EXHIBIT 10.28
November 23, 1999
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President & CEO
American Gaming & Entertainment, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: In re The ▇▇▇▇▇▇▇ Funding Group, Inc.
Case No. 96-61376 (as substantively consolidated, "▇▇▇▇▇▇▇")
In re Shamrock Holdings Group, Inc. ("Shamrock")
Case No. 98-63631
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
This letter agreement is written in connection with the resolution of
certain claims among American Gaming & Entertainment, Ltd. and its
subsidiaries and affiliates including, without limitation, Emerald Gaming,
Inc., AMGAM Associates ("AMGAM") and American Gaming and Resorts of
Mississippi, Inc. ("AGRM") (collectively, "AGEL"), Shamrock and ▇▇▇▇▇▇▇.
Shamrock, ▇▇▇▇▇▇▇ and AGEL agree as follows:
1. On the Effective Date:
a. AGEL release Shamrock and ▇▇▇▇▇▇▇ from all claims,
obligations, liabilities, causes of action, suits, debts, dues, warrants,
accountings, or any other claim incurred or arising at any time from the
beginning of the world through the Effective Date (as defined below) except
for their respective obligations under this letter agreement.
b. Shamrock and ▇▇▇▇▇▇▇ release AGEL from all claims,
obligations, liabilities, causes of action, suits, debts, dues, warrants,
accountings, or any other claim incurred or arising at any time from the
beginning of the world through the Effective Date except for their obligations
under this letter agreement.
c. Mississippi Claims. Except as set forth in paragraph
3(a) hereof, AGEL hereby transfers to Shamrock all of its right, title and
interest in all of its rights, title and interests under the First Amended
Joint Plan of Liquidation for AmGam Associates
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
November 23, 1999
Page 2
and American Gaming and Resorts of Mississippi, Inc. and all documents and
instruments related thereto or executed in connection therewith, as such
Plan has been confirmed by the United States Bankruptcy Court for the
District of Mississippi.
d. Rising Sun Casino. Except as set forth in paragraph
3(a) hereof, AGEL shall deliver or cause to be delivered directly to Shamrock
immediately upon receipt all payments, distributions, dividends and proceeds
of any type to which AGEL is entitled pursuant to or in connection therewith
the Irrevocable Proxy and Consent Agreement dated August 23, 1996 by and
between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and AGEL, as amended, including distributions already
made or to be made into the Rising Sun escrow account which totaled
approximately $1,148,428.16 as of September 3, 1999, in addition to all other
monies held by RSR for the benefit of AGEL and all other rights which may be
held by Shamrock and obligations of AGEL in connection therewith. On or
before the Effective Date, AGEL and Shamrock shall execute a security
agreement relating to AGEL's interest in the Rising Sun Casino in a form
mutually agreeable to Shamrock and AGEL.
e. Withdrawal of Claims. AGEL withdraws all claims in the
bankruptcy cases of Shamrock and ▇▇▇▇▇▇▇ with prejudice.
2. Preservation of Equity Interests.
a. Nothing in this letter agreement shall constitute a waiver
or release of any type of Shamrock's or ▇▇▇▇▇▇▇'▇ equity interests (including,
without limitation, common and preferred interests) and all rights related
thereto in AGEL.
b. Notwithstanding the foregoing, however, Shamrock and its
affiliates agree to forgive all accrued dividends, whether declared or
undeclared, on AGEL's Series C Cumulative Preferred Stock and Series D
Cumulative Preferred Stock. Shamrock and its affiliates further agree to
waive any future dividends on such preferred stock so long as Shamrock or its
affiliates own such preferred stock, provided, however, that is AGEL declares
any dividends on its Common Stock or redeems any of its Common Stock or redeem
any of its Common Stock or Series A Preferred Stock, other than Common Stock
or Series A Preferred Stock owned by Shamrock and its affiliates, then
dividends on the Series C Cumulative Preferred Stock and Series D Cumulative
Preferred Stock shall accrue as of such date and the holders of Preferred
Stock shall be entitled to participate in such dividend or redemption on the
same basis as if such Preferred Stock had been converted into Common Stock in
accordance with the terms of such Preferred Stock. All other provisions of
the Series C Cumulative Preferred Stock and Series D Cumulative Preferred
Stock shall remain in effect, including, without limitation, provisions
regarding voting and conversion.
c. AGEL shall endeavor to find during the thirteen month term
referred to in paragraph 5 hereof or such longer term as agreed to by Shamrock
in writing, a buyer of its stock and/or remaining assets in cooperation with
Shamrock and ▇▇▇▇▇▇▇ so as to maximize for its stockholders any residuary
value of AGEL.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
November 23, 1999
Page 3
3. Retention of Certain Assets by AGEL.
a. AGEL shall be permitted to retain sufficient cash as to
have $464,000, less legal retainers and plus accounts payable incurred in the
ordinary course of business to bona fide third parties and mutually agreed
upon by AGEL and Shamrock, as of January 1, 2000 in the aggregate which shall
be used for ordinary working capital purposes including officer and employee
compensation pursuant to the budget attached as Exhibit A. All other monies
and assets shall be delivered to Shamrock. AGEL shall each month deliver to
Shamrock a monthly statement for the preceding month showing AGEL's actual
expenses. AGEL and Shamrock shall review AGEL's expenses at least on a
quarterly basis to determine if additional expense reductions can be made to,
including, Directors and Officers insurance and legal expenses. Any monies
retained by AGEL as of January 31, 2001, after paying any and all outstanding
expenses, shall be delivered to Shamrock.
b. Prior to the hearing by the United States Bankruptcy Court
for the Northern District of New York seeking approval of this letter
agreement, AGEL shall deliver an affidavit of its President & CEO in form
satisfactory to Shamrock and its counsel certifying that AGEL has no
liabilities other than the types and amounts disclosed on its balance sheet
dated as of September 30, 1999, a true copy of which shall be attached to such
affidavit.
4. Employment of Wellington. J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Wellington")
agrees to continue his employment by AGEL until at least thirteen months
following the Effective Date in order to carry out his duties as President and
Chief Executive Officer of AGEL pursuant to the form of employment agreement
attached as Exhibit B ("Employment Agreement"). The Employment Agreement,
which supersedes the Employment Agreement dated September 12, 1996, as
amended, shall not be amended without the prior written consent of Shamrock
and ▇▇▇▇▇▇▇. AGEL shall provide Shamrock and ▇▇▇▇▇▇▇ with reporting concerning
its business and financial activities from time to time as reasonably
requested by Shamrock and ▇▇▇▇▇▇▇. Wellington's employment contract shall have
a thirteen month term, compensation of $125,000 annually for that term, and
$125,000 severance payment payable on termination of agreement from a reserve
account set aside and controlled by Shamrock, assuming (a) no intervening
voluntary bankruptcy filing by AGEL prior to the conclusion of the thirteen
month period without Shamrock's consent and (b) provisions of this letter
agreement and employment agreement are met. Wellington's existing employment
agreement with AGEL shall remain in effect until this letter agreement is
approved by the United States Bankruptcy Court of the Northern District of New
York.
5. Corporate Existence. AGEL shall maintain its corporate
existence for a period of no less than thirteen months following the Effective
Date.
6. Dismissal of Adversary Proceeding. ▇▇▇▇▇▇▇ shall dismiss the
adversary proceeding captioned ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇
Funding Group, Inc., et al v. Gamma International, American Gaming &
Entertainment, Ltd. and ▇▇▇▇ Does 1 to 100 (AP 98-70465 A) (United States
Bankruptcy Court for the Northern District of New York) on the Effective Date,
with prejudice and without costs.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
November 23, 1999
Page 4
7. Further Assurances. Each of AGEL, Shamrock and ▇▇▇▇▇▇▇ agree to
cooperate with each other to effectuate the intent of this letter agreement
including, without limitation, (a) the active assistance of AGEL and
Wellington in realizing upon the assets of comprising the Mississippi Claim,
the Rising Sun Casino and other property of AGEL, and (b) the execution and
delivery by AGEL of notices to third parties respecting the delivery of
property directly to Shamrock or ▇▇▇▇▇▇▇ as the case may be as contemplated by
this letter agreement.
8. Effective Date. This letter agreement shall become effective
and binding upon the parties hereto ("Effective Date") upon the entry of an
Order of the United States Bankruptcy Court for the Northern District of New
York approving this letter agreement, and such Order becoming a final order
such that it is not subject to appeal or reconsideration unless the condition
of a final order is waived by the parties hereto.
9. Notices. Wherever notices are required to be given under this
letter agreement, they shall be given by certified mail, return receipt
requested as follows:
If to AGEL: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Ravin, Sarasohn, Cook, Baumgarten, ▇▇▇▇▇
& ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Shamrock: Shamrock Holding Group, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phillips, Lytle, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ Funding Group, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
November 23, 1999
Page 5
With copy to: M.O. ▇▇▇▇▇, Esq.
Simpson, Thacher & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
10. This letter agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and shall be governed
by the internal laws of the State of New York without reference to its
conflict of law rules. Any dispute arising under this letter agreement shall
be resolved by the United States Bankruptcy Court for the Northern District of
New York.
The parties acknowledge that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is executing this
agreement solely in his capacity as the Trustee of ▇▇▇▇▇▇▇ and President of
Shamrock and shall have no personal responsibility or liability whatsoever
under this agreement.
Very truly yours,
Shamrock Holdings Group, Inc., Debtor In Possession
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________
Title
▇▇▇▇▇▇▇ Funding Group, Inc., Debtor
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________
Title
Accepted and Agreed to:
American Gaming & Entertainment, Ltd.
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
________________________________
President & CEO Title
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
November 23, 1999
Page 6
Emerald Gaming, Inc. American Gaming and Resorts of
Mississippi, Inc.
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________ _______________________
President Title President Title
AMGAM Associates
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
___________________________
Manager Title
EXHIBIT "A"
Budget Per Settlement Agreement
Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Totals
Payroll 14,465 14,465 14,465 10,799 10,799 15,880 10,799 10,799 10,799 10,799 10,799 15,880 10,799 161,547
Severance - - 5,610 - - - - - - - - - - 5,610
Expense Reports 100 100 100 100 100 100 100 100 50 50 50 50 50 1,050
Telephone, UPS ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ 400 5,200
Insurance (Prop.,
D&O) 1,000 1,000 1,000 1,000 1,000 91,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 103,000
File Storage 300 300 300 300 300 300 300 300 300 300 300 300 300 3,900
Rent, Utils 200 650 200 100 100 100 100 100 100 100 100 100 100 2,050
Car 500 500 500 500 500 500 500 500 500 500 500 500 500 6,500
Ravin, Sarasohn 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 52,000
D & T / ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ & Co. - - 20,000 25,000 1,500 - - 1,500 - - - 1,500 - 49,500
▇▇▇▇▇▇ ▇▇▇▇▇ 2,000 4,000 - 1,000 5,000 2,000 2,000 2,000 - 3,000 3,000 2,000 4,000 30,000
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 2,500 - 5,000 2,500 2,500 - - 2,500 - - - - - 15,000
Director Fees - - - - - - - - - - - - - -
American Stock
Exchange 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 13,000
Misc Other 2,100 2,100 2,100 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,000 1,000 20,300
▇▇▇▇ & Wiser 1,000 - - - - - - - - - - - - 1,000
Mountaineer
Settlement (5,600) - - - - - - - - - - - - (5,600)
TOTALS 23,965 28,515 54,675 48,199 28,699 116,780 21,699 25,699 19,649 22,649 22,649 27,730 23,149 464,057
Exhibit B
EMPLOYMENT AGREEMENT
To be filed and served prior to hearing
on approval of letter agreement
