COLLATERAL ACCOUNT AGREEMENT
 
COLLATERAL ACCOUNT AGREEMENT dated February 23, 2011 (this "Agreement"), made by
EXCX Funding Corp., a Nevada corporation (the "Pledgor"), in favor of Barry
Honig as collateral agent (in such capacity, the "Collateral Agent") for the
"Lenders" (as defined below).
 
WITNESSETH:
 

WHEREAS,  each party listed as a "Lender" on the Schedule “A” attached hereto
have made certain loans (the “Loans”) pursuant to a Credit Facility Agreement of
even date herewith (the “Credit Agreement”) by and among The Empire Sports &
Entertainment Holdings Co., a Nevada corporation (the “Parent”),The Empire
Sports & Entertainment, Co., a Nevada corporation (the “Operating Sub”), and
EXCX  Funding Corp.,  a Nevada corporation, collectively as Borrowers, and Barry
Honig and Michael Brauser, (each a "Lender" and collectively, the "Lender")(the
“Loans”) to or for the benefit of Pledgor;
 
WHEREAS,  Pledgor (i) has opened account number _________ (the "Collateral
Account") with J.P. Morgan (together with any successor entity, the
"Intermediary") and (ii) is entering into this Agreement for the benefit of
Collateral Agent and Lenders providing for the pledge to Collateral Agent, for
the benefit of Lender, of a security interest in the Collateral Account,
including, without limitation, all, cash now or hereafter held therein, as
collateral security for the repayment of the Loans;

WHEREAS, Pledgor has determined that the execution, delivery and performance of
this Agreement directly benefits, and is in the best interest of, Pledgor;

NOW, THEREFORE, in consideration of the premises and agreements herein, the
Pledgor hereby agrees with the Collateral Agent as follows:
 
SECTION 1.     Definitions.  All terms used in this Agreement which are defined
in the Notes or Article 8 or 9 of the Uniform Commercial Code (the "Code") in
effect in the State of New York from time to time and which are not otherwise
defined herein shall have the same meanings herein as set forth therein.  All
capitalized terms not defined herein or in the Code shall be defined in the same
manner as in the Credit Agreement  .
 
SECTION 2.     Security Interest.  As security for the due and punctual payment
of the Obligations (as defined in Section 3 hereof), the Pledgor hereby pledges,
assigns and grants to the Collateral Agent, for the benefit of the Lenders, a
continuing security interest in and lien on, all of the Pledgor's right, title
and interest in and to the following (the "Collateral"):  (i) the Collateral
Account, all amounts which may now or hereafter be on deposit in the Collateral
Account, including without limitation, all cash now or hereafter held in the
Collateral Account; (ii) all interest, cash, and other property from time to
time received, receivable, or otherwise distributed in respect of or in exchange
for any or all of the then existing Collateral; and (iii) to the extent not
described above, all proceeds of any and all of the foregoing Collateral.
 
 
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SECTION 3.    Obligations.  The security interest created hereby in the
Collateral constitutes continuing collateral security for all of the following
obligations, whether now existing or hereafter incurred (the "Obligations"):the
prompt payment by the Pledgor, as and when due and payable (whether upon demand,
acceleration or otherwise), of all amounts from time to time owing by them to
the Collateral Agent or any Lender under the Loans, including, without
limitation, all principal and interest under the Loans (including amounts that,
but for the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, would become due), indemnities, fees, costs, expenses or
otherwise; and
 
SECTION 4.    Establishment of the Cash Collateral Account; Delivery of the
Collateral.  The Pledgor has established and will maintain the Collateral
Account with the Intermediary.  At any time upon the occurrence and during the
continuance of an Event of Default of the Loans , the Collateral shall be held
by the Intermediary in the Collateral Account pursuant to the terms hereof and a
deposit account control agreement, in form and substance satisfactory to the
Collateral Agent, in its sole discretion (the "Control Agreement") among the
Pledgor, the Collateral Agent, on behalf of the Lenders and the Intermediary.
The Collateral Account shall be under the sole dominion and control of the
Collateral Agent and the Pledgor shall have no right to give any instructions on
the Collateral Account without the prior written consent of the Collateral
Agent.
 
SECTION 5.    Application of Amounts in Cash Collateral Account.  At any time
upon the occurrence and during the continuance of an Event of Default of the
Loans (as defined in the Credit Facility Agreement), the Collateral Agent may
apply all or part of the cash held in the Cash Collateral Account to the payment
of all or any part of the Obligations in such manner as the Collateral Agent may
elect.
 
SECTION 6.    Representations and Warranties.  The Pledgor hereby represents and
warrants as follows:
 
(a)      The Pledgor (i) is a corporation organized, validly existing and in
good standing under the laws of the State of Nevada, and (ii) has all requisite
corporate power and authority required to carry on its business as now conducted
and as presently contemplated.
 
(b)      The execution, delivery and performance by the Pledgor of this
Agreement (i) are within the corporate powers of the Pledgor, (ii) have been
duly authorized by all necessary corporate action, (iii) do not contravene, or
constitute a default under, any applicable law or regulation, the certificate of
incorporation or bylaws of the Pledgor or any agreement, indenture, judgment,
injunction, order, decree or other instrument binding upon the Pledgor or its
properties, and (iv) do not result in the creation of any lien, security
interest or other charge or encumbrance (except as provided in or contemplated
by this Agreement) upon or with respect to any of its properties.
 
(c)      This Agreement constitutes the legal, valid and binding obligation of
the Pledgor, enforceable against the Pledgor in accordance with its terms.
 
(d)      No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body is required for
(i) the due execution, delivery and performance by the Pledgor of this
Agreement, (ii) the grant by the Pledgor, or the perfection, of the security
interest purported to be created hereby in the Collateral or (iii) the exercise
by the Collateral Agent of any of its rights and remedies hereunder.
 
 
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(e)     This Agreement creates a valid security interest in favor of the
Collateral Agent, for the benefit of the Lenders, in the Collateral, as security
for the Obligations.  Upon execution and delivery of the Control Agreement, such
security interest shall be a perfected, first priority security interest and all
action necessary to perfect and protect such security interest shall have been
duly taken.
 
(f)      The Pledgor is and will be at all times the legal and beneficial owner
of the Collateral and has and will at all times have good and marketable title
thereto, free and clear of any lien, security interest, or other charge or
encumbrance, except for the security interest created by this Agreement.
 
SECTION 7.    Covenants of the Pledgor.  So long as any Obligation shall remain
outstanding, unless the Collateral Agent shall otherwise consent in writing:
 
(a)      The Pledgor agrees that it will not, (i) sell, assign (by operation of
law or otherwise), or otherwise dispose of any interest in the Collateral, or
(ii) create or suffer to exist any lien, security interest, or other charge or
encumbrance upon or with respect to any Collateral, except for the security
interest purported to be created in the Collateral by this Agreement.
 
(b)      The Pledgor will not, without the prior written consent of the
Collateral Agent, cancel, terminate, amend, modify or waive any provision of any
agreement, document or other instrument constituting Collateral, or enter into
any agreement or permit to exist any restriction with respect to any Collateral
other than pursuant hereto.
 
(c)       The Pledgor will, at its expense, defend the Collateral Agent's right,
title and security interest in and to the Collateral against the claims of any
person or entity.
 
(d)       The Pledgor will not take or fail to take any action which would in
any manner impair the enforceability of the Collateral Agent's security interest
in and to the Collateral.
 
(e)       The Pledgor will, at its expense, promptly deliver to the Collateral
Agent a copy of each notice or other communication received by it in respect of
the Collateral.
 
SECTION 8.    Additional Provisions Concerning the Collateral.
 
(a)       The Pledgor agrees that at any time and from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or that
the Collateral Agent may reasonably request in order (i) to perfect and protect
any pledge, lien and security interest purported to be created hereby; (ii) to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder in respect of the Collateral; or (iii) to otherwise effect the
purposes of this Agreement.  If the Pledgor fails to perform any agreement or
obligation contained herein, the Collateral Agent itself may perform or cause
performance of such agreement or obligation, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable to the Collateral Agent
by the Pledgor pursuant to Section 10 hereof.
 
 
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(b)       The Pledgor hereby authorizes the Collateral Agent to file, without
the signature of the Pledgor where permitted by law, one or more financing or
continuation statements, and amendments thereto, relating to the Collateral.
 
(c)       The Pledgor hereby irrevocably appoints the Collateral Agent the
Pledgor's attorney-in-fact, such appointment to become effective upon an Event
of Default, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time until this Agreement shall
terminate, in the Collateral Agent's discretion to take any action and to
execute any instrument which the Collateral Agent, in its sole and reasonable
discretion, may deem necessary to accomplish the purposes of this Agreement.
 
SECTION 9.    Remedies Upon Default.  If any Event of Default shall have
occurred and be continuing, the Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a Collateral Agent
on default under the Uniform Commercial Code then in effect in the State of New
York and may apply the Collateral to pay or to provide for the future payment of
all or any part of the Obligations in such order as the Collateral Agent may
elect.  In the event that the proceeds of the Collateral are insufficient to pay
all amounts to which the Collateral Agent is or will legally be entitled, the
Pledgor shall be liable for the deficiency, together with interest thereon at
the rate specified in the Notes for interest on overdue principal thereof, but
not to exceed the maximum rate permitted by law (together with the costs of
collection and attorneys' fees).
 
SECTION 10.   Indemnity and Expenses.
 
(a)       The Pledgor agrees to indemnify the Collateral Agent from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement, except for any such claims, losses or liabilities arising from the
Collateral Agent's gross negligence or willful misconduct.
 
(b)      The Pledgor agrees to pay upon demand to the Collateral Agent the
amount of any and all costs and expenses, including attorneys' fees, which the
Collateral Agent may incur in connection with (i) the custody or preservation
of, or collection of any Collateral or the exercise or enforcement of any of the
rights of the Collateral Agent hereunder, or (ii) the failure by the Pledgor to
perform or observe any of the provisions hereof.
 
SECTION 11.   Notices, Etc.  All notices and other communications provided for
hereunder shall be in writing and delivered as specified in the Purchase
Agreement.
 
 
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SECTION 12.   Continuing Security Interest; Termination.  This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until all Obligations shall have been paid in full, (ii)
be binding on the Pledgor and its successors and assigns and (iii) inure,
together with all rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and its successors, transferees and assigns in
respect of the Loans.  Without limiting the generality of the foregoing, the
Collateral Agent may assign or otherwise transfer any of its rights hereunder to
any party, and such other party shall thereupon become vested with all of the
benefits in respect thereof granted to the Collateral Agent herein or
otherwise.  None of the rights or obligations of the Pledgor hereunder may be
assigned or otherwise transferred without the prior written consent of the
Collateral Agent.  Upon satisfaction in full of all Obligations, (A) this
Agreement and the security interest created hereby shall terminate and all
rights to the Collateral shall revert to the Pledgor, and (B) the Collateral
Agent will, upon the Pledgor's written request and at the Pledgor's expense,
execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination, but without representation,
warranty or recourse of any kind.
 
SECTION 13.   Miscellaneous.
 
(a)       No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the Pledgor and the Collateral Agent, and
no waiver of any provision of this Agreement, and no consent to any departure by
the Pledgor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
 
(b)      No failure on the part of the Collateral Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.  The rights and
remedies of the Collateral Agent provided herein are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law or in
any other document or agreement.  The rights of the Collateral Agent hereunder
against any party thereto are not conditional or contingent on any attempt by
the Collateral Agent to exercise any of its rights under any documents or
agreements delivered or executed in connection with the Loans against such party
or against any other person or entity.
 
(c)       Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.
 
(d)       This Agreement shall be governed by and construed in accordance with
the law of the State of New York applicable to contracts made and to be
performed therein (without regard to conflict of laws principles).
 
(e)       EACH OF THE PLEDGOR AND (BY ITS ACCEPTANCE OF THIS AGREEMENT) THE
COLLATERAL AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR
OTHER ACTION OF THE PARTIES HERETO AND EACH HEREBY AGREES THAT ALL CLAIMS
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE HEARD AND DETERMINED IN A
NEW YORK STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK OR OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.
 
 
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SECTION 14.   Obligation Unconditional; Continuing Security Interest.

(a)           All rights and interests of the Collateral Agent hereunder, and
all agreements and obligations of the Pledgor hereunder, shall remain in full
force and effect irrespective of: (i) any lack of validity or enforceability of
the Loans, (ii) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the notes evidencing the Loans
(iii) any exchange or release of, or non-perfection of any lien on or security
interest in, any collateral for any of the Obligations or (iv) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor or any other person or entity in respect of the
Obligations.

(b)           The Pledgor hereby waives (i) promptness and diligence, (ii)
notice of acceptance and notice of the incurrence of any Obligation by the
Pledgor, (iii) notice of any actions taken by the Collateral Agent or any other
person in connection with the Loans, any other documents executed in connection
with the Loans or any other agreement, document or instrument relating thereto,
(iv) all other notices, demands and protests, and all other formalities of every
kind in connection with the enforcement of the Obligations, the omission of or
delay in which, but for the provisions of this subsection (b), might constitute
grounds for relieving the Pledgor of any of its obligations hereunder and (v)
any requirement that the Collateral Agent protect, secure, perfect or insure any
security interest or other lien on any property subject thereto or exhaust any
right or take any action against the Pledgor or any other person or any
collateral.
 
 
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be executed and
delivered as of the date first above written.

   
EXCX FUNDING CORP.
         
By:
/s/ Sheldon Finkel
     
Name:  Sheldon FInkel
     
Title:CEO
ACCEPTED BY:
         
Barry Honig, Collateral Agent
         
/s/ Barry Honig
   

 
 
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 SCHEDULE A
 
Name of Lender
 
Barry Honig
 
Michael Brauser

 
 
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