EXHIBIT 10.40
CLOSING MEMORANDUM
This Closing Memorandum (this "MEMO AGREEMENT") is entered into as
of January 12, 2004 by and among Catskill Development, L.L.C., a New York
limited liability company ("CATSKILL"), Alpha Monticello, Inc., a Delaware
corporation ("ALPHA"), Americas Tower Partners, a New York general partnership
("ATP"), Monticello Realty L.L.C., a Delaware limited liability company ("MR"),
Watertone Holdings, LP, a Delaware limited partnership ("WATERTONE"); Fox-Hollow
Lane, L.L.C., a New York limited liability company ("FOX"), Shamrock Strategies,
Inc., a Delaware corporation ("SHAMROCK"), Xxxxxxxx X. Xxxxxxx ("CE"), BY-B,
LLC, a New York limited liability company ("BKB"), Xxxxxx X. Xxxxxx ("RB"),
Xxxxxx X. Xxxxxx ("PB"), Xxxxx X. Xxxxxxxxx ("SK"), Xxxxxxxxx Family Limited
Partnership ("KFLP"), KFP Trust ("KFP"), New York Gaming, LLC, a Georgia limited
liability company ("NYG") and Empire Resorts, Inc., a Delaware corporation
("EMPIRE"). Each of the signatories hereto is individually a "PARTY" and
collectively the "PARTIES". Capitalized terms not otherwise defined herein will
have the meanings assigned to such terms in the Securities Contribution
Agreement (as such term is defined below).
RECITALS
A. The Parties entered into that certain Amended and Restated
Securities Contribution Agreement, dated as of December 12, 2003, by
and between the Parties (the "SECURITIES CONTRIBUTION AGREEMENT"),
pursuant to which: (i) the Transferors are contributing the
Interests to Empire; and (ii) Empire is issuing Exchange Shares to
the Transferors in exchange for the Interests.
B. Contemporaneously with the execution and delivery hereof, the
Transaction is being consummated.
C. The Parties desire to set forth their understanding in connection
therewith and have a memorandum of the actions and agreements on
account thereof.
AGREEMENT
In consideration of the foregoing recitals and the mutual promises
and covenants contained herein, the sufficiency of which is hereby acknowledged,
the Parties agree as follows:
ARTICLE I
CLOSING ACTIONS AND DELIVERY OF DOCUMENTS
The following steps and actions of the Parties were taken at the closing of the
Transaction, which took place on January 12, 2004 at the offices of Xxxxxx &
Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000:
1) delivery of an Opinion from Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx &
Wolosky LLP that neither Empire nor the Transferors (including
any direct or indirect owner of any of the Transferors) will
recognize any income, gain or loss for U.S. federal income tax
purposes as a direct result of the Transaction and that Xxxxxxx
Xxxxxx will not recognize any gain or loss for U.S. federal
income tax purposes upon any subsequent resale of the Exchange
Shares, assuming no change in the law and that Empire is not a
U.S. Real Property Holding Company at the time of such resale;
2) the bylaws of Empire shall be amended, substantially in the
form of Exhibit C to the Securities Contribution Agreement;
3) the certificate of incorporation of Empire shall be amended,
substantially in the form of Exhibit D to the Securities
Contribution Agreement;
4) delivery of a Letter Agreement regarding the Cayuga Letter
Agreement providing for Empire's assumption of Catskill's
obligations under such letter agreement;
5) termination of the Service Compensation Agreements;.
6) the Notice Letter, dated as of January 12, 2004, from Catskill
to the Cayuga Nation and the Cayuga Catskill Gaming Authority
regarding the assignment of agreements, shall have been
acknowledged by the Cayuga Nation and the Cayuga Catskill
Gaming Authority;
7) Empire shall have received certificates with respect to the
representations and warranties made in the Securities
Contribution Agreement, dated the Closing Date, and executed by
an executive officer of Catskill and each of the Current
Catskill Members (other than CE, who shall sign such
certificate individually);
8) Empire shall have received a certificate with respect to the
representations and warranties made by the MRD Members in the
Securities Contribution Agreement, dated the Closing Date,. and
executed by each of the MRD Members;
9) Each of the Affiliates shall have executed. and delivered to
Empire an Affiliate Agreement;
10) Empire shall have received an opinion from Xxxx Xxxxx
Associates, Inc. to the effect that the Transaction is fair to
Empire and its stockholders from a financial point of view and
the Special Committee shall have approved the Transaction;
11) the Lease shall have been amended, substantially in the form of
Exhibit E to the Securities Contribution Agreement;
12) the Shared Facilities Agreement shall have been amended whereby
MRM shall become a co-party to the Shared Facilities Agreement;
13) Empire shall have received an opinion from each of Xxxxxx &
Xxxxxxx LLP, Patterson, Belknap, Xxxx & Xxxxx LLP and Xxxxxx &
Xxxxxxxx, PLLC, substantially in the form of Exhibits F-A, F-B
and F-C, respectively, to the Securities Contribution
Agreement;
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14) Catskill and the Transferors shall have received a certificate
with respect to the representations and warranties made by
Empire in the Securities Contribution Agreement, dated the
Closing Date, and executed by an executive officer of Empire;
15) Catskill and the Transferors shall have received an opinion
from Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Wolosky LLP,
counsel to Empire, substantially in the form of Exhibit G to
the Securities Contribution Agreement;
16) Catskill and the Transferors shall have received a certificate
from Empire's transfer agent verifying, in all material
respects, the accuracy of the outstanding shares of capital
stock of Empire as set forth in Section 5.8(a) of the
Securities Contribution Agreement, subject to modifications as
may be contemplated by Section 6.3(b) of the Securities
Contribution Agreement;
17) the Transferors shall have received the Exchange Shares;
18) delivery of an assignment and assumption agreement, in form and
substance reasonably satisfactory to it, as to the assumption
by Empire of the Liabilities;
19) the Employment Agreements shall have been amended as provided
in Section 6.17 of the Securities Contribution Agreement, with
such amendments to be effective as of the Closing Date; and
20) Empire shall have executed a guarantee of lease guaranteeing
MRM's obligations under the Lease, substantially in the form of
Exhibit H to the Securities Contribution Agreement.
ARTICLE II
POST-CLOSING ACTIONS AND DELIVERY OF DOCUMENTS
As of the Closing Date, certain conditions to the Closing have not
been satisfied and certain documents that were to be executed in connection with
the Closing have not been executed. The parties have agreed to close the
Transaction notwithstanding the failure to satisfy such requirements on the
condition that the delinquent party agrees to satisfy the obligations set forth
on Exhibit A attached hereto within ten (30) calendar days following the date
hereof. Each of the parties hereby agrees that it shall satisfy the requirements
set forth on Exhibit A attached hereto within such thirty (30) calendar day
period.
ARTICLE III
POST-CLOSING PAYMENTS
Empire agrees to, and shall, pay all of the. fees, including, legal
fees, costs and expenses, incurred by Catskill, the Remaining Catskill Members
and the Transferred Companies incident to or in connection with the negotiation,
preparation, execution, delivery and performance of the Securities Contribution
Agreement and the Catskill Related Agreements, including without limitation,
legal fees, and expenses, and payments made in connection with obtaining
consents, waivers, agreements and permits, any stock transfer, real property
transfer, documentary transfer or other similar taxes and sales, use or
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other taxes imposed,by reason of or on account of, or arising out of or in
connection with the sale of the Interests and any deficiency, interest or
penalty asserted with respect thereto. The legal fees and expenses shall be
payable on the date of closing of the private placement transaction as
contemplated in that certain engagement letter by and between Xxxxxxxxx &
Company, Inc. and Empire, dated as of October 30, 2003, but in no event later
than February 29, 2004.
ARTICLE IV
MISCELLANEOUS
1. FURTHER ASSURANCES. Each Party will take such other actions as any other
Party may reasonably request or as may be necessary or appropriate to
consummate or implement the transactions contemplated by this Memo
Agreement or to evidence such events or matters.
2. GOVERNING LAWS. This Memo Agreement and the legal relations between the
Parties will be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and performed in such
State and without regard to conflicts of law doctrines, except to the
extent that state law as to certain matters is preempted by federal law.
3. AMENDMENTS; WAIVERS. Except as expressly provided herein, this Memo
Agreement may be amended only by agreement in writing of all Parties. No
waiver of any provision nor consent to any exception to the terms of this
Memo Agreement or any agreement contemplated hereby will be effective
unless in writing and signed by all Parties and then only to the specific
purpose, extent and instance so provided. No failure on the part of any
Party to exercise or delay in exercising any right hereunder will be deemed
a waiver thereof, nor will any single or partial exercise preclude any
further or other exercise of such or any other right.
4. NO ASSIGNMENT. Neither this Memo Agreement nor any rights or obligations
under it are assignable by one Party without the prior written consent of
the other Parties. Any such assignment without the prior written consent of
the other Parties will be void ab initio.
5. NOTICES. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Memo Agreement will
be in writing and will be deemed to have been given: (i) immediately when
personally delivered; (ii) when received by first class mail, return
receipt requested; (iii) one day after being sent for overnight delivery by
Federal Express or other overnight delivery service; or (iv) when receipt
is acknowledged, either electronically or otherwise, if sent by facsimile,
telecopy or other electronic transmission device. Notices, demands and
communications to the Parties will, unless, another address is specified by
the Parties hereafter in writing, be sent to the address indicated below:
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If to Catskill, addressed to:
Catskill Development, L.L.C.
x/x Xxxxxxxxxx Xxxxxxx
Xxxxx 00X
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, President
Fax: (000) 000-0000
With a copy to (which will not constitute notice):
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
If to ATP or MR, addressed to:
c/o Americas Tower Partners
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Managing Director
Fax: (000) 000-0000
With a copy. to (which will not constitute notice):
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
and, with respect to MR, a copy to (which will not constitute
notice):
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
Facsimile:: (000) 000-0000
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If to Empire or Alpha, addressed to:
Empire Resorts, Inc.
000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
With a copy to (which will not constitute notice):
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to SK, KFLP, KFP, NYG, Watertone or BKB, addressed to:
c/o Xxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx.00000
Fax: (000) 000-0000
If to CE, addressed to:
Xxxxxxxx X. Xxxxxxx
x/x Xxxxxxxxxx Xxxxxxx
Xxxxx 00X
Xxxxxxxxxx, Xxx Xxxx 00000
Fax:. (000) 000-0000
If to Fox, addressed to:
Fox-Hollow Lane, LLC
c/o Xxxxxxx Xxxxxxxxxx
00 Xxx Xxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to Shamrock, addressed to:
Shamrock Strategies, Inc.
c/o Xxxxxxxxxxx Xxxxxxx, President
0000 Xxx Xxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to RB, addressed to:
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to PB, addressed to:
c/o Monticello Raceway
Xxxxx 00X
Xxxxxxxxxx, Xxx. Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
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6. HEADINGS. The descriptive headings of the Articles, Sections and
subsections of this Memo Agreement are for convenience only and do not
constitute a part of this Memo Agreement.
7. COUNTERPARTS. This Memo Agreement and any amendment hereto or any other
agreement delivered pursuant hereto may be executed in one or more
counterparts and by different Parties in separate counterparts. All
counterparts will constitute one and the same agreement and will become
effective when one or more counterparts have been signed by each Party and
delivered to the other Parties.
8. SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This Memo Agreement
is binding upon and will inure to the benefit of each Party and their
respective successors or assigns, and nothing in this Memo Agreement,
express or implied, is intended to confer upon any other Person any rights
or remedies of any nature whatsoever under or by reason of this Memo
Agreement.
9. INTERPRETATION. Each Party acknowledges that it has been represented by
counsel in connection with this Memo Agreement. Accordingly, any rule of
law or any legal decision that would require interpretation of any claimed
ambiguities in this Memo Agreement against the Party that drafted it has no
application and is expressly waived. The provisions of this Memo Agreement
will be interpreted in a reasonable manner to effect the intent of the
Parties.
10. GENERAL RULES OF CONSTRUCTION. For all purposes of this Memo Agreement: (i)
the terms defined in this Memo Agreement include the plural as well as the
singular; (ii) all references in this Memo Agreement to designated
"Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of the body of this Memo
Agreement; (iii) pronouns of either -gender or neuter include, as
appropriate, the other pronoun forms; (iv) the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Memo Agreement
as a whole and not to any particular Article, Section or other subdivision;
(v) "or" is not exclusive; (vi) "including" and "includes" will be deemed
to be followed by "but not limited to" and "but is not limited to,"
respectively; (vii) any definition of or reference to any law, agreement,
instrument or other document herein will be construed as referring to such
law, agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified; and (viii) any definition of or
reference to any statute will be construed as referring also to any rules
and regulations promulgated thereunder.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the Parties hereto has caused this Memo
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
CATSKILL DEVELOPMENT, L.L.C.
By: /s/ Xxxxx Xxxxxx
--------------------
Name: Xxxxx Xxxxxx
Title: President
ALPHA MONTICELLO, INC.
By: /s/ Xxxxxx X. Xxx
---------------------
Name: Xxxxxx X. Xxx
Title: President
AMERICAS TOWER PARTNERS
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Director
MONTICELLO REALTY L.L.C.
By: By: MANHATTAN DEVELOPMENT
CORPORATION, its Manager
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: President
WATERTONE HOLDINGS, LP
By: By: BKB, LLC, its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Member
FOX-HOLLOW LANE, L.L.C.
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Managing Member
SHAMROCK STRATEGIES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Authorized Representative
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxxx
XXXXXXXXX FAMILY LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: General Partner
KFP TRUST
By: /s/ Xxxxxx Xxxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Trustee
NEW YORK GAMING, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Manager
EMPIRE RESORTS, INC.
By: /s/ Xxxxxx X. Xxx
--------------------------
Name: Xxxxxx X. Xxx
Title:
BKB, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Member
EXHIBIT A
POST-CLOSING ACTIONS AND DELIVERABLES
1. The Transferors shall have delivered to Empire executed Affiliate
Agreements from ATP and NYL.
2. Xxxxxxxxx shall have delivered to Empire the executed legal opinion of
Xxxxxxxxx.
3. Empire shall have delivered an execution copy of the Certificate of the
Transfer Agent regarding Empire's Capitalization.
4. Empire shall have delivered to the Transferors the execution copies of and
signature of the Berkshire Bank to the Berkshire Bank Waivers.
5. The Executed Mortgage Modification and Spreader Agreement shall have been
delivered.
6. The 255 Affidavit pursuant to the Mortgage Modification and Spreader
Agreement shall have been delivered.
7. BKB, LLC shall have delivered the executed written consent of the members
of BKB, LLC.
8. Xxxxx X. Xxxxxxxxx shall have delivered the signatures of Xxxxx X.
Xxxxxxxxx and. Xxxxxxxxx Family Limited Partnership to the Assignment by
Xxxxx X. Xxxxxxxxx of some of his interest in BKB, LLCC to KFP Trust.
9. Xxxxx X. Xxxxxxxxx shall have delivered the signatures of Xxxxx X.
Xxxxxxxxx and Xxxxxxxxx Family Limited Partnership to the Assignment, by
Xxxxx X. Xxxxxxxxx of some of his interest in BKB, LLC to Xxxxxxxxx Family
Limited Partnership.
10. Xxxxx X. Xxxxxxxxx shall have delivered the signature of Xxxxx X. Xxxxxxxxx
to the Assignment by Xxxxx X. Xxxxxxxxx of some of his interest in BKB, LLC
to Xxxxxx X. Xxxxxx.
11. Xxxxx X. Xxxxxxxxx shall have delivered the signature of Xxxxx X. Xxxxxxxxx
to the Assignment by Xxxxxx Xxxxxx of some of his interest in BKB, LLC to
Xxxxxx X. Xxxxxx.
12. BKB, LLC shall have delivered the BKB signature to the Assignment and
Assumption Agreement between BKB, LLC and Americas Tower Partners regarding
the transfer of 25% interest in Monticello Raceway Development Company,
LLC.
13. MR and Watertone, respectively shall have delivered the execution copy of
and notarized signature of Monticello Realty L.L.C. to the Note and
Mortgage Modification Agreement regarding the assignment of interest by
Watertone Holdings, LP to Xxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxx and
Xxxxxxxxx Family Limited Partnership.
14. ATP, Watertone and MR shall have delivered the execution copy of Catskill
Members' Agreement.
15. Executed Mortgage Assumption Agreement of Xxxxx X. Xxxxxxxxx, pursuant to
the Mortgage Note and Modification Agreement.
16. Executed Mortgage Assumption Agreement of Xxxxxx X. Xxxxxx, pursuant to the
Mortgage Note and Modification Agreement.
17. Executed Mortgage Assumption Agreement of Xxxxxxxxx Family Limited
Partnership, pursuant to the Mortgage Note and Modification Agreement.
