CONDITIONS OF LICENCE
GRANTED TO
(insert)
Index
no.CONDITION HEADINGS PAGE
1INTRODUCTION
2DEFINITIONS AND INTERPRETATION
3DURATION OF LICENCE
4COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS
5EXECUTION AND AMENDMENTS TO AGREEMENTS
6COMPLIANCE WITH UNDERTAKINGS AND LICENCE CONDITIONS
7CONSTRUCTION OF THE CASINO DEVELOPMENT PROJECT
8FINANCIAL COMMITMENTS
9COMMENCEMENT OF OPERATIONS
10OPERATION OF THE RESORT
11DEVICES AND GAMES
12HOURS OF OPERATION
13PREVIOUSLY DISADVANTAGED INDIVIDUALS
14BBBEE COMPLIANCE
15EASTERN CAPE SUPPLIERS AND SERVICES PROVIDERS
16PUBLIC INTEREST
17TOURISM INVOLVEMENT
18ENVIRONMENTAL ISSUES IN RESPECT OF THE PROPERTY
19HEALTH AND SAFETY
20EMPLOYMENT
21CORPORATE GOVERNANCE
22MAINTENANCE PLAN
23DUTIES RELATING TO LICENSEE SHAREHOLDERS
24REPORTING TO THE ECGBB
25DUTY TO SUPPLY INFORMATION
26CONSEQUENCES OF NON-COMPLIANCE
28 ADDITIONAL CONDITIONS
ANNEXURE
Annexure A –Development Guarantee issued by (insert)
Annexure B – Draft Licence Period Guarantee
CONDITIONS OF LICENCE
1INTRODUCTION
WHEREAS-
1.1the ECGBB has issued the RFP inviting applications for a casino licence in Zone 3 in the Eastern Cape Province;
1.2the Licensee has submitted the Application in response to the RFP;
1.3the Licensee has undertaken to perform certain acts and fulfil certain requirements relating to the Casino Development Project and the operation of the Resort;
1.4the ECGBB acting in terms of sections 44 and 38 of the Act has awarded the Licence to the Licensee on the basis of the Application;
1.5the ECGBB is empowered by sections 33, 38, 43 and 44 of the Act to impose such licensing conditions and requirements as it considers appropriate;
1.6the ECGBB wishes to ensure that the considerations contemplated in section 43 of the Act are in particular upheld; and
1.7the Licence is a revocable privilege contingent upon continuous suitability for licensing, including compliance with the terms and conditions imposed by the ECGBB.
NOW THEREFORE the ECGBB hereby imposes the following conditions in respect of the Licence:
2DEFINITIONS AND INTERPRETATION
2.1Subject tocondition2.2 below, words and expressions not defined in these Conditions shall, where they are used in these Conditions, have the same meanings ascribed to them in the RFP.
2.2Notwithstanding anything to the contrary contained in the RFP the following words and expressions, where used in these Conditions, shall have the meaning set out opposite them unless the context in which they are used in these Conditions clearly indicates a different meaning-
2.2.1“Act” means the Gambling and Betting Act (Eastern Cape), No. 5 of 1997,and the Regulations;
2.2.2“Agreements” means any agreement/s and other legal undertakings which relate to the operation and management of the Casino and/or the Resort and which may in the reasonable opinion of the ECGBB have an effect on the rights of PDIsas contemplated in the RFP and in these Conditions and includes -
2.2.2.1(insert);
2.2.3“Applicable Laws”means the Act and all other applicable statutes, ordinances, regulations, judgments and orders of any competent court, or governmental agency or authority in any relevant jurisdiction within the Republic of South Africa, as well as such rules which may be issued from time to time by the ECGBB as may be applicable to the Resort and/or to the Casino Development Project;
2.2.4“Application” means –
2.2.4.1the application submitted by the Licensee to the ECGBB on (insert)in response to the RFP in terms of which the Licensee applied for the issuing of the Licence; and
2.2.4.2all further documents, correspondence and proposals submitted by the Licensee to the ECGBB relating to the Application;
2.2.5“BBBEE” has the meaning ascribed thereto in section 1 of the Broad Based Black Economic Empowerment Act, No. 53 of 2003;
2.2.6“(insert)” means the (insert)Casino Resort, owned and operated by the Licensee;
2.2.7“Business Day” means a day which is not a Saturday, Sunday or public holiday in the Republic of South Africa;
2.2.8“Casino” means the casino, comprising of the slot machines, thegambling machines and any other gambling activities, which forms part of the Resort;
2.2.9“Casino Development Project” means the development and upgrading project to be undertaken by the Licensee in terms of which the Licensee shall procure, inter alia-
2.2.9.1(insert);
the particulars of which are more fully set out in the Application;
2.2.10“Commencement Date” means(insert)notwithstanding that such date is not a Business Day;
2.2.11“Conditions” means these Conditions issued in terms of sections 33, 43 and 44 of the Act;
2.2.12"Consent" means any consent, permit, clearance, authorisation, approval, ruling, exemption, registration, filing, decision, licence, permission required to be issued by or made with any Responsible Authority for the purposes of undertakingany of the Casino Development Project milestones contemplated in the Project Development Programme;
2.2.13“CPI” means the Consumer Price Index, excluding interest rates on mortgage bonds, as published from time to time by Statistics South Africa (or its successor-in-title);
2.2.14“Development Period” means the period in which the Licensee will undertake and complete the Casino Development Project in terms of the Project Development Programme, which period has been estimated by the Licensee to be(insert) months from the Signature Date;
2.2.15“ECGBB” means the Eastern Cape Gambling and Betting Board, established in terms of section 3 of the Act, and herein represented byReuben Mabutho Zwane in his capacity as the Chief Executive Officer, duly authorised thereto;
2.2.16"Environment" means the environment as contemplated in the National Environmental Management Act, No. 107 of 1998;
2.2.17"Environmental Approval" means any permit, licence, environmental authorisation, registration certificate, record of decision, consent, exemption and other approval issued under Environmental Law;
2.2.18"Environmental Authority" means any government department with jurisdiction to enforce Environmental Law including the Department of Environmental Affairs and the Department of Water Affairs, relevant provincial department and municipality;
2.2.19"Environmental Laws" means all duties (including duties of care), obligations, statutes, regulations, ordinances, bylaws, common law, international law, judicial precedent, administrative orders, directives, compliance notices, Environmental Approvals and any other regulatory tools aimed at, amongst other things, the protection and management of the Environment and promotion of the health and well-being of all persons;
2.2.20"Force Majeure" means any of the following events-
2.2.20.1acts of war, invasion, hostilities, civil war, mutiny, military uprising;
2.2.20.2nuclear contamination;
2.2.20.3confiscation, nationalization or requisition by the State;
2.2.20.4statutory amendments preventing completion;or
2.2.20.5earthquake, volcano or acts of God,
which directly causes the Licensee to be unable to meet any of its obligations in respect of a particular milestone as set out in the Project Development Programme,and which cannot be corrected or compensated for by the allowance of additional time for the completion of the Casino Development Project;
2.2.21“Guarantees” meansthe development guarantee and the licence period guaranteeissued by (insert) and (insert)as guarantors of the obligations of the Licensee in favour of the ECGBB,effective from the Signature Date and within 30 days of the commencement of gambling operations, respectively, a copies of whichareattached hereto as AnnexuresAand B;
2.2.22"Health and Safety Approval" means any notice, permit, policy, exemption, licence, authorisation, registration, certificate, decision, consent and other approval required by and/or issued under Health and Safety Law;
2.2.23“Health and Safety Management Program” means an internationally comparable Health and Safety Management System;
2.2.24"Health and Safety Law" means all statutes, regulations, duties, codes of practice and standards promulgated in terms thereof, bylaws and Health and Safety Approvals regulating occupational health and safety and building safety;
2.2.25“Licence” means thecasino licence awarded to the Licensee in terms of section 44 of the Act, which is subject to these Conditions;
2.2.26“Licence Period” means the period referred to in Condition2.9;
2.2.27“Licensee” means (insert) (Proprietary) Limited,a company incorporated in accordance with the laws of the Republic of South Africa with registration number(insert)trading as(insert)Casino Resort.
2.2.28“Management Fees” means the total operating management fees payable by the Licensee for the management and operation of theCasino which in terms of the relevantAgreements, is divided in the following proportions-
2.2.28.1(insert) - (insert)%
2.2.28.2PDI Shareholders – (insert)%
2.2.29“PDI Shareholders” means (insert) (Proprietary) Limited;
2.2.30“Previously Disadvantaged Individuals”or“PDIs” means those persons who are members of categories of persons previously disadvantaged by unfair discrimination as recognised in terms of section 9(2) of the Constitution of the Republic of South Africa, No. 108 of 1996, and who, for the purposes of these Conditions,stand to benefit directly or indirectly by virtue of the performances provided for in these Conditions;
2.2.31“Project Development Programme” means the programme setting out development milestones and a timeline in which the Casino Development Project shall be completed during the Development Period;
2.2.32“Project Quantity Surveyor” means the project quantity surveyor for the Casino Development Project appointed by the Licensee from time to time;
2.2.33“Property” means(insert), Eastern Cape Province.
2.2.34“Quarter” means a period of three (3)calendar months ending on the last day of each March, June, September and December, the first of which shall be the aforesaid quarter which first succeeds the Commencement Date;
2.2.35“Regulations” means the Eastern Cape Gambling and Betting Regulations, issued in terms of section 80 of the Act;
2.2.36“Relief Event” means-
2.2.36.1any fire, explosion, tempest, flood, ionizing radiation, riot and civil commotion, or pressure waves caused by devices travelling at supersonic speed;
2.2.36.2any off-site failure or shortage of power, water, fuel or transport;
2.2.36.3any blockade or embargo which does not constitute an event of Force Majeure;
2.2.36.4any delay in obtaining any Consent or statutory amendments preventing completion of the milestones in accordance with the Project Development Programme;
2.2.36.5any official or unofficial strike,lockout, go-slow or other such labour disputes generally affecting the construction sector in respect of the rendering of any undertakingrequired to achieve the Casino Development Project milestones contemplated in the Project Development Programme,
unless any of the events listed in Conditions2.2.36.1to 2.2.36.5above (all inclusive) arises (directly or indirectly) as a result of any negligence, willful conduct or default of any entity forming part of the(insert) and/or any of its contractors and/or subcontractors contracted to perform any services in respect of to the Casino Development Project;
2.2.37“Resort” means the hotel, leisure and gaming resort known as the(insert)Casino Resort located on the Property, together with all ancillary and other facilities and amenities to and of the Resort to be established or added thereto from time to timeand in particular in terms of the Casino Development Project and includes the Casino,(insert);
2.2.38“Responsible Authority" means any ministry, any minister, any organ of state, any official in the public administration or any other governmental or regulatory department, commission, institution, entity, service utility, board, agency, instrumentality or authority (in each case, whether national, provincial or municipal) or any court, each having jurisdiction over the matter in question, but excluding for all purposes the ECGBB;
2.2.39“RFP” means the Final Request For Proposals issued by the ECGBB on (insert)inviting applications for a casino licence in Zone 3 in the Eastern Cape Province;
2.2.40“Signature Date” means the date on which the duly authorised representative of the ECGBBissues the licence and signs these Conditions;
2.2.41“Zone 3” means the zone situated in the Eastern CapeProvince in terms of which the Licence is issued and which relates to the municipal areas contemplated under the description of Zone 3in the RFP.
2.3The headings in these Conditions have been inserted for convenience only and shall not be taken into account in its interpretation.
2.4Words and expressions defined in any sub-condition shall, for the purpose of the Condition of which that sub-condition forms part, bear the meaning assigned to such words and expressions in that sub-condition.
2.5If any provision in a definition is a substantive provision conferring rights or imposing obligations on any party, effect shall be given to it as if it were a substantive condition in the body of the Conditions, notwithstanding that it is only contained in the interpretation Condition.
2.6A reference to any statutory enactment shall be construed as a reference to that enactment as at the Commencement Date and as amended or substituted from time to time.
2.7The words "include(s)" and "including" mean "include without limitation" and "including without limitation". The use of the words "include(s)" and "including" followed by a specific example or examples shall not be construed as limiting the meaning of the general wording preceding it.
2.8If any period is referred to in these Conditions by way of reference to a number of days, the days shall be reckoned exclusively of the first and inclusively of the last day unless the last day falls on a day which is not a Business Day, in which case the day shall be the next succeeding Business Day.
2.9TheseConditions shall be governed by and construed and interpreted in accordance with the national laws of the Republic of South Africa and the provincial laws of the Eastern Cape Province.
3DURATION OF LICENCE
The Licence shall, subject to Condition26, be valid from the Commencement Date and endure for a period of 20 (twenty) years thereafter.The aforesaid Licence Period may not be extended.
4COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS
4.1The Licensee shall for the duration of the Licence comply with all Applicable Laws.
4.2The Licensee shall procure that the Casino Development Project be completed within the Development Period and that the Resort be operated and maintained in accordance with these Conditions and the Applicable Laws and any further directives issued by the ECGBB in accordance with Applicable Laws.
4.3The Casino shall comply with all Applicable Laws and the standards set by the South African Bureau of Standards, its successor in title, or any other similar accredited entity, subject to any exemption the ECGBB may grant in terms of the Act, the Regulations or Rules made in terms of the Act.
4.4At any time during the Licence Period the Casino may at the ECGBB’s instance and on reasonable written notice to the Licensee be inspected by the South African Bureau of Standards, its successor in title, or any other similar accredited entityto ensure compliance with Applicable Laws and the standards.
4.5The ECGBB will on a continuous basis re-evaluate and test the Central Monitoring System referred to in Regulation 41 of the regulations made under the Act, to ensure regulatory compliance. The Licensee shall bear the reasonable costs, as provided for in the Act, incurred by the ECGBB in respect of such re-evaluation and testing.
5EXECUTION AND AMENDMENTS TO AGREEMENTS
5.1The Licensee shall comply with the provisions of all the Agreements in the governance of its operations.
5.2The Licensee shall not be entitled to amend the provisions of any Agreement/s without the prior written approval of the ECGBB.
5.3The Licensee shall notify the ECGBB immediately upon any event of default or acceleration under the Agreements and the Licensee shall advise the ECGBB on a continuing basis regarding any action taken, or likely to be taken, by creditors, trustees or shareholders with regard to such event, default, acceleration or similar matter.
5.4The Licensee shall notify the ECGBB immediately prior to any transfer or assignment of rights under the Agreements or documents related to the financing arrangements concerning the Licensee.
5.5The ECGBB shall be entitled at any time during the Development Period to cancel the Guarantee provided that the Licensee has submitted a bank guarantee (reasonably satisfactory to ECGBB) in favour of the ECGBB for the value to be determined by the ECGBB,in circumstances where -
5.5.1the ECGBBis of the reasonable opinion that the Licenseehaspersistentlyfailed to meet its obligations under the Project Development Programme; and/or
5.5.2upon the occurrence of any of the following events-
5.5.2.1if the employees of the Licensee participate in a strike for longer than three (3) consecutive months; and/or
5.5.2.2the audited financial statements submitted to the ECGBB by the guarantorin compliance with its obligations in terms of the Guarantee objectively demonstrate thepending or actual financial instability of the guarantor; and/or
5.5.2.3the audited financial statements submitted to the ECGBB by the Licensee in compliance with its obligations in terms of Condition25.4.13objectively demonstrate the pending or actual financial instability of the Licensee.
6COMPLIANCE WITH UNDERTAKINGS AND LICENCE CONDITIONS
6.1The Licensee shall comply to the satisfaction of the ECGBB with all commitments and undertakings made in the Application, as supplemented or amended in correspondence and at the public hearing, and with any directives or guidelines issued by the ECGBB on the aforesaid undertakings in accordance with Applicable Laws and be regularly monitored.
6.2The Licensee shall bear the reasonable costs, as provided for in the Act, incurred by the ECGBB or its agents in ensuring compliance with the undertakings and stipulations contemplated in the Application and these Conditions, in fulfilment of its duties under the Act.
6.3The ECGBB shall as far as reasonably possible utilise its own resources in ensuring compliance with the undertakings and stipulations contemplated in the Application and these Conditions and to the extent that it does not have sufficient resourcesin required circumstances, appoint the agents referred to in Condition 6.2 above in terms of the Act.
6.4The Licensee shall provide the necessaryonsite logisticalfacilities to the reasonable satisfaction of the ECGBB for regulatory inspectors of the ECGBB on a full time basis.
7OPERATION AND CONSTRUCTION
7.1The Licensee shall operate the Resort on the Property in the location as stipulated in the Application.
7.2The Licensee shall ensure that its rights to the Property remain secured in compliance with section 42(iv) of the Act.
7.3The Licensee shall procure the completion of the Casino Development Project during the Development Period in accordance with the proposals, specifications and undertakings contemplated in the Applicationand the Project Development Programme.
7.4The Licensee shall provide to the ECGBB,by no later than sixty (60) days after the Signature Date, a copy of the Project Development Programme. The nature, scope and specifications of the Casino Development Project and the Project Development Programme shall only be amended by the Licensee with the prior written approval of the ECGBB.
7.5The ECGBB shall be entitled during the Development Period to inspect and/or monitor through physical inspections and/or otherwise the Casino Development Project.
7.6The Licensee shall procure that all the elements forming part of the Casino Development Project are-