlled by a board of five members known as the Hammond Redevelopment Commission (the "Redevelopment Commission");


I. The Redevelopment Commission has responsibility to investigate, study and survey areas and promote the use of land in the manner that best serves Hammond, Indiana, and has responsibility to cooperate with departments and agencies of the City that best serves the redevelopment of Hammond, Indiana;


J. The Redevelopment Commission currently controls (or will hereafter control) and has the right (or will hereafter acquire the right) to possess and to make certain dispositions by lease of certain real estate located on the waterfront of Lake Michigan in Hammond, Indiana, upon which the City and the Developer desire to construct a portion of the Project;


K. The City has determined that it is in the best interests of the citizens of Hammond, Indiana, for the Redevelopment Commission to be a party to this Agreement; and


L. The City, the Redevelopment Commission and the Developer desire to enter into this Agreement to provide for the development, ownership and operation of the Project as contemplated by the Letter of Intent.


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AGREEMENT
---------


NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants of the parties herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City, the Redevelopment Commission and the Developer agree as follows:


ARTICLE I
---------


DEFINITIONS
-----------


The following terms when used in this Agreement with initial capital letters shall have the following meanings:


"Act" means the Riverboat Gambling Act as established by Indiana Code (S) 4-33-1-1, et seq., and all amendments thereto and all rules and orders
-- --- promulgated thereunder.


"Adjusted Gross Receipts" has the same meaning as in Indiana Code (S) 4-33- 2-2, except as may be modified for the purposes of calculating the Annual Payment as set forth in Section 5.01 hereto.


"Affiliate of the Developer" means (a) any or all of the members, partners and shareholders of the Developer, and (b) any limited liability company, partnership, corporation or other entity in which the Developer, a wholly-owned or partially-owned but controlled subsidiary of the Developer, any of the members, partners or shareholders of the Developer, members of the families of the Developer or any of the members, partners or shareholders of the Developer, or a trustee for the benefit of such family members, or some, any or all of them, directly or indirectly, own an interest, either singly or in the aggregate, sufficient to effectively control such entity.


"Agreement" means this written Hammond Riverboat Gaming Project Development Agreement.


"Applicable Laws" means all laws, rules, regulations, ordinances, codes, administrative actions and/or orders of any court or governmental agency or unit, whether federal, state or local, property exercising or having jurisdiction with respect to or over the subject matter in question.


"Application" means the application for the License submitted by the Developer to the Gaming Commission and all amendments, supplements, modifications, exhibits and schedules thereto.


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"Boat" means the vessel named and known as Empress III, a riverboat gaming
----------- casino owned or leased and to be operated by the Developer on Lake Michigan from Hammond, Indiana, that may be further modified, improved, equipped and/or replaced by the Developer from time to time as herein provided and that is more particularly described and/or depicted on Exhibit A attached hereto and incorporated herein by this reference.


"Business Day" means each Monday, Tuesday, Wednesday, Thursday, and Friday which is not a day on which banking institutions in Hammond, Indiana, are authorized or obligated by law or executive order to close.


"Cash Bond" means (a) a bond provided to the City in which a surety acceptable to the City guarantees to the City upon terms and conditions acceptable to the City that certain work will be completed in accordance with this Agreement, (b) a letter of credit issued by a financial institution acceptable to the City naming the City as the beneficiary and entitling the City to draw upon the letter of credit upon terms and conditions acceptable to the City in the event that the Developer fails to complete certain work in accordance with this Agreement, or (c) a cash deposit that is placed in escrow with a financial institution acceptable to the City pursuant to the terms and conditions of an escrow agreement that are acceptable to the City and that requires the escrow agent to disburse the cash deposit to the City in the event that the Developer fails to complete certain work in accordance with this Agreement.


"Certificate" means the certificate set forth in Recital F. above, as amended or restated from time to time.


"Certificate Date" means November 17, 1995, the date as of which the Certificate was issued to the Developer by the Gaming Commission.


"City" means the municipal corporation of Hammond, Indiana; provided, that it is expressly understood and agreed by the Developer that except as otherwise expressly provided in this Agreement, any obligations of the City under this Agreement may be fulfilled by the duly authorized and appropriate (as the context so requires) subdivision, unit, agency, commission, department, authority, instrumentality, Common Council, Mayor, other officer, executive or representative, or any combination thereof, of the municipal ...