New Jersey § 5:12-85

§ 5:12-85.

a. No casino license shall be issued to any applicant or retained by any holder unless

the commission determines that all persons designated by the division as persons who

must qualify in conjunction with such license meet all applicable qualification criteria

and are not unqualified by reason of any disqualification criteria set forth in section

86 of P.L.1977, c. 110 ( C.5:12-86 ). b. Corporate applicants for and holders of casino licenses shall be required to establish

and maintain the qualifications of the following: (1) each officer of the corporation;

(2) each director of the corporation; (3) each person who directly or indirectly

holds any beneficial interest or ownership of the securities issued by such applicant

or holder; (4) any holder who in the opinion of the director has the ability to control

the applicant for or holder of a casino license or to elect a majority of the board

of directors of such applicant or holder; and (5) each holding, intermediary or subsidiary

company of an applicant for or holder of a casino license. c. As to each holding, intermediary and subsidiary company of an applicant for or

holder of a casino license, such applicants and holders shall be required to establish

and maintain the qualifications of the following: (1) each Corporate Officer; (2)

each director of the corporation; (3) each person who directly or indirectly holds

a beneficial interest or ownership interest of 5% or more in such holding, intermediary

or subsidiary company; (4) any person who in the opinion of the director has the

ability to control or elect a majority of the board of directors of such holding,

intermediary or subsidiary company; and (5) any other person who the director may

consider appropriate for qualification. d. The director shall have the authority to waive any or all of the qualification

requirements for any person listed in paragraph (1), (2) or (3) of subsection c. of

this section. e. Applicants for and holders of casino licenses shall be required to establish and

maintain the qualifications of any financial backer, investor, mortgagee, bondholder,

or holders of indentures, notes or other evidences of indebtedness, either in effect

or proposed which bears relation to the casino operation or casino hotel premises

who holds 25% or more of such financial instruments or evidences of indebtedness;

provided however in circumstances of default, any person holding 10% of such financial

instruments or evidences of indebtedness shall be required to establish and maintain

his qualifications as required pursuant to subsection c. of this section. The director may, in his discretion, require that any other financial backer, investor,

mortgagee, bondholder, or holder of indentures, notes or other evidences of indebtedness

who does not meet the threshold set forth herein to establish and maintain his qualifications

as required pursuant to subsection c. of this section. f. Banks and licensed lending institutions shall be exempt from any qualification

requirements under this act if such bank or licensed lending institution is acting

in the ordinary course of business. g. An institutional investor holding either (1) under 25% of the equity securities

of a casino licensee's holding or intermediary companies, or (2) debt securities of

a casino licensee's holding or intermediary companies, or another subsidiary company

of a casino licensee's holding or intermediary companies which is related in any way

to the financing of the casino licensee, where the securities represent a percentage

of the outstanding debt of the company not exceeding 25%, or a percentage of any issue

of the outstanding debt of the company not exceeding 50% unless the full issue is

in the amount of $150 million or less, shall be granted a waiver of qualification

if such securities are those of a corporation, whether publicly traded or privately

held, and its holdings of such securities were purchased for investment purposes only

and it files a certified statement to the effect that it has no intention of influencing

or affecting the affairs of the issuer, the casino licensee or its holding or intermediary

companies; provided, however, that it shall be permitted to vote on matters put to

the vote of the outstanding security holders. The director may grant a waiver of qualification to an institutional investor holding

a higher percentage of such securities upon a showing of good cause and if the conditions

specified above are met. Any institutional investor granted a waiver under this subsection which subsequently

determines to influence or affect the affairs of the issuer shall provide not less

than 30 days' notice of such intent and shall file with the division an application

for qualification before taking any action that may influence or affect the affairs

of the issuer; provided, however, that it shall be permitted to vote on matters put

to the vote of the outstanding security holders. If an institutional investor changes its investment intent, or if the director finds

reasonable cause to believe that the institutional investor may be found unqualified,

no action other than divestiture shall be taken by such investor with respect to its

security holdings until there has been compliance with the provisions of P.L. 1987,

c. 409 ( C.5:12-95.12 et seq. ), including the execution of a trust agreement. The casino licensee and its relevant holding, intermediary or subsidiary company

shall immediately notify the division of any information about, or actions of, an

institutional investor holding its equity or debt securities where such information

or action may impact upon the eligibility of such institutional investor for a waiver

pursuant to this subsection. h. If at any time the director finds that an institutional investor holding any security

of a holding or intermediary company of a casino licensee, or, where relevant, of

another subsidiary company of a holding or intermediary company of a casino licensee

which is related in any way to the financing of the casino licensee, fails to comply

with the terms of subsection f. of this section, or if at any time the director finds

that, by reason of the extent or nature of its holdings, an institutional investor

is in a position to exercise such a substantial impact upon the controlling interests

of a licensee that qualification of the institutional investor is necessary to protect

the public interest, the director may, in accordance with the provisions of subsections

a. through e. of this section or subsections d. and e. of section 105 of P.L.1977,

c. 110 ( C.5:12-105 ), take any necessary action to protect the public interest, including requiring such

an institutional investor to be qualified pursuant to the provisions of the “Casino

Control Act,” P.L.1977, c. 110 ( C.5:12-1 et seq. ). i. Any company required to qualify pursuant to subsection b. of this section shall

establish by clear and convincing evidence that it meets the standards set forth in

section 84 of P.L.1977, c. 110 ( C.5:12-84 ). j. As to each company required to qualify pursuant to subsection c. of this section,

the applicant for or holder of the casino license shall establish by clear and convincing

evidence that each such company meets the standards set forth in subsections a., c.,

and d. of section 84 of P.L.1977, c. 110 ( C.5:12-84 ). k. Any natural person required to qualify pursuant to subsections b. and c. of this

section shall be required to establish his qualifications in accordance with the standards

applicable to casino key employees in section 89 of this act, P.L.1977, c. 110 ( C.5:12-89 ); provided, however that persons required to qualify pursuant to subsection c. of

this section shall not be required to establish residency.