| Item 1.01 | Entry Into a Material Definitive Agreement. |
As previously disclosed in a Form8-K filed by The Madison Square Garden Company (collectively with its subsidiaries, “MSG”) with the Securities and Exchange Commission (the “SEC”) on July 17, 2018, subsidiaries of MSG and Las Vegas Sands Corp. (collectively with its subsidiaries, “Sands”) entered into a long-term ground lease agreement (the “Lease Agreement”) pursuant to which MSG leased a parcel of land in Las Vegas, Nevada (the “Premises”) from Sands in order to develop and construct a music and entertainment venue (the “MSG Sphere”) and a pedestrian bridge that will directly connect the MSG Sphere to the Venetian/ Palazzo/Sands Expo complex (the “Bridge,” and the Bridge together with the MSG Sphere, the “Project”).
On May 31, 2019, a subsidiary of MSG and Hunt Construction Group Inc. (“Hunt”) entered into a construction agreement (the “Construction Agreement”) in connection with the Project. Under the Construction Agreement, MSG has engaged Hunt to oversee and perform the construction work for the Project on a cost-plus basis, with Hunt’s responsibilities to include, among other things, the direct performance of construction work, the engagement and supervision of, and responsibility for, subcontractors, the furnishing of construction materials, supplies and equipment, and the achievement of specific construction-related milestones.
Under the Construction Agreement, MSG will reimburse Hunt for the costs incurred by Hunt in connection with the Project (subject to certain exceptions and limitations), including payments required to be made by Hunt to subcontractors for work performed, and materials, supplies and equipment furnished pursuant to subcontracts approved by MSG. MSG will also pay Hunt a fee that will be calculated as a percentage of the total cost of the work performed under the Construction Agreement, with the actual percentage to be determined based on the terms of the Construction Agreement. The Construction Agreement has incentives and penalties based on total cost and timing of completion.
In addition to other termination rights, MSG may terminate the Construction Agreement for convenience at any time upon 15 calendar days prior written notice to Hunt, subject to payment of certain incurred costs, accrued fee amounts and other unreimbursed amounts owing to Hunt as of the termination date.
The foregoing description of the Construction Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Construction Agreement, a copy of which will be filed as an exhibit to the Annual Report on Form10-K of The Madison Square Garden Company for the fiscal year ended June 30, 2019.
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