SETTLEMENT AND RELEASE AGREEMENT
Settlement and Release Agreement (this "Agreement") dated January 6, 1998
by and among Leisure Resort Technology, Inc., a Connecticut corporation
("Leisure"), ▇▇▇ ▇. ▇▇▇▇▇ ("Tyrol"), Trading Cove Associates, a Connecticut
general partnership ("TCA"), ▇▇▇▇▇▇ Suites, Inc., a Michigan corporation
("▇▇▇▇▇▇"), LMW Investments, Inc., a Connecticut corporation ("LMW"), RJH
Development Corp., a New York corporation ("RJH"), Waterford Gaming L.L.C., a
Delaware limited liability company ("Waterford"), and Sun Cove, Ltd., a
Connecticut corporation ("Sun").
WHEREAS, Leisure, Tyrol, Slavik, LMW, RJH, Sun and TCA have entered into
the Acknowledgment and Release Agreement dated as of February 3, 1995 (the
"Acknowledgment and Release Agreement"), pursuant to which ▇▇▇▇▇▇, LMW and RJH
collectively assigned, transferred and conveyed to Leisure a (5%) beneficial
interest in the profits, the losses and certain specified distributions of TCA
(the "Beneficial Interest");
WHEREAS, Waterford has acquired (subject to Leisure's Beneficial
Interest) the partnership interests of ▇▇▇▇▇▇, LMW and RJH, and has assumed
the obligations of ▇▇▇▇▇▇, LMW and RJH to Leisure pursuant to the
Acknowledgment and Release Agreement;
WHEREAS, Leisure has filed an action against TCA, ▇▇▇▇▇▇, LMW, RJH,
Waterford and Sun in the Superior Court of the State of Connecticut, Judicial
District of Middlesex, captioned Leisure Resort Technology, Inc. vs. Trading
Cove Associates, ▇▇▇▇▇▇ Suites, Inc., LMW Investments, Inc., RJH Development
Corp., Waterford Gaming, L.L.C. and Sun Cove Ltd., D.N. CV 97 83139S (the
"Action"); and
WHEREAS, the undersigned now desire that the Action and other differences
among them be settled and that Leisure release any rights attendant to the
Beneficial Interest and any claims it may have against TCA, ▇▇▇▇▇▇, LMW, RJH,
Waterford or Sun.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
1. Upon the execution of this Agreement, Waterford shall pay to
Leisure $5,000,000 by bank cashier's or certified check payable to the order
of, or by wire transfer to an account specified by, Leisure.
2. Leisure hereby releases, relinquishes and discharges any
right, title, interest or claim arising from or relating in any way to the
Beneficial Interest, including but not limited to any claim against TCA,
▇▇▇▇▇▇, LMW, RJH, Waterford and Sun for payments pursuant to Paragraph 1(c)
and 1(f) of the Acknowledgment and Release Agreement.
3. Leisure hereby consents and agrees to the dismissal with
prejudice of the Action, and shall file within three business days hereof in
the Superior Court of the State of Connecticut, Judicial District of
Middlesex, a Stipulation of Dismissal dismissing the Action with prejudice,
effective the date it is filed or such later date as may be required by the
Court. All parties to the Action agree, and the Stipulation of Dismissal
shall state, that each party shall bear its own costs, including attorneys'
fees.
4. Any agreement, understanding or other commitment on the part
of TCA, ▇▇▇▇▇▇, LMW, RJH, Waterford or Sun to provide, or to have provided,
information of any kind or type to Leisure, whether pursuant to Paragraph 1(g)
of the Acknowledgment and Release Agreement or otherwise, is hereby
terminated. Any confidential information (as defined in the Confidentiality
Agreement between TCA and Leisure executed in October of 1997 (the
"Confidentiality Agreement")) heretofore provided by TCA, ▇▇▇▇▇▇, LMW, RJH,
Waterford or Sun to Leisure shall be kept confidential by Leisure pursuant to
the terms of the Confidentiality Agreement (whether or not the provision of
information occurred before or after the Confidentiality Agreement was
executed).
5. If at any time TCA or any of its partners, affiliates,
related entities, or any person related by birth or marriage to any partner,
affiliate, or related entity of TCA, or any successor or assign thereto
(collectively, the "Manager") enters into an agreement with the Mohegan Tribe
of Indians of Connecticut or any affiliate or any other party related thereto
(collectively the "Mohegan Tribe") pursuant to which the Manager's management
or operation of, or any other involvement of any kind with, the Mohegan
Tribe's gaming facilities or other related facilities or enterprises is
amended, restated, extended or renewed, or if a new agreement or arrangement
relating to the foregoing is entered into between the Manager and the Mohegan
Tribe, TCA shall promptly notify Leisure and Tyrol that such an agreement has
been entered into, and Waterford shall pay $2,000,000 to Leisure on the
earliest to occur of (i) the retirement of the $65,000,000 12-3/4 Senior
Notes due 2003 issued by Waterford and Waterford Gaming Finance Corp. (the
"Notes") pursuant to the terms of the Indenture, dated as of November 8, 1996,
among Waterford, Waterford Gaming Finance Corp. and Fleet National Bank (the
"Indenture"), (ii) any renewal, extension, refinancing or refunding of
(whether direct or indirect), or amendment, modification or supplement to, the
Notes, whether or not between or among the parties to the Indenture, and (iii)
November 30, 2003; provided that Waterford shall have no obligation to make
the payment specified in this paragraph if the Manager's management or
operation of, or other involvement with, the Mohegan Tribe's gaming facilities
or other related facilities or enterprises is extended, through one or more
agreements, for a total of 90 days or less. Payment shall be by bank
cashier's or certified check payable to the order of, or by wire transfer to
an account specified by, Leisure. The obligation under this paragraph shall
not be construed as a condition precedent or subsequent to any other
obligation set forth in this Agreement but rather as an independent contingent
obligation.
6. This Agreement constitutes a settlement and release of the
Beneficial Interest, which is a capital asset (as defined in Section 1221 of
the Internal Revenue Code of 1986, as amended). Accordingly, pursuant to
Arrowsmith v. Commissioner, 344 U.S. 6 (1952), Waterford and TCA agree that,
for Federal income tax purposes, they shall treat and report the settlement
and release of the Beneficial Interest as the purchase by Waterford from
Leisure of a capital asset and payments made hereunder in a matter consistent
with such a purchase.
7. In connection with the execution of this Agreement, the
parties shall issue a joint public announcement containing language agreed
upon by all parties hereto. None of the parties hereto nor any of their
respective attorneys, officers, directors, members, shareholders, employees or
partners shall otherwise disclose any of the terms or provisions of this
Agreement without the prior written consent of all the parties except: (i) to
their respective attorneys, officers, directors, members, shareholders,
employees, partners or auditors, provided that any such person to whom such
terms or provisions are disclosed has agreed to be bound by the provisions of
this paragraph; or (ii) as may be necessary to comply with any federal, state,
local, municipal or other administrative order, constitution, law, ordinance,
regulation, statute or treaty (any "Legal Requirement").
8. Each party has had the opportunity to request information
relating to the subject matter of this Agreement, to have such information
reviewed by accountants and counsel and to ask questions, and each party was
represented by counsel in the making of this Agreement. Leisure and Tyrol:
(i) acknowledge that TCA and the Mohegan Tribe have had negotiations
concerning the possibility of extending their relationship; (ii) understand
that the results of such negotiations are at this point uncertain; and (iii)
whatever the results of such negotiations, if any, waive any right or claim
under this or any other agreement or any theory of law to any payments other
than those set forth in Paragraphs 1 and 5 herein.
9. Leisure and Tyrol, on the one hand, and TCA, ▇▇▇▇▇▇, LMW,
RJH, Waterford and Sun, on the other hand, mutually release and forever
discharge one another (including their respective affiliates, partners,
officers, directors, members, shareholders, employees, agents,
representatives, successors and assigns) from any liability, claim,
counterclaim, right or cause of action, demand, debt, contract, obligation,
damage and expense of any nature whatsoever, whether presently known or
unknown, relating to or arising out of the Acknowledgment and Release
Agreement or any prior agreement, understanding or commitment to which any or
all of the parties hereto were a party, which any party may have, claim to
have had or have at any time heretofore had or claimed to have had; provided
that, nothing contained herein shall release or discharge any obligation under
this Agreement. Each party hereto hereby submits to the exclusive
jurisdiction of the United States District Court for the District of
Connecticut and the Superior Court of the State of Connecticut, Judicial
District of Middlesex for the purposes of all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated hereby. Each
party hereto irrevocably waives, to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to the laying of venue
of any such proceeding brought in such a court and any claim that any such
proceeding has been brought in an inconvenient forum.
10. TCA will indemnify and hold harmless Leisure and its
officers, directors, shareholders and employees (collectively, the
"Indemnified Persons") for, and will pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage (including incidental and consequential
damages), and expense (including but not limited to amounts incurred by the
Indemnified Persons for investigation and defense and reasonable attorneys'
fees, disbursements and other related costs) arising, directly or indirectly,
from or in connection with any pending or future lawsuits or claims against
Leisure relating to the acts, omissions or other conduct of TCA or TCA's
Management Agreement with the Mohegan Tribe. In any action brought by Leisure
to enforce its rights, and TCA's obligations, under this Agreement, including
but not limited to any action brought to recover payments due to Leisure
hereunder, the prevailing party shall be entitled to recover from the losing
party the costs (including but not limited to reasonable attorneys' fees,
disbursements and other related costs) incurred by the prevailing party in
connection with such action.
11. Each party represents and warrants to all other parties
hereto, with respect to itself or himself, as follows (the representations and
warranties in clauses (i), (ii) and (iii) being made only by the parties that
are not individuals): (i) it is a corporation, limited liability company or
general partnership, as the case may be, existing and in good standing under
the laws of the state in which it was formed; (ii) its execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby applicable to it have been duly authorized by all
necessary corporate, partnership or limited liability company action, as the
case may be; (iii) all acts and other proceedings required to be taken
(including without limitation shareholder approval) by it to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions herein applicable to it have been duly and properly taken;
(iv) this Agreement has been duly and validly executed and delivered by such
party and constitutes the valid and binding obligation of such party,
enforceable against it in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding at equity or at law); (v) the
execution, delivery and performance of this Agreement by such party and the
consummation of the transactions contemplated hereby applicable to it will
not, in any material respect, with or without giving notice or the lapse of
time, or both, (a) conflict with or violate any Legal Requirement to which
such party is subject; (b) conflict with or violate any award, decision,
injunction, judgment, order, ruling, subpoena or verdict entered, issued, made
or rendered by any court, administrative agency, other governmental body or
arbitrator with appropriate jurisdiction applicable to such party; (c)
conflict with or violate any provision of, as the case may be, (1) the
articles or certificate of incorporation and the bylaws of such party if it is
a corporation, (2) the partnership agreement and any statement of partnership
of such party if it is a general partnership, (3) the certificate of formation
and the limited liability company agreement of such party if it is a limited
liability company, (4) any other charter or similar document adopted or filed
in connection with the creation, formation or organization of such party if
it is not an individual, or (5) any amendment to any of the foregoing; or (d)
conflict with or result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would constitute a default) under
any agreement to which such party or any shareholder or partner of such party,
as the case may be, is party; (vi) as to each of Waterford and TCA, it will
have net assets in excess of net liabilities and will be able to pay its debts
in the ordinary course as they become due; and (vii) as to Leisure, upon the
payment provided for in paragraph 1, it will have net assets in excess of net
liabilities and will be able to pay its debts in the ordinary course as they
become due.
12. Upon the execution of this Agreement, Leisure shall deliver
to TCA an opinion of counsel substantially in the form attached hereto as
Exhibit A, and Waterford shall deliver to Leisure opinions of counsel
substantially in the forms attached hereto as Exhibit B and Exhibit C.
13. The parties understand that upon execution of this Agreement,
Waterford and Sun shall remain equal partners in TCA.
14. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
Leisure or Tyrol:
Leisure Resort Technology, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ R. Tyrol
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Day, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
TCA, ▇▇▇▇▇▇, LMW, Waterford or Sun:
Trading Cove Associates
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
RJH:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
15. This Agreement (a) shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns; (b)
is the complete and exclusive statement of the matters set forth herein
between the parties; (c) shall not be amended except by a written amendment
executed by each of the parties hereto; (d) may not be assigned by any party
hereto without the prior written consent of each of the other parties,
provided that no consent shall be required for the contemplated complete
liquidation and dissolution of Leisure and distribution of its assets,
including its rights hereunder, to a liquidating trust on behalf of the
shareholders of Leisure; and (e) shall be governed by and construed in
accordance with the laws of the State of Connecticut, without giving effect to
the conflicts of laws principles thereof.
16. In the event that any provision contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
jurisdiction, such provision shall be ineffective as to such jurisdiction to
the extent of such invalidity, illegality or unenforceability without
invalidating or affecting the remaining provisions hereof or affecting the
validity, legality or enforceability of such provision in any other
jurisdiction.
17. The parties agree, from and after the date hereof and from
time to time, to execute and deliver to each other such other documents and to
do such other acts and things, all as another party may reasonably request for
the purpose of carrying out the intent of this Agreement.
18. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement will operate
as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege.
19. This Agreement may be executed in counterparts, each of
which shall be an original and all of which, when taken together, shall
constitute a single agreement.
IN WITNESS WHEREOF, the parties have executed and delivered, or
caused to be executed and delivered, this Agreement as of the date first above
written.
LEISURE RESORT TECHNOLOGY, INC.
By:
Name:
Title:
▇▇▇ ▇. ▇▇▇▇▇, individually
TRADING COVE ASSOCIATES
By:
Name:
Title:
▇▇▇▇▇▇ SUITES, INC.,
By:
Name:
Title:
LMW INVESTMENTS, INC.,
By:
Name:
Title:
RJH DEVELOPMENT CORP.
By:
Name:
Title:
WATERFORD GAMING, L.L.C.
By:
Name:
Title:
SUN COVE LTD.
By:
Name:
Title: