FINAL DRAFT DATED 5/9/16

MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (this Memorandum) is made and entered
into as of ________, 2016, by and between THE TOWN OF PRESTON, CONNECTICUT
(Town), a municipal corporation having an address at Town Hall, 389 Route 2, Preston,
Connecticut 06365, and the MOHEGAN TRIBAL GAMING AUTHORITY (MTGA), a
governmental instrumentality of the Mohegan Tribe of Indians of Connecticut, having an
address at One Mohegan Sun Boulevard, Uncasville, Connecticut 06382.
RECITALS
A.
The Town is the owner of a portion of the former Norwich State Hospital
site, which is comprised of approximately 393 acres of land now known as Preston
Riverwalk, located within the Town, which is improved with buildings and related
facilities, as more particularly described on Exhibit A attached hereto (the Property).
B.
The Town purchased the Property from the State of Connecticut (the
State) in March 2009, pursuant to a Purchase and Sale Agreement between the Town and
the State made as of November 2, 2005, and as amended by the First Amendment to
Purchase and Sale Agreement between the Town and the State dated as of September 21,
2011 (the State Agreement).
C.
The Town has determined that it is desirable to improve the Property with a
project or projects that will promote economic development, generate tax revenues, create
jobs and be in the best interests of the Town, the region and the State.
D.
The Town has received a preliminary proposal from MTGA to construct,
manage and otherwise effectuate certain projects on the Property subject to applicable laws
and regulations and a property disposition and development agreement to be entered into
between the Town and MTGA (the Proposal).
E.
The Proposal has been reviewed by the Towns Board of Selectmen (the
Selectmen) and Preston Redevelopment Agency (the PRA), and by resolutions
adopted by the Selectmen on May __, 2016 and the PRA on May __, 2016, the Selectmen
and the PRA have determined that the Town should enter into exclusive negotiations with
MTGA for the sale and development of the Property pursuant to this Memorandum,
subject to the approval of this Memorandum at a Special Town Meeting to be held on or
about May __, 2016 (the Special Town Meeting).
F.
The parties are entering into this Memorandum in furtherance of the above
public purposes and in order to set forth the general terms and conditions governing the
nature and development of the Project, the detailed terms and conditions of which shall be
contained in a property disposition and development agreement, as described in Section 2.
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NOW, THEREFORE, in consideration of the mutual covenants, representations

and agreements herein contained, One Dollar ($1.00) and other good and valuable
consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Project; Structure.
(a)
The Project shall have a cost to construct of between $200,000,000 to
$600,000,000 that, except as otherwise provided hereunder, shall be subject to real
property taxation imposed by the Town at the then assessed value and mill rate generally
applicable to real property in the Town for each fiscal year (the Project).
(b)
The Project shall be a high-quality, integrated mixed-use project suitable for
the unique nature of the site and is contemplated to consist of entertainment, recreation,
hotel, retail (including, without limitation, lifestyle center, restaurants, convenience),
business, timeshare, senior housing, and similar or related uses, all to be determined and
described in the PDDA (as hereinafter defined), and in conformance with the Towns
planning, zoning and other land use regulations.
(c)
The Project shall result in the creation of between 200 and 700 permanent,
full-time jobs.
(d)
The Project construction is anticipated to begin within three (3) years of the
transfer of the Property to MTGA, and be fully built out within five (5) years of said
transfer, subject to extensions of time as mutually agreed to by the parties.
Section 2. Exclusivity; Property Disposition and Development Agreement (PDDA).
(a)
Following the approval of this Memorandum at the Special Town Meeting,
the Town will negotiate exclusively with MTGA for a period of six (6) months (the
Exclusivity Period) in connection with the potential development of the Project at the
Property. The Exclusivity Period can be extended by the parties if agreed to in writing.
Within the Exclusivity Period, MTGA, at its sole cost and expense, will conduct its due
diligence on the Property, including environmental diligence, as well as further investigate
and develop the potential components and programming for the Project.
(b)
During the Exclusivity Period, the Town and MTGA shall negotiate
exclusively and in good faith and with each other a property disposition and development
agreement (the PDDA) for the Property. During the Exclusivity Period, the Town shall
make available all documents related to the Property, except those exempt from disclosure
under the Connecticut Freedom of Information Act (e.g., confidential or proprietary
business information provided to the Town by third parties who claimed an exemption
from disclosure of such information and privileged communications between the Town and
its attorneys). The Town will provide MTGA with reasonable access to the Property
during the Exclusivity Period. The PDDA shall address, among other things, the approvals

process, prohibition against annexation, historic preservation issues, transportation issues,

and the matters addressed herein in greater detail, but shall nevertheless be consistent in all
material respects with the general understandings set forth herein, and shall contain
customary and usual representations, warranties, defaults, conditions, deliveries, prohibited
uses and prorations. The PDDA shall also set forth the obligations of the parties and the
closing conditions to be satisfied prior to the transfer of the Property from the Town to
MTGA (the Closing). The parties acknowledge and agree that the Town and MTGA
shall have the right to seek to include in the PDDA provisions not included in this
Memorandum in the event that the Town and/or MTGA, during their review of the
materials previously or hereafter submitted or represented during the negotiation of the
PDDA, or in connection with MTGAs due diligence of the Property, determines in good
faith that such additional provisions are necessary or desirable. The PDDA shall include a
provision whereby, upon transfer of the Property, the Town shall be relieved from any
conditions or obligations imposed upon the Town by the State in connection with the
Property, including any conditions or obligations imposed by the State Grant described in
Section 6. The parties shall agree upon a declaration of covenants and restrictions that
shall run with the Property, and shall provide, among other things, that any attempted
annexation of the Property or any portion thereof shall result in the reversion of the
Property to the Town. In the event that the PDDA cannot be finalized and agreed upon by
the end of the Exclusivity Period, for any reason or no reason, either party, provided that
such party has negotiated in good faith, shall thereafter have the right to terminate
negotiations upon delivery of written notice to the other, in which event the parties hereto
shall have no further obligations hereunder except those that expressly survive such
termination. If the PDDA is successfully negotiated within the Exclusivity Period, as the
same may be extended as herein provided, the parties will promptly execute the PDDA and
the Town will commence the process of seeking the approvals provided for in Section 8(b)
which are conditions of its effectiveness.
(c)
The PDDA shall provide that MTGA shall use its commercially reasonable
efforts to attract and maintain first class tenants and operators, as that term is generally
understood in the retail, office leasing, hotel, and entertainment industries, for all
components of the Project.
(d)
In connection with the execution of the PDDA and the obligations
thereunder, MTGA shall effectively waive and relinquish any right or defense of sovereign
immunity, including those derived directly or indirectly from any related entity, including
the Mohegan Tribe of Indians of Connecticut. MTGA shall have the right under the
PDDA to direct that one or more of the independent parcels comprising the Property be
deeded to one or more entities at the Closing, such that each Project component will be
developed on one or more separate and financeable parcel; provided that each such entity
expressly assumes all of MTGAs obligations under the PDDA with respect to such Project
component, and provided further that no such separate conveyance shall relieve MTGA of
any of its obligations under the PDDA.
(e)
MTGA shall pay the Towns reasonable legal, consulting and other costs
incurred by the Town in connection with the drafting, negotiation and completion of the
PDDA and the proposed sale of the Property to MTGA pursuant thereto (it being
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understood that the retention of any consultants, advisors and legal counsel other than
those identified on the attached Schedule 1, will be made with the prior approval of
MTGA, not to be unreasonably withheld). Such costs will be billed monthly, and will be
paid by MTGA within 30 days of presentment to MTGA. In the event that MTGA fails to
pay such bills within 30 days of the receipt of written notice from the Town of such failure,
MTGA will be deemed in breach of this Memorandum and the Town may, in its sole and
absolute discretion, immediately terminate this Memorandum and seek damages, if any, as
may be provided herein. On a monthly basis, the Town will provide MTGA with a
forecast of total expenses the Town anticipates will be incurred through completion of the
PDDA that are subject to payment/reimbursement hereunder. Notwithstanding the
foregoing, MTGA shall not be obligated to pay or reimburse the Town pursuant to this
paragraph for aggregate expenses in excess of $600,000 without MTGAs prior consent,
which shall not be unreasonably withheld.
Section 3. Purchase Price; Escrows.
(a)
As more particularly set forth in the PDDA, MTGA shall, at the Closing, (i)
pay the Town the sum of One Dollar ($1.00), (ii) establish the Letter of Credit and agree to
the payments to be made to the Town under the Letter of Credit, if any, as provided in
Section 4 herein (collectively, the Purchase Price), and (iii) undertake and timely
complete the performance of the development of the Property as provided pursuant to the
PDDA.
(b)
The Closing shall be scheduled to occur as provided in the PDDA, time
being of the essence.
(c)
At the Closing, MTGA shall establish a sinking letter of credit in the initial
amount of $11,000,000 (the Letter of Credit) for the purposes set forth in Section 4
hereof.
Section 4. Payments From and Reductions in Letter of Credit.
(a)
The purpose of the Letter of Credit is to provide (i) $2,000,000 as security
for the reduction or retirement of the principal of the DECD Loan, as defined and pursuant
to Section 4(b)(i), and (ii) $9,000,000 as security for MTGAs obligation to construct the
Project as described in Section 1 or make payments to the Town for its failure to do so,
pursuant to Section 4(b)(ii).
(b)
If, within five (5) years after Closing, the following conditions are met,
reductions in the amount of the Letter of Credit, or payments to the Town from the Letter
of Credit, will be authorized as follows:
(i)
if the Connecticut Department of Economic and Community
Development (DECD) determines that at least 100 permanent, full-time jobs have been
created at the Property, and forgives $1,000,000 of the Towns $2,000,000 loan from the
State (the Towns DECD Loan), a $1,000,000 reduction in the Letter of Credit will be

authorized. If no such determination is made within said five (5) year period, a $1,000,000
payment from the Letter of Credit will be made to the Town to be used to reduce or retire
the Towns DECD Loan. If DECD determines that at least 200 permanent, full-time jobs
have been created at the Property and forgives the remaining $1,000,000 of the Towns
DECD Loan, another $1,000,000 reduction in the Letter of Credit will be authorized. If no
such determination is made within said five (5) year period, another $1,000,000 payment
from the Letter of Credit will be made to the Town to be used to reduce or retire the
Towns DECD Loan. The parties recognize that the current terms of the DECD Loan
require principal and interest repayments before the end of such five (5) year period if the
requisite number of permanent jobs are not created, so the implementation of the
provisions of this clause (i) is understood to be subject to corresponding agreement by
DECD to be effective upon execution of the PDDA, which agreement the Town shall
diligently pursue.
(ii)

if, at any time within such five (5) year period,

(A)
at least $200,000,000 of constructed property is completed, a
$3,000,000 reduction in the Letter of Credit will be authorized, with $1,000,000 of such
reduction as consideration to MTGA for the Towns and MTGAs legal and other costs
paid by MTGA during the Exclusivity Period,
(B)
at least $300,000,000 of constructed property is completed, a
further $3,000,000 reduction in the Letter of Credit will be authorized,
(C)
at least $400,000,000 of constructed property is completed, a
further $3,000,000 reduction in the Letter of Credit will be authorized.
At the end of such five (5) year period, any remaining amount of the Letter of Credit (i.e.
any part of the initial $9,000,000 provided as security for construction of the Project not
reduced by the completion of improvements pursuant to this clause (ii)) shall be payable to
the Town.
(c)
In the event that the Town is authorized to draw funds from the Letter of
Credit pursuant to Section 4(b), the Town will provide MTGA with thirty (30) days written
notice of the occurrence of such condition and demand for payment of the applicable
amount. If MTGA does not pay the amount due within such 30 day period, the Town shall
be permitted to draw such amount from the Letter of Credit.
Section 5. Property Taxes; Tax Fixing.
(a)
As part of the PDDA, MTGA and the Town shall enter into a tax fixing
arrangement, substantially consistent with the following:
(i)
Raw Land. For a period of three (3) years following the Closing,
Raw Land shall be taxable at 50% of its then assessed value, but not less than an
assessment value that will result in a total annual property tax of $165,000; and thereafter
shall be taxable at 100% of its then assessed value.

(ii)
Constructed Property (Excluding Raw Land). For a period of
seven (7) years following the Closing, Constructed Property shall be taxable at the
following percentages:
(A)
100% of its then assessed value until at least $100,000,000
of constructed property is completed, then at
(B)
75% of its then assessed value until at least $400,000,000 of
constructed property is completed, then at
(C)
70% of its then assessed value until at least $500,000,000 of
constructed property is completed, then at
(D)
65% of its then assessed value until at least $600,000,000 of
constructed property is completed, then at
(E)
60% of its then assessed value when over $600,000,000 of
constructed property is completed,
(b)
The parties agree that the real property taxation imposed by the Town shall
be determined based on the then assessed value as determined by the Town Assessor and at
the mill rate generally applicable to real property in the Town for each fiscal year. MTGA
shall retain all rights to contest and appeal the assessed value, as provided in the
Connecticut General Statutes.
(c)

The tax fixing agreement shall apply only to real property.

(d)
The Town agrees that, after the expiration of the Tax Fixing Arrangement,
the tax burden on the Property and the Project will be at the mill rate generally applicable
to real property in the Town as reasonably and justifiably determined by the Town with
non-discriminatory application.
Section 6. State Grant Funding for Environmental Remediation.
(a)
After the approval of this Memorandum at the Special Town Meeting, the
Town will use its commercially reasonable efforts to obtain an additional State grant (the
State Grant) and to complete the demolition and remediation work on the Property (the
Additional Work) within one (1) year after the execution and delivery of the PDDA.
The Town provides no assurances that it will be successful in obtaining the State Grant or
that the State Grant will be sufficient to complete the Additional Work. While obtaining
the State Grant and completing the Additional Work shall be a condition to the Closing,
any inability or other failure of the Town to obtain the State Grant or complete the
Additional Work shall not constitute a default by the Town under this Memorandum or the
PDDA or give rise to any liability or obligation of the Town to MTGA.

(b)
The Town and MTGA will work cooperatively with the Towns
environmental engineers, Tighe & Bond, to develop a remedial action plan for
environmental remediation and re-use of the Property that is acceptable to the State and
MTGA.
Section 7. As-Is, Where-Is; Due Diligence.
(a)
MTGA specifically acknowledges that, except as expressly provided herein,
the Town makes no representation or warranty, expressed or implied, as to the Property or
its fitness for use for any particular purpose, condition or durability thereof, or that it will
be suitable for MTGAs purposes. MTGA hereby waives any and all objections to or
claims with respect to any and all physical characteristics and existing conditions of the
Property, including, without limitation, archaeological conditions and any hazardous
materials in, at, on, under or related to the Property, whether such objections or claims
arise under environmental laws, contract, tort, strict liability, common law, federal or state
statute (as now or hereinafter may be enacted) or any other theory of recovery, legal or
equitable, as to the Town. MTGA further acknowledges and agrees that the Property is to
be sold and conveyed to, and purchased and accepted by, MTGA in its condition after the
final demolition and remediation has been completed, AS IS and WHERE IS and with
all faults, and MTGA hereby assumes the risk that past, present or future physical
characteristics, archaeological conditions and environmental conditions may not have been
revealed by its inspection or investigation.
(b)
Except as expressly set forth herein and in the PDDA, MTGA on behalf of
itself and anyone claiming by, through or under MTGA, hereby fully and irrevocably
releases the Town and it agents and representatives, from any and all claims that it may
now have or hereafter acquire against the Town or the Towns agents and representatives
for any cost, loss, liability, damage, expense, action or cause of action, whether foreseen or
unforeseen, arising from or related to any construction defects, errors or omissions on or in
the Property, the presence of hazardous materials or any other conditions affecting the
Property. For purposes of this Memorandum, hazardous materials shall be defined as
any substance which is or could be hazardous or toxic, including but not limited to, any
substance or material classified or regulated as hazardous waste pursuant to federal or
state environmental laws or regulations.
Section 8. Town Approvals of MOU, PDDA; Land Use Approvals.
(a)
This Memorandum shall not become effective or binding on either MTGA
or the Town until it has been submitted to and approved at a Town Meeting and, if
required, at Referendum.
(b)
The PDDA shall not become effective and binding on either MTGA or the
Town, unless and until it has been submitted to and approved by: (i) the Town boards,
commissions and agencies of cognizance, including the Preston Redevelopment Agency,
the Board of Finance and the Board of Selectmen; and (ii) a Town Meeting, and
Referendum, if required.

(c)
MTGA acknowledges that these approvals are required, and MTGA hereby
agrees to not bring any claim or action against the Town if any one or more of such
approvals is not given or granted.
(d)
The PDDA shall provide that MTGAs obligations to take title to all or any
portion of the Property at the Closing shall not be contingent upon MTGAs obtaining
future Town zoning or other land use approvals. Therefore, upon execution of this
Memorandum, MTGA acknowledges that it will be MTGAs obligation to promptly
pursue any such Town zoning or land use approvals.
Section 9. Insurance; Indemnification.
(a)
MTGA shall maintain or cause to be maintained, at its own cost and
expense, insurance in the form and amounts reasonably acceptable to the Town.
(b)
(i)
MTGA covenants and agrees, at its sole cost and expense, to
indemnify, defend and hold the Town and its agents, representatives and employees (each
a Town Indemnified Party) harmless from and against any direct and actual liabilities,
damages, demands, claims or expenses (including reasonable attorneys fees and court
costs) (i) arising out of the negligence or willful misconduct of MTGA under this
Memorandum or the PDDA, and (ii) after the transfer of all or any portion of the Property
to MTGA, from any claims made against the Town for any conditions or obligations
imposed upon the Town by the State in connection with the State Grant, and from any
claims made against the Town arising as a result of any breach or failure of MTGA to
perform or observe obligations or covenants with respect to the Property under the State
Agreement which are assumed by MTGA as transferee of the Property; provided, however,
that the foregoing shall not be construed to mean that either MTGA or the Town has
agreed to assume any liability for environmental conditions after conveyance of the
Property. This provision shall survive the expiration or termination of this Memorandum.
(ii)
MTGA acknowledges that it is an important consideration and
inducement to the Town that in connection with the transfer of the Property the Town be
relieved from any risk associated with the environmental condition of the Property.
Accordingly, it will be a condition and requirement of the PDDA that, effective upon
Closing, the Town either be fully relieved as a matter of law from (by operation of the
Brownfield Remediation and Revitalization Program or otherwise), or adequately insured
or indemnified against, any claim of loss, liability or expense arising from or relating to
environmental conditions or the presence of hazardous materials on, at or from the
Property.
(c)
The Town covenants and agrees, at its sole cost and expense, to indemnify,
defend and hold MTGA and its agents, representatives and employees (each an MTGA
Indemnified Party) harmless from and against any direct and actual liabilities, damages,
demands, claims or expenses (including reasonable attorneys fees and court costs) arising
out of the negligence or willful misconduct of the Town under this Memorandum or the
PDDA. This provision shall survive the expiration or termination of this Memorandum.
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Section 10. Miscellaneous.

(a)

Cooperation, Assurances, Estoppel Agreements, etc.

(i)
The Town and MTGA have executed this Memorandum to set forth
their basic agreements as to the rights, restrictions, procedures and principles that will
govern the terms of the PDDA generally for the development of the Property. As a result,
the Town and MTGA understand that the parties shall work-out additional details and
agreements in good faith and using their commercially reasonable efforts following the
date hereof. MTGA and the Town agree to take such actions, including the execution and
delivery of such documents and instruments as shall become necessary or appropriate to
carry out the terms, provisions and intent of this Memorandum.
(ii)
Whenever this Memorandum provides for the approval or consent of
the Town or MTGA, or any matter is to be to the Towns or MTGAs satisfaction or
discretion, unless specifically stated to the contrary, such approval, consent or satisfaction
shall be made, given or determined in the reasonable discretion of the party whose
approval, consent or satisfaction is required or called for hereunder. The party acting for
the Town or MTGA or the person designated by the Town or MTGA to so act on its or
their behalf in making all approvals, consents or determinations shall evidence such
authority as the parties shall reasonably request on a timely basis. Notwithstanding the
foregoing, neither of the parties shall have any obligation to enter into any agreement,
including without limitation the modification of this Memorandum, which shall materially
diminish the rights, increase the obligations or alter the reasonable commercial
expectations of the parties.
(iii)
Notwithstanding that the Town has determined to enter into
exclusive negotiations with MTGA for the sale and development of the Property, the Town
may continue to accept inquiries from third parties regarding the Property, provided that
the Town shall not enter into substantive discussions or negotiations with any third party
until this Memorandum has expired or been terminated, or if this Memorandum is
approved at the Special Town Meeting, until the end of the Exclusivity Period. The Town
will advise any such inquiring party of the existence of this Memorandum and its
obligation to deal exclusively with MTGA; provided, however, that it shall not be a
violation of such obligation for the Town to provide upon request of any such inquiring
party such information and documents relating to the Property as have been made publicly
available to other third parties, or which the Town is required to furnish pursuant to a
request made under the Connecticut Freedom of Information Act (i.e. non-exempt public
records).
(b)
Invalidity. If any term or provision of this Memorandum shall to any extent
or for any reason be held invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision of this Memorandum, but the
remainder of this Memorandum and each term and provision of this Memorandum shall be
valid and enforceable to the fullest extent permitted by law, subject to such modification
hereof as may be necessitated by such invalidity.

(c)
Legal Requirements; Venue. This Memorandum shall be governed by, and
construed and enforced in accordance with, the laws of the State of Connecticut, without
regard to principles of conflicts of law. Connecticut shall be the venue for resolution of
any disputes hereunder, without regard to principles of federal or State jurisdiction.
(d)
Notices. Any notice, report, demand, request or other instrument or
communication authorized, required or desired to be given under this Memorandum by
MTGA or the Town shall be in writing and shall be deemed given if addressed to the party
intended to receive the same, at the address of such party set forth below, when delivered
at such address by hand or by overnight delivery service, or three (3) days after the same is
deposited in the United States mail as first class certified mail, return receipt requested,
postage paid, whether or not the same actually shall have been received by such party.
If to MTGA:

Mohegan Tribal Gaming Authority

One Mohegan Sun Boulevard
Uncasville, CT 06382
Attn: Chief Financial Officer
Email: mkontomerkos@mohegansun.com

With a copy to:

Mohegan Tribe of Indians of Connecticut

13 Crow Hill Road
Uncasville, CT 06382
Attn: Helga Woods, Attorney General
Email: hwoods@moheganmail.com

And a copy to:

Mohegan Tribal Gaming Authority

One Mohegan Sun Boulevard
Uncasville, CT 06382
Attn: Scott Wells, General Counsel
Email: swells@mohegansun.com

If to the Town:

Town of Preston
Town Hall
389 Route 2
Preston, CT 06365
Attn: First Selectman Robert Congdon
Email: congdon@prestonct.org

With a copy to:

Shipman & Goodwin LLP

One Constitution Plaza
Hartford, CT 06103
Attn: Bruce A. Chudwick, Esq.
Email: bchudwick@goodwin.com

Either party may change the address to which any such notice, report, demand, request or
other instrument or communication to such party is to be delivered or mailed, by giving

10

written notice of such change to the other parties, but no such notice of change shall be
effective unless and until received by such other parties.
(e)
Calculation of Time. Whenever in this Memorandum a period of time is
stated as a number of days, it shall be construed to mean calendar days; provided, however,
that when any period of time so stated would end on a Saturday, Sunday or legal holiday,
such period shall be deemed to end on the next day following which is not a Saturday,
Sunday or legal holiday.
(f)
Waivers; Extensions. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or succeeding
breach thereof or of any other agreement or provision herein contained. No extension of
time for the performance of any obligation or act shall be deemed an extension of time for
the performance of any other obligation or act.
(g)
Counterparts; Captions; Context. This Memorandum may be executed in
counterparts, each of which shall be deemed an original. This Memorandum shall not be
binding or effective until duly executed by the Town and MTGA. The section headings
are for convenience of reference only and shall not affect the construction to be given to
any of the provisions hereof. Where the context shall indicate or require: (i) all references
to singular nouns or pronouns shall include the plural, and vice versa; (ii) the masculine
shall include the feminine, and the neuter, and vice versa; and (iii) all pronouns shall be
deemed modified to reflect the correct gender where so required.
(h)
Assignment. This Memorandum may not be assigned by either party
without the prior written consent of the other. Notwithstanding the foregoing, the Town
shall have the right to assign its rights hereunder to the PRA.
(i)
Entire Agreement, Modifications. This Memorandum constitutes the entire
current contract between the parties hereto with respect to the Property and the Project
(prior to the completion of the PDDA) and supersedes any and all prior negotiations,
agreements and understandings, written or oral, formal or informal, all of which are
deemed to be merged herein. No provision of this Memorandum may be supplemented,
terminated, modified or waived except by a writing signed by both parties. No
modification or amendment to this Memorandum of any kind whatsoever, shall be made or
claimed by the Town or MTGA, and no notice of any extension, change, modification or
amendment made or claimed by the Town or MTGA shall have any force or effect unless
the same shall have been reduced to writing, and fully signed by the Town and MTGA.
(j)
Binding Effect. This Memorandum shall be binding upon and inure to the
benefit of the parties hereto and, to the extent permitted hereby, their respective successors
and assigns.
(k)
No Joint Venture, Partnership or Employment Relationship. Nothing in this
Memorandum shall be construed to create a joint venture, partnership or employment
relationship between the Town and MTGA.

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(l)
Negation of Third-Party Beneficiaries.
The provisions of this
Memorandum are for the exclusive benefit of the parties hereto and not for the benefit of
any third person, nor shall this Memorandum be deemed to have conferred any rights,
express or implied, upon any third person, provided, however, that MTGA may assign its
rights under this Memorandum and/or the PDDA to one or more subsidiaries of MTGA
with the written consent of the Town, which consent shall not be unreasonably withheld,
and provided that no such assignment shall relieve MTGA of any of its obligations under
this Memorandum and/or the PDDA.
(m)
No Broker. The Town and MTGA each represent and warrant to the other
that no real estate agent or broker was involved in negotiating the transaction contemplated
herein. In the event that any claims for real estate commissions, fees or compensation arise
in connection with this transaction, the party so incurring or causing such claims shall
indemnify, defend and hold harmless the other party from any loss or damage, including
reasonable attorneys fees and costs, which said other party suffers because of any such
claims.
[Signature Page to Follow]

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IN WITNESS WHEREOF, the parties have caused this Memorandum to be

executed by their duly authorized representatives effective as of the day and year first
above written.
TOWN OF PRESTON, CONNECTICUT
BY: ____________________________
Name: Robert Congdon
Title: First Selectman
MOHEGAN TRIBAL GAMING
AUTHORITY
BY: _____________________________
Name: Robert J. Soper
Title: President and CEO

EXHIBIT A
LEGAL DESCRIPTION
[To be agreed upon prior to execution
and delivery of the Property Disposition and
Development Agreement]
The parties hereto acknowledge and agree that Town intends to convey to MTGA
all of the former Norwich State Hospital site, now known as Preston Riverwalk,
that is owned by Town.

SCHEDULE 1
LEGAL, CONSULTING AND OTHER COSTS TO BE PAID BY MTGA
(pursuant to Section 2(e))

LEGAL - Shipman & Goodwin LLP

LAND USE - Yale Urban Design Workshop
SURVEYOR - Meehan & Goodin
ENVIRONMENTAL ENGINEER - Tighe & Bond