ERIC REEHL Nima Asset Management LLC New York, NY
Exhibit 99.1
XXXX
XXXXX
Nima
Asset Management LLC
000
Xxxxx Xxxxxx, 0xx
xxxxx
Xxx
Xxxx, XX
April 8,
2009
BOARD OF
DIRECTORS
Monticello,
New York
Sirs:
1.
Introduction
This Letter Agreement (“Agreement”)
confirms (a) the appointment of Xxxx Xxxxx ("Xxxxx") by the Board of Directors
(“Board”) of Empire Resorts Inc. ("Empire" or the "Company") to serve as Chief Restructuring Officer of
the Company, effective as of Xxxxx 00, 0000, (x) the request by the Board for
Xxxxx to assist in the Company’s efforts to identify, negotiate and secure
additional debt and/or equity capital, and (iii) provide additional services to
the Company under Section 2 and to address the strategic issues facing the
Company and other such items or issues as directed by the
Board.
2. Retention of
Services
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(a)
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Xxxxx will serve as Chief
Restructuring Officer and will, on an expedited basis, address the issues
facing the Company, including the recapitalization of the Company, as more
dully described below. Xxxxx shall be considered to stand
within the attorney-client privilege among or between the
Company and its counsel.
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(b)
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As Chief Restructuring Officer,
Xxxxx will report directly to the
Board. In this capacity, Xxxxx shall coordinate the
restructuring efforts with members of the Board and senior management of
the Company, third party professionals, legal counsel, bankers, creditors,
and others as required to accomplish the stabilization of the Company’s
capital structure and financial status and the scope of services required
to accomplish same.
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Xxxxx shall provide the following
services to assist the Company in the accomplishment of its financial,
operational, and strategic goals in coordination with the Board and
the Company's senior management
(collectively, the “Services”):
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1.
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Establish
a plan to re-finance or modify the Company’s indebtedness and secure
additional sources of both debt and equity capital, and assist in the
execution of these efforts;
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2.
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Manage the Company’s
restructuring process including, without limitation, assisting in (a)
developing possible restructuring plans or
strategic alternatives for maximizing enterprise value and (b) negotiating
with creditors, lenders, vendors, suppliers, and
other stakeholders in connection with any restructuring, including with
respect to interim, permanent, bridge or other refinancing, and
any restructuring or reorganization;
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3.
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Assist
in the communication and/or negotiation with outside constituents
including without limitation lenders, customers, lessors, and
suppliers;
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4.
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Assist management, if required,
with the development of a strategic plan, and such other related forecasts
to be utilized during negotiations with outside
constituencies or by the Company for other corporate
purposes;
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5.
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Assist in managing the purchase
or acquisition of significant assets or business segments as part of the
restructuring effort or thereafter; and
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6.
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Provide such other similar
services as may be requested by the Board, including, standing in an
interim position as Chief Executive Officer, or Chief Financial Officer,
as the Board may determine is necessary for the good of the Company,
without any increase of the aggregate monthly payment of $20,000 set forth
in 4(a) below.
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Xxxxx will keep the Board informed as
to progress in regards to the objectives. Xxxxx will work with
Company personnel and third party professionals to fulfill such roles and will
take such steps as may be necessary to avoid duplication
with the Company's other professionals.
3. Privileged and
Confidential Information and Work Product
The
Company acknowledges that all advice (written or oral) given by Xxxxx to the
Company in connection with the Retention of Services in Section 2 above is
intended solely for the benefit and use of the Company (limited to the Board and
management) and will keep such information confidential and, except as otherwise
provided by Xxxxx, will not publish, distribute or disclose in any manner any
advice developed by or received from Xxxxx without his prior written
approval (except
to the Company's respective officers, directors, employees, agents, attorneys,
advisors lenders, or prospective lenders and persons who have a need
to know such information in order to perform services under this Agreement).
Such approval shall not be unreasonably withheld.
Xxxxx’x approval is not needed if (a) the
advice sought is required to be disclosed by law or by an order binding on the
Company or Board, issued by a court having competent jurisdiction over the
Company, as applicable (unless such order specifies that the advice to be
disclosed is to be placed under seal) provided however that the Company
shall provide Xxxxx with prompt written notice of such requirement, (b) such
information is otherwise publicly available, (c) the disclosure
is of information in the possession of the Company prior to this engagement or
is independently developed by the Company, or (d) the disclosure is
of information acquired from a third party who, to the Company's knowledge owes
no obligation of confidence with respect to such
information.
4. Fees
The
Company agrees to compensate Xxxxx for the retention of services as specified
herein based on a combination monthly retainer and contingent success fee as
follows:
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(a)
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With
regards to a monthly retainer, the Company shall pay Xxxxx $20,000 per
month commencing as of the execution of this Agreement for a term of three
(3) months, to be extended upon mutual written agreement (the “Retainer”),
provided, however, that in the event the Company files a chapter 11
petition or is otherwise forced into bankruptcy proceedings, this
Agreement shall, unless otherwise extended by the Board in writing, be
terminated effective as of the date of such petition or commencement of
such proceedings with respect to all further, unaccrued payments. The
Company shall pay the first month amount upon signing of this Agreement,
and shall make each monthly payment upon each 30-day anniversary while
Xxxxx is serving as Chief Restructuring
Officer.
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(b)
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In
the event that the Company achieves, exchanges or otherwise modifies or
resolves conclusively all first and
second mortgage indebtedness of the Company before July 31, 2009, the
Company shall issue to Xxxxx (or his designee) an amount of common stock
of the Company equivalent to $300,000 in fair market value based on the
average closing market price of the Company’s common stock in the 30 day
trading period immediately preceding the trading day before a public
announcement is made of a binding agreement with a majority of bond
holders of the $65 million second mortgage facility necessary to
effectuate the contemplated
transaction.
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(c)
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It
is understood that any amounts paid under 4(a) above will reduce the
payment of consideration in common stock, if any, in 4(b) on a 1:1 dollar
basis;
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(d)
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The
Board shall have sole discretion to accept or reject any restructuring
proposal. The Company shall have no liability to Xxxxx under this
Agreement in the event the Board fails to accept any restructuring
proposal or decides the Company would fare better in bankruptcy
proceedings.
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(e)
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The
Board may choose to award Xxxxx a discretionary performance bonus
subsequent to a successful completion of a restructuring clearly
attributable to the individual efforts and special talents of
Xxxxx.
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(f)
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In
consideration of this Agreement, Xxxxx shall not receive any other
compensation or benefits as usually granted to
employees.
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(g)
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The
Company may accept offers from third parties to provide DIP or other
financing without any obligation to Xxxxx beyond the compensation that has
been provided for under this
Agreement
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In
addition to the fees outlined above, Xxxxx will be reimbursed for reasonable
direct expenses which are likely to be incurred in connection with his efforts
on behalf of the Company. Direct expenses include reasonable and customary out-
of- pocket expenses such travel, meals, accommodations, extraordinary telephone,
overnight mail, messenger, legal counsel, and other expenses specifically
related to his role as Chief Restructuring Officer.
5. Limitation of
Liability
The
Company agrees to indemnify, hold harmless and defend Xxxxx against any and all
losses, claims, damages, liabilities, penalties, judgments, awards,
amounts paid in settlement, reasonable out- of- pocket costs, fees, expenses and
disbursements including, without limitation, the reasonable out-of-pocket
costs, fees, expenses and disbursements, as and when incurred, of investigating,
preparing or defending any action, suit, proceeding or investigation
(whether or not in connection with proceedings or litigation in which Xxxxx is a
party), directly or indirectly caused by, relating to, based upon,
arising out of or in connection with the engagement of Xxxxx by the Company or
any services rendered pursuant to such engagement; provided that
the Company will not be responsible for payment of indemnification amounts
hereunder (and any indemnified person shall reimburse the Company
for indemnification amounts already paid) that are determined by a final
judgment of a court of competent jurisdiction to have resulted from
an indemnified person gross negligence or willful misconduct.
These indemnification provisions extend
to the officers, directors, principals, members, managers, representatives,
agents and counsel of Xxxxx and shall survive
the termination or expiration of the engagement. The contract rights to
indemnification conferred in this paragraph shall not be exclusive of any
other right that any indemnified person may have or hereafter acquire under any
statute, agreement, order of a bankruptcy court or pursuant to any
directors and officers liability insurance policy. The Company shall also reimburse any
indemnified person for all reasonable out- of- pocket expenses incurred in
connection with enforcing such indemnified person's rights under this
Agreement. The Company agrees that it will obtain
a modification of its Directors and Officers insurance to specifically include
and cover Xxxxx under the Company's policies for directors' and officers'
insurance. The Company agrees to also maintain insurance
coverage for Xxxxx for a period of not less than two (2) years following the
date of termination of such Xxxxx’x services hereunder. The
obligations of the parties as reflected herein shall
survive the termination of the Engagement.
The Company will be responsible for all
employment, withholding, income and other taxes incurred in connection with
any income Xxxxx earns under this Agreement. The Company acknowledges
Xxxxx has other business interests unrelated to the Company or its business, and
Xxxxx will maintain such interests during the term of this
Agreement.
6. Entire
Engagement
This
Agreement constitutes the entire understanding between the parties with respect
to the subject
matter and supersedes all prior written and oral proposals, understandings,
agreements and/or representations, all of which are merged herein. Any
amendment or modification of this Agreement shall be in writing and executed by
each of the parties hereto.
7. Governing Law and
Jurisdiction
This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York. The
Courts of New York shall have exclusive
jurisdiction in relation of any claim, dispute or difference concerning the
Agreement and any matter arising from it. The parties hereto
irrevocably waive any right they may have to object to any action being brought
in these Courts, to claim that the action has been brought to an
inconvenient forum or to claim that those Courts do not have
jurisdiction.
8. Notice
All notices required or permitted to be
delivered under this Agreement shall be sent, if to us, to the address set forth
above, to the attention of Xxxx Xxxxx, and if to you, to the
address for you set forth above, to the attention of your General Counsel, or to
such other name or address as may be given in writing to the other
party. All notices under the Agreement shall be sufficient if
delivered by facsimile or overnight mail. Any notice shall be
deemed to be given only upon actual receipt.
9. Citation of
Engagement
Notwithstanding
anything to the contrary contained herein, after the engagement of Xxxxx becomes
a matter of public record, Xxxxx shall have the right to disclose
his retention by the Company or the successful completion of his services
hereunder in marketing or promotional materials placed by Xxxxx, at his
own expense, in financial and other newspapers or otherwise.
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I look forward to working with you on
this matter. Please sign and return a copy of this letter signifying your
agreement with the terms and provisions herein. If you have any
questions, please contact me at (000) 000-0000.
Very truly yours,
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Xxxx
Xxxxx
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/s/ Xxxx
Xxxxx
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Agreed
to by Empire
Resorts
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By:
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/s/ Xxxxxxx Xxxxxxxxxx |
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Xxxxxxx
Xxxxxxxxxx
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Senior
Vice
President
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Date 4/8/2009
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