Document:

eri-ex102_62.htm

 

Exhibit 10.2

AGREEMENT

THIS AGREEMENT. entered into this   9   day of April    , 2019, and made effective January 1, 2019, by and between MOUNTAINEER PARK, INC., located at 1420 Mountaineer Circle, New Cumberland, WV, 26047 (the “MTR”), and MOUNTAINEER    PARK HORSEMEN’S BENEVOLENT AND PROTECTIVE ASSOCIATION,    INC., located at       1420 Mountaineer Circle    , New Cumberland, WV, 26047 (the “HBPA”).

WITNESSETH:

WHEREAS, it is the mutual intent and purpose of the above parties to set forth the basic agreement covering purse structure and other matters of mutual interest and concern and to comply with West Virginia statutory requirements for a contract; and

WHEREAS, the parties recognize the need for defining and describing the business relationship between MTR and HBPA so that they may direct the business of thoroughbred horse racing at Mountaineer Park in the best interest of all parties concerned.

NOW, THEREFORE, in consideration of the benefits and advantages occurring to each of the parties hereto, do by these presents hereby agree, bind and obligate themselves to each other as follows, to-wit:

ARTICLE I 

Definitions

1.The term “purse schedule” shall mean the total daily distribution for all races scheduled and conducted.

2.The term “purse schedule distribution” shall mean the amount allocated for each and every race based upon age, class, distance and type of race.

ARTICLE II 

HBPA Exclusive Bargaining Agent

1.Exclusive Representation. The HBPA is by the West Virginia Racing Commission and MTR to be the duly qualified and exclusive representative of the majority of the owners and trainers of live thoroughbred horse racing, within the meaning of the Interstate Horseracing Act (15 U.S.C.§ 3001 et seq.) (the “Act”). MTR shall only negotiate with the exclusive bargaining agent or representative of the HBPA. Any negotiation or discussion of the terms and provisions of this Agreement, or any amendment thereto, or any Agreement which shall supersede the terms and provision of this Agreement with any person, or entity or representative of an entity that is not the exclusive bargaining agent representative of the HBPA shall constitute a breach of this Agreement, provided that at such time the HBPA remains the duly qualified and exclusive representative of the majority of the owners and trainers of horses at MTR . Furthermore, MTR shall not insert any term or provision which conflicts with the HBPA’s exclusive representation of owners and trainers of live thoroughbred racing into any contract or agreement arising out of the use of the MTR’s facilities and/or participation in the live horse races conducted at the MTR. 

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MTR agrees that it shall negotiate with and conduct any and all business which is the subject of this Agreement and any matters reasonably related to any provisions of this Agreement with the duly elected officers of the HBPA or their duly designated representatives.

The HBPA agrees that it shall provide to MTR, in writing, on an annual basis, the names and addresses of each duly elected member of the HBPA Board of Directors, the names and addresses of each duly elected officer of the HBPA, and the names and addresses of each representative duly designated by the Board of Directors of the HBPA who shall have the authority to negotiate with MTR.

HBPA promises that it will exercise any and all authority to require its members to comply, when possible, with the intent and terms of this Agreement.

ARTICLE III 

Racing Schedule

1.During the term of this Agreement, MTR shall each year use its best efforts to conduct racing as submitted and approved by the West Virginia Racing Commission and periodically provide schedules to the HBPA, it being understood that (a) MTR shall not be in breach of this Agreement so long as it requests a license from the West Virginia Racing Commission to conduct racing, and in fact conducts racing, as submitted and approved by the West Virginia Racing Commission. HBPA acknowledges that MTR, consistent with its best efforts commitment, would not be expected to conduct racing on more than five (5) days in a calendar week and may cancel racing days based on inclement weather, unavailability of horses or jockeys, and economic factors.

Within seven (7) days of cancellation of a race day, MTR shall discuss options with the HBPA. MTR agrees subject to availability of horses, to program no less than (9) races per day.

2.MTR agrees that it will not discontinue racing during the approved racing schedule unless agreed upon by the HBPA, except in the event of an act of God or other catastrophe, or conditions beyond the foreseeable control of MTR.

ARTICLE IV

Minimum Purse and Purse Scheduling

1.During the term of this Agreement the daily minimum purse schedule shall be established by MTR and the HBPA prior to the first live racing date of each year.

2.MTR will publish a purse schedule distribution as approved by MTR and the HBPA, which shall show the purse schedule distribution planned for various classes of horses at various distances. Such schedule shall be updated as necessary. Said schedule with any amendments thereto shall be posted in the Racing Secretary’s office. In the event of a purse schedule distribution decrease, the purses for bottom claiming races shall be updated as necessary. Said schedule with any amendments thereto shall be posted in the Racing Secretary’s office. In the event of a purse schedule distribution decrease, the purses for bottom claiming races shall not be reduced unless the purses for all races are also reduced. In the event of a purse schedule distribution increase, the purses for all races shall be increased (though not necessarily by the same percentage.)

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3.Notwithstanding the above, MTR will not be obligated to go into an overpayment situation at any time during the life of this agreement.

4.Purses for stakes races shall not exceed, in the aggregate, 6% of the total purses paid, from the purse account, in the immediately preceding calendar year including the amounts paid for stakes races and amounts received for sponsorship of races unless otherwise authorized by HBPA. MTR shall determine the number of and purses for stake races and submit the stakes schedule to HBPA for written comment.

5.MTR agrees to pay purses back through not less than ten (10) places according to the following chart. Any place not paid shall revert to the purse account.

 

		
	
Finish
	
Percent of Purse

	
1
	
58%

	
2
	
20%

	
3
	
10%

	
4
	
5%

	
5
	
2%

	
6
	
1%

	
7
	
1%

	
8
	
1%

	
9
	
1%

	
10
	
1%

 

6.In 2019, the owner of each horse starting in a race will be charged a start fee of (i) $20 per horse per start in any race having a total purse of less than $ 10,499 and (ii) $25 per horse in any race having a total purse of $10,500 to $16,299 and (iii) $35 per horse per start in any racing having a total purse of $16,300 or more. These start fees will be deducted from the owner’s accounts and paid to MTR by the horsemen’s bookkeeper.

7.In 2020 and 2021, the owner of each horse starting in a race will be charged a start fee of (i) $15 per horse per start in any race having a total purse of less than $10,499 and (ii) $25 per horse in any race having a total purse of $10,500 to $16,299 and (iii) $35 per horse per start in any racing having a total purse of $16,300 or more. These start fees will be deducted from the owner’s accounts and paid to MTR by the horsemen’s bookkeeper.

8.It is understood by both parties that purse schedules shall not be in conflict with the rules of racing of the West Virginia Racing Commission as presently constituted or amended.

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ARTICLE V

Purse Funds

1.During the term of this Agreement, MTR shall pay purse monies:

(a)As provided by state law; and

(b)Any additional percentage of the mutuel handle which may be legislated and incorporated into the West Virginia Code during the period of this Agreement, if specifically legislated for purses.

2.In the event any Underpayment Money exists in the purse account at the end of any calendar year, then said Underpayment Money shall be added to the sum payable in purses for the next succeeding year.

3.This is an agreement regarding the proceeds from video lottery terminals as provided in West Virginia Code § 29-22A-7(a)(6).

ARTICLE VI

Revenue from Off-Track Betting and Telephone Wagering

1.In the event MTR, HBPA or horsemen receive additional revenue or payments from telephone wagering from whatever source derived, whether as a result of legislation, by contract and/or modification of the rules of the West Virginia Racing Commission, the amount determined by code shall be allocated to purses.

2.Revenue from live, export and import and wagering from any other sources will be distributed in accordance with West Virginia Code.

3.Revenue from Video Lottery Terminals will be distributed in accordance with West Virginia Code.

ARTICLE VII

Condition Book

1. HBPA represents that it has created a Condition Book Committee to consult with horsemen concerning the conditions of racing and to make known to MTR the results of their consultations. MTR agrees that this Committee shall have the right to meet with appropriate MTR personnel to discuss and comment on each condition book at least seventy-two (72) hours before printing in order to permit Committee review, suggestions, and recommendations. MTR will give due consideration to the Committee’s suggestions and recommendations.

2.During the term of this contract the bottom claiming price will not go below Four Thousand Dollars ($4,000.00).

ARTICLE VIII 

Racing Committee/Arbitration

1.Track and the HBPA shall organize and maintain a joint committee (hereinafter the “Racing Committee”) to address issues related to and associated with live racing at Mountaineer Race Track. The HBPA and Track shall each appoint three (3) representatives to the Racing Committee. The Racing Committee shall have no authority to alter the terms and conditions of this Agreement.

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2.In the event there is a disagreement between the parties as to whether any party has compiled with the terms or conditions in this Agreement, then Track and the HBPA shall each choose an Arbitrator and the two Arbitrators shall choose a third Arbitrator. The Board of Arbitrators shall decide the issues involved and each party agrees to be bound by the decision of the arbitrations panel, provided, however, that the arbitrators’ decision shall not be binding on the parties with respect to matters of Federal law.

ARTICLE IX

Stalls

1.It is recognized by both parties that effective stall utilization is important to MTR and that equitable allocation is essential to the livelihood of horsemen.

2.MTR shall exercise reasonable discretion when allocating horse stalls, such that it shall not unlawfully allocate on the basis of race, color, religion, sex, national origin, age, or other classes protected under law.

3.MTR shall make every effort to provide horsemen with fifteen (15) days prior notice of the acceptance or rejection of stall applications and may demand immediate confirmation from the horsemen of their intent to use allotted stalls.

4.A Stall Committee consisting of a Director of Racing, Racing Secretary, HBPA representative, Stall Superintendent and State Steward shall hear any disputes regarding allocation of stalls.

5.Upon seven (7) days prior notice, MTR shall have the right to take from any horsemen any stall that management believes in good faith is not being used for racing purposes.

6.MTR shall permit approved horsemen to use the stalls at its racetrack barns and other facilities as they exist on the date hereof for training purposes without charge for horses qualified to race at MTR.

7.MTR agrees to provide stall and shed row area with proper fill within a reasonable time period, upon written request of HBPA.

8.Any change in present stall application form that affects horse or trainer eligibility for stalls shall be approved by HBPA.

ARTICLE X

Barn Area

1.Barn area will be available to horsemen during the live race meet and four (4) weeks prior to the start of the live race meet. Barn area will close one week after the live race meet. The racetrack will be available to horsemen during scheduled training times six (6) days per calendar week. A clocker will be available six (6) days per week and the gate shall be available five (5) days per week. Training will start four (4) weeks prior to the beginning of the meet and end on the last day of racing

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2.HBPA recognizes an obligation of horsemen and backside personnel to maintain the stable area in a sanitary condition, free from litter and other foreign objects. HBPA will use its best efforts to ensure that horsemen and their employees fulfill their obligations in this regard. MTR retains its right to discipline (including removal) horsemen or their employees who fail to obey MTR’s published rules and regulations.

3.MTR shall maintain all bam area restroom facilities in a safe and healthy environment.

4.MTR agrees to maintain both main roads leading to and from the racetrack, between all bams and all horsemen parking lots, for both training and racing purposes when horses are on the grounds. These roads are designated as the road going past the rec hall/kitchen and the other road leading from the stable gate. Reasonable efforts before 7:00 a.m. will be made to keep these areas salted and ice-free so as not to be hazardous to horses or backside personnel. MTR further agrees to make necessary repairs to the backside and stall areas as deemed necessary from the monthly inspection conducted.

ARTICLE XI

Racing Surfaces

1.The Track Surface Committee consisting of two horsemen, two jockeys, (appointed by their respective associations), the track superintendent, a representative of the Racing Commission, the State Veterinarian, a steward, and a representative of MTR shall meet pursuant to a published schedule to assess track surface conditions and agree to any actions to be taken with respect to maintenance of the racing surface. MTR shall maintain the track in accordance with the reasonable direction of the Track Surface Committee.

2.Trainers shall, at reasonable times and upon reasonable notice to the office of the Director of Racing, have the right to enter onto the track for the purpose of determining the safety of the racing surface.

3.MTR shall keep the racing surface safe, uniform, harrowed, and watered.

4.MTR, with a member of the HBPA Track Committee, will take soil samples of both the dirt and turf one month prior to opening, once during the meet and as the Track Surface Committee may request. Samples will be sent to a mutually agreed upon testing laboratory. Upon completion and receipt of laboratory results, Track Surface Committee will make recommendations and forward said recommendations to the Director of Racing. Costs of testing and results will be shared evenly by MTR and the HBPA.

ARTICLE XII

Paddock Blacksmith

HBPA may contract with a paddock blacksmith who shall not be deemed an employee of MTR or HBPA but an independent contractor, to be available in the paddock for each race on each and every race day. MTR shall reimburse HBPA for the cost of the blacksmith in an amount not to exceed $100 per live racing day.

ARTICLE XIII

Fire and Liability Insurance

MTR shall pay to HBPA annually, on or before May 15th of each year during the term of this Agreement, the actual cost of the HBPA’s proportional assessment of a policy of fire and hazard insurance (maintained by the national HBPA) covering horses and tack belonging to horsemen.

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Because of this payment for the Fire and Disaster Insurance Plan, the HBPA shall indemnify and hold MTR harmless from and against any damage, loss, action, judgment, cost or expense (including reasonable attorneys’ fees) resulting from any claim, demand or cause of action made or brought by a horsemen for any loss covered by the Fire and Disaster Insurance Plan.

ARTICLE XIV

Deceased Horse Removal

The cost of removing deceased horses shall be paid by one half by HBPA and one half by MTR.

ARTICLE XV

No Monopoly on Goods and Services

MTR shall not establish or impose upon horsemen a monopoly, restriction or requirement regarding the use of blacksmiths, feed men, track supplier, veterinarians or other services customarily used by horsemen. MTR will permit any supplier of commodities or services to enter the stable area; provided, however, that such supplier of services or commodities has received a clearance from management and the West Virginia Racing Commission, which will authorize admission to the stable area. MTR agrees not to unreasonably withhold said clearance. Any owner or trainer stabled on grounds will be permitted at any time to haul in hay or grain for his own use only.

ARTICLE XVI

Personnel Identification

MTR shall bear all expenses incurred for the preparation of the identification badges to be worn by backstretch personnel on a first issue. All lost badges shall be paid for by the individual who loses the badge.

ARTICLE XVII

Tattooing of Horses

Cost of lip tattooing shall be borne by the owners or trainers of the horse being tattooed and not by MTR or HBPA.

ARTICLE XVIII

HBPA Amenities

1.MTR shall provide a business office for the duly elected representatives and officers of HBPA.

2.MTR shall provide front side parking located right behind the grandstand.

3.MTR shall provide adequate parking, admission passes and courtesies for horsemen.

4.MTR shall provide to HBPA two hundred (200) programs each racing day during the week and two hundred fifty (250) programs for each West Virginia Derby Day.

5.MTR shall ensure that the kitchen is operational during the live race meet. If there is not a contract for the operation of the kitchen, MTR shall ensure that the area is available and maintained as a rec hall with vending machines during live racing and the HBPA will ensure the rec hall maintains a standard of cleanliness.

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ARTICLE XIX

Horsemen’s Bookkeeper

A horsemen’s bookkeeper shall be employed by MTR or as mandated by the racing rules and shall be subject to the policies generally applicable to MTR’s employees. The horsemen’s bookkeeper shall perform those functions set forth from time to time by statute, and MTR shall provide such equipment as shall be reasonably necessary for the performance of the horsemen’s bookkeeper’s statutory duties.

ARTICLE XX

Horsemen’s Bookkeeper Account

The following accounts shall be maintained by the horsemen’s bookkeeper in the same bank in which such accounts are currently maintained, so long as such bank’s fees for services remain competitive with other banks in West Virginia.

First Account – “Horsemen’s Daily Account” – The horsemen’s bookkeeper shall establish a checking account into which the following shall be deposited: (a) purse money, stake fees; (b) any owner or trainer deposits; and (c) all moneys received as a result of claims made by horsemen or owners in connection with the races. All of the funds in this account are recognized as being the sole property of the horsemen, jockeys, etc., as reflected by the records maintained by the horsemen’s bookkeeper. MTR agrees to deposit to the Horsemen’s Daily Account each day the full amount due owners for purses earned that day. MTR agrees to deposit all other Horsemen’s Bookkeeper Account deposits (i.e. claims, etc.) a minimum of once per week to the Horsemen’s Daily Account. All interest earned on this account will be considered the sole property of HBPA.

Second Account – “Horsemen’s Reserve Account” – The horsemen’s bookkeeper shall establish and maintain a reserve account into which all Underpayment Money (described above) shall be deposited. All of said Underpayment Money shall be used for purses. All interest earned on this Underpayment Money shall be considered the sole property of the horsemen and shall be added to the purse account to be used for the payment of purses.

ARTICLE XXI

HBPA Administrative Fund

The bookkeeper shall distribute to the HBPA during the term of this Agreement, an amount equal to one percent (1%) of the total amount distributed for purses for thoroughbred racing at Mountaineer Park for the preceding month. Said sums shall be deemed to be purse money, but shall not be withheld or deducted from any single purse, but shall be deducted from the percentage permitted by the State of West Virginia to be paid to the HBPA Trust Fund. If current West Virginia Code § 19-23-9 (b) (1) et seq. is amended to permit a percentage different than the current percentage of 2% of the purses actually paid during the preceding month for the Trust and administration of the fund set forth in West Virginia Code §19-23-9 (b) (1), the HBPA and MTR agree to renegotiate a new division of the percentage of funds to be allocated to the HBPA Trust and Administrative funds. All sums due to the HBPA shall be paid by the end of each month.

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ARTICLE XXII

Security

MTR agrees to provide and maintain reasonable security at its main gate and such other gates providing ingress and egress to its stable areas four (4) weeks prior to the start of the live meet, during the live race meet, and one week following the live meet’s conclusion.

ARTICLE XXIII

Starting Gate

MTR agrees to provide assistant starters, as defined by the West Virginia Thoroughbred Rules of Racing, five days per week during training.

ARTICLE XXIV

Daily Meeting Figures

The pari-mutuel handle and purse distribution figures as well as the percentage figures which represent the relationship between purses and the total of pari-mutuel handle, shall be given to the HBPA office each day of a race meet in progress.

ARTICLE XXV

Valuable Property Right

MTR recognizes that the horses and participants in races and related events occurring prior or subsequent to the running of a race are valuable property rights belonging to the owners and trainers, and MTR will not produce or exhibit still or motion pictures, videotapes, radio or television programs, or authorize or license others to make or exhibit motion pictures or television programs of any of said events without prior consultation and written agreement of the HBPA, it being understood, however, that (i) MTR may use such depictions for the promotion of MTR’s business; and (ii) this provision is not intended to affect the simulcasting, which is governed in all respects by the parties’ separate agreement of this date concerning simulcasting.

ARTICLE XXVI

Severability

In the event any provision, item or clause of this Agreement or the application thereof is held invalid, such invalidity shall not affect the remaining provisions, items or clauses or application of this Agreement, and, to this end, it is agreed by the parties that this Agreement is severable.

ARTICLE XXVII

Simulcasting

Both the HBPA and MTR mutually benefit from the collecting the highest possible fee for the MTR’s import and export signal. The HBPA acknowledges, however, that MTR requires flexibility to negotiate in a commercially reasonable manner with third parties regarding the fee the MTR will receive for the MTR’s import and export signal. The HBPA therefore agrees that the HBPA will not object to any contract entered into between the MTR and a third party that provides for a commission rate paid to the MTR in excess of 3% of gross handle from all North American Thoroughbred and Standardbred Race Tracks and Race Track owned OTB’s, 4% of gross handle from all North American Greyhound Tracks and 6% of gross handle from all ADW sites.

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Simulcasting at the MTR shall be governed by West Virginia statutes and the Federal Interstate Horse Racing Act of 1978, Simulcasting Agreement and the Federal Interstate Horse Racing Act of 1978. A Simulcasting Agreement and site approval executed simultaneously with this Agreement shall be a part of this Agreement (Exhibit B). To the extent there is a conflict between this Agreement and the Simulcasting Agreement with respect to matters relating to live racing, then the terms of this Agreement shall control.

ARTICLE XXVIII

Term

The term of this Agreement shall commence January 1, 2019, and shall terminate on December 31, 2021. However, this Agreement is binding only during the periods during which the MTR is permitted to operate permitted activities as defined in the Racetrack Video Lottery Act of 1994, as amended.

ARTICLE XXIX

Unzipper Clause

The parties acknowledge that during the negotiations that resulted in this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to any subject or matter not removed by law from the area of negotiations, and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement. Notwithstanding the aforementioned, MTR for the life of this Agreement, voluntarily and unqualifiedly reserves the right to reopen negotiations on any subject matter covered by the Agreement IF MTR encounters competition within a One Hundred and Fifty (150) mile radius, and HBPA and MTR agree that the other shall be obligated to negotiate with respect to any subject matter not specifically referred to or covered by this Agreement, even though the subject or matter may not have been within the knowledge or contemplation of either or both of the parties at the time that they negotiated or signed this Agreement. However, this will not preclude the parties from mutually agreeing to amend this Agreement at any time.

ARTICLE XXX

Integration

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter contained herein and supersedes any prior agreements between the parties hereto either oral or written.

IN WITNESS THEREOF, the parties to this Agreement have caused these presents to be executed by their agents hereunto duly authorized, and their seals to be affixed hereto, as of the date first above written.

WITNESS the following signatures:

 

									
	
MOUNTAINEER PARK, INC.
	
 
	
MOUNTAINEER PARK HORSEMEN’S

BENEVOLENT AND PROTECTIVE

ASSOCIATION, INC
	
	
 
	
 
	
 
	
	
 
	
 
	
Jason Pugh
	
 
	
Jami Poole

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Jason Pugh                            
	
 
	
By:        /S/  Jami Poole                                     

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Its:
	
 
	
VP:General Manager
	
 
	
Its:   President

 

 

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AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into this  9    day of April  2019     , by and between Mountaineer Park, Inc. (the “Track”) a corporation licensed by the West Virginia Racing Commission to conduct thoroughbred racing at Mountaineer Race Track and Gaming Resort (the “Mountaineer Park”), and the Mountaineer Park HBPA Benevolent Trust (the “Trust”), a conduit trust established by Mountaineer Park Horsemen’s Benevolent and Protective Association, Inc. (the “HBPA”) and the trustees of the Trust.

BACKGROUND

The Trust was established out of a general concern for the welfare and well-being of those individuals who are not employed by the Track or the HBPA, but whose primary source of income is derived from the racing, training, and care of thoroughbred horses at Mountaineer Park. The Trust will provide certain health and other benefits to individuals associated with Mountaineer Park to help defray the cost of medical and other expenses incurred by such individuals that are not covered by commercial health or other insurance.

The Track has agreed to pay over certain amounts in order to fund the Trust and the Trust has agreed to administer such funds.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    FUNDING The Track shall pay over to the Trust monthly, in arrear, an amount equal to 1 % of the total amount distributed for purses.

2.    TERM The term of this Agreement shall commence on January 1, 2019, and shall continue until December 31, 2021. This Agreement is binding, however, only during the periods, which the Track is authorized to operate “permitted activities” as, defined in the Race Track Video Lottery Act of 1994.

3.    MISCELLANEOUS

3.1    Entire Agreement This Agreement constitutes the entire agreement between the Parties and there are no representations, warranties, understandings or commitments except as provided herein.

3.2.    Binding Effect This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective legal representatives, successor, and permitted assigns.

3.3.    Severability If the application of any term or provision of this agreement, whether in whole or in part, shall be held invalid or unenforceable, the remainder of this agreement shall not be affected by such holdings and shall be fully enforced.

3.4    Counterparts This agreement may be executed in two or more counterparts, each of which shall be deemed an original but all which together shall constitute one and the same instrument.

 

 

3.5.    Governing Law The laws of West Virginia shall govern the validity and construction of this agreement and any dispute arising out of or relating to this agreement, without regard to the principles of conflict of laws.

3.6.    Hold Harmless The parties agree that this agreement is being made as an accommodation to the HBPA, and the HBPA hereby agrees to save and hold the Track harmless from any and all liabilities which may result from the execution or operation of this amendment.

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

							
	
 
	
 
	
ATTEST:
	
 
	
 
	
 
	
MOUNTAINEER PARK, INC.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
/s/ Jason Pugh

	
 
	
 
	
 
	
 
	
 
	
 
	
Jason Pugh

	
 
	
 
	
 
	
 
	
 
	
 
	
GM Mountaineer Park, Inc.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
MOUNTAINEER PARK HBPA

BENEVOLENT TRUST

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
/s/ Jami Poole

	
 
	
 
	
 
	
 
	
 
	
 
	
Jami Poole

	
 
	
 
	
 
	
 
	
 
	
 
	
Trust Chairman

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
MOUNTAINEER PARK HBPA

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
/s/ Jami Poole

	
 
	
 
	
 
	
 
	
 
	
 
	
Jami Poole

	
 
	
 
	
 
	
 
	
 
	
 
	
PresidentExhibit 10.1

 

FIRST AMENDMENT TO LEASE (the “First Amendment”) dated as of March 13, 2019, between S/K 520 ASSOCIATES (the “Landlord”), whose mailing address is P.O. Box 6872, 520 US Highway 22, Bridgewater, NJ 08807, and FOAMIX PHARMACEUTICALS INC., (the “Tenant”), having an office at 520 US Highway 22, Bridgewater, NJ 08807.

 

W I T N E S S E T H :

 

WHEREAS, Tenant entered into a lease with Landlord dated October 25, 2017 (the “Original Lease”) for Leased Premises located on the second floor of 520 US Highway 22, Bridgewater, New Jersey (the “Building”) as more particularly described in the Lease; and

 

WHEREAS, the parties have agreed to amend the Lease to add an additional 4,639 square feet (the “Added Premises”) and to extend the Term in accordance with the terms set forth below;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties have agreed to amend the Lease as follows:

 

1.             LEASE CONTINUES IN FORCE

 

Words not defined in this First Amendment shall have the meanings specified in the Lease. Except as amended by the provisions of this First Amendment, the Original Lease shall otherwise remain in full force and effect. In the event of a conflict between this First Amendment and the Original Lease, this First Amendment shall control.

 

	2.	
ADDITION OF PREMISES

 

2.1.          Plans for the preparation of the Added Premises and for modification of the existing Leased Premises dated February 12, 2019 have been prepared by C.G. Albrecht Architect A.I.A. (the “Tenant Plan”). Landlord shall perform a turnkey installation based upon the Tenant Plan and the specifications (“Landlord’s Work”). Landlord’s Work shall include the items specified in Exhibit B. Landlord’s Work shall not include any specialized installations such as computer, data and telephone lines. All communications, data, computer and internet access facilities, including cabling, wiring, raceways, infrastructure, IT room(s), conduits, punch-downs, terminations, junction boxes and ancillary devices and materials, as required, including final hook-ups shall be installed by Tenant, at its expense. All such Tenant’s work shall be done in compliance with the requirements of section 12 of the Original Lease.

 

2.2.          Beginning on the date that preparation of the Added Premises and the existing Leased Premises in accordance with the Tenant Plan is substantially completed (except for minor details of construction, decoration and mechanical adjustments, the non-completion of which do not materially interfere with the use and enjoyment of the Leased Premises by Tenant (the “Added Premises Commencement Date” or “APCD”), the Added Premises, as more particularly shown on Exhibit A annexed hereto, shall be added to the existing Leased Premises defined in the Original Lease and, from and after the Added Premises Commencement Date, the Added Premises shall (i) constitute a part of the Leased Premises, and (ii) be governed by all the terms and provisions of the Original Lease. For the avoidance of doubt, minor details of construction, decoration and mechanical adjustments shall not prevent substantial completion.

 

2.3.          Following the execution of this First Amendment, Landlord shall use reasonable commercial efforts to perform Landlord’s Work to reach the Added Premises Commencement Date no later than August 1, 2019. Landlord’s Work shall be done during Regular Business Hours using reasonable commercial efforts to minimize any material disruption or interruption of Tenant’s use. Tenant shall reasonably cooperate with Landlord in the performance of the Landlord’s Work. Tenant, in a timely manner, shall move all desks, chairs, telephones, computers and other possessions in the existing Leased Premises, and to do all things reasonably necessary, to allow the Landlord’s Work to proceed in a timely and orderly manner. In the event the Landlord does not deliver the Added Premises by September 1, 2019 then Landlord shall provide Tenant with a rent abatement valued to be the prorated Basic Rent for the Added Premises for each day delivery is delayed beyond August 1, 2019 provided that if the actions or inactions of Tenant delay the performance of Landlord’s Work the abatement shall be reduced by one day for each day of delay caused by Tenant’s actions or inactions.

 

 

2.4.          Tenant shall pay Landlord $25,000 to reimburse Landlord for a portion of the costs incurred by Landlord (the “Reimbursement”). The Reimbursement shall be paid to the Landlord in equal monthly installments of $694 which shall be payable together with the Basic Rent on the first day of each month during the Extended Term. No interest shall be charged unless the payments are not made in a timely manner. If, for any reason, Landlord anticipates that it will be required to incur additional costs to complete the Landlord Work, Landlord shall consult with Tenant prior to incurring any such costs and the parties shall reasonably agree on any additional amount to be paid by Tenant to Landlord for the completion of the Landlord Work.

 

3.             TERM AND OPTIONS

 

3.1.          The Term of the Lease for the entire Leased Premises shall be extended for thirty-six (36) months (the “Extended Term”) from the Added Premises Commencement Date. If the Added Premises Commencement Date is not the first day of a calendar month then the Extended Term shall run during the month in which the Added Premises Commencement Date occurs and for thirty-six (36) months from the first day of the following month.

 

.          3.2          If, prior to the respective date of exercise thereof, (a)(i) no Event of Default shall have occurred or (ii) if an Event of Default shall have occurred, the Tenant shall have previously cured it in full and the Landlord shall have waived it and (b) there shall not have been a History of Recurring Events of Default, Tenant is hereby granted one option to renew this Lease (the “Option to Renew”) upon the following terms and conditions:

 

		3.2.1	
At the time of the exercise of the Option to Renew and at the time of said renewal, no Default shall have been declared by Landlord and Tenant shall occupy and be in operation at the entire Leased Premises pursuant to this Agreement.

 

		3.2.2	
Notice of the exercise of the Option to Renew shall be sent to the Landlord in writing at least nine (9) months before the expiration of the Extended Term.

 

		3.2.3	
The Renewal Term shall be for a period of five (5) years to commence at the expiration of the Extended Term, and all of the terms and conditions of this Agreement, other than the annual amount of Basic Rent, shall apply during the Renewal Term.

 

		3.2.4.	
Subject to the last sentence of this paragraph, the amount of annual Basic Rent to be paid during the Renewal Term shall equal the Market Rental Rate of the Leased Premises if the same were available for lease to the public. If the parties are unable to agree on the Market Rental Rate of the Leased Premises, the parties shall resolve such dispute within forty-five (45) days of the notice of the Option to Renew by the following procedure: each party shall appoint one appraiser who shall in turn appoint a third independent appraiser and the determination of said three appraisers shall be binding on the parties. In no event, however, shall the annual Basic Rent payable by Tenant during the Renewal Term be less than the annual Basic Rent paid by Tenant during the immediately preceding twelve months.

 

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3.3.          Section 20 of the Original Lease is amended by adding the following sentence: “Notwithstanding the foregoing provisions, Landlord may only relocate Tenant with Tenant’s consent.”

 

4.             RENT

 

4.1.          Beginning on April 1, 2019, the Basic Rent and the monthly installments shall be revised in accordance with the following table.

 

	
Period

	
Annual Rate

	
Installments

	
4/1/19 through the APCD

	
$128,100.00

	
$10,675.00

4.2.          Beginning on the Added Premises Commencement Date, the Basic Rent shall be revised in accordance with the following table:

 

	
Period

	
Annual Rate

	
Installments

	
Mos. 1 thru 12 from APCD

	
$362,315.16

	
$30,192.93

	
Mos. 13 thru 24 from APCD

	
$369,634.80

	
$30,802.90

	
Mos. 25 thru 36 from APCD

	
$376,954.32

	
$31,412.86

4.3.          Tenant also shall pay all Additional Rent and Tenant Electric Charges, in accordance with the terms of the Original Lease.

 

4.4.          If the Added Premises Commencement Date is not the first day of a calendar month, the Basic Rent for the month shall be pro-rated at the rate of $687.50 per day through the day before the Added Premises Commencement Date and at the rate of $1,006.44 per day for the balance of the month.

 

4.5.          Tenant shall increase the Security Deposit to $90,578.82.

 

5.             TENANT’S SHARE

 

Beginning on the Added Premises Commencement Date, Tenant’s Share shall be increased to 24.1%.

 

6.             REPRESENTATIONS

 

The Tenant hereby represents and warrants that:

 

6.1.          its North American Industrial Classification (NAICS) code is 424210 and it will promptly give notice of any change therein during the Term to the Landlord;

 

6.2.          no broker or other agent has shown the Added Premises or the Building to the Tenant, or brought either to the Tenant’s attention, except Cushman & Wakefield of NJ, Inc. whose entire commission therefore is set forth in a separate document and which commission the Tenant understands will be paid by the Landlord directly to the person named;

 

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6.3.          the execution and delivery of, the consummation of the transactions contemplated by and the performance of all its obligations under, this Agreement by the Tenant have been duly and validly authorized by its general partners, to the extent required by their partnership agreement and applicable law, if the Tenant is a partnership; or, if the Tenant is a limited liability company, by its members, to the extent required by their operating agreement and applicable law; or, if the Tenant is a corporation, by its board of directors and, if necessary, by its stockholders at meetings duly called and held on proper notice for that purpose at which there were respective quorums present and voting throughout; and no other approval, partnership, corporate, governmental or otherwise, is required to authorize any of the foregoing or to give effect to the Tenant’s execution and delivery of this Agreement;

 

6.4.          the execution and delivery of, the consummation of the transactions contemplated by and the performance of all its obligations under, this Agreement by the Tenant will not result in a breach or violation of, or constitute a default under, the provisions of any statute, charter, certificate of incorporation or bylaws, partnership agreement or operating agreement of the Tenant or any affiliate of the Tenant, as presently in effect, or any indenture, mortgage, lease, deed of trust, other agreement, instrument, franchise, permit, license, decree, order, notice, judgment, rule or order to or of which the Tenant or any affiliate of the Tenant is a party, a subject or a recipient or by which the Tenant, any affiliate of the Tenant or any of their respective properties and other assets is bound; and

 

6.5.          it is not a Specially Designated National or a Blocked Person as those terms are defined in the rules of the Office of Foreign Assets Control nor a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

 

7.             BINDING EFFECT

 

The terms, covenants and conditions of this First Amendment shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

 

8.              COUNTERPART

 

This First Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument, and all of which together shall constitute one and the same instrument. Any signature page to any counterpart may be detached from the original counterpart to which it was attached, and then attached to another counterpart that is identical to the original counterpart, without impairing the legal effect of the signatures thereon.

 

(The signatures are set forth on the following page.)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 

LANDLORD:

S/K 520 ASSOCIATES

By: S/K 520 Corp.

 

By:  _______________________________________

        Jonathan Kushner, Vice President

 

TENANT:

FOAMIX PHARMACEUTICALS INC.

 

By:   _______________________________________

         /s/ David Domzalski, Chief Executive Officer

 

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FOAMIX PHARMACEUTICALS LTD (the “Guarantor”) is the maker of a Guaranty in favor of S/K 520 ASSOCIATES which provides, among other things, for (i) the payment and performance of each and every obligation of Tenant under the Lease from the time a default is declared by Landlord until possession is unconditionally surrendered and the Leased Premises is delivered to the Landlord, and (ii) all reasonable costs and expenses incurred by Landlord in enforcing its rights and remedies with respect to this Guaranty. The Guarantor hereby affirms and agrees that the Guaranty remains in full force and effect and shall continue following the execution of this First Amendment and through the Extended Term as defined above.

 

FOAMIX PHARMACEUTICALS LTD

____________________________ (L.S.)

[Insert name and title]

 

[Add Authentication of Signature of Person Signing on behalf of a Body Corporate]

 

 

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EXHIBIT A

DIAGRAM OF ADDED PREMISES

 

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EXHIBIT B

LANDLORD’S WORK ADDITIONS

 

		1.	
All walls in the 14,639 SF Leased Premises to be painted.

 

		2.	
All carpet to be replaced in the 14,639 SF Leased Premises (with exception of the private offices in the existing Leased Premises).

 

		3.	
Board room adjacent to reception area to include new carpet.

 

		4.	
3 new core drills.

 

		5.	
Existing workstations in “bullpen” area to be removed.

 

		6.	
All work contemplated in Exhibit A floor plan.

 

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FIRST AMENDMENT TO LEASE

 

Between

S/K 520 ASSOCIATES

 

The Landlord

 

And

 

FOAMIX PHARMACEUTICALS INC.

 

The Tenant

 

For Premises In

 

520 US Highway 22, Bridgewater, New Jersey 08807

 

March ____, 2019

 

Prepared by:

Gary O. Turndorf

520 Route 22

P.O. Box 6872

Bridgewater, NJ 08807

(908) 725-8100

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