Exhibit 10.2
 
 
 

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REGISTRATION RIGHTS AGREEMENT

 
by and between

 
Kien Huat Realty III Limited

 
and

 
Empire Resorts, Inc.

 
 
 
_____________________

 
Dated as of August 19, 2009
 
 
 

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TABLE OF CONTENTS
 

   
Page
Section 1
Certain Definitions
1
Section 2
Registration
5
Section 3
Piggyback Registrations
8
Section 4
Suspension Periods
9
Section 5
Holdback Agreements
10
Section 6
Registration Procedures
10
Section 7
Registration Expenses
15
Section 8
Indemnification
15
Section 9
Securities Act Restrictions
18
Section 10
Transfers of Rights
18
Section 11
Miscellaneous
19
     
Annex A
Form of Opinions of Counsel
 

 
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THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of August 19, 2009, by and between Kien Huat Realty III Limited, an Isle of
Man corporation (the “Investor”), and Empire Resorts, Inc., a Delaware
corporation (the “Company”).
 
WHEREAS, the Company and the Investor are parties to that certain Investment
Agreement, dated August 19, 2009 (the “Investment Agreement”), pursuant to which
the Company has agreed to issue an aggregate of up to 34,506,040 shares of
common stock, par value $.01 per share (the “Company Shares”) in exchange for
the Purchase Price (as defined in the Investment Agreement); and
 
WHEREAS, in connection with the consummation of the transactions contemplated by
the Investment Agreement, the parties desire to enter into this Agreement in
order to create certain registration rights for the Investor as set forth below.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
 
SECTION 1

 
CERTAIN DEFINITIONS
 
1.1           As used in this Agreement, the terms below shall have the meanings
specified below:
 
“Adverse Effect” shall have the meaning specified in Section 2(d).
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person.  For purposes of this definition, “control”
(including, with correlative meaning, the terms “controlling” and “controlled”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
 
“Agreement” shall have the meaning specified in the preamble to this Agreement.
 
“Availability Default” shall have the meaning specified in Section 2(g).
 
“beneficially own” means, with respect to any Person, securities of which such
Person or any of such Person’s Affiliates, directly or indirectly, has
“beneficial ownership” as determined pursuant to Rule 13d-3 and Rule 13d-5 of
the Exchange Act, including securities beneficially owned by others with whom
such Person or any of its Affiliates has agreed to act together for the purpose
of acquiring, holding, voting or disposing of such securities; provided that a
Person shall not be deemed to “beneficially own” (a) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person’s Affiliates until such tendered securities are accepted for payment,
purchase or exchange; (b) any security as a result of an oral or written
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding:  (i) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and (ii) is not
also then reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report).
 

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“Business Day” means a day other than a Saturday, a Sunday or a day on which
commercial banking institutions in the State of New York are authorized or
obligated by law to close.
 
“Company” shall have the meaning specified in the preamble to this Agreement.
 
“Company Shares” shall have the meaning specified in the first recital to this
Agreement.
 
“Effectiveness Default” shall have the meaning specified in Section 2(g).
 
“Exchange Act” means the Securities Exchange Act of 1934 and the rules
promulgated by the SEC thereunder.
 
“Filing Default” shall have the meaning specified in Section 2(g).
 
“FINRA” means the Financial Industry Regulatory Authority created in July 2007
through the consolidation of the National Association of Securities Dealers and
the member regulation, enforcement and arbitration functions of the NYSE.
 
“Form S-3” means a registration statement on Form S-3 under the Securities Act
or such successor forms thereto permitting registration of securities under the
Securities Act.
 
“Governmental Entity” means any federal, state, local or foreign court,
government or political subdivision or department thereof, or any governmental
administrative or regulatory body.
 
“Holdback Agreement” shall have the meaning specified in Section 5.
 
“Holdback Period” shall have the meaning specified in Section 5.
 
“Indemnified Party” shall have the meaning specified in Section 8(c).
 
“Indemnifying Party” shall have the meaning specified in Section 8(c).
 
“Initial Registration Request” shall have the meaning specified in Section 2(a).
 
“Investor” shall have the meaning specified in the preamble to this
Agreement.  References herein to the Investor shall apply to Permitted
Transferees who obtains the rights of the Investor pursuant to Section 10,
provided that (a) all obligations of the Investor and its Permitted Transferees
hereunder shall be several, and not joint and several; and (b) for purposes of
all thresholds and limitations herein, the actions of the Investor and any
Permitted Transferees shall be aggregated.
 
“Investment Agreement” means the agreement specified in the first recital
hereto, as such agreement may be amended, supplemented or otherwise modified
from time to time.
 
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“IRA” means that certain Investor Rights Agreement, dated as of July 27, 2009,
by and among the Company and the Warrantholders.
 
“Minimum Amount” means, at any time, 5% of the total Company Shares then
outstanding.
 
“Park Avenue Holders” means (a) each of the persons who executes the IRA as
“Warrantholders”; and (b) any other person (i) who is a transferee, directly or
indirectly, of shares registrable pursuant to the IRA from a Warrantholder and
(ii) who shall have become a party to the IRA in accordance with its terms.
 
“Person” means an individual, corporation, partnership, trust, limited liability
company, branch of any legal entity, unincorporated organization, joint stock
company, joint venture, association, other entity or Governmental Entity.
 
“Permitted Transferee” means any Affiliate of the Investor to whom rights and
obligations are transferred under this Agreement.
 
“Piggyback Registration” shall have the meaning specified in Section 3(a).
 
“Prospectus” means the prospectus or prospectuses (whether preliminary or final)
included in any Registration Statement and relating to Registrable Securities,
as amended or supplemented, and including all material incorporated by reference
in such prospectus or prospectuses.
 
“Purchase Price” shall have the meaning specified in the Investment Agreement.
 
“Registrable Securities” means, at any time, (a) Company Shares issued to the
Investor pursuant to the terms of the Investment Agreement or acquired and held
by the Investor whether or not from the Company; and (b) any Company Shares or
any other security issued by the Company after the date hereof in respect of the
Company Shares referenced in (a) by way of a share dividend or share split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization, until, in respect of any Company Shares, the earliest
to occur of the date on which (i) the resale of such Company Shares has been
registered pursuant to the Securities Act and such Company Shares have been
disposed of in accordance with the Registration Statement relating to such
resale; (ii) such Company Shares are sold to the Company; and (iii) the entire
amount of the Registrable Securities held by the Investor may be sold in a
single sale pursuant to Rule 144 of the Securities Act.
 
“Registration” shall have the meaning specified in Section 2(a).
 
“Registration Expenses” shall have the meaning specified in Section 7(a).
 
“Registration Statement” means any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement whether or not pursuant to a request of the Investor, including the
Prospectus, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all documents incorporated by
reference in such Registration Statement.
 
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“S-3 Shelf Registration Statement” means a Registration Statement (including any
amendment or supplement thereto) on Form S-3 for the continuous sale or resale
of securities including Registrable Securities.
 
“SEC” means the Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933 and the rules promulgated by
the SEC thereunder.
 
“Suspension Period” shall have the meaning specified in Section 4.
 
“Termination Date” means the first date on which there are no Registrable
Securities.  For the avoidance of doubt, this Agreement shall not terminate upon
the termination of the Investment Agreement.
 
“underwritten offering” means a registered offering in which securities of the
Company are sold to one or more underwriters on a firm commitment basis for
offering to the public.
 
1.2           Interpretation.  When a reference is made in this Agreement to an
article, section, exhibit or schedule, such reference shall be to an article or
section of, or an exhibit or schedule to, this Agreement unless otherwise
indicated.  The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation.”  Unless the context otherwise requires, the
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.  The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine genders of such term.  Any agreement, instrument or statute defined or
referred to herein or any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time amended,
modified, supplemented or replaced, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor agreements, instruments or statutes.  Any agreement or
instrument referred to herein shall include reference to all exhibits, schedules
and other documents or agreements attached thereto or incorporated therein.
 
SECTION 2

 
REGISTRATION
 
(a)           Right to Request Registration.  Subject to the provisions of this
Agreement, at any time until the Termination Date, the Investor may request that
the Company register (a “Registration”) for public resale by the Investor all or
any portion of the Registrable Securities held by the Investor; provided,
however, that immediately upon execution of this Agreement, the Investor shall
be deemed to have requested that the Company register all of the Company Shares
issued to the Investor pursuant to the terms of the Investment Agreement on an
S-3 Shelf Registration Statement (the “Initial Registration Request”).  Upon
such request, and subject to Sections 4 and 6, the Company shall use reasonable
best efforts (i) to, at any time when the Company is eligible to use Form S-3,
file an S-3 Shelf Registration Statement (or any amendment or supplement
thereto) covering the number of Registrable Securities specified in such request
under the Securities Act for public resale in accordance with the method of
disposition specified in such request within 15 Business Days after the date of
the Investor’s written request therefor; (ii) if the Company is not eligible to
file an S-3 Shelf Registration Statement, to file a Registration Statement
(other than an S-3 Shelf Registration Statement) registering for resale such
number of Registrable Securities as requested to be so registered pursuant to
this Section within 20 Business Days after the date of the Investor’s request
therefor; and (iii) to cause such Registration Statement to be declared
effective by the SEC as soon as practicable thereafter.  If permitted under the
Securities Act, such Registration Statement shall be one that is automatically
effective upon filing.  Notwithstanding anything contained herein to the
contrary, the Company shall not be obligated to (i) effect a Registration
pursuant to this Section 2(a) within 120 days after the effective date of a
previous Registration; (ii) to effect a Registration pursuant to this Section
2(a) unless the request is for a number of Registrable Securities with a market
value that is equal to at least $100,000 as of the date of such request; or
(iii) to effect more than five Registrations pursuant to this Section 2(a).
 
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(b)           Underwritten Offerings.  At the request of the Investor, any sale
of Registrable Securities, whether pursuant to a Registration or an existing S-3
Shelf Registration Statement, shall be an underwritten offering;
provided, however, that (based on the then-current outstanding Company Shares)
the number of Registrable Securities included in such offering would be at least
equal to the Minimum Amount; and provided further, that the Company shall not be
required to provide for or cooperate with a sale of Registrable Securities,
whether pursuant to a Registration or an existing S-3 Shelf Registration
Statement, pursuant to an underwritten offering as requested by the Investor, on
more than two occasions in any 12-month period unless consented to by the
Company.
 
(c)           Selection of Underwriters.  If any of the Registrable Securities
are to be sold in an underwritten offering initiated by the Investor, the
Investor shall select the managing underwriter or underwriters to lead the
offering, subject to the reasonable consent of the Company.
 
(d)           Priority.  The Company may include Company Shares other than
Registrable Securities in a Registration for any accounts (including for the
account of the Company) on the terms provided in this Agreement.  For any
underwritten offering, the Company may include Company Shares other than
Registrable Securities for any accounts (including for the account of the
Company), but only with the consent of the managing underwriters of such
offering.  If the managing underwriters of the requested offering advise the
Company and the Investor that in their opinion the number of Company Shares
proposed to be included in the offering exceeds the number of Company Shares
that can be sold in such underwritten offering without having the effect of
materially delaying or jeopardizing the success of the offering (including the
price per share of Company Shares proposed to be sold in such offering) (an
“Adverse Effect”), the Company shall include in such offering (i) first, the
number of Registrable Securities that the Investor proposes to sell; (ii)
second, the number of Company Shares proposed to be included therein by any Park
Avenue Holder thereof, pro rata among such Park Avenue Holders on the basis of
the number of Company Shares owned by each such Park Avenue Holder; and (iii)
third, the number of Company Shares proposed to be included therein by any other
Persons (including Company Shares to be sold for the account of the Company)
allocated among such Persons in such manner as the Company may determine.  If
the number of Company Shares that the managing underwriters determine can be
sold in such underwritten offering without having an Adverse Effect is less than
the number of Company Shares proposed to be registered pursuant to clause (i)
above by the Investor, the full amount of Company Shares to be sold shall be
allocated to the Investor.
 
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(e)           Right to Effect Sales.  The Investor shall be entitled, at any
time and from time to time when an S-3 Shelf Registration Statement is effective
and until the Termination Date, to offer and sell such Registrable Securities as
are then registered pursuant to such Registration Statement, but only upon not
less than 10 Business Days’ prior written notice to the Company (if such sale is
to be underwritten) or such other period as may be reasonably necessary for the
Company to comply with the covenants contained in Section 6(a), in each case to
the extent relevant to such offering.  The Investor shall give the Company
prompt written notice of the consummation of each such sale (whether or not
underwritten).
 
(f)           Effective Period of Registration Statements.
 
(i)           The Company shall use reasonable best efforts to keep the
Registration Statement effective for a period of 366 days, in the case of an S-3
Shelf Registration Statement, or 180 days in the case of any other Registration
Statement or, if shorter in each case, until the first to occur of (x) the date
on which all Registrable Securities covered by such Registration Statement shall
have been sold by the Investor; and (y) the Termination Date, provided that such
period in (x) shall be extended by the number of days in any Suspension Period
commenced pursuant to Section 4 during such period (as it may be so extended)
and by the number of days in any period commenced during such period (as it may
be so extended).
 
(g)           Liquidated Damages.  Subject to the terms and conditions of this
Agreement (including Sections 4 and 6 hereof), if the Company does not (i) file
an S-3 Shelf Registration Statement (or such other Registration Statement as may
be appropriate in the circumstances) as and when required under this Agreement
with respect to any Registrable Securities, other than as a result of the SEC
being unable to accept such filings (a “Filing Default”); or (ii) cause (A) such
S-3 Shelf Registration Statement (or such other Registration Statement) to be
declared effective by the SEC; and (B) such Registrable Securities to be
approved for listing on NASDAQ within 10 Business Days of the Investor request
(an “Effectiveness Default”), then the Company shall pay the Investor (or, if
applicable, the relevant Permitted Transferee(s)) cash in an amount equal to 1%
of the value of such Registrable Securities held by the Investor (or, if
applicable, the relevant Permitted Transferee(s)) at the close of business on
the second Business Day following such Filing Default or Effectiveness
Default.  Following effectiveness of the Registration Statement and listing of
the Registrable Securities on NASDAQ, subject to the terms and conditions of
this Agreement (including Sections 4 and 6 hereof), if at any time the
Registration Statement ceases to be effective and available for resale of the
Registrable Securities covered by such Registration Statement (an “Availability
Default”), the Company shall pay the Investor (or such Permitted Transferee(s))
cash in an amount equal to 1% of the value of the Registrable Securities subject
to such Registration Statement (or, if applicable, the relevant Permitted
Transferees) for each month that such Availability Default continues (pro rated
for any partial month).  Payment of liquidated damages resulting from an
Availability Default shall be made on the first day of each month or such
earlier date as such Availability Default shall have been cured.  Any amount due
but not paid by the Company pursuant to this subsection shall bear interest at a
daily compounded rate equal to 12% per annum or the highest rate permitted by
applicable law, whichever is lower, from and including the due date therefor
through but excluding the date of payment.  Liquidated damages payable hereunder
shall be paid by wire transfer of immediately available funds to an account
designated in writing by the Investor to the Company.
 
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(h)           Investment Agreement Restrictions.  Nothing in this Agreement
shall affect the provisions of the Investment Agreement related to Company
Shares, which shall apply independently hereof in accordance with the terms
thereof.
 
SECTION 3

 
PIGGYBACK REGISTRATIONS
 
(a)           Right to Piggyback.  Whenever prior to the Termination Date the
Company proposes to register any Company Shares under the Securities Act (other
than on a registration statement on Form S-8 or S-4), whether for its own
account or for the account of one or more holders of Company Shares (other than
the Investor), and the form of registration statement to be used may be used for
any registration of Registrable Securities (a “Piggyback Registration”), the
Company shall give written notice to the Investor of its intention to effect
such a registration and, subject to Sections 3(b) and 3(c), shall include in
such registration statement and in any offering of Company Shares to be made
pursuant to that registration statement all Registrable Securities with respect
to which the Company has received a written request for inclusion therein from
the Investor within five Business Days after the Investor’s receipt of the
Company’s notice or, in the case of a primary offering, such shorter time as is
reasonably specified by the Company in light of the circumstances (provided that
only Registrable Securities of the same class or classes as Company Shares being
registered may be requested to be included).  The Company shall have no
obligation to proceed with any Piggyback Registration and may abandon, terminate
and/or withdraw such registration for any reason at any time.  If the Company or
any other Person other than the Investor proposes to sell Company Shares in an
underwritten offering pursuant to a registration statement on Form S-3 under the
Securities Act, such offering shall be treated as a primary or secondary
underwritten offering pursuant to a Piggyback Registration.
 
(b)           Priority on Primary Piggyback Registrations.  If a Piggyback
Registration is initiated as a primary underwritten offering on behalf of the
Company and the managing underwriters advise the Company and the Investor (if
the Investor has elected to include Registrable Securities in such Piggyback
Registration) that in their opinion the number of Company Shares proposed to be
included in such offering exceeds the number of Company Shares (of any class)
which can be sold in such offering without having an Adverse Effect, the Company
shall include in such registration and offering (i) first, the number of Company
Shares that the Company proposes to sell; and (ii) second, the number of Company
Shares proposed to be included therein by any Park Avenue Holder thereof, pro
rata among such Park Avenue Holders on the basis of the number of Company Shares
owned by each such Park Avenue Holder; and (iii) third, the number of Company
Shares requested to be included therein by other holders of Company Shares,
including the Investor (if the Investor has elected to include Registrable
Securities in such Piggyback Registration), pro rata among all such other
holders on the basis of the number of Company Shares requested to be included
therein by all such other holders or as such other holders and the Company may
otherwise agree (with allocations among different classes of Company Shares, if
more than one are involved, to be determined by the Company).  If the number of
Company Shares that may be sold is less than the number of Company Shares
proposed to be registered pursuant to clause (i) above by the Company, the full
amount of Company Shares to be sold shall be allocated to the Company.
 
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(c)           Priority on Secondary Piggyback Registrations.  If a Piggyback
Registration is initiated as an underwritten registration on behalf of a holder
of Company Shares other than the Investor (and the Investor has elected to
include Registrable Securities in such Piggyback Registration), and the managing
underwriters advise the Company that in their opinion the number of Company
Shares proposed to be included in such registration exceeds the number of
Company Shares (of any class) which can be sold in such offering without having
an Adverse Effect, then the Company shall include in such registration
(i) first, the number of Company Shares requested to be included therein by the
holder(s) initially requesting such registration; (ii) second, the number of
Company Shares requested to be included therein by other holders of Company
Shares, including the Investor (if the Investor has elected to include
Registrable Securities in such Piggyback Registration), pro rata among such
holders on the basis of the number of Company Shares requested to be included
therein by such holders or as such holders and the Company may otherwise agree
(with allocations among different classes of Company Shares, if more than one
are involved, to be determined by the Company); and (iii) third, the number of
Company Shares that the Company proposes to sell.
 
(d)           Selection of Underwriters.  If any Piggyback Registration is a
primary or secondary underwritten offering, the Company, subject to the rights
of the Park Avenue Holders pursuant to the IRA, shall have the right to select
the managing underwriter or underwriters to administer any such offering.
 
(e)           Basis of Participation.  The Investor may not sell Registrable
Securities in any offering pursuant to a Piggyback Registration unless it (i)
agrees to sell such Company Shares on the same basis provided in the
underwriting or other distribution arrangements approved by the Company and that
apply to the Company and/or any other holders involved in such Piggyback
Registration; and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, lockups and other documents
required under the terms of such arrangements.
 
SECTION 4

 
SUSPENSION PERIODS
 
The Company may (i) delay the filing or effectiveness of a Registration
Statement in conjunction with a Registration or (ii) prior to the pricing of any
underwritten offering or other offering of Registrable Securities pursuant to a
Registration, delay such underwritten or other offering (and, if it so chooses,
withdraw any Registration Statement that has been filed), but in each case
described in clauses (i) and (ii) only if the Company determines in its
reasonable judgment (A) that proceeding with such an offering would require the
Company to disclose material information that would not otherwise be required to
be disclosed at that time and that the disclosure of such information at that
time would not be in the Company’s best interest; or (B) that the registration
or offering to be delayed would, if not delayed, materially adversely affect the
Company and its subsidiaries taken as a whole or materially interfere with, or
jeopardize the success of, any pending or proposed material transaction,
including any debt or equity financing, any acquisition or disposition, any
recapitalization or reorganization or any other material transaction, whether
due to commercial reasons, a desire to avoid premature disclosure of information
or any other reason.  Any period during which the Company has delayed a filing,
effectiveness or an offering pursuant to this Section is herein called a
“Suspension Period.”  The Company shall provide prompt written notice to the
Investor of the commencement and termination of any Suspension Period (and any
withdrawal of a Registration Statement pursuant to this Section) but shall not
be obligated under this Agreement to disclose the reasons therefor.  The
Investor shall keep the existence of any Suspension Period confidential and
refrain from making offers and sales of Registrable Securities (and direct any
other Affiliates making such offers and sales to refrain from doing so) during
each Suspension Period.  In no event (x) may the Company deliver notice of a
Suspension Period to the Investor more than two times in any calendar year; (y)
shall a Suspension Period or Suspension Periods be in effect for an aggregate of
60 days or more in any calendar year and (z) may the Company deliver notice of a
Suspension Period to the Investor or otherwise attempt to exercise its rights
pursuant to clauses (i) and (ii) of this Section 4 in connection with the
Initial Registration Request.
 
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SECTION 5

 
HOLDBACK AGREEMENTS
 
The restrictions in this Section shall apply for as long as the Investor is the
beneficial owner of any Registrable Securities.  If the Company sells Company
Shares or other securities convertible into or exchangeable for (or otherwise
representing a right to acquire) Company Shares in a primary underwritten
offering pursuant to any registration statement under the Securities Act (but
only if the Investor is provided its piggyback rights, if any, in accordance
with Sections 3(a) and 3(b)), or if any other Person sells Company Shares in a
secondary underwritten offering pursuant to a Piggyback Registration in
accordance with Sections 3(a) and 3(c), and if the managing underwriters for
such offering advise the Company (in which case the Company promptly shall
notify the Investor) that a public sale or distribution of Company Shares
outside such offering would materially adversely affect such offering, then, if
requested by the Company, the Investor shall agree, as contemplated in this
Section, not to sell, or request the registration of, any Registrable Securities
(or any securities of any Person that are convertible into or exchangeable for,
or otherwise represent a right to acquire, any Registrable Securities) for a
period (each such period, a “Holdback Period”) beginning on the 15th day before
the pricing date for the underwritten offering and extending through the earlier
of (a) the 90th day after such pricing date (subject to customary extensions);
and (b) such earlier day (if any) as may be designated for this purpose by the
managing underwriters for such offering (each such agreement of the Investor, a
“Holdback Agreement”).  Each Holdback Agreement shall be in writing in form and
substance satisfactory to the Company and the managing
underwriters.  Notwithstanding the foregoing, the Investor shall not be
obligated to make a Holdback Agreement unless the Company and each selling
shareholder in such offering also execute agreements substantially similar to
such Holdback Agreement relating to public sales or distributions of Company
Shares outside the applicable offering.
 
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SECTION 6

 
REGISTRATION PROCEDURES
 
(a)           Whenever the Investor requests that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use reasonable best
efforts to effect, as soon as practicable and otherwise as and when provided
herein, the registration and (if applicable) the sale of such Registrable
Securities in accordance with the intended methods of disposition thereof, and,
pursuant thereto, the Company shall, as soon as practicable as provided herein:
 
(i)           subject to the other provisions of this Agreement, use reasonable
best efforts to prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities and cause such Registration Statement to
become effective (unless it is automatically effective upon filing);
 
(ii)           use reasonable best efforts to prepare and file with the SEC such
amendments and supplements to such Registration Statement and the Prospectus
used in connection therewith as may be necessary to comply with the applicable
requirements of the Securities Act and to keep such Registration Statement
effective for the relevant period required hereunder, but no longer than is
necessary to complete the distribution of Company Shares covered by such
Registration Statement, and to comply with the applicable requirements of the
Securities Act with respect to the disposition of all Company Shares covered by
such Registration Statement during such period in accordance with the intended
methods of disposition set forth in such Registration Statement;
 
(iii)           use reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any Registration Statement, or the lifting
of any suspension of the qualification or exemption from qualification of any
Registrable Securities for sale in any jurisdiction in the United States;
 
(iv)           deliver, without charge, such number of copies of the preliminary
and final Prospectus and any supplement thereto as the Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities of
the Investor covered by such Registration Statement in conformity with the
requirements of the Securities Act;
 
(v)           use reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such U.S.
jurisdictions as the Investor reasonably requests and continue such registration
or qualification in effect in such jurisdictions for as long as the applicable
Registration Statement may be required to be kept effective under this
Agreement; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it or any of its subsidiaries
would not otherwise be required to qualify but for this subparagraph (v);
(B) subject itself or any of its subsidiaries to taxation in any such
jurisdiction; or (C) consent to general service of process for itself or any of
its subsidiaries in any such jurisdiction;
 
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(vi)           notify the Investor and each distributor of such Registrable
Securities identified by the Investor, at any time when a Prospectus relating
thereto would be required under the Securities Act to be delivered by such
distributor, of the occurrence of any event as a result of which the Prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and,
at the request of the Investor, the Company shall use reasonable best efforts to
prepare, as soon as practical, a supplement or amendment to such Prospectus so
that, as thereafter delivered to any prospective purchasers of such Registrable
Securities, such Prospectus shall not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
 
(vii)           on the effective date of any Registration Statement filed
pursuant to Section 2(a), the Company shall cause to be delivered to the
Investor (i) an opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP,
counsel for the Company (or such other counsel reasonably acceptable to the
Investor), dated the effective date and addressed to the Investor, substantially
to the effect set forth in Annex A hereto and otherwise in form and substance
reasonably satisfactory to the Investor; and (ii) to the extent allowed pursuant
to professional standards, a customary comfort letter of Friedman LLP,
independent accountants to the Company, dated the effective date and addressed
to the Investor, confirming that they are independent accountants within the
meaning of the Securities Act and the Exchange Act and the respective applicable
rules and regulations adopted by the SEC thereunder and otherwise in form and
substance reasonably satisfactory to the Investor;
 
(viii)                      in the case of any block trade (whether on a
principal or agency basis) involving Registrable Securities, whether pursuant to
a Registration Statement or otherwise, take all such other customary and
reasonable actions as the Investor or the relevant dealer may request in order
to facilitate the disposition of such Registrable Securities pursuant to such
block trade, including the entry into any agreement for the indemnification of
such dealer and the provision of opinions of counsel and comfort letters that
are consistent with customary and reasonable practices for such transactions;
 
(ix)           in the case of an underwritten offering in which the Investor
participates pursuant to a Registration or a Piggyback Registration, enter into
an underwriting agreement in substantially the form used by the Company at that
time for underwritten offerings of that kind, with appropriate modification,
containing such provisions (including provisions for indemnification, lockups,
opinions of counsel and comfort letters), and take all such other customary and
reasonable actions as the managing underwriters of such offering may request in
order to facilitate the disposition of such Registrable Securities (including,
making members of senior management of the Company available at reasonable times
and places to participate in  “road-shows” that the managing underwriter
determines are necessary to effect the offering);
 
(x)           to the extent not prohibited by applicable law, (A) make
reasonably available, for inspection by the Investor, a prospective purchaser in
case of a block trade, or the managing underwriters in case of an underwritten
offering and any attorneys and accountants acting for the Investor, such
prospective purchaser or such managing underwriters, pertinent corporate
documents and financial and other records of the Company and its subsidiaries;
(B) cause the Company’s officers and employees to supply information reasonably
requested by the Investor, such prospective purchaser or such managing
underwriters or attorneys in connection with such offering; (C) make the
Company’s independent accountants available for the Investor’s, such prospective
purchaser’s or such managing underwriter’s due diligence and have them provide
customary comfort letters to the Investor  or such managing underwriters in
connection therewith; and (D) cause the Company’s counsel to furnish customary
legal opinions to the Investor or such  managing underwriters in connection
therewith; provided, however, that such records and other information shall be
subject to such confidential treatment as is customary for  due diligence
reviews;
 
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(xi)           use reasonable best efforts to cause all such Registrable
Securities to be listed on NASDAQ or any successor primary securities exchange
(if any) on which Company Shares are then listed;
 
(xii)           provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement and,
a reasonable time before any proposed sale of Registrable Securities pursuant to
a Registration Statement, provide the transfer agent with printed certificates
for the Registrable Securities to be sold or such other applicable evidence of
such Registrable Securities, subject to the provisions of Section 10;
 
(xiii)                      make generally available to its shareholders a
consolidated earnings statement (which need not be audited unless required by
law, including the Securities Act) for a period of 12 months beginning after the
effective date of the Registration Statement as soon as reasonably practicable
after the end of such period, which earnings statement shall satisfy the
requirements of an earning statement under Section 11(a) of the Securities Act
and Rule 158 thereunder; and
 
(xiv)                      promptly notify the Investor and the managing
underwriters of any underwritten offering, if any:
 
(A)           when the Registration Statement, any pre-effective amendment, the
Prospectus or any Prospectus supplement or any post-effective amendment to the
Registration Statement has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
 
(B)           of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for any additional information
regarding the Investor;
 
(C)           of the notification to the Company by the SEC of its initiation of
any proceeding with respect to the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement; and
 
(D)           of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under
the applicable securities or blue sky laws of any jurisdiction.
 
For the avoidance of doubt, the provisions of clauses (ix), (xiii) and (xiv) of
this Section shall apply only in respect of an underwritten offering and only if
the number of Registrable Securities to be sold in the offering would (based on
the then-current outstanding Company Shares) be at least equal to the Minimum
Amount.
 
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(b)           No Registration Statement (including any amendments thereto) shall
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading, and no Prospectus (including any supplements thereto) shall contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, in each case, except for any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission of a material fact made in reliance on and in conformity with written
information furnished to the Company by or on behalf of the Investor or any
underwriter or other distributor specifically for use therein.
 
(c)           At all times after the Company has filed a Registration Statement
with the SEC pursuant to the requirements of the Securities Act and until the
Termination Date, the Company shall use reasonable best efforts to continuously
maintain in effect the registration of Company Shares under Section 12 of the
Exchange Act and to use reasonable best efforts to file all reports required to
be filed by it under the Securities Act and the Exchange Act.
 
(d)           The Company may require the Investor and each distributor of
Registrable Securities as to which any Registration is being effected to furnish
to the Company documentation and information regarding such Person and the
distribution of such securities as the Company may from time to time reasonably
request in connection with such Registration.
 
(e)           The Investor agrees by having Company Shares treated as
Registrable Securities hereunder that, upon being advised in writing by the
Company of the occurrence of an event pursuant to Section 6(a)(vi), the Investor
will immediately discontinue (and direct any other Affiliates making offers and
sales of Registrable Securities to immediately discontinue) offers and sales of
Registrable Securities pursuant to any Registration Statement (other than those
pursuant to a plan that is in effect prior to such time and that complies with
Rule 10b5-1 of the Exchange Act) until it is advised in writing by the Company
that the use of the Prospectus may be resumed and is furnished with a
supplemented or amended Prospectus as contemplated by Section 6(a)(vi), and, if
so directed by the Company, the Investor will deliver to the Company all copies,
other than permanent file copies then in the Investor’s possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
 
(f)           The Company may prepare and deliver an issuer free writing
prospectus (as such term is defined in Rule 405 under the Securities Act) in
lieu of any supplement to a Prospectus, and references herein to any
“supplement” to a Prospectus shall include any such issuer free-writing
prospectus.  Neither the Investor nor any other seller of Registrable Securities
may use a free writing prospectus to offer or sell any such shares without the
Company’s prior written consent.
 
(g)           It is understood and agreed that any failure of the Company to
file a registration statement or any amendment or supplement thereto or to cause
any such document to become or remain effective or usable within or for any
particular period of time as provided in Section 2, 3, or 6 or otherwise in this
Agreement, due to reasons that are not reasonably within its control, or due to
any refusal of the SEC to permit a registration statement or prospectus to
become or remain effective or to be used because of unresolved SEC comments
thereon (or on any documents incorporated therein by reference) despite the
Company’s good faith and reasonable best efforts to resolve those comments,
shall not be a breach of this Agreement (and will not trigger any liquidated
damages under Section 2(g)).
 
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(h)           It is further understood and agreed that the Company shall not
have any obligations under this Section at any time on or after the Termination
Date, unless an underwritten offering in which the Investor participates has
been priced but not completed prior to the Termination Date, in which event the
Company’s obligations under this Section shall continue with respect to such
offering until it is so completed (but not more than 90 days after the
commencement of the offering).
 
(i)           Notwithstanding anything to the contrary in this Agreement, the
Company shall not be required to file a Registration Statement or include
Registrable Securities in a Registration Statement unless it has received from
the Investor, at least five Business Days prior to the anticipated filing date
of the Registration Statement, information and documents reasonably required by
the Company to be provided by the Investor.
 
SECTION 7

 
REGISTRATION EXPENSES
 
(a)           All reasonable expenses incident to the Company’s performance of
or compliance with this Agreement, including all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, FINRA filing
fees, listing application fees, printing expenses, transfer agent’s and
registrar’s fees, cost of distributing Prospectuses in preliminary and final
form as well as any supplements thereto, and fees and disbursements of counsel
for the Company and all independent certified public accountants and other
Persons retained by the Company (but not including any underwriting discounts or
commissions attributable to the sale of Registrable Securities or fees and
expenses of counsel and any other advisors representing any underwriters or
other distributors), shall be borne by the Company (such expenses being herein
called “Registration Expenses”).  The Investor shall bear the cost of all
underwriting discounts and commissions associated with any sale of Registrable
Securities and shall pay all of its own costs and expenses of any sale under
this Agreement, including all fees and expenses of any counsel (and any other
advisers) representing the Investor and any stock transfer taxes.
 
(b)           The obligation of the Company to bear the expenses described in
Section 7(a) shall apply irrespective of whether a registration, once properly
demanded or requested becomes effective or is withdrawn or suspended; provided,
however, that Registration Expenses for any Registration Statement withdrawn
solely at the request of the Investor (unless withdrawn following commencement
of a Suspension Period pursuant to Section 4) shall be borne by the Investor.
 
SECTION 8

 
INDEMNIFICATION
 
(a)           The Company shall indemnify, to the fullest extent permitted by
law, the Investor and each Person who controls the Investor (within the meaning
of the Securities Act) against all losses, claims, damages, liabilities,
judgments, costs (including reasonable costs of investigation) and expenses
(including reasonable attorneys’ fees) arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or any amendment thereof or supplement thereto
(including any “free writing prospectus” filed by the Company (as defined in
Rule 433 under the Securities Act)) or arising out of or based upon any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are made in reliance and in conformity with information furnished in
writing to the Company by the Investor expressly for use therein.  In connection
with an underwritten offering in which the Investor participates conducted
pursuant to a registration effected hereunder, the Company shall indemnify each
participating underwriter and each Person who controls such underwriter (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Investor.
 
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(b)           In connection with any Registration Statement in which the
Investor is participating, the Investor shall furnish to the Company in writing
such information as the Company reasonably requests for use in connection with
any such Registration Statement or Prospectus, or amendment or supplement
thereto, and shall indemnify, to the fullest extent permitted by law, the
Company, its officers and directors and each Person who controls the Company
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities, judgments, costs (including reasonable costs of investigation) and
expenses (including reasonable attorneys’ fees) arising out of or based upon any
untrue or alleged untrue statement of material fact contained in the
Registration Statement or Prospectus, or any amendment or supplement thereto
(including any “free writing prospectus” (as defined in Rule 405 of the
Securities Act and required to be filed by the Company with the SEC or retained
by the Company under Rule 433 of the Securities Act), or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to
the extent that the same are made in reliance and in conformity with information
furnished in writing to the Company by or on behalf of the Investor expressly
for use therein.  The Investor agrees that, unless it has or shall have obtained
the prior written consent of the Company, it has not made and will not make any
offer relating to the Registrable Securities that would constitute a “free
writing prospectus”  (as defined in Rule 405 of the Securities Act).
 
(c)           Any Person entitled to indemnification hereunder (an “Indemnified
Party”) shall give written notice to the party indemnifying it (the
“Indemnifying Party”) of any claim with respect to which it seeks
indemnification promptly after discovery by such Indemnified Party of any
matters giving rise to a claim for indemnification.  Such notice shall describe
such claim in reasonable detail.  Failure to so notify the Indemnifying Party
shall not relieve the Indemnifying Party from any liability that it may have to
an Indemnified Party except to the extent that the Indemnifying Party is
actually prejudiced thereby.  The Indemnified Party shall permit such
Indemnifying Party to assume the defense of such claim with counsel reasonably
satisfactory to the Indemnified Party.  An Indemnifying Party who is entitled
to, and elects to, assume the defense of a claim shall not be obligated to pay
the fees and expenses of more than one counsel (in addition to one local
counsel) for Persons indemnified (hereunder or otherwise) by such Indemnifying
Party with respect to such claim (and all other claims arising out of the same
circumstances), unless in the reasonable judgment of any Indemnified Party there
may be one or more legal or equitable defenses available to such Indemnified
Party which are in addition to or may conflict with those available to another
Indemnified Party with respect to such claim, in which case such maximum number
of counsel for all Indemnified Parties shall be two rather than one.  If any
Indemnifying Party is entitled to, and elects to, assume the defense of a claim,
the Indemnified Party shall continue to be entitled to participate in the
defense thereof, with counsel of its own choice, but, except as set forth above,
the Indemnifying Party shall not be obligated to reimburse the Indemnified Party
for the costs thereof.  If the Indemnifying Party assumes the defense of any
claim, all Indemnified Parties shall deliver to the Indemnifying Party copies of
all notices and documents (including court papers) received by the Indemnified
Party related to the claim, and each Indemnified Party shall cooperate in the
defense or prosecution of such claim.  Such cooperation shall include the
retention and (upon the Indemnifying Party’s request) the provision to the
Indemnifying Party of records and information that are reasonably relevant to
such claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.  The Indemnifying Party shall not be subject to any liability for any
settlement made by the Indemnified Party without the Indemnifying Party's
written consent (but such consent will not be unreasonably withheld or
delayed).  The Indemnifying Party shall not consent to the entry of any judgment
or enter into or agree to any settlement relating to a claim or action for which
any Indemnified Party would be entitled to indemnification by any Indemnifying
Party hereunder unless such judgment or settlement imposes no ongoing
obligations on any such Indemnified Party and includes as an unconditional term
the giving, by all relevant claimants and plaintiffs to such Indemnified Party,
of a release, reasonably satisfactory in form and substance to such Indemnified
Party, from all liabilities in respect of such claim or action for which such
Indemnified Party would be entitled to such indemnification.  The Indemnifying
Party shall not be liable hereunder for any amount paid or payable or incurred
pursuant to or in connection with any judgment entered or settlement effected
with the consent of an Indemnified Party unless the Indemnifying Party has also
consented to such judgment or settlement.
 
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(d)           The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the Indemnified Party or any officer, director or controlling Person of such
Indemnified Party and shall survive the transfer of securities and the
Termination Date but only with respect to offers and sales of Registrable
Securities made before the Termination Date or during the period following the
Termination Date referred to in Section 6(h).
 
(e)           If the indemnification provided for in or pursuant to this
Section is due in accordance with the terms hereof, but is held by a court to be
unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
which result in such losses, claims, damages, liabilities or expenses as well as
any other relevant equitable considerations.  The relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party, and by such Party’s relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  In no event shall the liability of the Indemnifying
Party be greater in amount than the amount for which such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 8(a) or 8(b) hereof had been
available under the circumstances.
 
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SECTION 9

 
SECURITIES ACT RESTRICTIONS
 
The Registrable Securities are restricted securities under the Securities Act
and may not be offered or sold except pursuant to an effective registration
statement or an available exemption from registration under the Securities
Act.  Accordingly, the Investor shall not, directly or through others, offer or
sell any Registrable Securities except pursuant to a Registration Statement or
pursuant to an exemption from, or a transaction not subject to, registration
under the Securities Act.
 
SECTION 10

 
TRANSFERS OF RIGHTS  
 
If the Investor transfers any Registrable Securities to an Affiliate, such
Affiliate shall be a Permitted Transferee and such Permitted Transferee shall,
together with all other such Permitted Transferees and the Investor, also have
the rights of the Investor under this Agreement with respect to such Registrable
Securities (including all of the Investor’s rights in Section 8), but only
if the Permitted Transferee signs and delivers to the Company a written
acknowledgment that it has joined with the Investor and the other Permitted
Transferees as a party to this Agreement and has assumed, severally but not
jointly, the rights and obligations of the Investor hereunder with respect to
the Registrable Securities transferred to it by the Investor.  Each such
transfer shall be effective when (but only when) the Permitted Transferee has
signed and delivered the written acknowledgment to the Company's reasonable
satisfaction.  Upon any such effective transfer, the Permitted Transferee shall
automatically have the rights so transferred, and the Investor’s obligations
under this Agreement, and the rights with respect to the Registrable Securities
not so transferred, shall continue.  Notwithstanding any other provision of this
Agreement, no Person who acquires securities transferred in violation of this
Agreement or the Investment Agreement, or who acquires securities that are not
or upon acquisition cease to be Registrable Securities, shall have any rights
under this Agreement with respect to such securities, and such securities shall
not have the benefits afforded hereunder to Registrable Securities.
 
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SECTION 11

 
MISCELLANEOUS
 
(a)           Notices.  All notices, requests, demands, consents and other
communications given or required to be given under this Agreement and under the
related documents shall be in writing and delivered to the applicable party at
the address indicated below:
 
(i)           If to the Investor:
 
Kien Huat Realty III Limited
c/o Kien Huat Realty Sdn Bhd.
22nd Floor Wisma Genting
Jalan Sultan Ismail
50250 Kuala Lumpur
Malaysia
Attention:  Gerard Lim
Fax:  +603 2162 4951
 
with a copy to:
 
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006
Attention:  Steven L. Wilner
Fax:  (212) 225-3999
 
(ii)           If to the Company:
 
Empire Reports, Inc.
Monticello Casino and Raceway
Route 17B, P.O. Box 5013
Monticello, NY  12701
Attention:  Joseph Bernstein
Fax:  (845) 807-0000
 
with a copy to:
 
Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Attention:  Robert H. Friedman
Fax:  (212) 451-2222
 
 
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this subsection.  All notices may be sent by facsimile, or registered or
certified mail, return receipt requested, postage prepaid.  Notice shall be
effective upon actual receipt thereof at designated address.
 
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(b)           No Waivers.  Any term, condition or provision of this Agreement
may be waived to the extent permitted by law in writing at any time by the party
that is entitled to the benefits thereof.  The waiver of any breach of any
provision under this Agreement by any party shall not be deemed to be a waiver
of any preceding or subsequent breach under this Agreement.  No such waiver
shall be effective unless in writing.
 
(c)           Assignment.  Neither this Agreement nor any right, remedy,
obligation nor liability arising hereunder or by reason hereof shall be
assignable by any party hereto without the prior written consent of the other
party, and any attempt to assign any right, remedy, obligation or liability
hereunder without such consent shall be void, except an assignment, in the case
of a merger or consolidation where such party is not the surviving entity, or a
sale of substantially all of its assets, to the entity which is the survivor of
such merger or consolidation or the purchaser in such sale; provided, however,
that the Investor shall have the right to assign its rights and obligations
hereunder to one or more of its Affiliates in connection with a transfer to such
Affiliate(s) of Registrable Securities.
 
(d)           No Third-Party Beneficiaries.  Except as provided in Section 8,
nothing contained in this Agreement, expressed or implied, is intended to confer
upon any person or entity other than the Company and the Investor (and any
Permitted Transferee to which an assignment is made in accordance with this
Agreement), any benefits, rights, or remedies.
 
(e)           Governing Law; Submission to Jurisdiction; Waiver of Jury Trial,
Etc.  This Agreement will be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.  The parties hereto agree that any suit, action or
proceeding brought by either party seeking to enforce any provision of, or based
on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in any federal or state court
located in New York County, New York.  Each of the parties hereto submits to the
jurisdiction of any such court in any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of, or in
connection with, this Agreement or the transactions contemplated hereby and
hereby irrevocably waives the benefit of jurisdiction derived from present or
future domicile or otherwise in such action or proceeding.  Each party hereto
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
 
(f)           Counterparts; Effectiveness.  This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.  This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.
 
(g)           Entire Agreement.  This Agreement contains the entire
understanding of and all agreements between the parties hereto with respect to
the subject matter hereof and supersedes any prior or contemporaneous agreements
or understandings, oral or written, pertaining to any such matters which
agreements or understandings shall be of no force or effect for any purpose.
 
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(h)           Severability.  If any provision of this Agreement, as applied to
any part or circumstance, shall be adjudged by a court of competent jurisdiction
to be void, invalid or unenforceable, the same shall in no way affect any other
provision of this Agreement, the application of any such provision and any other
circumstances or the validity or enforceability of the other provisions of this
Agreement.
 
(i)           Amendments.  The provisions of this Agreement, including the
provisions of this sentence, may be amended, modified or supplemented, only with
the prior written consent of the Company and the Investor.
 
[Execution Page Follows]
 
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IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties
hereto as of the date first written above.
 

 
Empire Reports, Inc.
     
By:
/s/ Joseph E. Bernstein    
Name:
Joseph E. Bernstein     
Title:
Chief Executive Officer

 

 
Kien Huat Realty III Limited
     
By:
/s/ Gerard Lim    
Name:
Gerard Lim    
Title:
Authorized Signatory 

 

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Annex A
Form of Opinions of Counsel
 
(i)                      The Company is validly existing as a corporation under
the laws of its jurisdiction of organization, with corporate power to own its
properties and conduct its business as described in the Registration Statement
and the prospectus included therein, as amended or supplemented to the effective
date of the Registration Statement (the “Final Prospectus”) and to perform its
obligations under the Investment Agreement and the Registration Rights
Agreement;
 
(ii)                      The execution and delivery of the Investment Agreement
and the Registration Rights Agreement (the “Transaction Documents”) have been
duly authorized by the Company, and the Transaction Documents are the valid and
binding agreements of the Company, enforceable against the Company in accordance
with their operative terms;
 
(iii)                      The Registration Statement has become effective under
the Securities Act; any required filing of the Final Prospectus and any
amendments or supplements thereto pursuant to Rule 424(b) under the Securities
Act has been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any notice objecting to its use
has been issued by the SEC, no proceedings for that purpose have been instituted
or threatened by the SEC, and the Registration Statement and the Final
Prospectus (other than the financial statements and related notes, financial
statement schedules and other financial, accounting and statistical information
contained therein or omitted thereunder, as to which such counsel need express
no opinion) comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules thereunder; and although
counsel is not passing upon and does not assume responsibility for the
independent review or verification or accuracy, completeness or fairness of the
statements contained in the Registration Statement and Final Prospectus, such
counsel has no reason to believe that on the effective date the Registration
Statement contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus as of its date
included any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and other financial and statistical information contained
therein, as to which such counsel need express no opinion);
 
(iv)                      The Company’s authorized equity capitalization as
of                , 20   is as set forth in the Registration Statement and the
Final Prospectus; the statement under the caption “Description of Capital Stock”
in the Registration Statement, to the extent they constitute matters of law or
legal conclusions, constitute an accurate summary in all material respects of
such matters and conclusions; the shares of the Company common stock to be sold
pursuant to the Transaction Documents have been duly and validly authorized and,
when issued and delivered in accordance with the Transaction Documents, will be
validly issued, fully paid and nonassessable; the certificate for the Company’s
common stock complies in all material respects with the applicable statutory
requirements; and, to the knowledge of such counsel, the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Registrable Securities;
 
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(v)                      None of the issue of such Registrable Securities, the
consummation of any other of the transactions contemplated by the Investment
Agreement and the Registration Rights Agreement, or the fulfillment of the terms
thereof will conflict with, result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to, (i) the charter or by-laws of the Company or its
subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or its subsidiaries is a
party or bound or to which its or their property is subject, which documentation
is filed or incorporated by reference as an exhibit to the Registration
Statement, or (iii) any federal or New York statute, law, rule or regulation, or
any judgment, order or decree known to us to be applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or its
subsidiaries or any of its or their properties, except in the case of clauses
(ii) and (iii) for any conflicts, breaches, violations or impositions which
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a whole;
and
 
(vi)                      No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental authority or
agency under any applicable law, is required in connection with the Company’s
execution and performance of its obligations under the Investment Agreement and
the Registration Rights Agreement, except such as have been obtained and such as
may be required under the Securities Act, the Exchange Act, applicable rules
under the Securities Act and the Exchange Act and applicable Nasdaq listing
standards (provided that counsel provides no opinion as to any necessary
qualification under state securities or blue sky laws of the various
jurisdictions in which the Registrable Securities are being offered and no
opinion with respect to FINRA rules and regulations).
 
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