(a)

1. (1) An institutional investor that intends to become subject to this part as a result of its ownership of an equity security issued by a corporate licensee or a holding company, or any security issued by a corporate licensee or a holding company which gives the holder voting rights in the corporation, may apply to the Arkansas Racing Commission for a waiver of the requirements of this part with respect to the ownership of the voting or equity securities if such institutional investor intends to and does hold the securities for investment purposes only.
2. (2) An institutional investor shall not be eligible to receive or hold a waiver if the institutional investor will own, directly or indirectly, more than fifteen percent (15%) of the voting or equity securities of the corporate licensee or a holding company on a fully diluted basis where any such securities are to be acquired other than through a debt restructuring.
3. (3) Securities acquired before a debt restructuring and retained after a debt restructuring or as a result of an exchange, exercise, or conversion, after a debt restructuring, of any securities issued to an institutional investor through a debt restructuring, shall be deemed to have been acquired through a debt restructuring.
4. (4) A waiver granted under this section shall be effective only as long as the institutional investor’s direct or indirect ownership interest in such voting or equity securities meets the limitations set forth above.

(b)

1. (1) An institutional investor shall not be deemed to hold an equity security issued by a corporate licensee or a holding company, or any security issued by a corporate licensee or a holding company which gives the holder voting rights in the corporation, for investment purposes only unless the voting or equity securities will be acquired and held in the ordinary course of business as an institutional investor and do not, directly or indirectly, allow the institutional investor to vote for the election of members of the Arkansas Racing Commission, cause any change in the corporate charter, bylaws, other organic document, management, policies, or operations of the corporate licensee or the holding company, or cause any other action which the Arkansas Racing Commission finds to be inconsistent with investment purposes only.

2. (2) The following activities shall not be deemed to be inconsistent with holding voting or equity securities for investment purposes only:

   1. (A) Serving as a member of any committee of creditors or security holders in connection with debt restructuring;
   2. (B) Nominating any candidate for election or appointment to the Arkansas Racing Commission or the equivalent in connection with a debt restructuring;
   3. (C) Making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in management, policies, or operations; and
   4. (D) Such other activities as the Arkansas Racing Commission may determine to be consistent with such investment intent.

(c) An application for a waiver must include:

1. (1) A description of the institutional investor’s business and a statement as to why the institutional investor is within the definition of “institutional investor” set forth in subsection (k) of this section;

2. (2) A certification made under oath and the penalty of perjury that:

   1. (A) The voting or equity securities will be acquired and held for investment purposes only as defined in subsection (b) of this section and a statement by the signatory explaining the basis of the signatory’s authority to sign the certification and to bind the institutional investor to its terms;
   2. (B) The applicant agrees to be bound by and comply with The Arkansas Casino Gaming Amendment of 2018, Arkansas Constitution, Amendment 100, and the rules adopted thereunder, to be subject to the jurisdiction of the courts of Arkansas, and to consent to Arkansas as the choice of forum in the event any dispute, question, or controversy arises regarding the application or any waiver granted under this section; and
   3. (C) The applicant agrees that it shall not grant an option to purchase, or sell, assign, transfer, pledge, or make any other disposition of any voting or equity security issued by the corporate licensee or the holding company without the prior approval of the Arkansas Racing Commission;
3. (3) A description of all actions, if any, taken or expected to be taken by the institutional investor relating to the activities described in subsection (b) of this section;
4. (4) The name, address, telephone number, and Social Security number of the officers and directors, or their equivalent, of the institutional investor as well as those persons that have direct control over the institutional investor’s holdings of voting and equity securities of the corporate licensee or the holding company;
5. (5) The name, address, telephone number, and Social Security or federal tax identification number of each person who has the power to direct or control the institutional investor’s exercise of its rights as a holder of voting or equity securities of the corporate licensee or the holding company;
6. (6) The name of each person that beneficially owns more than five percent (5%) of the institutional investor’s voting securities or other equivalent;
7. (7) A list of the institutional investor’s affiliates;
8. (8) A list of all regulatory agencies with which the institutional investor or any affiliate that owns any voting or equity securities or any other interest in a company which is licensed or registered with the Arkansas Racing Commission files periodic reports, and the name, address, and telephone number of the person, if known, to contact at each agency regarding the institutional investor;

9. (9)

   1. (A) A disclosure of all criminal or regulatory sanctions imposed during the preceding ten (10) years and of any administrative or court proceedings filed by any regulatory agency during the preceding five (5) years against the institutional investor, its affiliates, and current officer or director, or any former officer or director whose tenure ended within the preceding twelve (12) months.
   2. (B) As to a former officer or director, such information need be provided only to the extent that it relates to actions arising out of or during such person’s tenure with the institutional investor or its affiliates; and
10. (10) Any additional information the Arkansas Racing Commission may request.

(d) The Arkansas Racing Commission shall consider all relevant information in determining whether to grant a waiver requested pursuant to subsection (a) of this section, including but not limited to:

1. (1) Whether the waiver is consistent with the policy set forth in this part; and
2. (2) Any views expressed to the Arkansas Racing Commission by the corporate licensee or any affiliate thereof.

(e) Any waiver granted pursuant to this section may be limited or conditioned in any respect by the Arkansas Racing Commission, including, but not limited to, requiring a certification, made under oath and the penalty of perjury, which contains the following:

1. (1) A statement attesting that the institutional investor holds and/or has held the voting or equity securities of the corporate licensee or the holding company for investment purposes only, and in the ordinary course of business as an institutional investor and not for the purpose of:

   1. (A) Causing, directly or indirectly, the election of the members of the Arkansas Racing Commission; or
   2. (B) Effecting any change in the corporate charter, bylaws, other organic document, management, policies, or operations of the corporate licensee or any of its affiliates;
2. (2) A statement that the institutional investor has not engaged in any activities inconsistent with the holding of voting or equity securities for investment purposes only in accordance with the provisions of subsection (b) of this section;
3. (3) The name, title, and telephone number of the persons having direct control over the institutional investor’s holdings of voting or equity securities in the corporate licensee or the holding company;

4. (4)

   1. (A) A statement of all complaints, arrest, indictments, or convictions of any officer or director of the institutional investor regarding the rules and regulations of the Securities and Exchange Commission and any regulatory agency of any state where it conducts business, or any offense which would constitute a gross misdemeanor or felony if committed in the State of Arkansas.
   2. (B) The name, position, charge, arresting agency, and a brief description of the event must also be included in the statement; and
5. (5) A statement indicating any change to the structure and/or operation of the institutional investor which could affect its classification as an institutional investor as defined in this part.

(f)

1. (1) An institutional investor that has been granted a waiver of licensing, registration, or finding of suitability as required by this part and that subsequently intends not to hold its voting or equity securities of the corporate licensee or the holding company for investment purposes only, or that intends to take any action inconsistent with its prior intent shall, within two (2) business days after its decision, deliver notice to the Arkansas Racing Commission in writing of the change in its investment intent.
2. (2) The Arkansas Racing Commission may then take such action under this part or any other provision of Amendment 100 or rules of the Arkansas Racing Commission as the Arkansas Racing Commission deems appropriate.

(i)

1. (1) If the Arkansas Racing Commission finds that an institutional investor has failed to comply with the provisions of this section, or should be subject to licensing, registration, finding of suitability, or any approval to protect the public interest, the Arkansas Racing Commission may, in accordance with this part or any other provision of Amendment 100 or rules of the Arkansas Racing Commission the Arkansas Racing Commission deems appropriate, require the institutional investor to apply for licensing, registration, or a finding of suitability.
2. (2) The institutional investor affected by the action taken by the Arkansas Racing Commission may request a hearing on the merits of such action.
3. (3) The hearing shall be included on the agenda of the next regularly scheduled Arkansas Racing Commission meeting occurring more than ten (10) working days after the request for hearing.
4. (4) Upon good cause shown by the institutional investor, the Arkansas Racing Commission may waive the ten-day requirement and place such hearing on an earlier Arkansas Racing Commission agenda.
5. (5) The Arkansas Racing Commission for any cause deemed reasonable, may by a majority vote sustain, modify, or reverse the decision of the Arkansas Racing Commission, or remand the matter to the commission for such further investigation and reconsideration as the Arkansas Racing Commission may order.
6. (6) While the application for licensure, registration, or a finding of suitability review of the Arkansas Racing Commission’s action requiring the filing of such application is pending, the institutional investor shall not directly or indirectly cause or attempt to cause any management, policy, or operating changes in the corporate licensee or holding company.