EMPIRE RESORTS, INC. (NASDAQ:NYNY) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
On March31, 2017 (the Commencement Date), Montreign Operating
Company, LLC (Montreign), an indirect, wholly-owned subsidiary of
Empire Resorts, Inc. (Empire and, together with its subsidiaries,
the Company) entered into a license agreement (the License
Agreement) with RW Services Pte Ltd (RWS). to the License
Agreement, RWS granted Montreign the right to use (the License)
certain Genting and Resorts World trademarks (the Licensed Marks)
in connection with the development, marketing, sales, management
and operation (the Permitted Uses) of the resort casino project
(the Casino), entertainment village project (the Entertainment
Village) and golf course project (the Golf Course and, together
with the Casino and the Entertainment Village, the Development
Projects) Montreign is developing at the site of a four-season
destination resort in the Town of Thompson in Sullivan County,
New York. The Company expects the name of the Casino (the Casino
Name) to be Resorts World used in combination with additional
words mutually agreed by Montreign and RWS.
The License is non-exclusive, non-transferable, revocable and
limited. However, unlike the License generally, the right to use
the Casino Name is exclusive to Montreign. In addition, the
License may be assigned or sublicensed only in certain limited
circumstances described in the License Agreement. Any use of the
License for a purpose other than the Permitted Uses will require
the prior written consent of RWS. However, Montreign may use the
Casino Name in connection with online gaming without any further
consent required from RWS.
The initial term of the License Agreement commences on the
Commencement Date and will expire on December31, 2027 (the
Initial License Term). The Initial License Term shall be extended
automatically for additional terms of twelve months each (each
such extension, an Extension Term) up to a maximum of 39
Extension Terms (the Initial License Term and any Extension Term,
collectively, the License Term), unless either of the parties
provide notice to terminate the License Agreement. In the event
the License Agreement is terminated, except in certain limited
circumstances, the right to use the Licensed Marks shall continue
for a transitional period of up to twelve months after the
termination date, during which time the parties shall coordinate
the cessation of use of the Licensed Marks and other intellectual
property rights granted under the License Agreement.
In consideration of the rights and licenses granted by RWS to
Montreign to the License Agreement, beginning on the date on
which the Casino opens to the public (the Effective Date),
Montreign shall pay to RWS a fee (the License Fee) equivalent to
a percentage of Net Revenue (as such term is defined in the
License Agreement) generated in each calendar year of the License
Term from (i)all activity at the Casino, (ii)each specific use of
the Licensed Marks in the Entertainment Village or Golf Course
and (iii)each specific use of the Casino Name in connection with
online gaming. The percentage of Net Revenue payable as the
License Fee increases incrementally between the third year and
sixth year of the License Term and thereafter remains stable for
the duration of the License Term. The License Fee remains a low
single digit percentage of Net Revenue during the entire License
Term. There is no License Fee due for the period during the
Commencement Date and the Effective Date during which time the
Company will be engaged in pre-opening marketing activities.
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During the term of the License Agreement, Montreign may
participate in the Genting Rewards Alliance loyalty program (the
Alliance), which would provide central marketing and
cross-promotion opportunities for the Development Projects with
other members of the Alliance. Montreigns participation in the
Alliance is subject to the provisions of a separate agreement,
which is currently being negotiated by the parties.
The License Agreement may be terminated prior to the end of the
License Term for a variety of reasons including upon the mutual
written consent of both parties, by Montreign upon twelve months
prior notice and automatically if RWS no longer has the right to
license the Licensed Marks and other intellectual property rights
granted in the License Agreement or if the Licensed Marks become
expired or invalid. Both parties have a right to terminate the
License Agreement if a material breach of the License Agreement
is not cured within the applicable cure periods, if either party
is directed by a governmental authority (including any gaming
regulators) to cease business activities with the other party or
if either party determines, in its respective sole and exclusive
judgment, that the activities of the other party could cause or
threatens to cause the denial, suspension or revocation of the
gaming licenses held by the terminating party or any of their
respective affiliates. RWS will have the right to terminate the
License Agreement if it determines that any action or inaction by
Montreign jeopardizes or threatens to materially jeopardize the
standing of RWS in its presently or future-conducted business.
Montreign will have a right to terminate the License Agreement if
it determines that any action or inaction by RWS jeopardizes or
threatens to materially jeopardize its obligations as a regulated
gaming operator. Notwithstanding anything to the contrary in the
Agreement, Montreigns rights and obligations under the License
Agreement are subject to and governed by the rules and
regulations applicable to Montreigns gaming operations at the
Casino, as well as the fiduciary obligations of the boards of
directors of Montreign and Empire, as well as the fiduciary
obligations of the largest stockholder of Empire.
RWS is an affiliate of Tan Sri Lim Kok Thay. Mr.Lim is a
beneficiary of and controls Kien Huat Realty III Limited, Empires
largest stockholder.
A press release relating to the License Agreement is attached as
Exhibit 99.1 hereto.
| Item9.01. | Exhibits |
| (d) | Exhibits. |
| Exhibit | Description | |
| 99.1 | Press Release, dated April6, 2017 |
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About EMPIRE RESORTS, INC. (NASDAQ:NYNY)
Empire Resorts, Inc. is a holding company for various subsidiaries engaged in the hospitality and gaming industries. The Company, through Monticello Raceway Management, Inc. (MRMI), owns and operates Monticello Casino and Raceway, which is an approximately 40,000 square foot video gaming machine (VGM) and harness horseracing facility located in Monticello, New York, over 90 miles northwest of New York City. Monticello Casino and Raceway operates over 1,110 VGMs, which include approximately 1,070 video lottery terminals (VLTs) and over 40 electronic table game positions (ETGs). It is also engaged in pari-mutuel wagering on the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races from racetracks across the country and internationally, and the export simulcasting of its races to offsite pari-mutuel wagering facilities. The Company, through Montreign Operating Company, LLC, holds a license to operate a resort casino. EMPIRE RESORTS, INC. (NASDAQ:NYNY) Recent Trading Information
EMPIRE RESORTS, INC. (NASDAQ:NYNY) closed its last trading session up +1.70 at 24.65 with 17,848 shares trading hands.