Exhibit 10.14
FIRST AMENDMENT OF LETTER AGREEMENT
THIS FIRST AMENDMENT OF LETTER AGREEMENT (this "Amendment") is made
and entered into as of April 30, 2004 (the "Effective Date"), by and between
EMPIRE RESORTS, INC. and CATSKILL DEVELOPMENT, L.L.C., having address at
Monticello Raceway, X.X. Xxx 0000, Xxxxx 00X, Xxxxxxxxxx Xxx Xxxx 00000
(collectively, "Monticello"), and CAYUGA NATION OF NEW YORK and CAYUGA
CATSKILL GAMING AUTHORITY, having an address at 00 Xxxx Xxxx Xxxxxx, Xxxxxxx,
Xxx Xxxx (collectively, "Cayuga" ). This Amendment is entered into with
reference to the following facts:
A. Catskill Development, L.L.C., Alpha Hospitality Corporation
(predecessor to Empire Resorts, Inc.) and Cayuga entered into a Letter
Agreement, dated as of April 3, 2003 (a copy of which is attached hereto as
Exhibit "A", the "Letter Agreement").
B. Monticello and Cayuga on behalf of themselves and their respective
successors and assignees desire to amend certain of the terms and provisions of
the Letter Agreement, upon the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable
consideration the receipt and legal sufficiency of which are hereby
acknowledged, Monticello and Cayuga agree as follows (all capitalized turns
defined in the Letter Agreement shall, have the same meanings in this Amendment
except to the extent that this Amendment sets forth some other definition for a
particular term):
1. Dates.
In Paragraphs 11 and 12 of the Letter Agreement, in each instance, (A)
the date "April 30, 2004" is deleted and replaced with the date "December 31,
2004"; and (B) the date "May 1, 2004" is deleted and replaced with the date
"December 31, 2004."
2. No Other Changes.
Except for the foregoing changes to the Letter Agreement, the parties
ratify and confirm the Letter Agreement. Monticello and Cayuga acknowledge and
agree that the Letter Agreement, as hereby amended, is in full force and effect
in accordance with its terms. Any inconsistency between this Amendment and the
Letter Agreement (as it existed before this Amendment) shall be resolved in
favor of this Amendment. Wherever the Letter Agreement refers to the Letter
Agreement, such reference shall be deemed to refer to the Letter Agreement as
modified by this Amendment.
3. Certain Confirmations.
Each of Monticello and Cayuga confirms and acknowledges on its own behalf:
3.1. Full Force and Effect. The Letter Agreement is in full force and
effect and has not been supplemented, modified or otherwise amended, or
canceled, terminated, or surrendered, except pursuant to this Amendment. The
Letter Agreement is binding and enforceable as against Monticello and Cayuga in
accordance with its terms. The Letter Agreement as modified by this Amendment
represents the entire agreement and understanding between Cayuga and Monticello
with respect to the subject matter thereof.
3.2. No Default. To each party's best knowledge, as of the Effective Date
neither Cayuga nor Monticello is in default in the performance of any of its
covenants, agreements or conditions contained in the Letter Agreement nor has
any event occurred that, with the passage of time or giving of notice or both,
would constitute a default under the Letter Agreement. Neither Monticello nor
Cayuga has given any notice of any uncured default to the other party.
4. Miscellaneous.
4.1 Representations and Warranties. Each party represents and warrants that
it has the legal power and authority to enter into this Amendment without
consent or approval by any third party, and that this Amendment is a valid,
legal, and binding obligation of such party enforceable in accordance with its
terms.
4.2. Further Assurances. Each party shall take such further actions as
shall be reasonably necessary from time to time to implement and effectuate the
intentions of the parties expressed in this Amendment.
4.3. Amendments. The Letter Agreement may not be further amended,
discharged or terminated except by a written instrument executed by the parties.
4.4. Counterparts. This Amendment may be executed in counterparts, each of
which shall be an original, but all of which shall constitute a single
agreement.
2
IN WITNESS WHEREOF, Monticello and Cayuga have executed this Amendment as
of the Effective Date.
EMPIRE RESORTS, INC. CAYUGA NATION OF NEW YORK
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------- ----------------------------------
By: Xxxxxx Xxxxxx By: Xxxxxxx X. Xxxxxxx
Its: CEO Its: Representative
CAYUGA CATSKILL
CATSKILL DEVELOPMENT, L.L.C. GAMING AUTHORITY
/s/ Xxxxx Xxxxxx /s/ Xxxxx X. Jimewon
-------------------------------- -----------------------------------
By: Xxxxx Xxxxxx By: Xxxxx X. Jimewon
its: President Its Director
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx, individually
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, individually
Attachments:
Exhibit A = Letter Agreement
3
EXHIBIT A
ALPHA HOSPITALITY CORPORATION
CATSIILL DEVELOPMENT L.L.C.
As of April 3, 0000
Xxxxxx Xxxxxx xx Xxx Xxxx
Cayuga Catskill Gaming Authority
00 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxx
Attention: Xxxxx Xxxxxxxx
Ladies and Gentlemen:
This letter sets forth the agreements and understandings among the Cayuga
Nation of New York (the "Nation"), the Cayuga Catskill Gaming Authority, an
instrumentality of the Nation (the "Authority"), Catskill Development, L.L.C.
("Catskill"), Alpha Hospitality Corporation (individually and collectively with
its subsidiaries, "Alpha"), Xxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxx Xxxxxx
("Xxxxxx"), the other principals and affiliates of Catskill or Alpha who are
listed on Schedule 1 annexed hereto and made a part hereof and who individually,
directly or indirectly, own ten (10%) percent or more of the equity interests in
Catskill (such principals and affiliates are referred to individually and
collectively as the "Principals"), Monticello Raceway Development Company,
L.L.C. ("Developer") and Monticello Casino Management, L.L.C. ("Manager"). For
purposes of this letter, Catskill and Alpha are referred to individually and
collectively as "Monticello", and Catskill, Alpha, Xxxxxx, Xxxxxx and the
Principals are referred to individually and collectively as "CAP".
The Nation intends to apply for approval of conveyance of an approximately
30 acre parcel of land (the "Property") currently forming a portion of the site
of the Monticello Raceway located in Xxxxxxxx County, New York to the United
States Government in trust for the Nation's benefit in order to facilitate the
development of a Class III gaming facility (the "Gaming Enterprise") on the
Property. The Gaming Enterprise is to be developed on behalf of the Nation by
Developer and its affiliates. In connection therewith, among other things, the
Nation, the Authority and Manager are entering into a gaming facility management
agreement (the "Management Agreement") with respect to the development and
operation of the Gaming Enterprise.
As an outgrowth of the foregoing transactions and in order to induce the
Nation, the Authority, and Catskill and its affiliates to enter into such
transactions, the Nation and the individuals and entities included in the
definition of CAP have discussed and agreed to certain aspects thereof and to
the structure of certain future joint business activities, as follows:
Cayuga Nation of New York
As of April 3, 2003
Page 2
1. In order to fund the costs and expenses of the Nation in connection with
acquiring the Property and developing the Gaming Enterprise, the Nation and
Catskill agree to formulate a mutually acceptable written budget within thirty
(30) days after the date hereof encompassing the costs and expenses of the
Nation (including services to be performed by members of the Nation) in
connection with such acquisition and development, and the fees and disbursements
to be paid to legal counsel, accountants and such other professionals,
consultants and specialists engaged by or on behalf of the Nation or the
Authority in connection therewith. The parties further agree that Catskill shall
fund all amounts contemplated by such budget as required thereby, but not less
frequently than monthly, until ninety (90) days after the Opening Date (as
hereinafter defined) with the understanding that Catskill would be reimbursed
for such amounts solely out of (x) the third party construction financing and
(y) to the extent such financing is insufficient, distributions to Manager
pursuant to Section 6.4 Third of the Management Agreement. The parties further
agree that neither the Nation nor the Authority shall have any obligation to
fund any of the costs and expenses of acquiring the Property or developing the
Gaming Enterprise, except as expressly contemplated by the Management Agreement,
as amended from time to time.
2. Catskill further agrees on behalf of itself and Developer that (i) the
maximum amount they (and their affiliates on their behalf), in the aggregate,
will be reimbursed for pre-development costs and expenses shall be $10,000,000
(exclusive of the purchase price for the Property) and such reimbursement shall
be funded solely (x) out of the third party construction financing and (y) to
the extent such financing is insufficient, distributions to Manager pursuant to
Section 6.4 Third of the Management Agreement, and (ii) such reimbursement
shall, in no event include any costs and expenses incurred by them or their
affiliates in connection with the litigation with Park Place Entertainment Corp.
or amounts paid by them or their affiliates to the St. Regis Mohawk Tribe, its
members, affiliates and/or their respective legal counsel, accountants and their
other professionals, consultants and specialists.
3. Subject to paragraph 4 and the other terms and conditions hereinafter
set forth, from, the date hereof through and including the date that is the
tenth (10th) anniversary of the date of the opening to the public of the Gaming
Enterprise (the "Opening Date"), the Nation and CAP have agreed that CAP and the
Nation, respectively, will have the right to participate in the proposed
development and operation directly or indirectly by the Nation, its
instrumentalities and agencies and/or its and their respective affiliates (the
Nation and such instrumentalities, agencies and its and their respective
affiliates are referred to individually and collectively as "Nation Group"), or
by CAP and/or its or their respective affiliates (CAP and/or its or their
respective affiliates are referred to individually and collectively as the "CAP
Group"):
(a) of one or more hotels, motels or other similar facilities
providing overnight accommodations including ancillary beverage,
food, entertainment, commercial and/or retail services (each a
"Hotel Facility") within a fifteen (15) mile radius of the
Property; and
Cayuga Nation of New York
As of April 3, 2003
Page 3
(b) any other entertainment, sports and/or retail facility
(including, but not limited to the placement of video lottery
terminals and/or slot machines on the real estate currently owned
by Catskill upon which Monticello Raceway is located) (each a
"Non-Hotel Facility") within a five-mile (5) radius of the
Property.
For purposes of this letter, a Hotel Facility and/or a Non-Hotel Facility
are/is referred to individually and collectively as a "Facility". The Nation
acknowledges and understands that the CAP Group has no current plans to develop
and/or operate a Hotel Facility. CAP acknowledges and understands that the
Nation Group has no current plans to develop and/or operate a Hotel Facility.
Notwithstanding the foregoing provisions of this paragraph 3 to the contrary,
(x) the term Hotel Facility shall not include any hotel, motel or
other similar facilities providing overnight accommodations
including ancillary beverage, food, entertainment, commercial
and/or retail services developed by the Nation Group or the CAP
Group in conjunction or their respective development of any Class
III or Class II gaming facility other than the Gaming Enterprise;
(y) the term Facility shall not include the Gaming Enterprise,
residential housing developments such as single-family homes, or
condominium, cooperative or rental apartments, or office or
professional buildings and
(z) the term Facility shall not include the Exempt Transaction
(hereinafter defined).
4. Notwithstanding any other provision of this Agreement to the contrary,
the rights afforded to the Nation and CAP under paragraph 3 shall vest when the
Property has been acquired by the United States in trust for the Nation's
benefit but shall not become exercisable until the Opening Date. Accordingly,
while the parties shall be obligated to provide each other with the information
contemplated by paragraph 9, no party can compel or obligate any other party to
make a decision under paragraph 9 until the Opening Date, and the right to
commence the running of all time periods set forth in paragraph 9 is tolled
until the Opening Date and the requirements of paragraph 9 have been satisfied.
Upon the occurrence of the Opening Date, the rights afforded under paragraph 3
shall become exercisable as to any Facility developed between the date of this
letter and the Opening Date.
5. Subject to paragraph 4, the Nation and CAP hereby agree that
(a) the Nation or its designee, provided that such designee is a 100%
owned agency, authority or instrumentality of, or otherwise 100%
controlled by, the Nation, or
Cayuga Nation of New York
As of April 3, 2003
Page 4
(b) the entities and individuals included in the definition of CAP,
or their designees, provided such designees are 100% owned or
controlled by one or more of such entities and individuals,
in each case, in the aggregate, will have the right to purchase, in each case at
its or their option and sole discretion, an interest (the "Acquired Interest")
of up to one-third (33.33%) of the equity in each Facility developed by the CAP
Group, or the Nation Group, respectively. The purchase price for the Acquired
Interest shall be a pro rata share of the costs, as calculated in accordance
with paragraph 6, of such Facility less the amount advanced by any lender for
any mortgage or other loan secured by such Facility's property or cash flow. If
the Nation, or CAP, as the case may be, does not exercise such right as to any
Facility, it or they shall nevertheless retain the right with respect to any
other Facility developed by the CAP Group, or the Nation Group, as the case may
be, in accordance with the terms of this Agreement.
6. The costs may include (i) land costs (acquisition, lease, etc., site
development and other costs and expenses incurred in connection therewith) and
(ii) so-called "hard" and "soft" costs and expenses incurred in connection with
the planning, development, construction, equipping and furnishing of such
Facility, including, reasonable financing, development and carrying costs, as
agreed to by the parties, but shall in no event be less than $1.00 provided,
however, that such costs shall in no event include any costs and expenses
incurred in connection with the operation of the Nation's or the Authority's, or
CRP's, businesses, including, without limitation, salaries, rent, insurance,
utility charges and any other type of general, administrative or overhead
expense.
7. Except as permitted by the following sentence, the purchase price for an
Acquired Interest shall be paid in cash at the time the Acquired Interest is
purchased. With respect to any Acquired Interest purchased by the Nation (or its
permitted designee) prior to the second (2nd) anniversary of the Opening Date,
in lieu of paying cash, the obligations of the Nation (or such designee) to pay
for such Acquired Interest, may, at the option of the Nation, be satisfied in
whole or in, part by the execution and delivery of a non-recourse promissory
note having an interest rate equal to the composite prime interest rate publicly
announced from time to time by The Wall Street Journal until such time as the
financing to construct such Facility is obtained at which time the interest rate
then and thereafter will be changed to the interest rate charged by the lender
providing such financing, (ii) providing for (A) monthly payments based on a
thirty (30) year amortization schedule, (B) no monthly payments until the first
(1st) anniversary of the date the Note is issued, with monthly payments to be
made over the ensuing five (5) years and (C) the payment of the entire unpaid
principal balance, together with accrued and unpaid interest thereon, at the end
of such five (5) year period; (iii) providing for the prepayment of the unpaid
principal amount in whole or in part, at any time and from time to time, without
premium or penalty, but with accrued interest on the amount being prepaid,
Cayuga Nation of New York
As of April 3, 2003
Page 5
(iv)providing for the payment obligations under the Note are to be a general
obligation of or guaranteed by the Authority, and (v) containing such other
reasonable terms and conditions as are agreed to by the parties.
8. In consideration for the option to obtain the Acquired Interests as set
forth above, the Nation agrees that the first Hotel Facility shall be the
so-called "preferred provider" Hotel Facility for the Gaming Enterprise for the
period commencing on the completion of such Hotel Facility and ending on the
retirement of the initial first mortgage indebtedness with respect to such Hotel
Facility. For purposess of this Agreement, the term "preferred provider" means
that the Nation will cause the Gaming Enterprise to refer and recommend rooms in
such Hotel Facility to the guests and clients of the Gaming Enterprise to the
extent such accommodations are available in the Hotel Facility; provided that
such Hotel Facility agrees to use commercially reasonable efforts to accommodate
such guests and clients at the most favorable corporate discount rates.
9. Whenever the Nation Group or CAP Group, as the case may be, identifies
and determines to proceed with a specific Facility (the party making such
identification and determination is referred to as the Facility "Developer" and
the other party is referred to as the "Prospective Participant"), the Facility
Developer shall provide the Prospective Participant with a written analysis
containing in reasonable detail the material terms of the proposed. Facility,
including, but not limited to copies of the contract or option to purchase the
property upon which such Facility will be constructed, and copies of
applications fled for requisite building and other permits, and business plans
and marketing studies, if any (collectively, the "Analysis"), together with such
other information as the Prospective Participant then or thereafter may
reasonably request, to the extent in the possession of the Facility Developer.
The Prospective Participant may thereafter notify the Facility Developer of the
Prospective Participant's decision to purchase an Acquired Interest in such
Facility. In such event, the Prospective Participant and the Facility Developer
shall enter into a definitive purchase and sale agreement (a "Contract"), in
form and substance reasonably and mutually satisfactory to the parties,
providing for the purchase by the Prospective Participant of an Acquired
Interest in such Facility. The Contract is to be prepared by Monticello's
attorneys who, will be instructed to begin the preparation of the form thereof
(which shall include customary provisions regarding governance, management and
disposition of an equity interest by an owner, and a form of the Note, customary
closing conditions, including opinions of counsel as to the authorization,
binding effect and availability of commercially reasonable judicial remedies for
the enforceability thereof) upon the execution and delivery hereof, and which
form shall be negotiated in good faith and fair dealing by the parties, subject
to such changes in the form once a Facility is identified as are reasonably
required and are otherwise acceptable to the parties. If the parties through no
fault of the Facility Developer have not entered into a Contract within a
reasonable time, not to be less than ninety (90) days from the date the Facility
Developer delivers the Analysis to the Prospective Participant, the Facility
Developer may thereafter submit a written request to the Prospective Participant
for confirmation from the Prospective Participant that the Prospective
Participant intends to purchase an Acquired
Cayuga Nation of New York.
As of April 3, 2003
Page 6
Interest in such Facility (the "Confirmation"). If the Developer does not
receive the Confirmation within thirty (30) days after the Developer submits a
request therefor, the Prospective Participant will be deemed to have elected to
forgo his, her or its right to purchase an Acquired Interest in such Facility.
If the Prospective Participant confirms that he, she or it intends to purchase
an Acquired Interest in such Facility, such Confirmation shall be accompanied by
a fully executed Contract (together with such documentation as is then provided
for therein) within thirty (30) days after the Facility Developer submits the
demand for the Confirmation.
10. If there is any material change in the proposed development of any
Facility, the Facility Developer thereof shall promptly notify the Prospective
Participant of all such changes. Further, if the Prospective Participant has not
previously exercised his, her or its right to purchase an Acquired Interest in
such Facility, the Facility Developer shall again offer, in accordance with the
procedures set forth in paragraph 9, the Prospective Participant the opportunity
to purchase an Acquired Interest in such Facility.
11. In consideration of the agreements and undertakings of the parties
hereto set forth herein, the Nation Group and the CAP Group severally agree that
for a period ending on the earliest of (i) approval (A) by the Secretary of the
Interior of the United States of the Application and (B) approval by the
National Indian Gaming Commission of the Management Agreement, (ii) the
termination of the Management Agreement by reason of Manager's (as such term is
defined in the Management Agreement) material breach of its obligations
thereunder, (iii) the termination of the Development and Construction Agreement
(as such term is defined in the Management Agreement) by reason of the
Developer's material breach of its obligations thereunder, and (iv) April 30,
2004, the Nation Group and the CAP Group, respectively, will refrain from having
discussions regarding the development of another Class III gaming facility in
Xxxxxxxx County, New York. If the approvals set forth in clause (i) above are
not obtained by April 30, 2004 or the Management Agreement or the Development
and Construction Agreement (or both) is (are) so terminated prior to May 1,
2004, this Agreement and the transactions contemplated or referenced herein
shall terminate and the partiess hereto shall have no obligation to proceed with
any of such transactions, or to each other, except that Catskill shall remain
liable for, and reimburse the Nation for, any amounts expended by the Nation
prior to May 1, 2004 in accordance with the budget established pursuant to
paragraph 1.
12. In consideration of the agreements and undertakings of the Nation set
forth herein, and notwithstanding any provision of the Management Agreement to
the contrary, Monticello and Manager shall use their commercially reasonable
efforts to (i) identify and enter into a joint venture, partnership or other
similar arrangement (which may include a direct or indirect investment in
Monticello or Manager) with one or more individuals or entities, (ii) identify
and employ or otherwise retain the services of one or more individuals, or
entities, or (iii) enter into a contractual arrangement with one or more third
parties, in each case in Monticello's and Manager's sole discretion, and in each
case by no later than April 30, 2004; provided that such individuals, entities
Cayuga Nation of New York
As of April 3, 2003
Page 7
or third parties as the case may be, (x) have the expertise, experience and
ability to (1) obtain financing to construct, and, (2) develop manage, operate
and maintain, the Gaming Enterprise, as well as to instruct the Authority and
others in the operation of a first-class gaming facility and (y), are approved
in advance by the Authority, in its sole and absolute discretion. In addition,
promptly after the approval of the Authority has been obtained, such
individuals, entities or third parties, as the case may be, acting through or on
behalf of Monticello and Manager, as the case may be, shall (i) have the day to
day responsibility for and, in consultation with the other persons and entities
comprising the Manager, the overall performance of, all of Manager's obligations
under the Management Agreement, and (ii) join with Monticello and Manager in
furnishing a a written certificate to the Authority confirming such
responsibility. If the Authority does not approve of and consent to the
performance of such obligations by such individuals, entities or third parties,
as the case may be, Monticello and Manager shall forthwith use their
commercially reasonable efforts to identify and accept such other individuals or
entities, as the case may be, who satisfy the conditions set forth in clauses
(x) and (y) above of this paragraph 12.
13. Alpha is hereby added as a party to the Letter of Intent previously
entered into between Catskill and the Nation, dated October 22, 2002, and in
consideration thereof and of the Nation's agreement that a Hotel Facility shall
become the "preferred provider" to the Gaming Enterprise, Alpha has made an
award to the Nation of 300,000 shares of its Common Stock (the "Stock"), to be
valued at the closing price of Alpha's Common Stock on the Nasdaq SmallCap
Market on such grant date, which is to become vested in the Nation in three
installments, in each case assuming that the Nation has not withdrawn the
Application from the Bureau of Indian Affairs and/or the National Indian Gaming
Commission:
(a) the first installment will consist of 100,000 shares and will become
vested on the date of the filing (the "Filing Date") by the Nation of
an Application for the Acquisition of Land to be Placed in Trust (the
"Application") for the Property with the United States Department of
the Interior
(b) the second installment will consist of 100,000 additional shares and
become vested on the six month anniversary of the Filing Date; and
(c) the third installment will consist of 100,000 additional shares and
become vested on the one-year anniversary of the Filing Date.
14. The Stock is to be held in escrow by the Nation's attorneys,
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx (the "Escrow Agent"). Compliance with all
conditions for release thereof as of the date of each release may be evidenced
by the filing with such escrow agent of a certificate of an authorized
representative of the Nation stating that the Nation has complied with all such
conditions. The escrow agent and the transfer agent for Alpha's common shares
will be fully protected in relying on such certification. The transfer agent
Cayuga Nation of
New York As of April 3, 2003
Page 8
shall be entitled to assume that any such certificate presented with the related
shares is valid and genuine.
15. On or immediately following each vesting date prescribed by paragraph
13, Alpha will file a registration statement on Form S-3 (or, if Alpha does not
meet the conditions to use Form S-3, on Form S-1) with the Securities and
Exchange Commission with respect to the 100,000 shares of Stock first then
vested and shall take any and all other steps necessary for all the shares of
Stock theretofore and then vested to be immediately, and remain, registered (and
the registration statement and prospectus current) under the Securities Act of
1933 and qualified under state securities laws, all of the above at Alpha's.
expense (including the fees of counsel to the Nation). Alpha will indemnify the
Nation against any liabilities with respect to or in connection with actions
taken or omitted to be taken, or statements made or omitted to be made, by or
on behalf of Alpha with respect to such registration to which the Nation and its
affiliates or associates may become subject as a result of such registration,
and will remain current in Alpha's filings under the Securities Exchange Act of
1934.
16. The Nation will be a stockholder of Alpha only to the extent that
shares have vested in the Nation as provided herein and, in the event the Nation
withdraws the Application, any portion of the Stock which has not vested as of
the date the Application is withdrawn will cease to be vestable and will be
cancelled by Alpha (the certificates of which shall be returned to Alpha by the
Escrow Agent), but no such cancellation will have any effect on the validity or
ownership of any shares which have already vested.
17. Monticello represents and warrants that no individual or entity other
than Xxxxxx and the other individuals or entities listed on Schedule 1 directly
or indirectly owns or currently has the right to acquire ten (10%) percent or
more of the equity interests in Catskill, Alpha, Developer or Manager, except
that Alpha presently has the right to acquire all direct and indirect equity
interests in Catskill, Developer and Manager as described in Exhibit J to the
Management Agreement (the "Exempt Transaction").
18. Any notice(s), consent(s) or other communications required hereunder
shall be sent to the parties hereto at the addresses for such parties prescribed
by, and become effective as provided in, Section 7.1 of the Management
Agreement, and in the case of the Nation, notice shall be sent to the address
set forth at the beginning of this Agreement and in the case of Monticello,
notices and other communications shall be sent to the address of the Manager set
forth in the Management Agreement. In addition, CAP agrees that a notice sent to
Monticello shall be deemed a notice to each individual and entity encompassed
within the definition of CAP.
19.(a) Subject to the provisions of this paragraph 19, the Nation expressly
waives sovereign immunity for the sole purpose of consenting to the jurisdiction
of any federal court located in the State of New York (or any federal appellate
court having jurisdiction thereover) or any State of New York court of any
level, in each case, of competent jurisdiction only for the purpose of enforcing
Cayuga Nation of New
York As of April 3, 2003
Page 9
remedies permitted hereunder arising out of its obligations under paragraphs 3
through 11 (inclusive), 13, 14, 16, and 20 and this Paragraph 19 and then only
to the extent that the judicial remedy being sought in such judicial proceeding
is injunctive relief, specific performance, or any other similar remedy that is
equitable in nature and that does not involve the payment by the Nation of any
monetary damages, it being understood and agreed by the parties hereto that the
Nation in no event shall be liable or otherwise responsible for the payment of
any award of monetary damages. In the event that any court or Arbitrator (as
hereinafter defined), as applicable, determines that a breach of the provisions
of paragraphs 3 through 11 (inclusive), 13,14, 16 and 20 by the Nation caused
CAP economic harm for which an award of monetary damages from the Nation, but
for the foregoing provisions of this paragraph 19, would be the appropriate
judicial remedy, the Authority (but in no event the Nation) shall, subject to
the applicable terms and provisions of this paragraph 19, pay the amount of such
award to CAP.
(b) Subject to the provisions of this paragraph 19, the Authority
waives sovereign immunity for the sole purpose of permitting or compelling
arbitration as provided in this paragraph 19 and consenting to the jurisdiction
of any federal court located in the State of New York (or any federal appellate
court having jurisdiction thereover) or any State of New York court of any
level, in each case, of competent jurisdiction for the purpose of any mediation,
arbitration or lawsuit (including enforcing awards and other remedies on account
thereof), as applicable, pursuant to the provisions hereof or arising out of
this Agreement. Without in any way limiting the generality of the foregoing, the
Authority expressly authorizes any governmental authorities who have the right
and duty under applicable law to take any action authorized or ordered by any
court, to take such action. In no instance shall any enforcement of any kind
whatsoever be allowed against any assets of the Nation or the Authority other
than the limited assets of the Authority specified in paragraph 19(g).
(c) The following disputes between the parties hereto shall be
resolved by the United States District Court for the Southern District of New
York (or any federal appellate court having jurisdiction thereover) or, if such
United States District Court cannot hear or refuses to hear such dispute, by the
New York State Supreme Court, sitting in New York County (or any state appellate
court having jurisdiction thereover): (a) any material monetary dispute and (b)
any dispute in which injunctive relief, specific performance or another similar
equitable remedy is one of the remedies being sought by any party (such disputes
being referred to as "Judicially Resolved Matters"). The following disputes
between the parties hereto shall be determined by mediation or arbitration as
set forth in paragraph 19(d): (a) any dispute as to whether any party hereto
acted reasonably (if and only if that is the standard by which such action is to
be judged), or used commercially reasonable efforts, when required to so act
under the terms and provisions of this Agreement and (b) any non-material
monetary dispute (such disputes being referred to as "JAMS Resolved Matters").
In the event that any dispute, controversy or claim arising between the parties
hereto is notoencompassed within the foregoing definitions of a Judicially
Resolved Matter or a JAMS Resolved Matter, such dispute shall be deemed to be a
Judicially Resolved Matter, notwithstanding the definition of such term.
Cayuga Nation of New York
As of April 3, 2003
Page 10
Anything to the contrary contained herein notwithstanding, in the event that
both the United States District Court for the Southern District of New York (or
any federal appellate court having jurisdiction thereover) and the New York
State Supreme Court, sitting in New York County (or any state appellate court
having jurisdiction thereover), cannot or refuse to hear any Judicially Resolved
Matter, such dispute shall be brought in the New York State Supreme Court,
sitting in Xxxxxxxx County (or any state appellate court having jurisdiction
thereover) (or if such court cannot or refuses to hear such dispute, such
dispute shall be resolved as if it were a JAMS Resolved Matter).
(d) All JAMS Resolved Matters shall be resolved by mediation or
arbitration, to be held in the County, City and State of New York, or such other
location as the parties may agree, before a single mediator/arbitrator who has
at least five years of knowledge and experience in the casino, hotel and
real estate industries ("Arbitrator"), the identity of whom shall be agreed
upon by the parties from the panel of mediators and arbitrators of JAMS.
Failing agreement between the parties concerning the identity of the Arbitrator,
JAMS shall appoint such person. The Arbitrator shall immediately conduct
mediation between the parties to attempt to resolve the dispute. Failing such
mediation, the Arbitrator shall determine the dispute through arbitration. The
parties recognize that disputes could arise which will require expeditious
determination. In such cases, the Arbitrator shall render a determination
expeditiously, and in the exercise of discretion, on a summary basis. Except in
such exigent circumstances, arbitration are to be conducted in accordance with
the rules of JAMS.
(e) In determining any matter the court or Arbitrator, as applicable,
shall apply the terms of this Agreement, without adding to, modifying or
changing the terms in any respect, and shall apply New York law and applicable
federal and Nation law. New York law shall govern the interpretation and
construction of this Agreement.
(f) The parties (and, in the case of a JAMS Resolved Matter, the
Arbitrator) shall maintain strict confidentiality with respect to the judicial
proceeding or arbitration, as applicable, subject to the requirements of
applicable law, including the federal securities laws.
(g) The waiver of immunity from suit in this paragraph 19 by the
Authority shall be specifically limited to injunctive relief, specific
performance and other similar equitable relief, and to the enforcement of an
award of money damages by judicial proceeding or arbitration; provided that the
Arbitrator and/or the court shall have no authority or jurisdiction to order
execution against any assets or revenues of the Nation and may execute only as
to the Authority against (i) undistributed or future Net Revenues (as such term
is defined in the Management Agreement) of the Gaming Enterprise; or (ii) if it
has been specifically found by an Arbitrator that, by exercise of regulatory
authority pursuant to the Nation Gaming Ordinance (as such term is defined in
the Management Agreement) or otherwise, or any rules, actions, or decisions of
the Authority pursuant thereto, the Authority has prejudiced CAP Group's rights
under this Agreement, the future Net Revenues of any other gaming operations
conducted by the Authority, or any other entity of the Authority, on the
Cayuga Nation of New York
As of April 3, 2003
Page 11
Property. Notwithstanding any other provision of this paragraph 19 to the
contrary, in no instance shall any enforcement of any kind whatsoever be allowed
against any assets of the Nation or the Authority other than the limited assets
of the Authority specified in this paragraph 19(g).
(h) Neither the Nation nor any officer, office-holder, employee,
agent, representative or member of the Nation or of the Authority, as such,
shall have any personal liability for obligations of the Authority under this
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Further, no member, nor any officer, office
holder, employee, agent, representative, or member of any member of the Cap
Group shall have any personal liability, for the obligations of Monticello under
this Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation.
20. Each party represents and warrants that it has engaged no broker or
finder in connection with any of the transactions contemplated by this Agreement
nor to its knowledge is any broker or finder in any way connected with any of
such transactions and will indemnify the other against any claim based thereon.
21. This Agreement and the matters set forth herein shall not be deemed
merged into or superceded by any other agreement or contract by or among the
Nation, the Authority or CAP, whether such agreement or contract was previously,
is now, or is hereafter executed in connection with the Application or
otherwise, notwithstanding the fact that such other agreement or contract may
contain a merger or similar clause unless this Agreement is expressly referred
to in such clause and such clause expressly states that this Agreement is
superceded or terminated by such agreement, or contract.
22. This Agreement may be executed in counterparts, each of which shall for
all purposes be deemed to be an original and all of which shall constitute the
same instrument. Any such counterpart may be executed and delivered by
telecopier or other facsimile transmission, all with the same force and effect
as if the same was a manually executed and delivered original counterpart. Any
such counterpart signature page may be attached to the body of one copy of this
Agreement to form a complete integrated whole.
23. New York law shall govern the interpretation and construction of this
Agreement.
24. The Nation acknowledges and agrees that Xxxxxx and Xxxxxx have
executed this Agreement to acknowledge their agreements with respect to the
provisions of paragraphs 3-11 (inclusive) and paragraph 18.
[balance of page intentionally left blank; signature pages follow]
Cayuga nation of New York
April 3 2003
If these terms are acceptable, please sign in the space provided below.
Very truly yours,
ALPHA HOSPITALITY CORPORATION CATSKILL DEVELOPMENT, L. L. C.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
---------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
Title: Chairman Title: Chairman
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
------------------------------------- -----------------------------------
Xxxxxx X. Xxxxxx, individually individually
Cayuga Nation of New York
As of April 3, 2003
Page 13
ACCEPTED AND AGREED:
CAYUGA NATION OF NEW YORK
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Representative
CATSKILL GAMING AUTHORITY
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title:
PRELTMINARY BUDGET
Pursuant to April 3, 2003 Letter Agreement among
Alpha Hospitality Corporation, Catslall Development, L.L,C.,
Cayuga Nation of new York and Cayuga Catskil1 Gamining Authority
As contemplated by paragraph I of the above identified letter agreement, the
parties thereto, by having their authorized representatives initial this
preliminary budget in the spaces provided below, agree to the following payments
with the understanding that the amount set forth in Item I below will be
reviewed and revised periodically to reflect actual experience and increased
activity as the development of the Gaming Enterprise on the Property progresses.
I. Monthly payments on the first day $35,000 per month
of each month on account of the
expenses of the Nation and its
instrumentalities and agencies,
including salaries to be paid to
individuals involved in rendering
services to the Nation, or its
instrumentalities or agencies, and
the costs of equipment supplies,
etc.
II. Payment of travel, lodging, meals To be reimbursed upon
and related expenses incurred by submission to Catskill of
individuals rendering services to documents evidencing
instrumentalities or agencies of the such expenses
Nation in furtherance of this
project; provided that the
incurrence of any material expense
has been approved by Catskill, such
approval not to be unrrasonably
withheld
III. Expenses of legal counsel, To be billed directly to
accountants, and other Catskill and paid by it
professionals, consultants and
specialists engaged to render
advice or assistance to the Nation
and its instrumentalities and
agencies, provided that the
incurrence of any material expense
has been approved by Catskill, such
approval not to be unreasonably
withheld
The parties agree that the $35,000 monthly payment provided for in Item I above
will be made by wire transfer from Catskill's bank to the Authotity's account at
HSBC Bank USA, and other payments shall be either, wired to such account or
otherwise paid as directed by the Nation or the Authority from time to time.
Initialed by authorized reprosentatives of:
Alpha Catskill Cayuga Cayuga
Hospitality Development Nation Catskill
Corporation L.L.C. of New York Gaming
Authority
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx /s/ Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
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