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NYNY > SEC Filings for NYNY > Form 8-K on 2-Jul-2013All Recent SEC Filings

Show all filings for EMPIRE RESORTS INC

Form 8-K for EMPIRE RESORTS INC


2-Jul-2013

Entry into a Material Definitive Agreement


Item 1.01. Entry into a Material Definitive Agreement.

Option Agreement Extension

The option agreement (the "Option Agreement"), by and between Monticello Raceway Management, Inc. ("MRMI"), a wholly-owned subsidiary of Empire Resorts, Inc. (the "Company"), and EPT Concord II, LLC ("EPT" and, together with MRMI, the "Parties"), originally entered into on December 21, 2011, was further amended by a letter agreement between the Parties, dated June 27, 2013 (the "Letter Agreement"). Pursuant to the Option Agreement, EPT granted MRMI a sole and exclusive option to lease certain EPT property located in Sullivan County, New York (the "EPT Property") pursuant to the terms of a lease negotiated between the parties.

Pursuant to the Letter Agreement, MRMI and EPT agreed to extend the option exercise period and the final option exercise outside date (as such terms are defined in the Option Agreement) from June 30, 2013 to July 30, 2013 (as the same may be further extended pursuant to the Option Agreement). Except for these amendments, the Option Agreement remains unchanged and in full force and effect.

Bryanston Settlement Agreement

Effective as of June 30, 2013 (the "Closing Date"), the Company, Kien Huat Realty III Ltd. ("Kien Huat"), Colin Au Fook Yew ("Au") and Joseph D'Amato ("D'Amato" and, together with the Company, Kien Huat and Au, the "Company Parties") consummated the closing of a Settlement Agreement and Release (the "Settlement Agreement") with Stanley Stephen Tollman ("Tollman") and Bryanston Group, Inc. ("Bryanston Group" and, together with Tollman, the "Bryanston Parties"). Pursuant to the Settlement Agreement, the Company Parties and the Bryanston Parties agreed to the settlement of certain claims relating to shares of Series E Preferred Stock of the Company (the "Preferred Stock") held by the Bryanston Parties and that certain Recapitalization Agreement, dated December 10, 2002, by and between, among others, the Bryanston Parties and a predecessor to the Company (the "Recapitalization Agreement"), pursuant to which the Bryanston Parties acquired the Preferred Stock. On the Closing Date, the Recapitalization Agreement terminated and ceased to have any further force and effect as between the Bryanston Parties and the Company.

In consideration for the mutual release of all claims, Empire shall redeem, purchase and acquire the Preferred Stock from the Bryanston Parties in accordance with the following timeline and payment schedule and based upon the closing by the Company of third party financing in an aggregate amount sufficient to enable the Company to complete the construction of its planned casino, hotel and racetrack at the EPT Property (the "Concord Event").

                      Preferred Stock Redemption Schedule



                               Tollman Redemption
Timeline                            Payment                Bryanston Group Redemption Payment

On the Closing Date           All Preferred Stock                          -
                              held by Tollman
                              redeemed at
                              approximately $1.528
                              million.

On the earlier to             Payment of all                               -
occur of the Concord          dividends accrued
Event and January 1,          and unpaid on
2014                          Tollman's Preferred
                              Stock since December
                              10, 2002 (the
                              "Accrued Dividends")
                              from funds legally
                              available to the
                              Company to effect
                              such payment.


--------------------------------------------------------------------------------
If the Concord Event occurs               -                All Preferred Stock and
on or before December 31,                                  Accrued Dividends held
2013                                                       by Bryanston redeemed at
                                                           $22.8 million from funds
                                                           legally available to the
                                                           Company to effect such
                                                           payment.

If the Concord Event occurs               -                All Preferred Stock and
after December 31, 2013 and                                Accrued Dividends held
on or before June 30, 2014                                 by Bryanston redeemed
                                                           for an amount between
                                                           $22.8 million and $28.0
                                                           million from funds
                                                           legally available to the
                                                           Company to effect such
                                                           payment pro rated based
                                                           upon the actual number
                                                           of days after December
                                                           31, 2013 the date that
                                                           the Preferred Stock is
                                                           redeemed.

If the Concord Event occurs               -                All Preferred Stock held
after June 30, 2014 and on                                 by Bryanston redeemed
or before December 31, 2014                                for an amount between
                                                           $28.0 million and the
                                                           Liquidation Value of the
                                                           Preferred Stock (as such
                                                           term is defined in the
                                                           Recapitalization
                                                           Agreement) and all
                                                           Accrued Dividends as of
                                                           December 31, 2014 from
                                                           funds legally available
                                                           to the Company to effect
                                                           such payment pro rated
                                                           based upon the actual
                                                           number of days after
                                                           December 31, 2013 the
                                                           date that the Preferred
                                                           Stock is redeemed.

If the Concord Event does                 -                Annual Dividend for
not occur before December                                  calendar year 2014 shall
31, 2014                                                   be paid to Bryanston
                                                           Group in the amount of
                                                           approximately $1.240
                                                           million prior to the
                                                           30th day following
                                                           December 31, 2014 from
                                                           funds legally available
                                                           to the Company to effect
                                                           such payment.

If the Concord Event occurs               -                All Preferred Stock held
after December 31, 2014 and                                by Bryanston shall be
on or before June 30, 2015                                 redeemed for an amount
                                                           equal to the Liquidation
                                                           Value and Accrued
                                                           Dividends as of the date
                                                           of the Concord Event
                                                           from funds legally
                                                           available to the Company
                                                           to effect such payment.

If the Concord Event does                 -                150,000 shares of
not occur by June 30, 2015                                 Bryanston's Preferred
                                                           Stock shall be redeemed
                                                           on June 30, 2016 for
                                                           $1.5 million. An
                                                           additional 150,000
                                                           shares of Preferred
                                                           Stock shall be redeemed
                                                           for $1.5 million on each
                                                           June 30 for the next
                                                           three years from funds
                                                           legally available to the
                                                           Company to effect such
                                                           payment. The balance of
                                                           the Preferred Stock
                                                           shall be redeemed in an
                                                           amount equal to the
                                                           Liquidation Value and
                                                           Accrued Dividends on
                                                           June 30, 2020 from funds
                                                           legally available to the
                                                           Company to effect such
                                                           payment.

As conditions to closing, (i) Bryanston Group delivered a voting proxy on the Preferred Stock they hold to designated officers of the Company, pursuant to which those officers have agreed not to vote the shares; (ii) the parties executed joint stipulations and orders dismissing certain actions filed by the Bryanston Parties against the Company Parties in New York Supreme Court (the "New York Court Proceeding") and the United States District Court for the Southern District of New York (the "Federal Court Proceeding") and extinguishing all claims of the Bryanston Parties that have been or could have been asserted against the Company Parties or any affiliated persons; (iii) the Board of Directors of Bryanston Group approved the Settlement Agreement and the transactions contemplated thereby before June 30, 2013; and (iv) the Settlement Agreement was reviewed by the New York State Gaming Commission. The Federal Court Proceeding was dismissed on June 28, 2013 and the New York Court Proceeding was dismissed on June 26, 2013.

The parties further agreed that, in the event of a voluntary or involuntary liquidation, dissolution or winding-up of the Company, Bryanston's Preferred Stock would retain all rights, rank and priority as enumerated in the Certificate of Designations, Powers, Preferences and Rights of the Series E Preferred


Stock. In the event the Company fails to make a payment due and owing to the Bryanston Parties from funds legally available to effect such payment, the Company shall have 45 days to cure such default. If such default is not cured within 45 days, the Company will be obligated to redeem the balance of the Preferred Stock held by Bryanston at the Liquidation Value and Accrued Dividends from funds legally available to effect such payment.


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