Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 28, 2015

EMPIRE RESORTS, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-12522	13-3714474
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Monticello Casino and Raceway, 204 State Route 17B, P.O. Box 5013, Monticello, NY		12701
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (845) 807-0001

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry into a Material Definitive Agreement.

Master Development Agreement and Completion Guaranties

On December 28, 2015 (the “Effective Date”), Montreign Operating Company LLC (“MOC”), Empire Resorts Real Estate I, LLC (“GC Tenant”) and Empire Resorts Real Estate II LLC (“EV Tenant”, and together with MOC and GC Tenant, the “Project Parties”), each a wholly-owned subsidiary of Empire Resorts, Inc. (“Empire” and, together with its subsidiaries, the “Company”), on the one hand, and EPT Concord II, LLC (“EPT”), EPR Concord II, L.P. (“EPR LP”) and Adelaar Developer, LLC (“Adelaar Developer”, together with EPT and EPR LP, collectively, “EPR”), on the other hand, entered into an Amended and Restated Master Development Agreement (as amended, the “MDA”), which amends and restates that certain Master Development Agreement, dated December 14, 2012 by and between EPT and Monticello Raceway Management Inc., a wholly-owned subsidiary of Empire (“MRMI”). The MDA defines and governs the overall relationship between EPR and the Project Parties with respect to the development, construction, operation, management and disposition of the four-season destination resort (“Adelaar”) to be developed by the parties on the approximately 1,700 acres owned by EPR in the Town of Thompson in Sullivan County, NY (the “EPR Property”). The initial phase of Adelaar shall consist of the development of a resort casino to be called “Montreign Resort Casino” (the “Casino Project”), a Rees Jones redesigned “Monster” Golf Course (the “Golf Course”), an Entertainment Village, which will include retail, restaurant, shopping and entertainment (the “Entertainment Village”) and an Indoor Waterpark Lodge (the “Waterpark” and, together with the Casino Project, the Golf Course and the Entertainment Village, the “Initial Projects”). The MDA generally provides that the development of Adelaar will comply with all requirements set forth in the gaming facility license (the “Gaming Facility License”) granted by the New York State Gaming Commission (“NYSGC”) on December 21, 2015 to MOC with respect to the Montreign Resort Casino for an initial term of ten years (the “License Term”) from an effective date of the earlier of March 1, 2016 or upon payment of certain financial commitments required by the NYSGC (the “License Effective Date”). The term of the MDA, as amended, commenced on the Effective Date and shall, with the exception of certain provisions relating to the operation of the facilities which survive for the License Term, expire on the earlier to occur of the (i) the completion and opening to the general public for business of the Initial Projects and (ii) sooner termination pursuant to the terms of the MDA, as described below.

In accordance with the terms of the MDA, the Project Parties shall each be responsible for the development and construction of their portion of the Initial Projects, with MOC responsible for the Casino Project, GC Tenant for the Golf Course and EV Tenant for the Entertainment Village. The Project Parties have agreed to invest a minimum of $611,000,000 in the development and construction of the Casino Project, $15,000,000 in the development and construction of the Golf Course and $25,000,000 in the development and construction of the Entertainment Village. The Project Parties have agreed to construct the Casino Project, Golf Course and Entertainment Village such that each project is completed within the project schedule agreed to by the parties (the “Project Schedule”). During the License Term, the Project Parties will be responsible for maintaining and operating the Casino Project, Golf Course and Entertainment Village in material compliance with all requirements set forth in the Gaming Facility License. In connection with the MDA, on December 28, 2015, Empire entered into a Completion Guaranty, guaranteeing completion of the development and construction obligations of the Project Parties described in this paragraph.

In accordance with the terms of the MDA, EPR shall be responsible for the development and construction of the Waterpark; and the common infrastructure-related improvements (such as streets,

sidewalks, sanitary and storm sewer lines, water, gas, electric, telephone and other utility lines, systems, conduits and other similar facilities) that are required to be constructed to enable the Initial Projects to be open and fully operational in accordance with the Project Schedule (the “Infrastructure”). EPR has agreed to be responsible for the development and construction of the Waterpark with a minimum capital investment of $120,000,000, and the Infrastucture. EPR plans to finance the costs of the Infrastructure through tax exempt bonds issued by a local development corporation. The debt service for the Infrastructure Bonds will be funded through special district tax assessments, a portion of which will be allocated to the Empire Project Parcels. EPR and the Project Parties have agreed to a capped dollar amount for each of the Empire Project Parcels (the “Empire Cap”) above which the Project Parties shall not be responsible. Furthermore, EPR has agreed to construct the Waterpark and the Infrastructure in accordance with the Project Schedule. On December 28, 2015, EPR Properties, a real estate investment trust and the parent company of EPR, entered into a Completion Guaranty, guaranteeing completion of the development and construction obligations of EPR described in this paragraph.

Neither party has the right to terminate the MDA unless both (a) the Casino Lease (as defined below) terminates prior to the License Effective Date (as defined below), in accordance with its terms and (b) MOC fails to exercise the Purchase Option (as defined below) prior to its expiration in accordance with the terms and conditions of the Purchase Option Agreement (as defined below).

Ground Leases

Casino Lease

On December 28, 2015, MOC entered into a lease (the “Casino Lease”) with EPT in substantially the same form as the form of ground lease underlying and attached as an exhibit to the amendment dated June 20, 2014 to that certain Option Agreement between MRMI and EPT, dated December 21, 2011 (as amended, the “Option Agreement”). The Casino Lease has been materially amended from the June 20, 2014 form in the following ways:

(a)

MOC has an early termination option, which expires on the License Effective Date. If MOC exercises its early termination option, MOC will be obligated to restore the leased premises to its original contours as of the date prior to the commencement of construction on the leased premises.

(b)

The annual fixed rent payments under the Casino Lease are as follows: (i) prior to the Commencement Date, MOC’s sole rent obligation under the Casino Lease will be to continue making the same payments it would have made under the Option Agreement; (ii) for the first year following the Commencement Date, MOC shall have no rental payments due, with certain prior payments made under the Option Agreement being deemed to satisfy all rental obligations under the Casino Lease during this period; (iii) beginning the 13th month following the Commencement Date and continuing through the 30th month following the Commencement Date, annual fixed rent shall equal $1,000,000.00 per month; and (iv) beginning the 31st month following the Commencement Date and through the remainder of the term of the Casino Lease, annual fixed rent shall equal $7,500,000.00.

(c)

MOC has an obligation to pay the special district tax assessment allocated to the Casino Parcel, not to exceed the Empire Cap applicable to the Casino Parcel.

(d)

The option to purchase the parcel underlying the Casino Lease (the “Casino Parcel”) is now set forth in the Purchase Option Agreement (as described below).

The remaining terms and conditions of the Casino Lease remain materially unchanged from the June 20, 2014 form.

Golf Course Lease

On December 28, 2015, GC Tenant entered into a sublease (the “Golf Course Lease”) with Adelaar Developer for the lease of the premises containing the Golf Course (the “Golf Course Parcel”).

The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the following material differences: (a) there is no percentage rent under the Golf Course Lease, and annual fixed rent is equal to: (i) $0.00 prior to the date the Golf Course opens for business to the public (the “Golf Course Opening Date”), (ii) $150,000.00 for the first ten years following the Golf Course Opening Date, and (iii) $250,000.00 thereafter for the remainder of the term of the Golf Course Lease, plus GC Tenant’s portion of the special district tax assessments relating to the Infrastructure up to the Empire Cap applicable to the Golf Course Parcel, which shall not be assessed against GC Tenant prior to 60 months following the Commencement Date; (b) the Golf Course Lease does not contain any affirmative financial reporting obligations of GC Tenant or an operating covenant of GC Tenant beyond compliance with the Gaming License and other statutory regulations, as required for MOC to maintain its Gaming License; and (c) an Event of Default under the Casino Lease triggers an Event of Default under the Golf Course Lease (but not vice versa) so long as GC Tenant is an affiliate of MOC. Empire Resorts, Inc. has agreed to guaranty the GC Tenant’s obligation to pay the special district tax assessments relating to the Infrastructure up to the Empire Cap applicable to the Golf Course Parcel.

Entertainment Village Lease

On December 28, 2015, EV Tenant entered into a sublease (the “Entertainment Village Lease”) with Adelaar Developer, for the lease of the premises containing the Entertainment Village (the “Entertainment Village Parcel” and, together with the Casino Parcel and the Golf Course Parcel, the “Empire Project Parcels”).

The terms of the Entertainment Village Lease are substantially similar to the Casino Lease, subject to the following material differences: (a) there is no percentage rent under the Entertainment Village Lease, and annual fixed rent is equal to: (i) $0.00 prior to the date any portion of entertainment village first opens for business to the public (the “EV Opening Date”), (ii) $150,000.00 for the first ten years following the EV Opening Date, and (iii) $250,000.00 thereafter for the remainder of the term of the Entertainment Village Lease, plus EV Tenant’s portion of the special district tax assessments relating to the Infrastructure up to the Empire Cap applicable to the Entertainment Village Parcel, which shall not be assessed prior to 60 months following the Commencement Date; (b) the Entertainment Village Lease does not contain any financial reporting obligations of EV Tenant or an operating covenant of EV Tenant beyond compliance with the Gaming License and other statutory regulations, as required for MOC to maintain its Gaming License; and (c) an Event of Default under the Casino Lease triggers an Event of Default under the Entertainment Village Lease (but not vice versa) so long as EV Tenant is an affiliate of MOC. Empire Resorts, Inc. has agreed to guaranty the EV Tenant’s obligation to pay the special district tax assessments relating to the Infrastructure up to the Empire Cap applicable to the Golf Course Parcel.

Purchase Option Agreement

On December 28, 2015, MOC, EPT and EPR LP entered into a Purchase Option Agreement (the “Purchase Option Agreement”), pursuant to which EPT and EPR LP collectively grant to MOC the option (the “Purchase Option”) to purchase all, but not fewer than all, of the Empire Project Parcels. The Purchase Option commenced on the Effective Date and shall expire on the earlier to occur of (i) the natural expiration of the term of the Casino Lease and (ii) 90 days following the earlier termination of the Casino Lease, if otherwise terminated in accordance with its terms (the “Purchase Option Period”). Depending on when MOC exercises the Purchase Option, the purchase price shall incrementally increase. However, the purchase price for the Empire Project Parcels shall also be reduced, subject to a maximum credit, by the amount of certain other obligations of the Project Parties paid to EPR.

Under the Purchase Option Agreement, EPR LP also grants to MOC the option (the “Resort Project Purchase Option”) to purchase not less than all of the balance of the EPR Property, excluding the Empire Project Parcels and the Waterpark (the “Resort Property”) for an additional fee. The Resort Project Purchase Option may be exercised only simultaneously with or after the exercise of the Purchase Option. The Resort Project Purchase Option commenced on the Effective Date and shall expire on the earlier to occur of (a) the expiration of the Purchase Option Period or (b) the ten-year anniversary of the earlier to occur of (i) the License Effective Date or (ii) the exercise date of the Purchase Option.

Under the Purchase Option Agreement, EPR LP also grants to MOC a right of first offer (“ROFO”) with respect to all or any portion of the Resort Property. Under the terms of the ROFO, if EPR LP makes an offer to, or rejects an offer made by, MOC, then EPR LP shall be precluded for a period of six months from transferring the designated portion of the Resort Property at a price and on terms which are on the whole substantially equivalent to or worse than those proposed or accepted by MOC. The ROFO commenced on the Effective Date and shall continue in full force and effect until EPR LP has sold, leased, licensed or otherwise transferred all of the Resort Property.

Item 8.01.

Other Items.

On December 21, 2015 (the “Award Date”), Empire, through a wholly-owned subsidiary, MOC, was awarded a Gaming Facility License by the New York State Gaming Commission to operate Montreign Resort Casino to be located at the site of Adelaar. A copy of such Gaming Facility License is attached hereto as Exhibit 99.1.

Item 9.01.

Exhibits.

(d) Exhibits.

99.1	Gaming Facility License issued by the New York State Gaming Commission with respect to Montreign Resort Casino

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 31, 2015


EMPIRE RESORTS, INC.

By:		/s/ Joseph A. D’Amato
Name:		Joseph A. D’Amato
Title:		Chief Executive Officer

EXHIBIT 99.1

LOGO

GAMING FACILITY LICENSE AWARD

MONTREIGN OPERATING COMPANY, LLC

The Gaming Commission (“Commission”) having issued a Request for Applications to Develop and Operate a Gaming Facility in New York State dated March 31, 2014 (“RFA”); and

Montreign Operating Company, LLC (“Montreign”) having submitted a response to the RFA (the response, along with such other periodic amendments, updates and submissions, the “Application”); and

The Commission having reviewed the entire Application; and

Having determined, based upon an investigation by the New York State Police, that Montreign and its associated entities and individuals are suitable and not disqualified in accordance with sections 1317 and 1318 of the Racing, Pari-Mutuel Wagering and Breeding Law; and

Having determined that Montreign meets each of the minimum license thresholds in accordance with section 1316 of the Racing, Pari-Mutuel Wagering and Breeding Law;

The Commission awards to Montreign, to be effective on the License Award Effective Date as defined herein, a gaming facility license to develop and operate the Montreign Resort Casino (“Gaming Facility”) in the Town of Thompson in Sullivan County (“License”).

Terms of the License include:

Name and Address of Licensee: Montreign Operating Company, LLC c/o Empire Resorts Inc., 204 State Route, PO Box 5013, Monticello, New York 12701.

Name and Address Agent for Service of Process: Montreign Operating Company, LLC. c/o Corporation Service Company, 80 State Street, Albany, New York, 12207-2543.

License Award Effective Date: The License is awarded effective as of March 1, 2016, or upon payment of the financial commitments required by Racing, Pari-Mutuel Wagering and Breeding Law §1315(1) and (4), whichever occurs earlier, pursuant to 9 NYCRR §5301.6(b)(4).

License Duration: 10 years from the License Award Effective Date, renewable thereafter for a period of at least 10 years.

License Conditions: This License is subject to the conditions attached hereto as Exhibit 1 (“License Conditions”). The License Conditions now in effect and as hereafter amended or modified are incorporated by reference, included as if completely set forth herein and made a part of this License.

/s/ Kristen M. Buckley

Kristen M. Buckley

Acting Secretary to the Commission

DATED: December 21, 2015

EXHIBIT 1

LICENSE CONDITIONS

All references to laws of New York or provisions of the Official Compilation of Codes, Rules and Regulations of the State of New York (“NYCRR”) are to the provisions of such laws as they exist on the date hereof and as they may hereafter be amended from time to time.

General Conditions

1. License Fee

Montreign shall pay, within 30 days of the License Award Effective Date, a $50,000,000 gaming facility license fee by electronic funds transfer in accordance with subdivision 4 of section 1315 of the Racing, Pari-Mutuel Wagering and Breeding Law, 9 NYCRR § 601.1(a)(1), and 9 NYCRR § 5301.9(b) and an additional $1,000,000 in accordance with Exhibit VIII.B.11 of the Request for Application.

2. Bond

Montreign shall, on the License Award Effective Date, deposit via cash or bond, $85,392,588 (10% of the proposed capital investment) in accordance with subdivision 1 of section 1315 of the Racing, Pari-Mutuel Wagering and Breeding Law and 9 NYCRR § 5301.9(a).

3. Capital Investment

Montreign shall invest, or cause to be invested, not less than $853,925,880 in development of the Gaming Facility and Adelaar Development described in General Conditions 5 and 6 in accordance with the design plans submitted with the Application.

4. Land

Montreign shall own or acquire (including by lease), within 60 days of the License Award Effective Date, the land where the Gaming Facility is proposed to be constructed, in accordance with subdivision 2 of section 1316 of the Racing, Pari-Mutuel Wagering and Breeding Law.

5. Gaming Facility

Montreign shall construct the Gaming Facility which, at a minimum, shall include the following:

Gaming floor of no less than an aggregate total of 90,000 square feet featuring no less than 2,150 slot machines, 102 table games and a 14 – 16 table poker room (inclusive of the poker room and VIP and high-limit areas);

Designated VIP/high-limit areas within such gaming floor which will offer a minimum of 26 slot machines, 8 table games, and a player’s lounge with food and beverages;

Hotel containing no less than 332 luxury rooms (including at least eight 1,000 – 1,200 square feet garden suites, seven 1,800 square feet, two story townhouse villas, and 12 penthouse-level suites), indoor pools and fitness center;

A VIP floor containing 6 private VIP gaming salons, a private gaming cage, and butler service;

Multi-purpose meeting and entertainment space of no less than 27,000 square feet with seating capacity for 1,300 people and a mezzanine level that includes a minimum of 14 - 16 table poker room, access to an outdoor terrace and no less than 7,000 square feet of meeting room space;

Spa of no less than 7,500 square feet;

At least seven restaurants/food and beverage outlets (inclusive of the food court), with an aggregate capacity for at least 727 patrons; and

At least four bar/lounges (including restaurant bars) with capacity for at least 141 patrons.

6. Adelaar Development

Montreign shall substantially fulfill the commitments and execute the development plans presented in the Application in regard to Adelaar, a comprehensive master planned resort community which includes:

Montreign Resort Casino, as described in General Condition 5. above;

lndoor Waterpark Lodge of no less than 325,000 square feet including a hotel with no less than 300 family-style suites, a 75,000 square foot indoor water park, a 25,000 square foot conference and banquet center, a 25,000 square foot outdoor water park, a 25,000 square foot arcade, two 5,000 square feet restaurants with an aggregate capacity for 250 patrons, and Concord Ski Hill;

Entertainment Village of no less than 50,000 but no more than 200,000 square feet with dining facilities and retail shops; and

Monster golf course.

7. Compliance with Construction Plans

Montreign shall comply in all material respects with the Gaming Facility construction plans, specifications, and timelines as contained in the Application or as otherwise approved by the Commission in accordance Article 13 of the Racing, Pari-Mutuel Wagering and Breeding Law and 9 NYCRR § 5301.

8. Commencement of Operations and Public Opening

Montreign shall commence gaming operations within 24 months following the License Award Effective Date in accordance with subdivision 3 of section 1315 of the Racing, Pari-Mutuel Wagering and Breeding Law and 9 NYCRR § 5301. Montreign shall be approved to open for gaming upon the Commission’s determination that the Gaming Facility, as described in General Condition 5. above has been substantially completed in accordance with the Application and is in compliance with 9 NYCRR § 5301.10.

9. Compliance with Executive Law Article 15-A and MWBE Requirements

Montreign shall comply with the provisions of Article 15-A of the Executive Law and 5 NYCRR §§ 140-144 and 9 NYCRR § 5311, including compliance with regulations in regard to utilization plans and procurement contracts for gaming facility capital projects.

10. Compliance with all Permitting Requirements

Montreign shall take all reasonable steps necessary to obtain and comply with all Federal, State, local and special permits and zoning approvals as required for the project.

11. Compliance with Agreements

Montreign shall maintain and comply in all material respects with the terms and conditions of the following agreements now in effect and as hereafter amended:

Impacted live entertainment agreements as listed in Exhibit IX.B.2.a of the Application including the Memorandum of Understanding between Montreign and The Upstate Theater Coalition for a Fairgame and the Venues dated June 24, 2014.

Project labor agreements as listed in Exhibit X.B.5 of the Application including the Agreement between Empire Resorts Inc. and the Hudson Valley Building and Construction Trades Council dated March 7, 2013; the Agreement between EPR Concord II. L. P. and the Local Unions affiliated with the Hudson Valley Building and Construction Trades Council dated June 20, 2014; and the Agreement between EPR Concord II, L.P. and the Local Unions affiliated with the Hudson Valley Building and Construction Trades Council dated September 5, 2014.

Labor peace agreements as listed in Exhibit X.B.6 of the Application including the Agreement between Empire Resorts Inc. and the New York Hotel & Motel Trades Council, AFL-CIO dated April 2, 2012.

Agreements with local partners as listed in Exhibit IX.B.4 of the Application.

Affirmative action program agreements as listed in Exhibit X.B.2 of the Application.

Executed signature forms contained in Attachments 1, 2 and 3 of the Application.

Montreign shall be given notice and a reasonable opportunity to cure any defects or failures to comply with any agreement listed above.

12. Workforce

Montreign shall create a minimum of 1,425 full time jobs and 96 part time jobs.

Montreign shall undertake to establish a workforce development and affirmative action program that conforms, at a minimum, to the programs and practices described in Exhibit X.B. of the Application and that complies with Racing, Pari-Mutuel Wagering and Breeding Law, 9 NYCRR § 5312 and any applicable regulations promulgated in relation thereto.

13. Problem Gambling

Montreign shall undertake to establish a problem gambling program that conforms, at a minimum, to the program described in Exhibit X.A. of the Application and complies with sections 1342, 1362 and 1363 of the Racing, Pari-Mutuel Wagering and Breeding Law and any applicable regulations promulgated in relation thereto.

14. Litigation Update

Montreign shall, within 30 days of the date hereof and thereafter on a quarterly basis, file with the Commission and timely update a list regarding the status of all litigation to which Montreign is a party. For the purposes of this condition, litigation is defined as any matter in which. (a) the damages reasonably may be expected to exceed $1,000,000 and that is not fully and completely covered under an insurance policy with a licensed insurance carrier or (b) the legal or equitable relief requested seeks to revoke or suspend Montreign’s license or otherwise may materially affect Montreign’s ability to apply for or maintain a gaming facility license in New York State or any other jurisdiction. For purposes of this section, Montreign shall include any qualifying entities and individuals associated with the project as determined by the Commission.

15. Compliance with debt to equity ratio requirements

Montreign shall comply with the debt to equity ratio requirements as established through regulation by the Commission.

16. Notification of Defaults

Montreign shall promptly inform the Commission of any declared default or any failure to meet any material payment of interest or principal when due under any of its existing or future debt.

17. Notification of Refinancing of Debt

Montreign shall, pursuant to 9 NYCRR 5301.10(b), provide written notification to the Commission if Montreign intends to enter into a transaction to refinance its existing debt or incur any additional capital debt obligations of $50 million or more, whether in a single transaction or cumulative transactions during any consecutive 12- month period, other than as contained in the Application.

18. Financial Audit Statements

Montreign shall comply with any and all regulations promulgated by the Commission requiring the submission of audited financial statements.

19. Anti-Money Laundering

Montreign shall submit at least 90 days prior to the anticipated opening date and, thereafter, implement and maintain a plan for compliance with the United States Currency and Foreign Transaction Reporting Act (“The Bank Secrecy Act of 1970”) and any applicable regulations promulgated in relation thereto.

20. Application for Alcoholic Beverage License

Montreign shall apply for a casino alcoholic beverage license in accordance with section 1340 of the Racing, Pari-Mutuel Wagering, and Breeding Law and any applicable regulations promulgated in relation thereto.

21. Conditions Binding as of date hereof

All of the terms and conditions of the License, except those specific to the License Award Effective Date, are binding as of the date hereof.

22. Re-opening of conditions

Nothing shall prevent the Commission from amending or modifying the License Conditions upon a petition by Montreign or upon a motion by the Commission.

23. Conditions Binding on Successors and Assigns

All of the terms and conditions of the gaming facility license shall be binding upon Montreign and its permitted successors and assigns.

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