EX-99.1
2
ex99-1contract.htm
MASTER VIDEO LOTTERY TERMINAL CONTRACT
Exhibit 99(1)
MASTER
VIDEO LOTTERY TERMINAL CONTRACT
by
and between the
Division
of Lotteries of the
Rhode Island Department of
Administration
and
UTGR,
Inc.
Dated
July 18, 2005
#636429
v16
TABLE
OF CONTENTS
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Section
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Page
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1.
|
Definitions
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2
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2.
|
Effective
Date and Term
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7
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| | |
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3.
|
Allocation
of Video Lottery Net Terminal Income
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8
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4.
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Investment
and Employment within the State
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9
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5.
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Advisory
Committee
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13
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| | |
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6.
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Slippage
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14
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| | |
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7.
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State
Access/Egress Support
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16
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| | |
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8.
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Project
Labor Agreement
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17
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| | |
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9.
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Limitation
on Use of Lincoln Park
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17
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10.
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Use
of Lottery System Infrastructure; Other State Services
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17
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11.
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Breach
by the Division; Termination
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18
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12.
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Breach
by UTGR; Termination
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19
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13.
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Effect
of Termination
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21
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| | |
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14.
|
General
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21
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#636429
v16
MASTER
VIDEO LOTTERY TERMINAL CONTRACT
This
Master Video Lottery Terminal Contract (this “Agreement”) is
made as of July 18, 2005, by and between the Division of Lotteries of the
Rhode
Island Department of Administration (the “Division”), an
agency of the State of
Rhode Island with its principal address at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000, and UTGR, Inc. (“UTGR”), a
Delaware corporation with its principal office located at 0000 Xxxxxxxxxxxx
Xxxx, Xxxxxxx, Xxxxx Xxxxxx 00000.
WITNESSETH:
WHEREAS,
the Division is established to conduct a lottery in the State of
Rhode Island
for the benefit of the State of
Rhode Island and its residents;
WHEREAS,
the Division’s predecessor issued a video lottery terminal license to Lincoln
Park, Inc. (“LPI”) (f/k/a Burrilville Racing Association, Inc.), a
Rhode Island
corporation d/b/a Lincoln Park, a gaming and entertainment facility located at
Lincoln Park, 1600 Louisquisset Pike, Lincoln,
Rhode Island;
WHEREAS,
LPI has been indicted by the United States of America acting by and through the
United States Attorney for the District of
Rhode Island for alleged violations
under the Xxxxx Act of 1946, and if convicted, could be subject to fines
aggregating up to US$3,000,000;
WHEREAS,
LPI is one of various, indirect wholly-owned United States subsidiaries of
Wembley plc, a track-based gaming company headquartered in London and operating
in the United Kingdom and the United States;
WHEREAS,
BLB Investors, L.L.C., a Delaware limited liability company, has proposed to
acquire, indirectly, through a wholly-owned affiliate, all of the U.S.
subsidiaries of Wembley plc, both direct and indirect, including
UTGR;
WHEREAS,
due to the indictment against LPI, a condition of the acquisition by BLB
Investors, L.L.C. of the U.S subsidiaries of Wembley plc is the simultaneous
reorganization of Wembley plc’s interests in Lincoln Park, principally the
separation from Wembley plc’s U.S. subsidiaries of any potential liability for,
and associated costs of, litigation in the LPI indictment matter, as well as
amounts held in escrow pursuant thereto and the transfer of Lincoln Park and
related licenses to UTGR;
WHEREAS,
the reorganization contemplates, among other things, the merger of LPI with and
into LPRI LLC, a
Rhode Island limited liability company, in a transaction
intended to qualify as a tax-free liquidation of LPI with and into its sole
shareholder, UTGR, as well as the subsequent distribution by LPRI LLC of all of
its business, assets and liabilities to UTGR, with the exception of the
potential liability for, and associated costs of, litigation in the LPI
indictment matter, which liability and costs shall be retained by LPRI LLC;
WHEREAS,
following the aforesaid reorganization and indirect acquisition by BLB
Investors, L.L.C. of the U.S. subsidiaries of Wembley plc, BLB Investors, L.L.C.
shall have no direct or indirect interest in LPRI, LLC;
WHEREAS,
a further condition of the acquisition by BLB Investors, L.L.C. of the U.S.
subsidiaries of Wembley plc is the entry by UTGR and the relevant
Rhode Island
legislative and regulatory authorities of a long-term revenue-sharing contract
in relation to the business conducted at Lincoln Park, including the transfer to
UTGR of the video lottery terminal license previously issued to LPI;
and
WHEREAS,
after discussions with BLB Investors, L.L.C., the Division has reached this
Agreement with UTGR in consideration of the benefits to be realized by the
Division and the State of Rhode Island pursuant to the aforementioned
acquisition and under this Agreement, among them, the construction, development
and investment of not less than $125,000,000 in respect of Lincoln Park, the
expected increase in lottery revenues as a result thereof, and the ensuing
increase in the funds available to the State of Rhode Island and its residents;
and
WHEREAS, this
Agreement has been duly authorized pursuant to the laws of the State of Rhode
Island as set forth in the Act Enabling the Division of Lotteries’ Entry into A
Video Lottery Terminal Contract with UTGR, Inc., Rhode Island General Laws,
[Senate 970 Substitute B and House 6285 Substitute A as amended as passed by the
General Assembly and signed into law by Governor on July 15, 2005] (the
“Act”)
NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
in consideration of the mutual promises, covenants, obligations and conditions
herein contained, the parties hereby agree as follows:
1. Definitions.
The
capitalized terms set forth below have the corresponding meanings when used in
this Agreement. Other capitalized terms are defined in this Agreement when they
are first used.
“Act” has the
meaning set forth in the Preamble.
“Acquisition” means
the acquisition by BLB or a BLB Affiliate of the Wembley US Group.
“Additional
Authorized VLT’s” has the
meaning set forth in Section 3.1 hereof.
“Adjusted
Base Year Net Terminal Income” means,
for the first Subsequent Year, the product of (a) the Net Terminal Income at
Lincoln Park for the twenty-four (24) calendar months ending on the last day of
the calendar month preceding the opening of a new Gaming Facility in Rhode
Island, divided by two, and (b) one (1) plus the CPI Adjustment. For each
Subsequent Year after the first Subsequent Year, the Adjusted Base Year Net
Terminal Income shall be the product of (x) the Adjusted Base Year Net Terminal
Income for the previous Subsequent Year and (y) one (1) plus the CPI
Adjustment.
“Advisory
Committee” has the
meaning set forth in Section 5, below.
“Annual
Growth Rate In Net Terminal Income” means
the percentage in increase or decrease in Net Terminal Income for any year
during the Term as compared to the immediately preceding year during the Term.
“Base
Year” means
the twelve (12) consecutive calendar months preceding the calendar month in
which a new Gaming Facility opens in Rhode Island.
“Benchmark
Excess” means,
for any Subsequent Year, an amount equal to the positive difference, if any,
between the (i) sum of (x) the product of the Adjusted Base Year Net Terminal
Income for such year and the Blended Rate and (y) the Benchmark Excess for the
immediately Preceding Subsequent Year, and (ii) the actual Net Terminal Income
received by UTGR for the Subsequent Year for which the calculation is being
made. .
“BLB” means
BLB Investors, L.L.C., a Delaware limited liability company.
“BLB
Affiliate” means
any entity controlling, controlled by or under common control with
BLB.
“Blended
Rate” for
UTGR means [(number of Existing Authorized Terminals in operation for the
calculation period/total number of video lottery terminals in operation for the
calculation period) x .2885]; plus [(number of Additional Authorized Terminals
in operation for the calculation period /total number of video lottery terminals
in operation for the calculation period) x .2600].
“Blended
Rate Adjustment Date” means
the first date of any period with respect to which there is an adjustment in the
Blended Rate required or permitted under this Agreement.
“Business” means
the ownership, operation and development of Lincoln Park.
“Business
Day” means a
day on which Rhode Island regulatory authorities are open for regular business,
provided such day is not a Saturday or Sunday.
“CPI
Adjustment” means
the annual change in the December Consumer Price Index-All Urban Consumers
(CPI-U) using the same base period for the immediately preceding year published
by the Bureau of Labor Statistics of the United States Department of Labor or
its successor agency (or if such index is no longer published, an index agreed
upon between UTGR and the Division) from the index for the December immediately
preceding the opening of a new Gaming Facility in Rhode Island, not to exceed a
three (3) percent change in any year.
“DBR” means
the Rhode Island Department of Business Regulation.
“Development
Phase” has the
meaning set forth in Section 4.3 hereof
“Division” - has
the meaning set forth in the Preamble.
“Division
Breach” has the
meaning set forth in Section 11, below.
“Effective
Date” has the
meaning set forth in Section 2.1, below.
“Existing
Authorized VLT’s” has the
meaning set forth in Section 3.1 hereof
“Extension
Date” has the
meaning set forth in Section 2.2, below.
“Force
Majeure Event” has the
meaning set forth in Section 14.1, below.
“GAAP” has the
meaning set forth in Section 4.1 hereof.
“Gambling
Game” means
any game having the attributes of chance, consideration and prize including
without limitation any banking or percentage game located within a Gambling
Facility played with cards, dice, dominoes, or any electronic, electrical or
mechanical device or machine for money, property, or any representation of
value.
“Gaming
Facility” means
any facility or venue, offering one or more Gambling Games, that is physically
located, in whole or in part, in the State, but excluding: (1) bingo, (2)
facilities or venues that only on an occasional basis host such games and then
only for the benefit of religious, charitable, educational or fraternal
organizations, volunteer fire and rescue companies or other similar non-profit
organizations, and (3) facilities or venues operated pursuant to IGRA, where
such operation is authorized without State Consent and does not operate any
Gambling Games other than Gambling Games specifically authorized under Rhode
Island law as of the effective date of the Act unless the right of such Gambling
Facility to operate Gambling Games other than those specifically authorized by
Rhode Island law as of the effective date of the Act is not derived from an act
of the Rhode Island General Assembly, amendment to the Rhode Island
Constitution, or a voter referendum pursuant to the Rhode Island Constitution
permitting the operations of such other Gambling Games elsewhere in the State
other than Lincoln Park or Newport Grand.
“IGRA” means
the Indian Gaming Regulatory Act, 25 U.S.C. Sections 2701-2721, 18 U.S.C.
Sections 1166-1168, as may be hereafter amended from time to time.
“Institutional
Lender” means
any bank, savings and loan association, insurance company, investment company
registered under the Investment Company of 1940, or any other organization which
is a “qualified institutional buyer” within the meaning Section 7(a) of Rule
144A of the Rules and Regulations of the United States Securities and Exchange
Commission.
“Investment
Requirement” has the
meaning set forth in Section 4.1, below.
“Investment
Requirement Assets” has the
meaning set forth in Section 4.1, below.
“Licensed
Video Lottery Retailer” has the
meaning given the term in Rhode Island General Laws §42-61.2-1(2) as may be
hereafter amended from time to time.
“Lincoln
Park” means the
Lincoln Park Gaming and Entertainment Facility located at 0000 Xxxxxxxxxxxx
Xxxx, Xxxxxxx, Xxxxx Xxxxxx.
“LPI” has the
meaning set forth in the Preamble.
“Lincoln
Park Indictment” means
Indictment No. CR-03-081ML filed by the United States of America acting by and
through the United States Attorney for the District of Rhode Island, for alleged
violations under the Xxxxx Act of 1946.
“LPRI” shall
mean LPRI, LLC, a Rhode Island limited liability company.
“Net
Terminal Income” means,
in relation to a Video Lottery Terminal, has the same meaning given to the term
as is in Section 42-61.2-1(3) of the General Laws of Rhode Island as in
effect on the July 15,2005
“Pari-Mutuel
Licensee” has the
meaning given the term in Rhode Island General Laws §42-61.2-1(4) as may be
hereafter amended from time to time.
“Phase
Milestone Completion Date” has the
meaning set forth in Section 4.3 hereof.
“Project
Labor Agreement” has the
meaning set forth in Section 8, below.
“Reorganization” means
the proposed restructuring of Wembley’s interests in LPI principally the
separation from the Wembley US Group of any potential liability for, and
associated costs of, litigation in the LPI Indictment, as well as amounts held
in escrow pursuant thereto, which reorganization contemplates, among other
things, the merger of LPI with and into LPRI in a transaction intended to
qualify as a tax-free liquidation of LPI with and into its sole shareholder,
UTGR, as well as the subsequent distribution by LPRI of all of its business,
assets and liabilities to UTGR, with the exception of the potential liability
for, and associated costs of, litigation in the LPI Indictment, which liability
and costs shall be retained by LPRI.
“Satisfaction
Date” has the
meaning set forth in Section 2.2, below.
“Slippage
Protection” means
for any Subsequent Year (other than the first Subsequent Year occurring after
the Base Year), whenever the Net Terminal Income is less than the Adjusted Base
Year Net Terminal Income, the Blended Rate shall be increased to that rate that
would have eliminated the resulting adverse impact from that difference upon
UTGR; provided, however, that for any Subsequent Year (including the first
Subsequent Year) in which an amount equal to twice the first six (6) months’ Net
Terminal Income for such Subsequent Year shall not exceed ninety percent (90%)
of the Adjusted Base Year Net Terminal Income for such Subsequent Year, the
aforesaid increase in the Blended Rate shall occur beginning in the seventh
(7th) month
of such Subsequent Year.
“State” means
the State of Rhode Island.
“State
Consent” means
the failure by the State to exhaust all of its administrative and judicial
remedies to oppose the taking or conversion of land in Rhode Island into trust
under 25 U.S.C. Section 465 where such taking or conversion is
for the purpose of gaming under IGRA.
“Subsequent
Year” means
each consecutive twelve (12) month period ending on the last day of the calendar
month preceding an anniversary of the opening of a new Gaming
Facility.
“Term” means
the Initial Term set forth in Section 2.4 and any Extension Term set forth in
Section 2.5, below.
“UTGR” means
UTGR, Inc., a Delaware corporation and member of the Wembley US Group, and, upon
the Effective Date of the Acquisition, a direct or indirect wholly-owned
subsidiary of BLB, and including any UTGR Business Affiliate. References herein
to “UTGR” shall include its permitted successors and assigns under this
Agreement.
“UTGR
Breach” has the
meaning set forth in Section 12.1, below.
“UTGR
Business Affiliate” means
any corporation, trust, partnership, joint venture or any other form of business
entity that controls, is controlled by or is under common control with,
UTGR.
“Video
Lottery Games” has the
meaning given the term in Rhode Island General Laws §42-61.2-1(6) and as
operated by the Division on the date hereof.
“Video
Lottery Terminal” or
“VLT” has the meaning given the term “Video Lottery Terminal” in Rhode Island
General Laws §42-61.2-1(7) as in effect on the date the Act became
law.
“Wembley” means
Wembley plc, a track-based gaming company headquartered in London and operating
in the United Kingdom and the United States.
“Wembley
US Group” means
the U.S. subsidiaries of Wembley plc in existence on the Effective
Date.
2. Effective
Date and Term.
2.1 Subject
to Section 2.2 and 2.3 hereof, this Agreement shall not be effective until the
Business Day on or by which all of the following conditions are satisfied (the
“Effective
Date”):
A. the
closing of the Acquisition, including without limitation, the execution of
definitive transaction documents by and between BLB, Wembley, and any of their
respective affiliates, obtaining the consent and approval thereof by the
appropriate Rhode Island regulatory authorities, and the Acquisition being
wholly unconditional under the laws of the United States;
B. this
Agreement has been signed by the Director or Acting Director of the
Division;
C. the
completed transfer to UTGR by LPI of the Video Lottery Terminal License issued
to LPI by the Division, including the approval by the Division of UTGR as a
Licensed Video Lottery Retailer as set forth in the Act;
D. the
completed transfer to UTGR by LPI of the pari-mutuel license issued to LPI by
the DBR, including the approval by the DBR of UTGR as a Pari-Mutuel Licensee;
and
E. the
completion of the Reorganization.
2.2 Notwithstanding
the provisions of Section 2.1, if any of the conditions in Section 2.1.A through
E has not been satisfied by July 22, 2005 (the “Satisfaction
Date”), the
parties shall extend the date of fulfillment of the conditions set forth in
Section 2.1 until July 31, 2005 (the “Extension
Date”), and
the Business Day on or by which all of the foregoing conditions are satisfied,
if on or prior to the Extension Date, shall be the “Effective
Date”.
2.3 If any of
the conditions set forth in Section 2.1 is not fulfilled by the Satisfaction
Date (or the Extension Date, as applicable), this Agreement shall not come into
effect. Neither party shall have any claim against the other as a result of the
non-fulfillment of any of the conditions set forth in Section 2.1.
2.4 The
Initial Term of the Agreement shall be from the Effective Date through and
including the fifth (5th)
anniversary of the Effective Date.
2.5 UTGR
shall have the right and option to extend the term of this Agreement for two
successive five year periods (the “First Extension Term” and the “Second
Extension Term” respectively) by giving notice to the Division at least ninety
(90) days prior to the expiration of the Initial Term or the First Extension
Term as applicable; provided, however, that the following conditions are met at
the time of the exercise of the option:
A. UTGR shall
not be in default of any material term or condition of this Agreement that has
not been cured within the applicable grace periods; and
B. UTGR
shall certify to the Division that (i) there are 1,300 full-time equivalent
employees at Lincoln Park on the date of the exercise and (ii) for the one-year
period preceding the date the option is exercised, there had been 1,300
full-time equivalent employees on average, as confirmed by the Rhode Island
Department of Labor and Training.
For
purposes of this Section 2.5, the term “full-time equivalent employee” means any
employee who (i) works a minimum of 30 hours per week, or two or more part-time
employees whose combined weekly hours equal or exceed 30 hours per week, and
(ii) earn no less than 150% of the hourly minimum wage prescribed by Rhode
Island law. In determining the number of employees, there shall be included all
employees employed by UTGR and employees at Lincoln Park employed by any lessee,
concessionaire or other third parties operating at Lincoln Park but excluding
any state employees.
3. Allocation
of Video Lottery Net Terminal Income
3.1 As a
Licensed Video Lottery Retailer, UTGR is hereby granted a license during the
Term for 4,752 Video Lottery Terminals at Lincoln Park, consisting of 3,002
existing authorized Video Lottery Terminals, and replacements thereof from time
to time (the “Existing
Authorized VLTs”) and
1,750 additional Video Lottery Terminals, and replacements thereof from time to
time, as are hereby (and pursuant to the enabling legislation for this
Agreement) authorized (the “Additional
Authorized VLTs”).
3.2 With
respect to the Existing Authorized VLTs, 28.85% of the Net Terminal Income
attributable to the Existing Authorized VLTs shall be paid to UTGR.
3.3 With
respect to the Additional Authorized VLTs, 26% of the Net Terminal Income
attributable to the Additional Authorized VLTs shall be paid to
UTGR.
3.4 For
purposes of accounting and administration of the allocation set forth in
Sections 3.2 and 3.3 above, total Net Terminal Income from Lincoln Park will not
be segregated between the Existing Authorized VLTs and the Additional Authorized
VLTs, as each Existing Authorized VLT and Additional Authorized VLT will be
presumed to generate its pro rata share (based on the total number of Video
Lottery Terminals in operation at Lincoln Park from time to time) of Lincoln
Park’s total Net Terminal Income. Thus, by way of illustration only, without
limitation on the foregoing, at such time as 4,000 Video Lottery Terminals are
in operation, UTGR’s share of the total Net Terminal Income from the entire
Lincoln Park facility would be calculated as follows:
(Total
Net Terminal Income) X [(3,002/4,000) X 28.85%) + (Total Net Terminal Income) X
( 998/4,000) X 26.00%] = total Net Terminal Income due to UTGR.
3.5 Net
Terminal Income from Lincoln Park shall be paid to the Division daily and UTGR’s
share thereof shall be calculated on a daily basis. UTGR’s compensation
hereunder shall be due and payable by the Division in a manner consistent with
the existing practice including, without limitation, the option for UTGR to post
a bond in order to receive more frequent payments.
4. Investment
and Employment within the State
4.1 UTGR
(and/or one or more UTGR Business Affiliates) will invest in the aggregate,
within three (3) years next following the Effective Date (but subject to
extension as set forth in Section 4.2 hereof), at least $125,000,000 of total
project costs, including all “hard costs” and allowable “soft costs”, in or
related to improvements, renovations and additions to Lincoln Park and to
appurtenant real and personal property to Lincoln Park (the “Investment
Requirement”), in
connection with (i) additions, renovations, and/or improvements to Lincoln Park
and to appurtenant real or personal property to Lincoln Park, including, without
limitation, improvements designed and constructed to provide access to Lincoln
Park, (ii) performing UTGR’s obligations under this Agreement, and (iii)
otherwise in connection with UTGR’s business operations in Rhode Island
(“Investment
Requirement Assets”). For
the purposes of this section, “hard costs” means all costs that in accordance
with Generally Accepted Accounting Principles (“GAAP”) are appropriately
chargeable to the capital accounts of UTGR or would be so chargeable either with
an election by UTGR or but for the election of UTGR to expense the amount of the
item, and “soft costs” shall mean all other costs appropriately chargeable to
the Investment Requirement which are not hard costs, in accordance with GAAP. In
determining whether the investment requirement has been satisfied, soft costs in
excess of ten million dollars ($10,000,000) shall be excluded.
4.2 The
Division may terminate this Agreement if UTGR, and UTGR Business Affiliates,
collectively, fail to fulfill the aggregate Investment Requirement pursuant to
Section 4.1 hereof unless such failure is attributable to (i) the failure to
receive the necessary local approvals in connection with the improvements,
construction and other activities enumerated in Section 4.1, notwithstanding the
use of UTGR’s commercially reasonable efforts to obtain such approval, or (ii)
the occurrence of one or more Force Majeure Events beyond the control of UTGR
and UTGR Business Affiliates, or (iii) delays attendant to any litigation,
including without limitation the LPI Indictment and any litigation brought by
any third party (other than UTGR except where UTGR is contesting the denial of
any permits required to be obtained in order to construct the improvements)
contesting in any way the construction of the improvements or having the effect
of delaying the expenditure of the Investment Requirement and which litigation
is ultimately resolved in a manner allowing the expenditure of the Investment
Requirement to proceed. The aforesaid three year period for satisfaction of the
Investment Requirement (and the Phases I, II and III Milestone Completion Dates,
as applicable) shall be extended by the number of days delay occurring as a
result of any one or more of the events described in clauses (i), (ii) or (iii)
of the preceding sentence.
Section
4.3. Development
Milestones. UTGR
hereby undertakes to make the Investment Requirement and construct and place in
service the Investment Requirement Assets in the following development phases
(the “Development Phases”) within the completion dates (each a “Phase Milestone
Completion Date”) subject to any Force Majeure or other event of a nature
described in Section 4.2 above operating to cause a delay in such Phase
Milestone Completion Date. The development and construction within each
Development Phase planned by UTGR is as follows:
A. Phase
I. Phase I
as described in Exhibit 4.3(A) consists of the removal of the existing porte
cochere on the western side and the construction of a new porte cochere, the
relocation of the greyhound dog betting and related facilities to the grandstand
area, construction of a new approximately 14,000 square foot facility to service
back office and back of the house operations, renovation of one-half of the
second floor for additional gambling such that at the end of the Phase I
construction, the VLT capacity shall be 3,500 units. While the Phase I Milestone
Completion Date is targeted by UTGR to occur at the expiration of six (6) months
following the Effective Date, such Phase I Milestone Completion Date shall in
any event occur by the first anniversary of the Effective Date, subject,
however, to extension as set forth in Section 4.2 or in this Section 4.3 above
or in Section 4.3D below.
B. Phase
II. Phase
II as described in Exhibit 4.3(B) shall consist of the elimination of the
existing entrance on the northerly side of the building, the construction of two
new structures, one consisting of approximately 135,000 square feet and another
consisting of approximately 40,000 square feet which will permit the operation
of 4,750 VLTs and supporting amenities. It will additionally contain a buffet
and two specialty restaurants, and an all purpose space of approximately 29,000
square feet. While the Phase II Milestone Completion Date is targeted by UTGR to
occur by January, 2007, such Phase II Milestone Completion Date shall in any
event occur by the second anniversary of the Effective Date, subject, however,
to extension as set forth in Section 4.2 or in this Section 4.3 above or in
Section 4.3D below.
C. Phase
III. Phase
III as described in Exhibit 4.3(C) will consist of a renovation of the first
floor and the back of the house of operations, completion of the build out of
certain areas adjacent to the existing dog racing grandstand, conversion of most
of the third floor to back of the house operations and a reconfiguration of
substantially all of the Video Lottery Terminal locations on the first floor.
While the Phase III Milestone Completion Date is targeted by UTGR to occur by
thirty-four (34) months following the Effective Date, such Phase III Milestone
Completion Date shall in any event occur by the third anniversary of the
Effective Date, subject, however, to extension as set forth in Section 4.2 or in
this Section 4.3 above or in Section 4.3D below.
D. UTGR
shall have the right to modify the projects within any phase without the consent
of the Division if such modification does not materially change the number of
video lottery terminals available or the location of any VLT’s at the end of
such Development Phase or does not change the Phase Milestone Completion Date by
more than sixty (60) days (provided, however, that UTGR shall use reasonable
efforts to keep the Division apprised of each modification from time to time).
UTGR shall have the right from time to time to make such modifications to any
Development Phase in addition to those permitted by the preceding sentence
subject to the approval of the Division which approval shall not be unreasonably
withheld or delayed; provided that in no event shall any change in a Phase
Milestone Completion Date be permitted if the last Phase Milestone Completion
Date would be more than three years after the Effective Date subject in all
events to force majeure delays or any other event justifying a delay as
referenced in Section 4.2 above or in the preceding provisions of this Section
4.3. Within ten (10) Business Days of the occurrence of any Force Majeure Event,
UTGR shall give notice thereof to the Division, such notice to identify the
Force Majeure Event and the expected delay period. UTGR shall further advise the
Division as to the termination of any Force Majeure delay period within ten (10)
Business Days of the last day of such period.
4.4 On or
before that date which is ninety (90) days after each Phase Milestone Completion
Date and in all events within ninety (90) days after the third anniversary of
the Effective Date (as such three-year period may have been extended as set
forth in Section 4.2 above), UTGR shall submit to the Division UTGR’s
certification confirmed by a certified public accounting firm reasonably
acceptable to the Division and using procedures approved by the Division not
inconsistent with GAAP, providing its professional opinion, on behalf of itself
and its applicable UTGR Business Affiliates as to the aggregate amounts
expended, allocated between hard costs and allowable soft costs in respect of
the Investment Requirement, so as to enable the Division to measure UTGR’s
Investment Requirement Assets and to confirm UTGR’s compliance with its
obligation under Section 4.1. UTGR shall pay all costs of obtaining and
preparing the professional opinion obtained from the certified public accounting
firm required by this section.
4.5 UTGR and
its officers, directors, and owners of more than 5% of the equity interests in
UTGR and BLB Investors, L.L.C., UTGR’s ultimate parent, agree to submit to
annual license renewal process as established by the Division and DBR through
which they each will be subject to criminal background checks and required to
reaffirm that there have been no material adverse changes to applications on
file with either the Division or DBR.
4.6 UTGR agrees
to comply with current rules and regulations of the Division and DBR as well any
additions or modifications to such rules as may be adopted from time to
time.
4.7 UTGR agrees
to adopt and implement ( within 180 days from the Effective Date ) industry
“best practice” codes, standards and procedures relating to the business and
operations at Lincoln Park , including, but not limited to, such areas as:
accounting and internal controls; financial reporting and audited financial
statements; internal audit and compliance; record retention; Gaming Facility
Revenue and Net Terminal Income computation; business ethics; personnel and
employee policies and practices; cash handling and management ; surveillance and
security; risk and facility management; asset preservation; corporate governance
and legal compliance; vendor and contractor selection; and such other areas as
shall be deemed appropriate by the Division to insure that UTGR is in compliance
with all applicable state laws and regulations.
4.8 UTGR
agrees to submit to periodic examinations by the Division with respect to the
business and operations of Lincoln Park;
4.9 UTGR
agrees to give the Division access to all its books, records and facilities at
Lincoln Park as well as the entities that control UTGR, including UTGR’s
ultimate parent BLB Investors, LLC.
4.10 UTGR
agrees that if a gaming license or permit applied for or granted to UTGR or any
of its principals in another is jurisdiction is revoked or denied, the Division
may revoke or deny UTGR’S permit in Rhode Island, if, after an independent
investigation the Division agrees with the conclusions reached in such other
jurisdiction; provided , however, if such revocation or denial involved a
principal of UTGR and not UTGR itself , and UTGR causes the affected principal
to divest its interest in UTGR, and such principal shall no longer be affiliated
with UTGR through any affiliate or otherwise, then the divestiture of such
affected principal may eliminate the need for any independent investigation by
the Division and the revocation or denial of the divested principal in the other
jurisdiction shall not be sole basis for the revocation or denial by the
Division of UTGR’s License in Rhode Island.
4.11 UTGR
agrees to cooperated with the Division to ensure the soundness of the business
and operations at Lincoln Park;
4.12 Within
thirty (30) days of the Effective Date, UTGR shall maintain the insurance
coverage required by Section 31 of Attachment A of the State of Rhode Island
Office Of Purchasing General Conditions of Purchase. In addition, UTGR and the
Division shall obtain business interruption insurance naming the Division as an
additional insured providing coverage equal to no less than nine (9) months of
the State’s share of Net Terminal Income for the twelve (12) months preceding
the date such insurance policy and any renewal or replacement thereof takes
effect; provided, however, that such obligation shall be conditioned on the
availability of such insurance at commercially reasonable rates and UTGR’s cost
for such insurance shall not exceed $150,000 per annum, adjusted by the CPI
Adjustment over the Term.
4.13 UTGR agrees
that (A) it will not unilaterally cease operations (except where such cessation
is caused by a requirement to comply with applicable laws, rules or regulations,
or where the same is caused by a Force Majeure Event or by the making of
improvements or repairs) and (B) in the event it breaches this Agreement and
thereafter as a result of such breach the Division shall lawfully elect to
terminate this Agreement in accordance with the terms of this Agreement, it will
continue to operate the Lincoln Park as requested by the Division and to
cooperate with the Division in finding a successor licensee on terms and
conditions reasonably acceptable to the Division and UTGR , but nothing in this
Section 4.13 shall (C) obligate UTGR to transfer any of its assets to any
proposed successor licensee except on commercially reasonable terms and
conditions, or (D) impair the rights of any Institutional Lender to UTGR or any
UTGR Business Affiliate.
4.14 UTGR
agrees to reimburse and pay to the Division ( or to such entities as the
Division may identify ) all reasonable costs and expenses associated with the
Division’s oversight over and review of the business or operations at Lincoln
Park , including such items as ongoing auditing, legal, investigation services
and other related matters; it being expressly understood and agreed that the
Division will endeavor to reach an agreement with DBR that where both agencies
are involved in any such oversight or review that both the Division and DBR will
coordinate their activities to minimize the costs to be reimbursed by
UTGR.
5. Advisory
Committee.
UTGR
shall establish an Advisory Committee (the “Advisory
Committee”), the
purpose of which shall be to consider and advocate programs and initiatives from
time to time to benefit all constituencies with an interest in the continued
economic success of Lincoln Park and the Business, and in particular, the
recommendation of steps to coordinate the operations of Lincoln Park and the
activities of the Business with State and municipal agencies to maximize the
effectiveness of joint marketing campaigns designed to benefit both the Business
and other State based businesses. The Advisory Committee shall meet quarterly,
shall select from one of its members a chairperson and shall adopt by-laws to
govern its meetings. The advisory committee shall consist of seven
(7) members
as follows: One (1) member representing UTGR or a UTGR Business Affiliate
appointed by UTGR; one (1) member representing the town of Lincoln, Rhode
Island, appointed by the Lincoln Town Administrator with the advice and consent
of the Lincoln Town Council; one (1) member representing the Rhode Island
Convention Center Authority which may be either a member of the Board of
Commissioners or a designee appointed by the Board; one (1) member representing
the Greater Providence Chamber of Commerce appointed by that entity: one (1)
member representing the Northern Rhode Island Chamber of Commerce, appointed by
that entity, and one (1) member representing the Providence-Warwick Convention
Visitors Bureau appointed by that entity and one(1) public member appointed by
the Governor.
6. Slippage.
6.1 In view
of the current and prospective economic benefits afforded to the State and to
all other parties benefiting from the commercial activities operated at Lincoln
Park, and in order to better assure, throughout the Term, that Lincoln Park and
the Business conducted thereon will be able to compete fairly with any other
Gaming Facilities operating from time to time within the State, during the Term,
the State, including any agency or instrumentality thereof, and the Division, do
hereby expressly pledge and agree that the owner of Lincoln Park and the
Business operated thereon shall be afforded Slippage Protection with any other
Gaming Facility except as currently exists for Lincoln Park and Newport Xxx Xxxx
under the provisions of Rhode Island General Laws 42-61.2 7(a)(2) as currently
in effect if:
(i) During
the Term of this Agreement, a new Gaming Facility located wholly or partially
within the State opens to the public for business;
(ii) Neither UTGR nor any UTGR
Business Affiliate is involved in any way in the operation or ownership of such
new Gaming Facility; and
(iii)
UTGR is not in default of any material covenant, term or condition of this
Agreement that has not been cured within the applicable cure periods set forth
in Section 12 of this Agreement.
6.2 Application
of Slippage Protection.
A. Beginning
with the first Subsequent Year and thereafter in each Subsequent Year, within
thirty (30) days after the close of the first six (6) months of such Subsequent
Year, UTGR shall submit to the Division a calculation comparing its Adjusted
Base Year Net Terminal Income for such year to the annualized actual Net
Terminal Income for the first six (6) months of such year and its proposed
adjustment in the Blended Rate together with such supporting documentation as
the Division shall reasonably require. If twice the actual Net Terminal Income
for the first six (6) months shall be less than ninety percent (90%) of the sum
of the Adjusted Base Year Net Terminal Income and any Benchmark Excess for the
immediately preceding Subsequent Year , then Blended Rate for the second six (6)
months shall be equal to the fraction, expressed as percentage, the numerator of
which is the positive difference, if any, between (x) the sum of (i) the product
of the Adjusted Base Year Net Terminal Income for the Subsequent Year for which
the calculation is being made and the Blended Rate and (ii) the Benchmark Excess
for the immediately preceding Subsequent Year and (y) the product of the actual
Net Terminal Income for such six month period and the Blended Rate, and
denominator of which is the actual Net Terminal Income for such six month
period. Any such adjustment in the Blended Rate shall be effective ten (10) days
after the submission by UTGR in accordance with this Section 6.2 A. and shall be
retroactive to the Blended Rate Adjustment Date notwithstanding any objections
the Division may have with respect to the calculation thereof, but subject
nevertheless to the Division’s right to dispute the same as herein provided. The
Division shall make payment for period between the Blended Rate Adjustment Date
and the effective date of such adjustment within twenty (20) calendar
days.
B. Within
sixty (60) days of the close of each Subsequent Year, UTGR shall certify to the
Division, with such supporting documentation as the Division shall reasonably
require, the amount of its share of Net Terminal Income for such Subsequent
Year, the amount of Benchmark Excess, if any, and its proposed adjustment in the
Blended Rate. In any Subsequent Year where there is a Benchmark Excess, the
Blended Rate for the next Subsequent Year shall be equal to a fraction,
expressed as a percentage, the numerator of which shall be (i) the sum of the
product of the Adjusted Base Year Net Terminal Income for such Subsequent Year
and the Blended Rate and (ii) the Benchmark Excess for the immediately preceding
Subsequent Year and the denominator of which shall the actual Net Terminal
Income for the immediately preceding Subsequent Year. Any adjustment in the
Blended Rate required by the UTGR submission shall be effective ten (10) days
after the submission by UTGR in accordance with this Section 6.2 B. and shall be
retroactive to the Blended Rate Adjustment Date notwithstanding any objections
the Division may have with respect to the calculation thereof, but subject
nevertheless to the Division’s right to dispute the same as herein
provided.
6.3 In
addition to the foregoing, commencing with the beginning of the 11th Year of
the Term of this Agreement and each year thereafter, in addition to the Slippage
Protection provided in the foregoing Section 6.2, the Blended Rate shall be
adjusted by 25% of the difference between (i) the annual change in the December
Consumer Price Index all relevant consumers (CPI-U) for the immediate preceding
year as published by the Bureau of Labor Statistics of the United States
Department of Labor, using the same base year (and in the event that such Index
shall no longer be published, UTGR and the Division agree to use such Index that
most closely approximates the Index as it was in effect immediately prior to the
succession of publication) and (ii) the Annual Growth Rate in Net Terminal
Income for the immediately preceding year ; provided, however, that in no case
shall the annual adjustment increase or decrease the Blended Rate as the same
may have been adjusted for Slippage Protection as provided for in Section 6.2 by
more than one percent. Within thirty (30) days after the publication of the
December Consumer Price Index, UTGR shall submit to the Division a calculation
of any adjustment to be made to the Blended Rate as required by this Section 6.3
together with such reasonable supporting documentation as the Division may
require together with a request to adjustment in the Blended Rate. Any
adjustment in the Blended Rate required by the UTGR submission shall be
effective ten (10) days after the submission by UTGR in accordance with this
Section 6.3, notwithstanding any objections the Division may have to the
calculation thereof but subject to the Division’s right to dispute the same as
herein provided. Any such adjustment shall be retroactive to the Blended Rate
Adjustment Date and in the case of a reduction in the Blended Rate, the Division
shall make payment for the period between the Blended Rate Adjustment Date and
the date of the adjustment within twenty (20) calendar days and similarly to the
extent that there is an increase in the Blended Rate, UTGR shall make a payment
to the Division of the amount due for the period between the Blended Rate
Adjustment Date and the effective date of the adjustment within 20 calendar
days.
6.4 In the
event that after any adjustment in the Blended Rate pursuant to either Section
6.2 or 6.3 there shall be a further adjustment in the Blended Rate by agreement
of UTGR and the Division, or as a result of a determination by an accounting
firm chosen in accordance with Section 6.5 hereof, such adjustment in the
Blended Rate o shall be retroactive to the Blended Rate Adjustment Date and any
amounts due to a party shall be paid within twenty (20) days.
6.5 In the
event of any dispute by the Division with respect to any adjustments in the
Blended Rate required by Sections 6.2 and 6.3, the Division shall give notice to
UTGR within twenty (20) days of the receipt by the Division of UTGR’s
submission. Upon receipt of the Division’s objection, UTGR and the Division
shall seek to mediate the same within thirty (30) days. If within such thirty
(30) day period UTGR and the Division are unable to reach agreement, then within
ten (10) days the Division shall submit to UTGR a list of three nationally
recognized accounting firms none of whom shall have been engaged by UTGR and
within the further ten (10) days, UTGR shall select one of such firms. Upon such
selection, the matter shall be forthwith submitted by UTGR and the Division to
the selected firm for a decision within thirty (30) days. Each of UTGR and the
Division agrees to submit such information to such accounting firm as such
accounting firm shall reasonably request. The decision of such accounting firm
shall be final and binding on the parties absent fraud or manifest error. The
non-prevailing party shall pay the costs and expenses of such accounting
firm.
6.6 Except as
currently exists for Lincoln Park and Newport Xxx Xxxx under the provisions of
Rhode Island General Laws 42-61.2-7(a)(2), the State and the Division hereby
expressly agrees not to enter into any agreement or adopt, modify or amend any
law, rule or regulation that would impair the rights of UTGR under the Act and
this Agreement. Notwithstanding anything above to the contrary, nothing in this
Agreement shall limit the authority of the Division to enforce its rights under
this Agreement or the State to enact, adopt and enforce laws and regulations
which are of general application and not specifically directed to the operation
of UTGR. Subject to the foregoing, the State and the Division expressly pledge
and agree with UTGR that the State and the Division will not limit, alter,
diminish or adversely impact the rights or economic benefits which vest in UTGR
under the terms of this Agreement as authorized by the Act.
7. State
Access/Egress Support. The
State, acting through the Rhode Island Department of Transportation or other
relevant agency shall provide the necessary road cuts, bridges, tunnels, highway
widening, traffic lights and the related signage on and from Route 146 as may be
necessary in order to improve access to and egress from Lincoln Park (and as set
forth in the final highway improvement plans provided by BLB or a BLB Affiliate
on or before June 3o, 2006 that are approved by the Rhode Island Department of
Transportation). Such construction shall be designed so as to minimize the
amount of motor vehicle traffic use and/or travel upon secondary roads and/or
through residential neighborhoods surrounding Lincoln Park. UTGR shall provide
and pay for the design of such improvements and upon completion thereof and
approval by the State, the State shall take all reasonable steps to have such
improvements included in the state transportation improvement plan or to cause
such improvements to be exempt therefrom. UTGR or a UTGR Business Affiliate
shall pay all costs for the construction of such improvements.
8. Project
Labor Agreement.
Promptly following the Effective Date, UTGR, or a UTGR Business Affiliate, as
applicable, shall execute a Project Labor Agreement (the “Project
Labor Agreement”) for
the construction of improvements to Lincoln Park, subject to all applicable
construction industry trade unions being parties thereto.
9. Limitation
on Use of Lincoln Park and on Certain Activities of BLB and UTGR.
9.1 UTGR, and
any UTGR Business Affiliate, including BLB, agrees that during the Term, it will
not construct and/or operate a hotel at or in close proximity to Lincoln Park
and it will not market Lincoln Park as a venue for conventions of the type which
are part of the target market for the Rhode Island Convention Center Authority,
the Providence Performing Arts Center, the Veterans Memorial Auditorium,
including Broadway or Broadway type plays, or any theatrical performances of a
musical, non-musical or comedic variety.
9.2 Notwithstanding
the restrictions under Section 9.1 hereof, nothing shall prohibit UTGR from
marketing to hold or host, or from holding or hosting at Lincoln Park holiday
fairs for local businesses, concerts, sporting and other entertainment events
which are open generally to the public and if held in an indoor events venue at
Lincoln Park, with no stage house, and with a non-fixed seating capacity of such
venue not to exceed 1,500 people for musical concerts and comedy shows, and
2,100 people for all other events.
9.3 Following
completion of the Investment Requirements, UTGR will maintain Lincoln Park in a
manner substantially consistent with a first class racino operated elsewhere in
the United States pursuant to regulations duly adopted pursuant to state
law.
10. Use of
Lottery System Infrastructure; Other State Services
During
the Term, the Division will permit UTGR to use, and assist and cooperate with
UTGR in its use of the Division’s Video Lottery Terminal systems infrastructure
subject to the rights of third parties, such use to be pursuant to mutually
agreed upon terms and conditions. UTGR shall provide access to the Division for
purpose of the repair, maintenance and improvement of any such facilities during
normal business hours and after reasonable notice.
11. Breach
by the Division; Termination
11.1 The
occurrence of any of the following shall be a breach of this Agreement on the
part of the Division (hereinafter a “Division
Breach”):
A. the breach by
the Division of any provision of this Agreement, other than a failure to pay
amounts due to UTGR under this Agreement;
B. the failure
on the part of the Division to pay when due any amount due UTGR under this
Agreement;
C. the
termination, revocation, suspension for sixty (60) consecutive days (or such
longer period as may be agreed to by UTGR) of the Division’s authority and/or
ability to offer Video Lottery Games;
D. the State’s
ability and/or authority to offer Video Lottery Games is materially adversely
affected for sixty (60) consecutive days (or such longer period as may be agreed
to by UTGR);
E. the
authority to offer within and throughout the State lottery games that involve
on-line computer processing of the sale transaction is granted to another
department, commission, agency or other body of the State, whether or not the
Division retains its authority to offer such lottery games, unless such other
department, commission, agency or other body of the State is a successor to the
Division, and maintains an exclusive right to operate Video Lottery Games for
the State, and assumes in writing all of the Division’s obligations hereunder at
the time such authority is granted to such other department, commission, agency
or other body.
11.2 UTGR may
(but shall not be obligated to) terminate this Agreement immediately by written
notice to the Division, in the event a Division Breach of the sort described in
Section 11.1.C, D, and/or E and/or in the event of any of the
following:
A. the
breach by the Division of any provision of this Agreement other than a failure
to pay amounts due to UTGR and the subsequent failure on the part of the
Division to cure such breach within thirty (30) days after written notice from
UTGR specifying such breach; provided, however, that if such breach is curable
but cannot be cured within the aforesaid 30-day period, then said 30-day period
shall be extended for so long as the breaching party is proceeding with
commercially reasonable diligence to effectuate such cure; and/or
B. the
failure on the part of the Division to pay when due any amount due UTGR under
this Agreement and the subsequent failure to pay such amount within ten (10)
days after written notice from UTGR specifying such failure to pay.
11.3 Except as
set forth in Section 11.4 below, in the event of a material breach by the
Division, UTGR shall be entitled to recover its actual damages, but, except as
otherwise specifically provided in this Agreement, shall not be entitled to
terminate this Agreement.
11.4 The
failure to provide the owner of Lincoln Park and the Business with adjustment in
the Blended Rate as required by Section 6 of this Agreement shall constitute a
violation of the Act and a material breach of this Agreement, and shall entitle
such owner to bring a claim against the Division and the State for actual
damages and/or specific performance and/or other equitable relief,
notwithstanding any limitation on such damages imposed by the laws of the State.
For purposes of computing the actual damages with respect to any claim by UTGR
against the State or the Division for a failure to provide adjustments in the
Blended Rate pursuant to the provisions of the Act and of this Agreement,
“actual damages” means the positive difference between: (i) the Gaming Facility
Revenues UTGR would have retained had the State or the Division made the
adjustments to the Blended Rate as required by Section 6 hereof for the period
of time the State or Division fails to provide such adjustment during the Term;
and (ii) the Gaming Facility Revenues actually retained by UTGR for the period
of time the State or Division fails to make the adjustments to the Blended Rate
as required by the Act and this Agreement during the Term.
12. Breach
by UTGR: Termination
12.1 The
occurrence of any of the following shall be a breach of this Agreement on the
part of UTGR (hereinafter a “UTGR
Breach”):
A. The
breach by UTGR of any provision of this Agreement other than a failure to pay
amounts due to the Division; and/or
B. The
failure on the part of UTGR to pay when due any amount due the Division under
this Agreement.
C. If UTGR
shall file a voluntary petition in bankruptcy, or shall be adjudicated a
bankrupt or insolvent ,or shall file any petition or answer seeking any
reorganization, arrangement, liquidation, dissolution or similar relief under
any present or future Federal Bankruptcy Act, or any other present or future
applicable federal, state or other statue or law, or shall seek or consent to,
or acquiesce in the appointment of, any trustee, receiver or liquidator of its
property, business or assets, or shall make any assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
when due; or
D. If within
sixty (60) days after the commencement of any proceedings against UTGR seeking
any reorganization, arrangement, recapitalization, readjustment, liquidation,
dissolution or similar relief under the present or any future Federal Bankruptcy
Act, or any other present or future applicable Federal , state or other statute
or law, such proceedings shall not have been dismissed , or if , within sixty
(60) days after the appointment, without the consent or acquiescence of UTGR ,
of any trustee, receiver or liquidator of UTGR , or of all ,or substantially
all, of its business, properties or assets, such appointment shall not have been
vacated or stayed on appeal or otherwise, or within sixty days after the
expiration of any such stay, such appointment shall not have been
vacated.
E. If UTGR
commits any act which would permit the Division to revoke its license, including
without limitation, conduct described in Section 42-61-5(d) (1), (3), (4)
or (5), G.L.R.I., 1956, as amended.
12.2 The
Division may (but shall not be obligated to) terminate this Agreement
immediately by written notice to UTGR, in the event UTGR fails to comply with
its obligations under Section 4.1, as evidenced by the certifications (or lack
thereof) provided to the Division pursuant to Section 4.3 and, within thirty
(30) days after written notice from the Division specifying such failure, UTGR
fails to bring itself into compliance with Sections 4.1; provided, however, that
if such breach is curable but cannot be cured within the aforesaid 30-day
period, then said 30-day period shall be extended so long as the breaching party
is proceeding with commercially reasonable diligence to effectuate such cure.
12.3 In the
event of a breach by UTGR of any covenant, term or condition of this Agreement,
the Division shall give UTGR notice thereof and UTGR shall in the case of
payment default shall have ten (10) days to pay such amount and in the case of
any other default (other than as specified in Section 12.2 hereof) shall have
thirty (30) days to cure such default unless such default cannot be cured by the
exercise of reasonable diligence within such thirty (30) day period in which
event such thirty (30) day period shall be extended for so long as UTGR is
proceeding with commercially reasonable diligence to effectuate such
cure.
12.4 In the event
of a breach by UTGR of any material covenant, term or condition of this
Agreement, the Division shall be entitled to recover its actual
damages.
12.5 In the
event that this Agreement shall be terminated due to a default by UTGR that is
not cured within the applicable cure periods set forth herein therefore, then
the “Acquisition Institutional Financiers” (as hereinafter defined) or their
institutional successors from time to time shall have the right to cause this
Agreement to be reinstated at any time within ninety (90) days following such
termination by curing or causing to be cured any defaults giving rise to such
termination; provided, however, that in the event that such default is capable
of cure, but not, on a commercially reasonable basis, within such 90-day period,
and in the further event that such Institutional Lender or their institutional
successors shall commence such cure within such 90-day period and shall proceed
with such cure with reasonable commercial diligence, then such 90-day period
shall be extended to facilitate the completion of such cure.
12.6 In the
event of any alleged breach of Sections 9.1, 9.2 and 9.3 of this Agreement,
which is not cured within the time provided for herein, the party disputing the
existence of such breach shall within ten (10) days of receipt of the notice of
such breach from the other party, give such other party notice that its disputes
the existence of a breach of the Agreement. Thereafter, within twenty (20) days
of giving of the notice disputing the breach, the Division shall cause a hearing
to be held before a Hearing Officer appointed pursuant to the rules and
regulations of the Division. Such hearing shall conducted in accordance with the
Administrative Procedures Act, Chapter 42-35 of the General Laws of Rhode Island
1956 (1993 Reenactment) as the same shall be amended from time to time. The
Hearing Officer shall determine whether a breach has in fact occurred and any
party aggrieved by the decision of the Hearing Officer may appeal to Superior
Court in accordance with Administrative Procedures Act. Until such time as the
Hearing Officer’s determination that a breach of this Agreement has occurred and
such determination has become final and all allowable appeals therefrom shall
have become final and no further appeal shall lie, this Agreement shall remain
in full force and effect. Upon a final determination in accordance with this
Section 12.6 that a breach of this Agreement has taken place, the aggrieved
party shall be entitled to all remedies available to it in law and
equity.
12.7 In the
event of any breach , or threatened breach , by UTGR of its obligations under
Section 4.13 of this Agreement the Division shall be entitled to injunctive
relief without the necessity of demonstrating irreparable harm.
13. Effect
of Termination.
Any
termination of this Agreement shall not affect any liability of any of the
parties that has accrued prior to the date of termination or as a result of such
termination or of the acts giving rise to such termination, including, without
limitation, the liability of any party for any default by such party in the
performance of its obligations under this Agreement, nor shall it affect the
coming into force or continuance in force of any provision of this Agreement
which is expressly intended to continue in force on or after such
termination.
14.1 Force
Majeure. Neither
party shall be liable for any delay in performing any obligation hereunder for
any one or more causes beyond its reasonable control, including but not limited
to strikes, lockouts and other labor disputes, accidents, war, terrorism,
invasion, riot, rebellion, civil commotion or disturbances, insurrection,
epidemics, embargoes, any act or judgment of any court granted in any legal
proceeding, illegal, malicious, wanton, or capricious acts of a third party,
changes or modification in industry standards or protocols, and the existence of
or changes in federal or State laws or the laws of other countries prohibiting
or imposing criminal penalties or civil liability for performance hereunder, the
inability of any party to secure the necessary governmental permits to carry out
its obligations under this Agreement notwithstanding the exercise of
commercially reasonable efforts, acts of God such as fire, wind or lightning,
earthquakes or other severe weather, explosion, act of government or faults or
delays by subcontractors to provide service due to circumstances such as those
cited above (each, a “Force
Majeure Event”).
Notwithstanding the foregoing, this Section 14.1 shall not apply to the
Division’s obligations under Section 6 and each Subsection of Section 6 of this
Agreement, nor shall this Section 14.1 apply to the exemption of this Agreement
from the provisions of Rhode Island General Laws §37.2 and Rhode Island General
Laws §42-61.2-4(3).
14.2 Relationship
of Parties. Except
as otherwise provided herein, the parties to this Agreement are and will be
acting in their individual capacities and not as agents, employees, partners,
joint venturers or associates of one another. The employees or agents of one
party shall not be deemed or construed to be the employees or agents of the
other party for any purpose whatsoever.
14.3 Scope
of the Agreement. This
writing shall constitute the entire agreement between the parties and shall
supersede all other prior agreements, oral or written, and all other
communications between the parties relating to the subject matter hereof.
14.4 Amendment. This
Agreement shall not be amended except by a writing of subsequent date hereto,
executed by duly authorized representative of the parties hereto.
14.5 Assignment
A. This
Agreement shall not be assigned by either party without the prior written
consent of the other party, provided, that the Division agrees to give expedited
consideration to any request for any assignment by UTGR where the assignee is
directly or indirectly controlled by, or under common control with, any one or
more of Starwood Capital Group Global, L.L.C., Xxxxxxx International Limited,
Waterford Group, L.L.C. ,or any Institutional Lenders from to time financing or
refinancing the Acquisition. So long as a proposed assignee of UTGR or any of
its permitted successors shall have been found to be qualified by the Division
to hold the license, the Division shall not unreasonably withhold or delay its
consent to such proposed assignment.
14.6 Notices.
All notices, demands and other communications required or permitted hereunder
shall be in writing and shall be deemed received (i) upon receipted delivery if
sent by messenger or personal courier, (ii) two (2) business days after being
deposited with a internationally recognized overnight courier, or (iii) upon
facsimile transmission to the number indicated below and receipt of a
confirmation with respect thereto; or (v) an actual receipt, if sent in any
other manner, in each case with postage/delivery prepaid or billed to sender and
addressed as follows:
|
If
to UTGR:
|
President
|
| |
UTGR,
Inc.
|
| |
c/o
Lincoln Park
|
| |
0000
Xxxxxxxxxxxx Xxxx
|
| |
Xxxxxxx,
Xxxxx Xxxxxx 00000
|
| | |
|
With
copy to:
|
Xxxxxxx
X. Xxxxxxxx, Esquire
|
| |
Xxxxxxxx,
Xxxxx & Xxxxxx, LLP
|
| |
0000
Xxxxx Xxxxxx
|
| |
Xxxxxxxxxx,
Xxxxx Xxxxxx 00000
|
| | |
|
If
to the Division:
|
Director,
Division of Lotteries
|
| |
0000
Xxxxxxx Xxxxxx
|
| |
Xxxxxxxx,
Xxxxx Xxxxxx 00000
|
| | |
|
With
copy to:
|
Director,
Department of Administration
|
| |
Xxx
Xxxxxxx Xxxx
|
| |
Xxxxxxxxxx,
Xxxxx Xxxxxx 00000
|
| | |
| |
Director,
Department of Xxxxxxxxxxxxxx
|
| |
Xxx
Xxxxxxx Xxxx
|
| |
Xxxxxxxxxx,
Xxxxx Xxxxxx 00000
|
Any party
may change its address for purposes of notice hereunder by sending notice in the
manner provided above, together with the effective date of such
change.
14.7 Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of each of the parties
hereto, and each of their respective successors and permitted
assigns.
14.8 Waiver. The
failure of either party to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of such provisions, nor in
any way affect the validity of this Agreement, or any part thereof, or the right
of the other party thereafter to enforce each and every provision.
14.9 Severability. The
parties acknowledge that the provisions contained herein are required for the
reasonable protection of the business interests of the parties. The illegality,
invalidity or unenforceability of any provision of this Agreement under any
applicable law shall not affect its legality, validity or enforceability under
the law of any other jurisdiction nor the legality, validity, enforceability of
any other provision, and to this end the provisions hereof are declared to be
severable, with the exception that UTGR, UTGR Business Affiliates (including
BLB), and/or any affiliate of any of them which operates the Facility and/or the
Business may terminate this entire Agreement if the obligations of the State,
the Division, or any agent or instrumentality of the State under Section 6 of
this Agreement are held to be unenforceable by a court of law or rendered
unenforceable by federal or state law.
14.10 Authorization to
Execute Agreement. The
parties warrant that they are authorized to execute and deliver this Agreement
and to perform the obligations set forth herein, and the persons executing this
Agreement on behalf of such party are authorized to do so.
14.11 Headings
and Interpretation. Section
headings of this Agreement are for convenience only and shall neither form a
part nor affect the interpretation hereof. Words in the singular number shall be
interpreted to include the plural (and vice-versa), when the sense so requires.
14.12 Governing
Law; Consent to Jurisdiction. This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of Rhode Island, without regard to conflict of law principles.
The parties agree that any suit for the enforcement of this Agreement may be
brought in the courts of the State of Rhode Island or any Federal Court sitting
therein and consent to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the parties at the addresses
set forth for the parties above. The parties hereby waive any objection that
they may now or hereafter have to the venue of any such suit or any such court
or that such suit was brought in an inconvenient court.
14.13 Recitals
Not Controlling. In the
case of any inconsistency between any provision in the Recitals of this
Agreement set forth before Section 1 and any provision of this Agreement set
forth in Section 1 through and including Section 14, the provisions set forth in
Section 1 through and including Section 14 of this Agreement shall
govern.
14.14 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
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#636429
v16
IN WITNESS
WHEREOF, this Agreement has been executed by the parties hereto on the ______
day and year first above written.
|
UTGR,
INC.
|
DIVISION
OF LOTTERIES
|
| | |
|
By:
/s/
Madison Xxxxx
|
By:
/s/
Xxxxxxx Xxxxxxxx
|
|
Name:
Madison Xxxxx
|
Name:
Xxxxxxx Xxxxxxxx
|
| Title:
President | Title:
Acting Director |
|
|
|
| | |
|
AGREED
AND ACCEPTED
| |
|
(as
to Section 7 only):
| |
| | |
|
Rhode
Island Department of Transportation
| |
| | |
| By:
/s/ Xxxxx X. Xxxxxxx | |
| Name:
Xxxxx X. Xxxxxxx | |
| Title:
Director | |
