Document:

Exhibit 10.21

 

PURSE
ENHANCEMENT AGREEMENT

 

This Purse Enhancement Agreement (the “Agreement” or “PEA”) is made
this 13th day of August, 2008 by and between:

 

The NEW JERSEY SPORTS & EXPOSITION AUTHORITY (the “NJSEA”), a
public body established in, but not of, the Department of Community Affairs of
the State of New Jersey, and existing under, and by virtue of, the laws of the
State of New Jersey and, in particular, P.L. 1971, c. 137, constituting N.J.S.A.
5:10-4, et seq., as amended and
supplemented, whose address is 50 State Route 120, East Rutherford, New Jersey
07073;

 

The CASINO ASSOCIATION OF NEW JERSEY (the “CANJ”), a New Jersey not for
profit corporation, by and through its member casinos, as more fully set forth
below; and

 

RIH ACQUISITIONS, NJ, LLC D/B/A THE ATLANTIC CITY HILTON;

 

BALLY’S PARK PLACE, INC D/B/A BALLY’S ATLANTIC CITY;

 

MARINA DISTRICT DEVELOPMENT COMPANY, LLC, D/B/A BORGATA HOTEL CASINO &
SPA;

 

BOARDWALK REGENCY CORPORATION D/B/A CAESARS ATLANTIC CITY;

 

HARRAH’S ATLANTIC CITY OPERATING COMPANY, LLC D/B/A HARRAH’S RESORT
ATLANTIC CITY;

 

RESORTS INTERNATIONAL HOTEL INC D/B/A RESORTS ATLANTIC CITY;

 

SHOWBOAT ATLANTIC CITY OPERATING COMPANY, LLC D/B/A SHOWBOAT CASINO
HOTEL;

 

ADAMAR OF NEW JERSEY, INC. D/B/A TROPICANA CASINO AND RESORT;

 

TRUMP PLAZA ASSOCIATES, LLC D/B/A TRUMP PLAZA HOTEL AND CASINO;

 

TUMP MARINA ASSOCIATES, LLC D/B/A TRUMP MARINA HOTEL AND CASINO; and

 

TRUMP TAJ MAHAL ASSOCIATES, LLC D/B/A TRUMP TAJ MAHAL CASINO RESORT;

 

1

 

(the aforementioned casinos are collectively referred to as the “Casinos”
and are individually referred to herein as “Casino”); and

 

The CASINO REINVESTMENT DEVELOPMENT AUTHORITY (the “CRDA”), a public
body established in, but not of, the Department of the Treasury of the State of
New Jersey, and existing under, and by virtue of, the laws of the State of New
Jersey and, in particular, P.L. 1984, c. 218, constituting N.J.S.A.
5:12-153, et seq., as amended and supplemented, whose
address is 1014 Atlantic Avenue, Atlantic City, New Jersey 08401.

 

NJSEA
and the Casinos, and each individual Casino may be individually referred to as
a “Party” or collectively referred to as the “Parties.”

 

Recitals

 

A.            By that certain Grant and
Donations Agreement executed by and between the NJSEA, the CRDA and the
Casinos, dated in April of 2004 (the “Grant Agreement”), among other terms
and conditions, the Casinos and the CRDA agreed to provide $86.0 million to the
NJSEA to be used for Authorized Uses through the period ending January 1,
2009 in exchange for a prohibition against the conduct of “Casino Gaming” (as
hereinafter defined) at any horseracing track in New Jersey for the same time
period.

 

B.            NJSEA believes that without
the continued infusion of funds provided under the Grant Agreement or some
other funding external to the racing program to provide higher levels of purses
to competing horse owners and trainers, the New Jersey horse racing industry
will find it difficult to remain competitive with horse racing tracks in surrounding
jurisdictions.

 

C.            NJSEA further believes that
an inability of the New Jersey horse racing tracks to compete with similar
facilities in surrounding states will continue to cause a decline in the
business operations of the New Jersey horse racing tracks, a decline in the
economies of the communities and regions where the tracks are located, and the
loss of valuable farmland that supports the New Jersey horse racing industry.
Therefore, the NJSEA believes that keeping the New Jersey horse racing tracks competitive
is desirable.

 

D.            The Casinos continue to
believe that permitting the operation of video lottery terminals or other
Casino Gaming at New Jersey horse racing tracks or other locations in New
Jersey outside of Atlantic City will divert customers from the Atlantic City
Casinos and negatively impact all forms of revenue realized from legalized
gaming in Atlantic City and detract from the unique economic generator which
benefits not only Atlantic City and South Jersey, but also the entire State. Therefore,
the Casinos, in the interest of maximizing revenue realized from legalized
gaming in Atlantic City, and fostering an economic climate that will facilitate
long term, substantial capital investment and workforce expansion in the
Atlantic City gaming industry, believe that the prohibition against Casino
Gaming detailed in the Grant Agreement is

 

2

 

desirable and must continue in effect, as more fully described in this
Agreement.

 

E.             The Casinos and the NJSEA
desire to enter into this Agreement to provide the PEA Payment (as hereinafter
defined) for the horseracing industry and to continue to prohibit Casino Gaming
at New Jersey locations outside of Atlantic City as provided herein for the
further period January 1, 2009 through and including December 31,
2011.

 

F.             Recently enacted legislation
(the “Legislation”), P.L.2008, c.12, which shall become operative upon
certification by the Chair of the Casino Control Commission (the “Commission”)
to the State Treasurer that this Agreement has been executed requires that the
Commission establish, by regulations supplementing P.L. 1977, c. 110 (C.5:12-l et seq.),  procedures and
standards to implement such Legislation (the “Regulations”).

 

G.            The Parties acknowledge that,
in addition to the continued prohibition of Casino Gaming in New Jersey outside
of Atlantic City, a significant component of the consideration for the
participation of the Casinos in this Agreement is the enactment of the
Legislation to provide for the deduction of certain Promotional Gaming Credits
(as defined in that Legislation) from the calculation of the tax on Gross
Revenue, and the Casinos’ ability to rely on the consistency of the provisions
in that Legislation.

 

H.            The Parties further
acknowledge and understand that the Governor has announced his intention to
sign an Executive Order (“Executive Order”) establishing a commission or
similar body (the “Governor’s Commission”), consisting of various stakeholders,
to study alternatives and formulate written recommendations for the long-term
stability and funding of the horseracing industry including possible state
appropriations to the NJSEA for calendar years 2011, 2012 and subsequent years,
with such appropriations to be repaid from future revenues received by the
NJSEA over a period of years, as agreed to between the State and the NJSEA. A
report to the Governor and the Legislature is anticipated to be completed on or
about July 1, 2010 (the “Report on the Horseracing Industry”).

 

I.              The CRDA is a party to this
Agreement solely for the limited purposes outlined herein.

 

NOW, THEREFORE, in consideration of the
foregoing recitals, incorporated herein by this reference, and the mutual
promises and covenants contained herein, and intending to be legally bound
hereby, the Parties and the CRDA agree as follows:

 

1.             Obligation of
the Casinos.

 

1.01.        In accordance with the terms and conditions of this
Agreement, the Casinos shall pay to the NJSEA a total of $90 million for the
benefit of the horseracing

 

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industry (the “PEA Payment”) to be used solely for the Authorized Uses
as defined in Section 2.01 herein.

 

1.02.       Subject to the provisions of Section 4 herein,
within five (5) Business Days, as defined herein, after the later of the
date on which the Regulations required by the Legislation become effective and
the date on which the Chair certifies to the State Treasurer that this
Agreement has been executed in accordance with the Legislation, (the “Effective
Date”), the Casinos shall commence making the PEA Payments in accordance with
the schedule set forth below (singly referred to as an “Installment Payment”
and collectively, as the “Installment Payments”):

 

	
  Amount
  of payment

  	
   

  	
  Date

  	
   

  
	
  $7.5 million

  	
   

  	
  Effective
  Date

  	
   

  
	
  $15.0 million

  	
   

  	
  November 14,
  2008

  	
   

  
	
  $7.5 million

  	
   

  	
  February 15,
  2009

  	
   

  
	
  $7.5 million

  	
   

  	
  May 15,
  2009

  	
   

  
	
  $7.5 million

  	
   

  	
  August 14,
  2009

  	
   

  
	
  $7.5 million

  	
   

  	
  November 15,
  2009

  	
   

  
	
  $7.5 million

  	
   

  	
  February 15,
  2010

  	
   

  
	
  $7.5 million

  	
   

  	
  May 15,
  2010

  	
   

  
	
  $7.5 million

  	
   

  	
  August 14,
  2010

  	
   

  
	
  $7.5 million

  	
   

  	
  November 15,
  2010

  	
   

  
	
  $7.5 million

  	
   

  	
  November 15,
  2011

  	
   

  

 

In the context of this Agreement, Business Days shall be defined as all
days of week excluding Saturdays, Sundays and holidays.

 

1.03.       Each Casino shall pay its share of the PEA Payment
in accordance with the annual Payment Statement (as defined in Section 3)
to be prepared and provided by the CRDA as more fully described in Section 3.01
herein. Each Casino shall be solely and individually responsible for the
payment of its respective share of the amounts due under this Section 1.
If a Casino fails to pay its share of an Installment Payment within fifteen
(15) days of its due date (“Payment Delinquency”), then the NJSEA shall deliver
a “Notice of Delinquency” to all Casinos and the CRDA The remaining Casinos
shall have the right, but not the obligation, to cure a Payment Delinquency. If
the NJSEA does not receive the full amount of the Installment Payment within
fifteen (15) days of the date of delivery of the Notice of Delinquency, the
NJSEA shall have all rights and remedies available to it under law and this
Agreement.

 

1.04.       Each Casino shall pay all of its obligations under
this Agreement at such time as they shall become due and payable and manage all
obligations, duties and liabilities in a manner consistent with maintaining
financial integrity and honesty in the conduct of all business activities and
financial affairs.

 

1.05.       Notwithstanding the Casinos’ payment obligations
under Section 1.02 herein, if a statewide public question is voted upon by
New Jersey voters in 2011 to authorize Casino Gaming at any New Jersey location
outside of Atlantic City and not

 

4

 

approved
by the voters, the Installment Payment due on November 15, 2011 shall be
reduced by half to $3.75 million.

 

1.06.        The CANJ and
the Casinos shall, in good faith, work and otherwise cooperate with any
Governor’s Commission created by the Executive Order.

 

2.             Obligations of
the NJSEA.

 

2.01        NJSEA shall use the PEA Payment solely for the
purposes of purse enhancements including an amount not to exceed four percent
(4%) of purse enhancements for racetrack and horsemen employee benefits,
breeders’ purses, and the establishment of off-track wagering facilities (the “Authorized
Uses”). The allocation of the PEA Payment within the Authorized Uses shall be
in the sole discretion of the NJSEA.

 

2.02        The Parties acknowledge that the Installment Payment
schedule set forth in Section 1.02 of this Agreement is accelerated from
the years 2009, 2010 and 2011 to assist and enable the NJSEA to fund Authorized
Uses incurred prior to the receipt of each Installment Payment. NJSEA agrees
that even though it may desire and determine to spend funds in excess of the
PEA Payment for obligations it incurs through 2011, NJSEA shall not seek from
the Casinos, and the Casinos shall not be required, directly or indirectly, to
fund any amounts in addition to the PEA Payment. Therefore, NJSEA further
believes that it will need another source of funding for 2011 and 2012,
including possible state appropriations as may be addressed in the Report on
the Horseracing Industry to be commissioned in accordance with the Executive
Order.

 

2.03.       All Installment Payments made by the Casinos to the
NJSEA shall be immediately deposited by the NJSEA into a segregated,
interest-bearing account within the New Jersey Cash Management Fund, yielding
interest at an annual rate that is competitive in the marketplace, with any
interest accrued thereon applied solely toward Authorized Uses. The NJSEA shall
maintain the segregated account for the duration of this Agreement and all
funds used by the NJSEA or paid by the NJSEA to recipients shall be drawn from
such account.

 

2.04.       In the event that any portion of the PEA Payment or
interest earned thereon is not used by NJSEA for the Authorized Uses prior to
2012 for any reason, such unused funds shall be returned by NJSEA to the CRDA
by January 15, 2012 for repayment within tens (10) days of CRDA’s
receipt to the Casinos in accordance with the allocation formula set forth in Section 3.01
herein, or as the Casinos may otherwise agree.

 

2.05.       Neither the NJSEA nor any entity to which it has
disbursed any portion of the PEA Payment nor any affiliate of NJSEA or any such
entity shall, prior to 2012, operate, conduct, maintain or permit any Casino
Gaming activity at any New Jersey race track or any other location in New
Jersey other than Atlantic City. For purposes of this Agreement, “Casino Gaming”
shall mean operating, conducting, or maintaining any of the following
activities or games: video lottery terminals, slot machines, roulette,
baccarat, blackjack, craps, big six wheel, minibaccarat, red dog, pai gow, sic
bo, poker or

 

5

 

any other “gambling game” described in or permitted
by N.J.S.A. 5:12-21, as that statute or the regulations there-under may be
amended from time to time.

 

2.06. A.           No later than
ten (10) days prior to the due date for each of the second through
eleventh and final Installment Payments to be made by the Casinos pursuant to Section 1.02
herein, NJSEA shall deliver to the CRDA separate certifications from NJSEA and
each entity to which it has disbursed Installment Payment funds (a “Recipient
Entity”) in the forms attached hereto as Forms 1A and IB and executed by the
respective Chief Executive Officer and Chief Financial Officer of each (the “Pre-Installment
Payment Certifications”) by which NJSEA and each such Recipient Entity shall
certify, respectively: (i) the total amount of all Installment Payment
funds received as of the date of the Pre-Installment Payment Certification and
interest earned thereon; (ii) that all Installment Payment funds received
by NJSEA and each such Recipient Entity have been disbursed to a Recipient
Entity in accordance with a Recipient Agreement (as defined in Section 2.07
herein) or used solely for the Authorized Uses and indicate the amount of
Installment Payment funds and the allocation of same so disbursed or used; (iii) that
NJSEA and each such Recipient Entity is in compliance with and not in breach of
the terms of this Agreement or its respective Recipient Agreement; and (iv) that
all representations required to be made on the forms attached hereto as Forms
1A and IB are true and accurate. Notwithstanding the provisions of this
subsection, the New Jersey Racing Commission (“NJRC”) shall not be required to
execute, certify or otherwise provide a Pre-Installment Payment Certification.

 

B.            No later than May 1 of
each of 2009, 2010, 2011 and 2012, NJSEA shall deliver to the CRDA separate
annual reports on behalf of NJSEA and each Recipient Entity in the forms
attached hereto as Forms 2A and 2B for each of the years 2008, 2009, 2010 and
2011 respectively, each prepared by an independent accounting firm licensed to
do business in New Jersey (the “Annual Reports”). Each Annual Report shall, in
accordance with the Forms and based upon the preparer’s review of the
respective books and records of the NJSEA or Recipient Entity for the year
under review, indicate the (i) total amount of all Installment Payment
funds received and the interest earned thereon; and (ii) the amount of all
Installment Payment funds disbursed to a Recipient Entity in accordance with a
Recipient Agreement or used for each of the Authorized Uses. Notwithstanding
the provisions of this subsection, no Annual Report shall be required of either
any Recipient Entity with respect to a calendar year in which it has received
less than One Million ($1,000,000) Dollars in Installment Payment funds or from
the NJRC with respect to any calendar year.

 

2.07.        NJSEA shall not
distribute any portion of the PEA Payment to any Recipient Entity unless and
until it shall have first acknowledged receipt of a copy of this Agreement and
agreed in writing to be bound by the terms and conditions hereof. Any such
agreement (the “Recipient Agreement”) shall establish procedures to assure that
the Recipient Entity shall comply with the Authorized Uses requirement of Section 2.01
of this Agreement and shall also contain a provision indicating that the CANJ
and the Casinos are the intended third-party beneficiaries of the Recipient
Agreement. The NJSEA shall also, immediately upon the execution of each
Recipient Agreement, provide all Parties to this Agreement with a copy of the
Recipient Agreement.

 

6

 

2.08.        The Parties acknowledge that
CANJ seeks to timely obtain information concerning the performance of the New
Jersey horse racing industry prior to and during 2008 through 2011 including: (i) live
NJ racing activities: handle wagered, live attendance, racing days held, races
run, horses raced and purse money paid at NJ race tracks; and (ii) NJ
simulcast racing activities: handle wagered at each NJ race track venue, NJ
off-track wagering venue and NJ casino venue. NJSEA, accordingly, agrees that
it shall:

 

A.           use good faith efforts to
assist CANJ to timely obtain same in a useable format from the New Jersey
Racing Commission (“NJRC”) including all “seven day reports” and “monthly” or “thirty
day reports” prepared for or maintained by NJRC;

 

B.            within a reasonable time,
provide CANJ with such current information by racing day as is maintained by
the appropriate official or employee at the Meadowlands Racetrack (for both
standardbred and thoroughbred racing days) and the Monmouth Park Racetrack (for
thoroughbred racing days) concerning races run, horses raced (including such
information as is readily available as to their identity and status as a New
Jersey horse) and purse money from all sources actually paid at each such
racetrack with respect to not less than 20% of the approved racing days during
each year from 2008 through 2011, which racing days shall be identified and
agreed to each year by NJSEA and CANJ; and

 

C.            designate an appropriate
NJSEA official to serve, subject to the authority of the NJSEA President and
CEO, as the NJSEA liaison to CANJ for the purpose of providing and assisting
with respect to such information.

 

2.09.        NJSEA shall, in
good faith, work and otherwise cooperate with any Governor’s Commission created
by the Executive Order, and, in particular, shall not support the drafting,
introduction or passage of legislation authorizing Casino Gaming at any New
Jersey location outside of Atlantic City prior to the delivery of the Report on
the Horseracing Industry to the Governor and the Legislature.

 

3.             Obligations of
the CRDA.

 

3.01.        The CRDA shall
serve in the limited role as an administrator between the Parties. In
particular, the CRDA shall calculate each Casino’s share of the Installment
Payment due based on a percentage representing each Casino’s gross gaming
revenue reported for the prior calendar year compared to the total gross gaming
revenue reported for all Casinos for that year. The CRDA shall prepare an
annual schedule (“Payment Statement”) setting forth such calculations for each
year in which Installment Payments are to be made and provide a copy of same to
each Casino by not later than January 15th of each such
year and for the year 2008, not later than fifteen days after the execution of
this Agreement. If any Casino ceases gaming operations during the course of any
year in

 

7

 

which any Installment Payment is due, the CRDA shall, within thirty (30)
days of that cessation of operation, issue a revised Payment Statement
reallocating the defunct Casino’s payment obligation to the Casinos remaining
in operation. A copy of each such Payment Statement shall be sent to the NJSEA
from the CRDA by electronic mail within five (5) days of issuance to each
Casino.

 

3.02.        CRDA shall not
be responsible for any errors in calculating the amount(s) owing to the
NJSEA from the Casinos or any delay in preparing and delivering the annual
Payment Statements. In the event of any such error, the CRDA shall prepare and
issue a corrected annual Payment Statement to the affected Casinos. Any
underpayment by a Casino shall be shall be paid by such Casino to the NJSEA
within ten (10) days of its receipt of the corrected Payment Statement.
Any overpayment by a Casino shall be credited by the CRDA toward such Casino’s
share of the immediately succeeding Installment Payment.

 

3.03         Unless
otherwise agreed by the Casinos, the CRDA within ten (10) days of its
receipt, shall remit to the Casinos any portion of the PEA Payment and interest
accrued thereon returned by the NJSEA in accordance with the Section 3.01
allocation formula or as the Casinos may otherwise agree.

 

3.04.        CRDA shall
deliver to the CANJ a copy of each Pre-Installment Payment Certification it
receives from the NJSEA within five days of its receipt thereof, and each
Annual Report it receives from the NJSEA within a reasonable time thereof.

 

4.             Conditions to
Casino Payments.

 

4.01.        The following
conditions precedent shall be satisfied prior to each Installment Payment to
the NJSEA from the Casinos under this Agreement:

 

A.            The Regulations required by
the Legislation shall have been adopted by the Commission and become effective;

 

B.            The Chair of the Commission
shall have certified to the State Treasurer that this Agreement has been
executed in accordance with the Legislation;

 

C.            Each Casino shall have
received from the CRDA the annual Payment Statement applicable to the Casino’s
share of the Installment Payment payable as calculated pursuant to Section 3.01
herein;

 

D.            CANJ shall have received
from the CRDA each Pre-Installment Payment Certification required from NJSEA by
Section 2.06(A) herein.

 

E.             CANJ shall have received
from the CRDA each Annual Report required from NJSEA by Section 2.06 (B) herein;

 

8

 

F.             The NJSEA shall not have
distributed any PEA Payment funds to a Recipient Entity prior to delivery to
the CANJ and each Casino of an executed copy of the Recipient Agreement between
the NJSEA and the Recipient Entity; and

 

G.            Neither the NJSEA nor any
Recipient Entity shall be in breach of its obligations under this Agreement or
under the Recipient Agreements, provided, however, that a breach
by a Recipient Entity, including, but not limited to, its failure to timely
provide a Pre-Installment Payment Certification or Annual Report required by Section 2.06
shall not be deemed to be a breach by the NJSEA, in which event, NJSEA shall be
entitled to receive the PEA Payment funds but not disburse such funds to the
breaching or non- compliant Recipient Entity.

 

H.            No statewide public question
shall have been approved by the New Jersey voters, no New Jersey legislation
shall have been enacted, and no other New Jersey governmental action shall have
been taken to authorize or purport to authorize Casino Gaming at any location
in New Jersey other than Atlantic City; and no Casino Gaming shall have been
operated, conducted or maintained at any such location.

 

I.              Prior to 2011, no statewide
public question to authorize Casino Gaming at any location in New Jersey other
than Atlantic City shall have been approved by the New Jersey legislature.

 

4.02.        If any of the
above conditions are not satisfied as of the date any Installment Payment is
due, the CANJ shall notify the NJSEA of the failed condition and the
Installment Payment shall not be due until after the condition is satisfied.
The Installment Payment shall then be due no later than fifteen (15) days after
the NJSEA provides confirmation to the CANJ that the condition has been
satisfied.

 

5.             Remedies.

 

5.01.        If NJSEA or any
Recipient Entity or any affiliate of the NJSEA or Recipient Entity breaches the
provisions of Section 2.05, the Casinos shall be entitled to enforcement
of the provisions of Section 2.05 by specific performance, it being
acknowledged by the Parties and any Recipient Entities that a breach of Section 2.05
will cause irrevocable harm to the Casinos that cannot be remedied through
monetary damages; that the remedies at law available to the Casinos would be
inadequate; and that it would be impossible to measure in money the damages
that would accrue in the event of such a breach. In addition, NJSEA and all
Recipient Entities specifically waive the defense that, in the event of a
breach of Section 2.05, the Casinos would have an adequate remedy at law.
The Casinos’ remedies hereunder shall not exclude any other rights or remedies.

 

9

 

5.02.       In the event that the conditions set forth in either
Sections 4.01(H) or 4.01(I) herein are not satisfied (hereinafter, a “Triggering
Event”), whether or not the Triggering Event is a result of any action of the
NJSEA, then, as of the date of the Triggering Event and in addition to all other
legal and equitable remedies: (a) the Casinos shall have the right to
terminate the Agreement; (b) the Casinos shall not make any further
Installment Payments; and (c) the NJSEA shall refund to the Casinos the
portion of the PEA Payment funds paid prior to the Triggering Event (the “Refund”)
in accordance with the terms and schedule below:

 

	
  Date
  of Triggering Event

  	
   

  	
  Refund

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Effective Date through 2009

  	
   

  	
  100

  	
  %

  
	
  January 1 through June 30, 2010

  	
   

  	
  60

  	
  %

  
	
  July 1 through December 31, 2010

  	
   

  	
  50

  	
  %

  
	
  2011

  	
   

  	
  20

  	
  %

  

 

The
Refund shall be derived from future revenues to the NJSEA from Casino Gaming
activity in New Jersey outside of Atlantic City and paid by the NJSEA in equal
quarterly installments over a period not to exceed three (3) years as
determined by the New Jersey State Treasurer and beginning not later than the
commencement of such Casino Gaming activity. The Parties acknowledge and agree
that Casino Gaming activity in New Jersey outside of Atlantic City, as
described herein, must actually occur for the Casinos to receive a refund.

 

5.03.       In the event that, prior to 2012, any provision of
the Legislation or Regulations is amended in a manner that reduces or otherwise
impairs the availability or amount of the deduction for Promotional Gaming
Credits (as defined in the Legislation and the Regulations) from the gross
revenue taxed pursuant to N.J.S.A. 5:12-144a (as provided therein), then, as of
the date of such amendment, the Casinos shall: (a) have the right to
terminate the Agreement; and (b) not make any further Installment
Payments.

 

5.04.       If any Party is in breach of any provision of this
Agreement, except for a breach for which the remedy is provided in Sections
1.03 and 5.01 herein, the non-defaulting Party shall provide the defaulting
Party with notice indicating the nature of the breach claimed (“Notice of
Default”). The defaulting Party shall have a period of thirty (30) days from
the mailing of the Notice of Default to remedy the breach identified therein.
If the defaulting Party fails to remedy its breach in the time permitted, the
non-defaulting Party shall be entitled to any remedies available to it at law
or in equity, including the right to terminate this Agreement.

 

5.05.       In the event of a Payment Delinquency and subject to
the provisions of Section 1.03, the NJSEA or any non-defaulting Casino or
Casinos may (to the extent that it or they have suffered damages as the result
of the Payment Delinquency), but shall not be obligated to, institute an action
in law, in equity, or in Bankruptcy Court to collect monies owed by the
defaulting Casino.

 

10

 

6.             General
Provisions.

 

6.01.       Records.
The NJSEA and each Recipient Entity shall maintain a full, permanent and
accurate set of books and records, kept in accordance with generally accepted
accounting principles, consistently applied, of all receipts, maintenance, use,
and disbursements of PEA Payment funds, together with all supporting records,
and shall make available to the Parties to this Agreement, during normal
business hours and upon no less than thirty (30) calendar days advance notice,
but not more than once per calendar year, the same. The NJSEA and each
Recipient Entity shall keep, retain and preserve the aforesaid records for at
least five (5) years (or such longer period of time as may be required by
law) following January 1, 2012.

 

6.02.       Parties
Bound. This Agreement is to be binding upon the Parties, the CRDA and their
respective successors and assigns. The Agreement shall not be effective or
binding as to any Casino until and unless all Casinos denominated as Parties
hereunder have duly executed same.

 

6.03.       Counterparts.
This Agreement may be executed in counterparts, and by facsimile if necessary
(with original signatures to follow by mail), each of which shall be deemed an
original, and together shall constitute one and the same instrument.

 

6.04.       No
Waiver. The failure of any Party to insist upon the strict performance of any
provisions of this Agreement, or the failure of any Party to exercise any
right, option or remedy hereby reserved shall not be construed as a waiver for
the future of any such provision, right, option or remedy or as a waiver of a
subsequent breach thereof. The consent or approval by any Party of any act of
another requiring a Party’s consent or approval shall not be construed to waive
or render unnecessary the requirement for consent or approval of any subsequent
similar act. The receipt by NJSEA or the making by the Casinos of any payment
with knowledge of a breach of any provision of this Agreement shall not be
deemed a waiver of such breach. No provision of this Agreement shall be deemed
to have been waived unless such waiver shall be in writing signed by the Party
to be charged.

 

6.05.       Notices.
Every notice, demand, consent, approval, request or other communication which
may be or is required to be given under this Agreement or by law shall be in
writing and shall be hand delivered or sent by United States Certified or
Registered Mail, postage prepaid, return receipt requested, or Overnight Mail
and shall be addressed to the following addresses:

 

(1)                            For RIH
Acquisitions, NJ, LLC and Resorts International Hotel, Inc, to: Hilton Legal
Department, 3400 Pacific Avenue, Atlantic City, NJ 08401

 

(2)                            For Bally’s
Park Place, Inc, Boardwalk Regency Corporation, Harrah’s Atlantic City
Operating Company, LLC, and Showboat Atlantic City Operating Company, LLC, to:
Bally’s Legal Department, Park Place and the Boardwalk, Atlantic City, NJ 08401

 

11

 

(3)                            For Marina
District Development Company, LLC, to: Borgata Legal Department, One Borgata
Way, Atlantic City, NJ 08401

 

(4)                            For Adamar of
New Jersey, Inc., to: Tropicana Legal Department, 2831 Boardwalk, Atlantic
City, NJ 08401

 

(5)                            For Trump Plaza
Associates, LLC, Trump Marina Associates, LLC, and Trump Taj Mahal Associates,
LLC, to: Robert M. Pickus, General Counsel, Trump Entertainment Resorts, Inc.,
15 South Pennsylvania Avenue, Atlantic City, NJ 08401

 

(6)                            For the CANJ,
to: Joseph A. Corbo, President, CANJ, c/o Borgata Legal Department, One Borgata
Way, Atlantic City, NJ 08401

 

(7)                            For the CRDA,
to: Casino Reinvestment Development Authority, ATTN: Executive Director, 1014
Atlantic Avenue, Atlantic City, NJ 08401

 

(8)                            For the NJSEA,
to: New Jersey Sports and Exposition Authority, ATTN: President and CEO,
Meadowlands Sports Complex, 50 Route 120, East Rutherford, NJ 07073

 

Any such notice shall be deemed delivered when received or refused. Any
Party may designate, by similar written notice to all other Parties, any other
address for such purposes. All of the Parties hereto waive personal or any
other service other than as provided for in this Agreement.

 

6.06.       Entire
Agreement. This Agreement sets forth the entire agreement between the Parties
with respect to the subject matter hereof. All prior conversations or writings
between the Parties or their representatives are merged herein and
extinguished. This Agreement shall not be modified except by a writing signed
by all Parties.

 

6.07.       Section Numbers
and Captions. The Section numbers and captions and titles appearing herein
are inserted only as a matter of convenience and are not intended to define,
limit, construe or describe the scope or intent of any Section, nor in any way
affect this Agreement.

 

6.08.       Remedies
Cumulative. The respective various rights, options, elections and remedies of
the Parties contained in this Agreement shall be cumulative and no one of them
shall be construed as exclusive of any other, or of any right, priority or
remedy allowed or provided for by law or equity and not expressly waived in
this Agreement. All rights and remedies of the Parties may be exercised and
enforced concurrently and whenever and as often as occasion thereafter arises.

 

6.09.       Interpretation.
This Agreement shall not be construed either for or against any Party, but
shall be interpreted in accordance with the general tenor of its language.
Masculine or feminine pronouns shall be substituted for the neuter form and
vice versa,

 

12

 

and the plural shall be substituted for the singular form and vice
versa in any place or places in this Agreement where the context requires such
substitution or substitutions. The Parties also mutually agree that all of the
provisions of this Agreement are to be construed as covenants and conditions as
though the words importing such covenants and conditions were used in each
instance.

 

6.10.       Waiver of Jury Trial. The Parties agree that there shall be no
trial by jury of any and all issues arising in any action or proceeding between
or among any of the Parties or their successors or assigns arising out of this
Agreement or any of its provisions.

 

6.11.       Applicable Law. This Agreement shall be governed by the law of
the State of New Jersey. Any actions brought to enforce any provision of this
Agreement shall be filed in Superior Court, Mercer County, New Jersey.
Notwithstanding anything to the contrary above, if the CANJ or any Casino
decides to file an action against a Casino, said action may be filed in
Superior Court, Atlantic County, New Jersey.

 

6.12.       Attorney Fees. If any Party at any time by reason of any
default or other breach of this Agreement by another Party is compelled, or
reasonably elects, to pay any sum of money or to incur any expense including
reasonable attorney’s fees (including the value of in-house attorney work) to
institute, prosecute or defend against any action or proceedings to enforce
rights hereunder and the Party is successful in the action or proceeding or the
defense thereof, then the unsuccessful Party, within thirty days of the invoice
therefor, shall pay to the successful Party the amount so reasonably paid or
incurred by the successful Party and interest thereon at the Interest Rate (as
hereinafter defined) from the date the successful Party paid such amount until
the date the unsuccessful Party so pays the successful Party.

 

6.13.       Interest.                If
any sum due and owing under this Agreement is not paid within thirty (30) days
of its due date, it shall accrue interest at the rate of one percent (1%) per
month (the “Interest Rate”) of the outstanding balance from the original due
date until such sum is paid in full.

 

[SIGNATURES APPEAR ON THE FOLLOWING
PAGES]

 

13

 

IN WITNESS
WHEREOF, the undersigned acknowledge that they have each
received a copy of this Agreement, that they understand the terms herein, and
that each of the Parties has executed this Agreement and affixed its corporate
seal, if necessary, as of the day and year first above written.

 

 

NEW JERSEY SPORTS AND EXPOSITION AUTHORITY

 

	
  By:

  	
  /s/ Dennis R. Robinson

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Dennis R. Robinson

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  

 

CASINO ASSOCIATION OF NEW JERSEY

 

	
  By:

  	
  /s/ Joseph A.
  Corbo, Jr

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Joseph A.
  Corbo, Jr

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  

 

RIH ACQUISITIONS, NJ, LLC D/B/A THE ATLANTIC CITY HILTON

 

	
  By:

  	
  /s/ Anthony P.
  Rodio

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Anthony
  P. Rodio

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Regional President

  	
   

  

 

BALLY’S PARK PLACE, INC D/B/A BALLY’S ATLANTIC CITY

 

	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  [ILLEGIBLE]

  	
   

  

 

14

 

MARINA DISTRICT DEVELOPMENT COMPANY, LLC, D/B/A BORGATA HOTEL
CASINO & SPA

 

	
  By:

  	
  /s/ Joseph A.
  Corbo, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Joseph A.
  Corbo, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President & General
  Counsel

  	
   

  

 

BOARDWALK REGENCY CORPORATION D/B/A CAESARS ATLANTIC CITY

 

	
  By:

  	
  /s/ Daniel L. Vita

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Daniel L. Vita

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP & General
  Manager

  	
   

  

 

HARRAH’S ATLANTIC CITY OPERATING COMPANY, LLC D/B/A A HARRAH’S RESORT
ATLANTIC CITY

 

	
  By:

  	
  /s/ R. Scott
  Barber

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  R.
  Scott Barber

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  SR VP & General
  Manager

  	
   

  

 

RESORTS INTERNATIONAL HOTEL INC D/B/A RESORTS ATLANTIC CITY

 

	
  By:

  	
  /s/ John
  Pasqualoni

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  John
  Pasqualoni

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  COO

  	
   

  

 

 

SHOWBOAT ATLANTIC CITY OPERATING COMPANY, LLC D/B/A SHOWBOAT CASINO
HOTEL

 

	
  By:

  	
  /s/
  Jay Snowden

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Jay
  Snowden

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP & General
  Manager

  	
   

  

 

15

 

ADAMAR OF NEW JERSEY, INC. D/B/A TROPICANA CASINO AND RESORT

 

	
  By:

  	
  /s/ Mark
  Giannantonio 

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Mark
  Giannantonio 

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President & COO

  	
   

  

 

TRUMP PLAZA ASSOCIATES, LLC

 

	
  By:

  	
  /s/ Robert M.
  Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert
  M. Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

TRUMP
MARINA ASSOCIATES, LLC

	
  By:

  	
  /s/ Robert M.
  Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert
  M. Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

TRUMP TAJ MAHAL ASSOCIATES, LLC

 

	
  By:

  	
  /s/ Robert M.
  Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert
  M. Pickus 

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

CASINO REINVESTMENT DEVELOPMENT AUTHORITY

 

	
  By:

  	
  /s/ Thomas D. Carver,
  Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Thomas D. Carver, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Executive Director

  	
   

  

 

16

 

Form 1A

 

NEW JERSEY SPORTS & EXPOSITION
AUTHORITY

 

PRE-INSTALLMENT PAYMENT CERTIFICATION

(circle applicable due date)

 

	
  November 4,
  2008

  	
  February 5,
  2009

  	
  May 5,
  2009

  	
  August 4,
  2009

  
	
   

  	
   

  	
   

  	
   

  
	
  November 5,
  2009

  	
  February 5,
  2010

  	
  May 5,
  2010

  	
  August 4,
  2010

  
	
   

  	
   

  	
   

  	
   

  
	
  November 5,
  2010

  	
  November 5,
  2011

  	
   

  	
   

  

 

To: The Casino Reinvestment Development Authority (“CRDA”), Casino
Association of New Jersey (“CANJ”) and each of the Casinos

 

A.           Pre-Installment
Payment Certification Requirement

 

The
New Jersey Sports & Exposition Authority (“NJSEA”) is required under
Sections 2.06 and 4.01(D) of its 2008 Purse Enhancement Agreement
(“Agreement”) with the CANJ and the Casinos to complete and deliver this
Pre-Installment Payment Certification (“Certification”) to the CRDA no later
than ten (10) days prior to the due date for, and as a condition precedent
to, each Installment Payment made to the NJSEA from the Casinos. AH capitalized
terms in this Certification shall have the meaning attributed to them in the
Agreement unless specifically defined otherwise herein.

 

B.            Receipt of
Installment Payment Funds:

 

I hereby certify that, as of the date of this Certification, the NJSEA
has received from the Casinos pursuant to the Agreement:

 

	
  PEA Installment Payment funds in the total amount
  of:

  	
   

  	
  $

  	
   

  	
   

  
	
  Interest earned on PEA funds held in interest
  bearing account:

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

C.            Use of
Installment Payment Funds:

 

I
hereby certify that, as of the date of this Certification, the funds identified
in Item B above have, in the amounts as set forth below, been used by the NJSEA
solely for the Authorized Uses set forth in Section 2.01 of the Agreement
or disbursed by the NJSEA solely to a Recipient Entity or Entities pursuant to
a signed written Recipient Agreement requiring that the funds be used solely
for such Authorized Uses:

 

 

	
  1.             Meadowlands Racetrack

  	
   

  	
   

  	
   

  	
   

  
	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
  Racetrack and Horseman Employee Benefits *

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

	
  2.             Monmouth Park Racetrack

  	
   

  	
   

  	
   

  	
   

  
	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
  Racetrack and Horseman Employee Benefits*

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.             Disbursed pursuant to the terms of the Agreement to:

  	
   

  	
   

  	
   

  	
   

  
	
  ·      Freehold
  Raceway

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      Atlantic
  City Race Course

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      Standardbred
  Breeders and Owners Assoc. of NJ

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      Thoroughbred
  Breeders Assoc of NJ

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      NJ
  Thoroughbred Horsemens’ Association (“NJTHA”)

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      NJ Racing
  Comm. for the benefit of NJTHA

  	
   

  	
  $

  	
   

  	
   

  
	
  ·      NJ Sire
  Stakes

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. Establishment
  of off-track wagering facilities

  	
   

  	
  $

  	
   

  	
   

  
	
  (identify with specificity)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5. Not yet
  disbursed or used by NJSEA

  	
   

  	
  $

  	
   

  	
   

  
	
  (retained in the segregated interest bearing
  account as provided for in Section 2.03 of the Agreement)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

* Section 2.01 of the Agreement requires that the collective
funding for Racetrack and Horseman Employee Benefits shall not exceed four (4%)
percent of the collective amount of funds applied to Purse Enhancements.

 

D.            Compliance with
the Agreement and Recipient Agreements

 

I
hereby certify that, as of the date of this Certification, the NJSEA has
complied with and is not in breach of the terms of the Agreement or any
Recipient Agreement.

 

 

E.            Certification

 

I hereby certify to the CRDA, CANJ and each of the Casinos that, as of
the date of this Certification, all of the foregoing statements are true. I am
aware that if any of the foregoing statements made by me are willfully false, I
am subject to punishment.

 

 

	
   

  	
   

  	
   

  
	
  Dennis
  R, Robinson, President and

  	
   

  	
  Date:

  
	
  Chief
  Executive Officer, NJSEA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Joseph
  Consolazio, Senior V.P. and

  	
   

  	
  Date:

  
	
  Chief
  Financial Officer, NJSEA

  	
   

  	
   

  

 

F.             Recipient Entity Certifications:

 

Sections
2.06 of the Agreement requires that NJSEA also deliver to the CRDA, together
with this Certification, separate Recipient Entity Pre-Installment Payment
Certifications completed by each Recipient Entity after its receipt or its use
of any Installment Payment funds which it has not certified regarding its
receipt and its use in a Recipient Entity Pre-Installment Payment Certification
it has previously provided to NJSEA for delivery to CRDA. NJSEA shall deliver
such completed Recipient Entity Pre-Installment Payment Certifications to the
CRDA no later than ten (10) days prior to the due date for each
Installment Payment.

 

 

Form 1B

 

(Name of Recipient Entity)

 

RECIPIENT ENTITY

PRE-INSTALLMENT PAYMENT CERTIFICATION

(circle applicable due date)

 

	
  November 4,
  2008

  	
  February 5,
  2009

  	
  May 5,
  2009

  	
  August 4,
  2009

  
	
   

  	
   

  	
   

  	
   

  
	
  November 5,
  2009

  	
  February 5,
  2010

  	
  May 5,
  2010

  	
  August 4,
  2010

  
	
   

  	
   

  	
   

  	
   

  
	
  November 5,
  2010

  	
  November 5,
  2011

  	
   

  	
   

  

 

To:
The New Jersey Sports & Exposition Authority (“NJSEA”), the Casino
Reinvestment Development Authority (“CRDA”), Casino Association of New Jersey
(“CANJ”) and each of the Casinos

 

A.            Installment
Certification Requirement

 

Each
entity (“Recipient Entity”) that receives funds from the NJSEA under the 2008
Purse Enhancement Agreement (“Agreement”) by and between NJSEA, the CANJ, the
CRDA and the Casinos is required to timely complete and deliver this
Pre-Installment Payment Certification (“Certification”) to the NJSEA.
Certifications from a Recipient Entity are due on each of the dates listed
above (“Due Dates”) beginning with the first Due Date after the Recipient
Entity’s first receipt of any Installment Payment funds, provided, however,
that no Certification shall be due on a particular Due Date if the Recipient
Entity has already accounted for the use of all Installment Payment funds
received by the Recipient Entity as of that Due Date in a prior Certification.
All capitalized terms in this Certification shall have the meaning attributed
to them in the Agreement unless specifically defined otherwise herein.

 

B.            Receipt of
Installment Payment Funds:

 

I hereby certify that, as of the date of this Certification, the
Recipient Entity identified above has received funds from the NJSEA pursuant to
the Agreement in the following amounts:

 

	
  PEA Installment Payment funds in the total amount
  of:

  	
   

  	
  $

  	
   

  	
   

  
	
  Interest earned on PEA funds held in interest
  bearing account:

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

C.            Use
of Installment Payment Funds:

 

I hereby certify that, as of the date of this
Certification, the funds identified in Item B above have, in the amounts as set
forth below, been used by the Recipient Entity solely for the Authorized Uses
set forth in Section 2.01 of the Agreement and in

 

 

accordance with its signed written Recipient Agreement with the NJSEA
which requires that funds be used solely for such Authorized Uses:

 

	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Racetrack and Horseman Employee Benefits *

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Not yet used

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

* Section 2.01 of the Agreement requires that the collective
funding for Racetrack and Horseman Employee Benefits shall not exceed four (4%)
percent of the collective amount of funds applied to Purse Enhancements.

 

D.            Compliance with
the Agreement and Recipient Agreements

 

I certify that, as of the date of this Certification, the Recipient
Entity identified above (1) has received a copy of the Agreement; (2) has
complied with all obligations, representations and warranties as are contained
in the Agreement and required of the Recipient Entity; and (3) has
executed, complied with and is not in breach of the Recipient Agreement as
defined in Section 2.07 of the Agreement.

 

E.            Certification

 

I hereby certify to the NJSEA, CANJ and each of the Casinos that, as of
the date of this Certification, all of the foregoing statements are true. I am
aware that if any of the foregoing statements made by me are willfully false, I
am subject to punishment.

 

 

	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  Date:

  
	
  CEO
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Chief
  Financial Officer

  	
   

  	
  Date:

  
	
  CFO
  Name:

  	
   

  	
   

  	
   

  
					

 

 

Form 2A

 

NEW JERSEY SPORTS & EXPOSITION
AUTHORITY

20   ANNUAL REPORT

(circle applicable due date)

 

	
  March 31, 2009

  	
  March 31, 2010

  	
  March 31, 2011

  	
  March 31, 2012

  

 

A.  Annual
Report Requirement

 

The New Jersey Sports & Exposition Authority (“NJSEA”) is
required under Sections 2.06(B) and 4.01(E) of its 2008 Purse
Enhancement Agreement (“Agreement”) with the Casino Association of New Jersey
(“CANJ”) and the Casinos to deliver Annual Reports (“Annual Report”) for each
of the years 2008, 2009, 2010 and 2011 to the Casino Reinvestment Development
Authority (“CRDA”) no later than March 31 of each of the years 2009, 2010,
2011 and 2012 as a condition precedent to the Casinos making subsequent
Installment Payments to the NJSEA.

 

Each Annual Report shall be prepared by an independent accounting firm
licensed to do business in the State of New Jersey (“Firm”) and presented in
the format below as an attachment to the Firm’s letter which shall identify it
as a report completed by the Firm after its review of the books and records of
the NJSEA.

 

Such procedures should be performed in accordance with AICPA standards
for agreed upon procedures.

 

All capitalized terms in the Annual Report shall
have the meaning attributed to them in the Agreement unless specifically
defined otherwise herein.

 

B.            Receipt
of Installment Payment Funds:

 

The Firm preparing this report states that, on the basis of its review
of the books and records of the NJSEA, during the calendar year 2008, 2009,
2010, 2011 (circle one), NJSEA received from the Casinos pursuant to the
Agreement:

 

	
  PEA Installment Payment funds in the total amount
  of:

  	
   

  	
  $

  	
   

  	
   

  
	
  Interest earned on PEA funds held in interest
  bearing account:

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

 

C.          Use of Installment Payment Funds:

 

The Firm preparing this report states that, on the
basis of its review of the books and records of the NJSEA, during the calendar
year 2008, 2009, 2010, 2011 (circle one), the funds identified in Item B above
have been used by NJSEA or disbursed by the NJSEA to Recipient Entities in the
amounts as set forth below:

 

	
  1.             Meadowlands
  Racetrack

  	
   

  	
   

  	
   

  	
   

  
	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
  Racetrack Employee Benefits

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.             Monmouth
  Park Racetrack

  	
   

  	
   

  	
   

  
	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
  Racetrack Employee Benefits

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.             Disbursed pursuant to the terms
  of the Agreement to:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
   

  	
  Freehold
  Raceway

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  b.

  	
   

  	
  Atlantic
  City Race Course

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  c.

  	
   

  	
  Standardbred
  Breeders and Owners Assoc. of NJ

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  d.

  	
   

  	
  Thoroughbred
  Breeders Assoc of NJ

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  e.

  	
   

  	
  NJ
  Thoroughbred Horsemen’s Assoc. (“NJTHA”)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  f.

  	
   

  	
  NJ
  Racing Comm. for the benefit of NJTHA

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
  g.

  	
   

  	
  NJ
  Sire Stakes

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.             Establishment
  of off-track wagering facilities

  (identify
  with specificity)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.             Net
  yet disbursed or used by NJSEA

  (retained in the segregated interest bearing account as provided for in
  Section 2.03 of the Agreement)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

	
  Annual
  Report prepared by:

  	
   

  	
   

  	
  Date:

  	
   

  

 

 

Form 2B

(Name of Recipient Entity)

 

RECIPIENT ENTITY

20   ANNUAL
REPORT

(circle applicable due date)

 

	
  March 31, 2009

  	
  March 31, 2010

  	
  March 31, 2011

  	
  March 31, 2012

  

 

A.         Annual
Report Requirement

 

Each entity (“Recipient Entity”) that receives funds from the New
Jersey Sports & Exposition Authority (“NJSEA”) under the 2008 Purse
Enhancement Agreement (“Agreement”) by and between NJSEA, the Casino
Association of New Jersey (the “CANJ”), the Casino Reinvestment Development
Authority (“CRDA”) and the Casinos shall deliver Annual Reports (“Annual
Report”) to the NJSEA no later than each due date listed above (“Due Dates”)
beginning with the first Due Date after it first receives any Installment
Payment funds. Nevertheless, no Annual Report shall be due from a Recipient
Entity on a particular Due Date if it has already accounted for the use of all
Installment Payment funds it has received as of that Due Date in a prior Annual
Report.

 

Each Annual Report shall be prepared by an independent accounting firm
licensed to do business in the State of New Jersey (“Firm”) and presented in
the format below as an attachment to the Firm’s letter which shall identify it
as a report completed by the Firm after its review of the books and records of
the Recipient Entity.

 

Such procedures should be performed in accordance with AICPA standards
for agreed upon procedures.

 

All capitalized terms in the Annual Report shall
have the meaning attributed to them in the Agreement unless specifically
defined otherwise herein.

 

B.          Receipt of Installment
Payment Funds:

 

The Firm preparing this report states that, on the basis of its review
of the books and records of the Recipient Entity, during the calendar year
2008, 2009, 2010, 2011 (circle one), the Recipient Entity identified above
received from the NJSEA pursuant to the Agreement:

 

 

	
  PEA Installment Payment funds in the total amount
  of:

  	
   

  	
  $

  	
   

  	
   

  
	
  Interest earned on PEA funds held in interest
  bearing account:

  	
   

  	
  $

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

C.         Use of Installment
Payment Funds:

 

The Firm preparing this report states that, on the
basis of its review of the books and records of the Recipient Entity, during
the calendar year 2008, 2009, 2010, 2011 (circle one), the funds identified in
Item B above have been used by the Recipient Entity identified above in the amounts
as set forth below:

 

	
  Purse Enhancements

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Breeder’s purses

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Racetrack and Horsemen Employee Benefits

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Not yet used

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  

 

 

	
  Annual
  Report prepared by:

  	
   

  	
   

  	
  Date:Exhibit 10.30

 

January 23,
2009

 

 

François-Xavier Frapaise,
MD

PMB 80 PO Box 5000

Rancho Santa Fe, CA  92067

 

Dear Xavier:

 

It is with great pleasure
that I offer you the position of Senior Vice President and Chief Scientific
Officer with Optimer Pharmaceuticals, Inc. reporting to me.

 

Associated with
this opportunity, the Company offers the following compensation and benefits:

 

1.               Annual Salary:  $280,000  US
Dollars, paid semi-monthly in arrears in accordance with the Company’s payroll
practices.

 

2.               Optimer offers a competitive benefit
package to you and your eligible dependents that includes Medical, Dental,
Vision, Group Term Life Insurance, Long Term Disability Insurance, a 401(k) plan
and several voluntary benefit options.

 

3.               Stock Options: The Company will provide
you with the following long-term incentive compensation arrangement in
accordance with the terms of Company’s 2006 Equity Incentive Plan (“Equity
Incentive Plan”).

 

Following
commencement of your employment and pending approval by Optimer’s Board of
Directors, you will be granted an Option to purchase 120,000 shares of Optimer
Pharmaceuticals, Inc. common Stock at the current fair market value on the
date of the grant.  The vesting schedule
for this Option is over a four year period with a one-year cliff and monthly
vesting thereafter.

 

4.               Optimer has 11 official holidays.  In addition, you will begin accruing paid
vacation at a rate of 17 days per year (5.67 hours per pay period) beginning
with your first pay period as a full-time employee.  You will also be provided with 5 days of sick
time per year.

 

5.               Incentive
Compensation Plan.  Optimer has an
incentive compensation plan which provides for the payment of cash bonuses to
our Chief Executive Officer, Vice Presidents, and Director-level employees.  The position of Chief Scientific Officer will
be eligible for a target bonus of a Vice President level position.   Target incentive compensation for a Vice
President level is 35% of annual salary. 
Actual bonuses paid under the Plan are based on the achievement of
established corporate and individual goals and require board approval.  Plan participants must be hired by July 1st to participate in the plan year.  Bonus amounts will be pro-rated for plan
participants that are hired after January 1st, but before July 1st in the plan
year.

 

 

6.               Severance Benefit Plan.  Optimer has a severance benefit plan and
attached is a summary of our plan provisions. 
Your position will be eligible for benefits at the Company Officer and
Vice President level.

 

Please understand that
this offer is contingent upon your consent for Optimer, through an outside
firm, to complete a criminal background check and verification of information
provided on your employment application.  
Attached is a form for you to complete giving Optimer authorization to
conduct your background investigation.

 

We would like you to
start on or before March 1st,
2009.

 

You should be
aware that your employment with the Company is for no specified period and
constitutes at-will employment.  As a result,
you are free to resign at any time, for any reason or for no reason.  Similarly, the Company is free to conclude
its employment relationship with you at any time, with or without cause, and
with or without notice.

 

For purposes of federal
immigration law, you will be required to provide to the Company documentary
evidence of your identity and eligibility for employment in the United
States.  Such documentation must be
provided to us within three (3) business days of your date of hire, or our
employment relationship with you may be terminated.

 

As a Company employee,
you will be expected to abide by company rules and regulations.  You will be specifically required to sign an
acknowledgment that you have read and understand the company rules of
conduct, which is included in our employee handbook.  You will also be expected to sign and comply
with an Employee Proprietary Information Agreement, which requires, among other
provisions, the assignment of patent rights to any invention made during your
employment at the Company and non-disclosure of proprietary information.   You will receive a copy of our Employee
Proprietary Information Agreement for your review with this employment offer
and also enclosed is our employee handbook and benefit summary.

 

We look forward to
working with you as part of the Optimer team. 
If you accept the position, please let Diane McCarty know and sign and
return your acceptance letter along with the authorization for the background
investigation.  Diane can be reached at
dmccarty@ optimerpharma.com, or 858-909-0736, ext. 139.

 

Best Regards,

 

 

	
  /s/
  Michael N. Chang

  	
   

  
	
  Michael N. Chang

  	
   

  
	
  Chief Executive Officer

  	
   

  

 

 

	
  I accept the offer as
  stipulated above:

  	
   

  	
  /s/ Francois-Xavier
  Frapaise

  	
   

  	
  1/27/09

  
	
   

  	
   

  	
  Signature

  	
   

  	
  Date

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