<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 23, 1999
American Gaming & Entertainment, Ltd.
_______________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Delaware
_______________________________________________________________________
(State or Other Jurisdiction of
Incorporation or Organization)
0-19049 74-2504501
_______________________________________________________________________
(Commission (IRS Employer
File Number) Identification No.)
51 Beech Road, Glen Rock, New Jersey 07452
_______________________________________________________________________
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (609) 822-8505
Not Applicable
_______________________________________________________________________
(Former Name, Address and Former Fiscal Year, if Changed Since Last
Report)
<PAGE 2>
American Gaming & Entertainment, Ltd.
SEC Form 8-K
Item 2. Acquisition or Disposition of Assets
In accordance with a Letter Agreement dated November 23, 1999 between
the Company and Shamrock Holdings Group, Inc. (and respective
affiliated entities) (the "Letter Agreement"), the Company has agreed
to transfer to Shamrock (a) substantially all of the Company's right,
title and interest (the "Mississippi Interest") under the First Amended
Joint Plan of Liquidation (the "Mississippi Plan") for AMGAM Associates
("AMGAM") and American Gaming and Resorts of Mississippi, Inc. ("AGRM")
and (b) all payments, distributions, dividends and proceeds of any type
to which the Company is entitled pursuant to or in connection with an
Irrevocable Proxy and Consent Agreement relating to the Company's 4.9%
interest in a riverboat gaming and entertainment complex in Rising Sun,
Indiana (the "RSR Interest") (collectively, the "Transferred Assets").
The Transferred Assets constitute substantially all of the assets of
the Company. As of September 30, 1999, the Company was indebted to
Shamrock in the amount of approximately $63,145,000. As of September
30, 1999, the amount of the Transferred Assets was approximately
$10,062,000. The transfer of the Transferred Assets will reduce the
Company's indebtedness to Shamrock. The Company shall retain sufficient
cash as to have $464,000 as of January 1, 2000, less legal retainers
plus accounts payable incurred in the ordinary course of business to
bona fide third parties and mutually agreed upon by the Company and
Shamrock. Such retained amount represents the Company's budgeted costs
through January 31, 2001. As of January 31, 2001, after paying any and
all outstanding expenses, the Company would transfer all remaining cash
to Shamrock.
In accordance with the Letter Agreement, the Company and Shamrock will
execute a security interest in the RSR Interest in exchange for
Shamrock agreeing to forebear from the exercise of any rights or
remedies in respect of all obligations owing by the Company to
Shamrock.
Pursuant to the Letter Agreement, Shamrock shall release the Company
from all debts and liabilities in excess of the amount of the
Transferred Assets, and shall cause the dismissal with prejudice of the
adversary proceeding captioned Richard C. Breeden, Trustee of the
Bennett Funding Group, Inc. et al v. Gamma International, American
Gaming & Entertainment, Ltd. and John Does 1 to 100 (AP 98-70465 A)
(United States Bankruptcy Court for the Northern District of New York).
<PAGE 3>
Shamrock and its affiliates shall waive all accrued dividends, whether
declared or undeclared, on the Series C Stock and Series D Stock.
Although undeclared dividends do not constitute legal obligations of
the Company, the Company accrued for such dividends because, under the
terms of the Series C Cumulative Preferred Stock ("Series C Stock") and
the Series D Cumulative Preferred Stock ("Series D Stock"), dividends
are cumulative whether or not declared and the Company was prohibited
from paying dividends on, purchasing or redeeming any of its Series A
Preferred Stock ("Series A Stock") or Common Stock so long as any such
cumulated dividends were unpaid. Shamrock and its affiliates shall
waive any future dividends on such preferred stock so long as Shamrock
or its affiliates own such preferred stock, provided, however, that if
the Company declares any dividends on its Common Stock or redeems any
of its Common Stock or Series A Stock, other than Common Stock or
Series A Stock owned by Shamrock and its affiliates, then the holders
of Series C Stock and Series D Stock shall be entitled to participate
in such dividend or redemption on the same basis as if such Series C
Stock and Series D Stock had been converted into Common Stock in
accordance with the terms of such Series C Stock and Series D Stock.
All other provisions of the Series C Stock and Series D Stock shall
remain in effect, including, without limitation, provisions regarding
voting and conversion.
The Company shall release Shamrock from all debts and liabilities and
shall withdraw all claims in the bankruptcy cases of Shamrock and
Bennett Funding Group, Inc. et al. The Company shall endeavor to find a
buyer of its stock and/or remaining assets during the term ending
January 31, 2001.
Mr. J. Douglas Wellington, the President and Chief Executive Officer of
the Company, shall continue his employment with the Company through the
term ending January 31, 2001 at an annual compensation of $125,000. At
the end of such term, assuming that there has been no intervening
voluntary bankruptcy filing by the Company without Shamrock's consent
and assuming that the provisions of the Letter Agreement and Mr.
Wellington's employment contract are met, Mr. Wellington shall be
entitled to a severance payment of $125,000 from a reserve account set
aside and controlled by Shamrock.
The Letter Agreement shall be effective upon the approval of the United
States Bankruptcy Court for the Northern District of New York and, if
necessary, the mailing of an Information Statement to the stockholders
of the Company. A copy of the Letter Agreement, pursuant to which the
Company is transferring the Transferred Assets to Shamrock, is attached
hereto as Exhibit 10.28.
<PAGE 4>
Item 5. Other Events
On November 19, 1999, the Company's Board of Directors voted to approve
an amendment to the Company's Restated Certificate of Incorporation
increasing the number of authorized shares of Common Stock to
3,000,000,000 shares (the "Authorized Share Amendment"). Shamrock and
its affiliates own all of the Company's outstanding Series C Stock,
Series D Stock and Series E Preferred Stock ("Series E Stock"),
convertible as of September 30, 1999 into 1,063,129,442 shares of
Common Stock. The Company does not have a sufficient number of
authorized shares of Common Stock to enable the conversion of all of
the Series C Stock, the Series D Stock and the Series E Stock. As of
the date of the date hereof, Shamrock and its affiliates have not
asserted any rights they may have against the Company for the Company's
failure to maintain a sufficient number of authorized shares of Common
Stock to enable the Shamrock and its affiliates to convert all of the
Series C Stock, the Series D Stock and the Series E Stock. As a result
of the Authorized Share Amendment, the Company anticipates having a
sufficient number of authorized shares of Common Stock to enable the
Shamrock and its affiliates to convert all of the Series C Stock, the
Series D Stock and the Series E Stock through January 31, 2001.
As discussed above in Item 2, Shamrock and its affiliates have agreed
to waive all accrued dividends, whether declared or undeclared, on the
Series C Stock and Series D Stock. On November 19, 1999, the Company's
Board of Directors voted to approve an amendment to the Company's
Restated Certificate of Incorporation to provide that if the Company
declares any dividends on its Common Stock or redeems any of its Common
Stock or Series A Stock, other than Common Stock or Series A Stock,
then the holders of Series C Stock and Series D Stock shall be entitled
to participate in such dividend or redemption on the same basis as if
such Series C Stock and Series D Stock had been converted into Common
Stock in accordance with the terms of such Series C Stock and Series D
Stock (the "Dividend Amendment").
The Authorized Share Amendment and Dividend Amendment shall be
effective upon the mailing of an Information Statement to the
stockholders of the Company.
On November 19, 1999, the Company's Board of Directors voted to amend
the Mr. Wellington's employment agreement, effective January 1, 2000,
to incorporate the terms of his employment set forth in the Letter
Agreement, as discussed above in Item 2.
The Company's Board of Directors currently consists of Mr. William R.
Rafferty and Mr. Wellington. Mr. Rafferty has advised the Company's
Board of Directors that he is resigning effective December 31, 1999.
<PAGE 5>
Item 7. Financial Statements and Exhibits
(a) Exhibits
Exhibit Number Description
______________ ___________
10.28 Letter Agreement dated November 23, 1999, by and
between Shamrock Holdings Group, Inc., Bennett Funding
Group, Inc., American Gaming & Entertainment, Ltd.,
Emerald Gaming, Inc., AMGAM Associates and American
Gaming and Resorts of Mississippi, Inc.
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.
American Gaming & Entertainment, Ltd.
(Registrant)
DATE: December 1, 1999
By: J. DOUGLAS WELLINGTON
______________________________
J. DOUGLAS WELLINGTON
President and Chief Executive
Officer and Principal Accounting
Officer
<PAGE 6>
EXHIBIT INDEX
Exhibit Number Description Page
______________ ___________ ____
10.28 Letter Agreement dated November 23, 1999, by and 7
between Shamrock Holdings Group, Inc., Bennett
Funding Group, Inc., American Gaming &
Entertainment, Ltd., Emerald Gaming, Inc., AMGAM
Associates and American Gaming and Resorts of
Mississippi, Inc.
<PAGE 7>
EXHIBIT 10.28
November 23, 1999
J. Douglas Wellington
President & CEO
American Gaming & Entertainment, Ltd.
51 Beech Road
Glen Rock, New Jersey 07452
Re: In re The Bennett Funding Group, Inc.
Case No. 96-61376 (as substantively consolidated, "Bennett")
In re Shamrock Holdings Group, Inc. ("Shamrock")
Case No. 98-63631
Dear Mr. Wellington:
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 Bennett.
Shamrock, Bennett and AGEL agree as follows:
1. On the Effective Date:
a. AGEL release Shamrock and Bennett 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 Bennett 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
<PAGE 8>
J. Douglas Wellington
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 Paul R. Partridge, Patrick F. Daly, James A. Everatt, Charles E.
Reisert, Eric C. Jackson 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 Bennett 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 Bennett's 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 Bennett so as to maximize for its stockholders any residuary
value of AGEL.
<PAGE 9>
J. Douglas Wellington
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. Douglas Wellington ("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 Bennett. AGEL shall provide Shamrock and Bennett with reporting concerning
its business and financial activities from time to time as reasonably
requested by Shamrock and Bennett. 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. Bennett shall dismiss the
adversary proceeding captioned Richard C. Breeden, Trustee of the Bennett
Funding Group, Inc., et al v. Gamma International, American Gaming &
Entertainment, Ltd. and John 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.
<PAGE 10>
J. Douglas Wellington
November 23, 1999
Page 4
7. Further Assurances. Each of AGEL, Shamrock and Bennett 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 Bennett 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. Douglas Wellington
51 Beech Road
Glen Rock, NJ 07452
Fax: (201) 447-1892
With copy to: Sharon L. Levine, Esq.
Ravin, Sarasohn, Cook, Baumgarten, Fisch
& Rosen, P.C.
103 Eisenhower Parkway
Roseland, NJ 07068-1072
Fax: (973) 228-9250
If to Shamrock: Shamrock Holding Group, Inc.
Clinton Square
Syracuse, New York 13202
Attn: Richard C. Breeden, President
Fax: (315) 422-9361
With copy to: William Brown, Esq.
Phillips, Lytle, Hitchcock, Blaine & Huber, LLP
3400 HSBC Center
Buffalo, New York 14203
Fax: (716) 852-6100
If to Bennett: Bennett Funding Group, Inc.
Clinton Square
Syracuse, New York 13202
Attn: Richard C. Breeden, Trustee
Fax: (315) 422-9361
<PAGE 11>
J. Douglas Wellington
November 23, 1999
Page 5
With copy to: M.O. Sigal, Esq.
Simpson, Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax: (212) 455-2502
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 Richard C. Breeden is executing this
agreement solely in his capacity as the Trustee of Bennett 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: RICHARD C. BREEDEN
__________________________
Title
Bennett Funding Group, Inc., Debtor
By: RICHARD C. BREEDEN
___________________________
Title
Accepted and Agreed to:
American Gaming & Entertainment, Ltd.
By: J. DOUGLAS WELLINGTON
________________________________
President & CEO Title
<PAGE 12>
J. Douglas Wellington
November 23, 1999
Page 6
Emerald Gaming, Inc. American Gaming and Resorts of
Mississippi, Inc.
By: J. DOUGLAS WELLINGTON By: J. DOUGLAS WELLINGTON
__________________________ _______________________
President Title President Title
AMGAM Associates
By: J. DOUGLAS WELLINGTON
___________________________
Manager Title
<PAGE 13>
EXHIBIT "A"
<TABLE>
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
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 400 400 400 400 400 400 400 400 400 400 400 400 400 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 / Mintz,
Rosenfeld & Co. - - 20,000 25,000 1,500 - - 1,500 - - - 1,500 - 49,500
Dillon Bitar 2,000 4,000 - 1,000 5,000 2,000 2,000 2,000 - 3,000 3,000 2,000 4,000 30,000
Reilly & Matthews 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
Byrd & 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
</TABLE>
<PAGE 14>
Exhibit B
EMPLOYMENT AGREEMENT
To be filed and served prior to hearing
on approval of letter agreement
