Exhibit 10.4

NOTE EXCHANGE AGREEMENT

This Note Exchange Agreement (this “Agreement”), dated as of December 28, 2017
(the “Effective Date”), is made by and among Empire Resorts, Inc., a Delaware
corporation (“Parent”), Montreign Holding Company, LLC, a New York limited
liability company and a wholly-owned subsidiary of Parent (the “Company”), and
Kien Huat Realty III Limited, a corporation organized in the Isle of Man (the
“Holder”). All capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Loan Documents (as defined below).

WHEREAS, the Company issued to Holder a Promissory Note, dated January 24, 2017,
in the original principal amount of Thirty Two Million Three Hundred Twenty
Thousand Dollars ($32,320,000.00) (the “Note”), which evidences the loan made by
the Holder pursuant to that certain Loan Agreement, dated January 24, 2017, by
and between the Company and Holder (the “Loan Agreement”);

WHEREAS, in connection with the Loan Agreement, Parent entered into a Pledge and
Security Agreement, dated January 24, 2017, with Holder, pursuant to which
Parent pledged all of the issued and outstanding membership interests of the
Company (the “Company Equity Interests”) as collateral (the “Pledged
Collateral”) to secure the Company’s performance of its Obligations under the
Note and the Loan Agreement (the “Pledge Agreement” and, together with the Loan
Agreement and the Note, the “Loan Documents”);

WHEREAS, Parent intends to enter into that certain Delayed Draw Term Loan
Agreement, dated December 28, 2017, with Bangkok Bank PCL (the “Bangkok Loan
Agreement”) and, in connection therewith, Parent and Holder have entered into
that certain Loan Agreement, dated December 28, 2017 (the “Backstop Loan
Agreement” and, together with the Bangkok Loan Agreement, the “Bangkok Loan
Documents”);

WHEREAS, in connection with the Bangkok Loan Documents, Parent and the Company
desire to cause the Note to be repaid, and the obligations of the Company
represented under the Note and the Loan Agreement to be cancelled, by exchanging
shares of the Parent’s common stock, par value $0.01 per share (the “Common
Stock”), for the Note as set forth herein;

WHEREAS, the Holder desires to acquire shares of Common Stock in exchange for
the satisfaction and the cancellation of the Note and the release of all
obligations of Parent and Company under the Loan Documents;

WHEREAS, Parent, the Company and Holder are entering into this Agreement to set
forth the terms and conditions applicable to the exchange of the Note for shares
of Common Stock; and

WHEREAS, the Closing of the Exchange (each as defined below) is a condition to
the closing of the transactions contemplated by the Bangkok Loan Documents.

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, the Parent and the Holder mutually agree as follows.

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ARTICLE I

EXCHANGE OF NOTE AND COMMON STOCK

Section 1. Exchange.

Section 1.1. Holder hereby agrees, subject to the terms and conditions set forth
herein, to exchange the Indebtedness due under the Note, including due but
unpaid interest accrued as of the Effective Date, for 1,379,873 shares of Common
Stock (the “Exchange Shares”) at an exchange price of $26.21 per share (the
“Exchange”).

Section 1.2. Subject to the terms and conditions of this Agreement, the
consummation of the Exchange shall take place at a closing (the “Closing”) to be
held at 12:00 p.m. on December 28, 2017, at the offices of Ellenoff Grossman &
Schole, LLP, or at such other time, date or place as the parties hereto may
mutually agree upon.

Section 1.2.1. At the Closing, the Holder shall deliver the Note for
cancellation and Parent shall deliver to Holder certificates representing the
Exchange Shares. Immediately upon the Closing, the rights and obligations of the
Company and Holder pursuant to the Loan Agreement shall cease, terminate and be
of no further force or effect. Notwithstanding the foregoing, the
representations and the provisions of and undertakings and indemnification set
forth in Sections 4.05, 8.15 and 8.18 of the Loan Agreement shall survive the
satisfaction and payment in full of the Note and the termination of the Loan
Agreement.

Section 1.2.2. Immediately upon the cancellation of the Note at the Closing, the
Pledge Agreement shall immediately cease, terminate and be of no further force
and effect. In connection therewith, the Security Interest held by Holder with
respect to the Pledged Collateral shall immediately be released and, effective
upon such release, the Company Equity Interests shall no longer be deemed
“Pledged Collateral” for any purpose under the Pledge Agreement or the other
Loan Documents. Upon the request of Parent and at Parent’s sole cost and
expense, Holder shall deliver to Parent, without any representations, warranties
or recourse of any kind whatsoever, such of the Pledged Collateral as then may
be held or controlled by Holder hereunder, and execute and deliver to Parent
such documents as Parent may reasonably request to evidence such termination,
including, without limitation, UCC termination statements; provided that if
Holder has misplaced or is otherwise unable to deliver the Pledged Collateral
(including any certificate evidencing the Company Equity Interests, along with
the membership powers endorsed in blank), Holder shall execute and deliver to
Parent a lost certificate affidavit and customary indemnity with respect to the
Pledged Collateral. Holder agrees, at the request and sole cost and expense of
Parent, to notify any third party reasonably requested by Parent of such
termination.

Section 1.3. Any certificate or certificates representing the Exchange Shares
will bear the following legend, together with any and all other legends as may
be required pursuant to applicable law (and Parent may issue appropriate
corresponding stop transfer instructions to any transfer agent for any of such
securities):

“The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Act”) and neither the securities
nor any interest therein may be offered, sold, transferred, or otherwise
disposed of except pursuant to (i) an effective registration statement under the
Act, (ii) to the extent applicable Rule 144 under the Act (or any similar rule
under such Act relating to the disposition of securities) or (iii) an opinion of
counsel of the issuer that an exemption from registration under the Act is
available.”

 

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1. Parent and Company Representations and Warranties. Parent and the
Company, as applicable, represents and warrants to Holder that:

Section 2.1.1. Each of Parent and the Company has the requisite corporate or
limited liability company (as applicable) power and authority to execute,
deliver and perform its obligations under this Agreement, and each of Parent and
the Company has taken all necessary corporate or limited liability company (as
applicable) action to authorize the execution, delivery and performance of this
Agreement and the consummation of the Exchange.

Section 2.1.2. This Agreement has been duly executed and delivered by each of
Parent and the Company and, assuming the due authorization, execution and
delivery by each of the other parties hereto, constitutes the valid and binding
agreement of Parent and the Company enforceable against such parties in
accordance with its terms.

Section 2.1.3. When issued pursuant to this Agreement in connection with the
Exchange, the Exchange Shares will be duly authorized, validly issued, fully
paid and non-assessable and free from all preemptive or similar rights, taxes,
liens, charges and other encumbrances.

Section 2.2. Holder Representations and Warranties. Holder represents and
warrants to the Parent and the Company that:

Section 2.2.1. Holder has all requisite power and authority to execute and
deliver, and perform its obligations under, this Agreement. All acts required to
be taken by the Holder to enter into this Agreement and consummate the
transactions contemplated hereby have been properly taken.

Section 2.2.2. Holder is the record and beneficial holder of the Note, and holds
the Note free and clear of all claims, liens, security interests, title defects
and objections or any other encumbrances of any kind or nature whatsoever.

Section 2.2.3. Holder is acquiring the Exchange Shares being delivered to Holder
under this Agreement for its own account and with no present intention of
distributing or selling any of them in violation of the Act or any applicable
state securities law. Holder will not sell or otherwise dispose of any of such
Exchange Shares unless such sale or other disposition has been registered or is
exempt from registration under the Act and has been registered or qualified or
is exempt from registration or qualification under applicable state securities
laws. Holder understands that the Exchange Shares it is acquiring under this
Agreement have not been registered under the Act by reason of their contemplated
issuance in transactions exempt from the registration and prospectus delivery
requirements of the Act and that the reliance of Parent and the Company on this
exemption is predicated in part on these representations and warranties of
Holder. Holder acknowledges and agrees that a restrictive legend consistent with
the foregoing has been or will be placed on the certificates for the Exchange
Shares and related stop transfer instructions will be noted in the transfer
records of the Parent and/or its transfer agent for the Exchange Shares, and
that Holder will not be permitted to sell, transfer or assign any of the
Exchange Shares acquired hereunder until such Exchange Shares are registered or
an exemption from the registration and prospectus delivery requirements of the
Act is available.

 

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Section 2.2.4. Holder (i) is either (x) a “Qualified Institutional Buyer” as
such term is defined in Rule 144A under the Act or (y) an “accredited investor”
as such term is defined in Rule 501 of Regulation D promulgated under the Act;
(ii) has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the investments to be made by
it hereunder; (iii) has the ability to bear the economic risks of its
investments for an indefinite period of time; and (iv) has sole investment
discretion with respect to the Exchange; and (v) has been given an opportunity
to obtain such information from the Parent and the Company as Holder deems
necessary or appropriate with respect to the Exchange.

ARTICLE III

CONDITIONS RELATING TO THE CLOSING

Section 3.1. Conditions to the Obligations of Holder. The obligation of Holder
to consummate the transactions to be performed hereunder are, unless otherwise
indicated, subject to the satisfaction of the following conditions on or prior
to the Closing, unless such conditions are waived by the Holder with respect to
the Closing:

Section 3.1.1. The representations and warranties of Parent and the Company set
forth in Section 2.1 shall be true and correct on and as of the date of Closing.

Section 3.1.2. All proceedings, corporate or otherwise, required to be taken by
Parent or the Company, as applicable, on or prior to the date of Closing in
connection with this Agreement and the Exchange contemplated hereby shall have
been duly and validly taken and all necessary consents, approvals or
authorizations required to be obtained by Parent or the Company, as applicable,
on or prior to the Closing shall have been obtained.

Section 3.1.3. Parent shall have issued and delivered, or caused to be issued
and delivered, to Holder, a certificate, registered in the name of Holder,
representing the Exchange Shares.

Section 3.2. Conditions to the Obligations of Parent and the Company. The
obligations of Parent and the Company to consummate the transactions to be
performed hereunder are, unless otherwise indicated, subject to the satisfaction
of the following conditions on or prior to the Closing, unless such conditions
are waived by the Parent or the Company with respect to the Closing:

Section 3.2.1. The representations and warranties of Holder set forth in
Section 2.2 shall be true and correct on and as of the date of Closing.

Section 3.2.2. All proceedings, corporate or otherwise, required to be taken by
Holder on or prior to the date of Closing in connection with this Agreement and
the Exchange contemplated hereby shall have been duly and validly taken and all
necessary consent, approvals or authorizations required to be obtained by Holder
on or prior to the Closing shall have been obtained.

Section 3.2.3. Holder shall have delivered, or caused to be delivered, to the
Company the Note.

Section 3.2.4. Holder shall have delivered to Parent or the Company, as
applicable, such other documents, certificates or other information as Parent or
the Company, as applicable, may reasonably request pursuant to Section 1.2.2
hereof.

 

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ARTICLE IV

MISCELLANEOUS

Section 4.1. Successors and Assigns. This Agreement shall bind and inure to the
benefit of Parent, the Company and Holder and their respective successors and
permitted assigns.

Section 4.2. Governing Law; Waiver of Jury Trial. All questions concerning the
construction, interpretation and validity of this Agreement shall be governed by
and construed and enforced in accordance with the domestic laws of the State of
New York without giving effect to any choice or conflict of law provision or
rule (whether in the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York. In furtherance of the foregoing, the internal law of the State of New
York will control the interpretation and construction of this Agreement, even if
under such jurisdiction’s choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.

Section 4.3. Amendments, Modifications and Waivers. The terms and provisions of
this Agreement may not be modified or amended, nor may any of the provisions
hereof be waived, temporarily or permanently, except pursuant to a written
instrument executed by Parent, the Company and Holder.

Section 4.4. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective must be in writing and, unless
otherwise expressly provided herein, are deemed to have been duly given or made
when delivered by hand or by courier or when transmitted electronically and a
confirmation of transmission received by the sender. Notices to the respective
parties hereto must be addressed as follows:

If to Parent:

Empire Resorts, Inc.

c/o Monticello Casino and Raceway

204 State Route 17B

P.O. Box 5013

Monticello, New York 12701

Attention: Ryan Eller, President and Chief Executive Officer

Email: reller@empireresorts.com

If to the Company:

Montreign Holding Company, LLC

c/o Monticello Casino and Raceway

204 State Route 17B

P.O. Box 5013

Monticello, New York 12701

Attention: Ryan Eller, President and Chief Executive Officer

Email: reller@empireresorts.com

If to Holder:

Kien Huat Realty III Limited

c/o 21st Floor Wisma Genting

 

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Jalan Sultan Ismail

Kuala Lumpur

Malaysia

Attention: Gerard Lim

Email: gerard.lim@hienhuat.com

Section 4.5. Expenses. The Company shall reimburse Holder upon receipt of
written notice from Holder for (i) all documented and reasonable out-of-pocket
costs and expenses incurred by Holder (or any of its affiliates) in connection
with this Agreement, including reasonable legal fees and disbursements,
accounting fees and any other third-party diligence materials; (ii) all
documented and reasonable out-of-pocket costs and expenses incurred by Holder
(or any of its affiliates) in connection with (A) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Parent, the Company or by Holder and
(B) enforcing or preserving any rights, in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting the Company or Parent, this Agreement, or
the other Loan Documents; and (iii) all documented and reasonable out-of-pocket
costs and expenses (including attorney’s fees) incurred by Holder (or any of its
affiliates) in connection with the enforcement of any obligations of Parent or
the Company under this Agreement.

Section 4.6. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

Section 4.7. Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
agreement among the parties with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto.

Section 4.8. Regulatory Matters. Notwithstanding anything to the contrary set
forth in this Agreement, Holder acknowledges that its rights, remedies and
powers under this Agreement will be subject to any applicable laws, rules and
regulations of the Governmental Authorities, including all laws, rules,
regulations, orders and other enactments applicable to gaming privileges,
operations or activities with respect to the Parent or the Company, and that
approvals, licenses and consents from the Governmental Authorities may be
required in connection therewith.

Section 4.9. Counterparts; Facsimile Signatures. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one agreement. Facsimile counterpart signatures to this Agreement
shall be acceptable and binding.

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Note Exchange
Agreement as of the date first written above.

 

EMPIRE RESORTS, INC. By:  

/s/ Ryan Eller

  Name: Ryan Eller   Title: President and Chief Executive Officer MONTREIGN
HOLDING COMPANY, LLC By:  

/s/ Ryan Eller

  Name: Ryan Eller   Title: President and Chief Executive Officer KIEN HUAT
REALTY III LIMITED By:  

/s/ Gerard Lim Ewe Keng

  Name: Gerard Lim Ewe Keng   Title: Authorized Signatory

[Signature Page to Note Exchange Agreement]