ex101to8k05558_03232009.htm


    Exhibit 10.1

     

    
      AGREEMENT

       

      THIS AGREEMENT (this
“Agreement”) is made as of March 23, 2009, among Concord Associates, L.P., a New
York limited partnership having an office at c/o Cappelli Enterprises, Inc., 115
Stevens Avenue, Valhalla, New York 10595 (“Concord”) and Empire Resorts, Inc., a
Delaware corporation having an office at 701 North Green Valley Parkway, Suite
200, Henderson, Nevada 89074 (“Empire”).  This Agreement sets forth
the material terms and conditions of a transaction (the “Transaction”) between
Concord and Empire, and the agreement by the parties hereto to formalize and
execute one or more additional agreements, as more fully set forth herein,
consistent with the terms outlined in this Agreement; provided, that, in the
event that such additional agreement(s) are not executed by the parties hereto,
the terms of the Transaction set forth in this Agreement shall remain in full
force and effect and shall be binding upon the parties hereto.

       

      W I T N E S S E T H
:

      


      WHEREAS, on February 8, 2008,
Concord and Empire entered into that certain Agreement to Form Limited Liability
Company and Contribution Agreement (as amended by Amendments dated December 30,
2008, and January 30, 2009, the “Original Agreement”); and

       

      WHEREAS, Concord, Monticello
Raceway Management Inc. (“MRMI”) and Monticello Harness Horsemen’s Association,
Inc. (the “Horsemen”) negotiated and entered into that certain Agreement dated
as of July 1, 2008 (the “Horsemen Agreement”) which provides for, among other
things (i) the operation of one or more racing tracks at the Monticello Raceway
in Monticello, New York and/or at that certain parcel of land located in the
Town of Thompson, New York and commonly known as the Concord Hotel and Resort
(the “Concord Property”), (ii) an initial term ending on July 31, 2010, which
may be extended until December 31, 2030 pursuant to the terms set forth in the
Horsemen Agreement in the event that construction financing with respect to the
construction of improvements, including a harness horseracing track, on the
Concord Property closes on or before July 31, 2010, and (iii) annual purse
payments to the Horsemen in the amounts set forth on Exhibit B attached to the
Horsemen Agreement and made a part thereof; and

       

      WHEREAS, pursuant to the terms
of the Horsemen Agreement, Concord agreed to reimburse MRMI, and guaranteed to
the Horsemen, any excess in the Guaranteed VGM Purse Contribution (as defined in
the Horsemen Agreement) in excess of 8.75% of the net win from video gaming
machine activities at the Monticello Raceway (such difference, the
“VGM Shortfall”) for the period commencing on July 1, 2008 until the earlier to
occur of July 31, 2010  or the date that a certificate of occupancy is
issued and all requisite licenses have been obtained in connection with a
harness horseracing and video gaming machine facility at the Concord Property;
and

       

      
        
          
          

        

        
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      WHEREAS, each of the Concord
and Empire hereby acknowledge and agree that the Horsemen Agreement remains in
full force and effect, and that such Horsemen Agreement is in the mutual best
interest of both Concord and Empire; and

       

      WHEREAS, in connection with
the execution of the Horsemen Agreement, on July 1, 2008 Concord, MRMI and
Empire entered into that certain Agreement (the “Horsemen Side Agreement”);
and

       

      WHEREAS, on October 23, 2008,
the New York State Racing and Wagering Board (“R&W”) acted pursuant to
Racing, Pari-Mutuel Wagering and Breeding Law (the “Racing Law”) Section 302 and
approved the filing of the certificate of incorporation of Concord Empire
Raceway Corp. (the “Raceway Corp.”), a New York harness racing corporation
authorized to hold harness race meetings at the Concord Property and to apply
for a Racing Law Section 307 license to conduct pari-mutuel harness horse
racing, and on January 15, 2009, R&W agreed to grant priority to and act
favorably on an application submitted by the Raceway Corp. for a license to
conduct pari-mutuel harness racing meets at the Concord Property (the “Eighth
Track License”); and

       

      WHEREAS, Empire hereby
acknowledges and agrees that the issuance of the Eighth Track License to Raceway
Corp. and the development of the Track and the Concord Gaming Facilities
(hereinafter defined) at the Concord Property is reasonably expected to
revitalize the economy of, and tourism industry in, Sullivan County, New York,
and, as a result, Empire hereby acknowledges and agrees that the issuance of the
Eighth Track License to Raceway Corp., and the development and subsequent
operation of the Track and the Concord Gaming Facilities at the Concord
Property, are in the best interest of Empire; and

       

      WHEREAS, as of the date of
this Agreement, the conditions set forth in Article 19 of the Original Agreement
have not been satisfied, and neither Concord nor Empire anticipates that the
Original Agreement conditions will be able to be satisfied in the future;
and

       

      WHEREAS, as of February 28,
2009, the Original Agreement became terminable by either party in accordance
with its terms; and

       

      WHEREAS, upon the execution of
this Agreement, the parties desire that the Original Agreement shall be
automatically terminated and be of no further force or effect, and the terms of
this Agreement shall supersede all prior written agreements between Concord and
Empire.

       

      NOW, THEREFORE, the parties
hereto, intending to be legally bound hereby, agree as follows:

       

      
        
          
          

        

        
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      Article
I.                      Transaction
Overview

       

      Section
1.01                Overall
Transaction Structure.

       

      1.           Commencing
on the Closing Date (as hereinafter defined), and for a term of forty (40) years
(unless earlier terminated pursuant to the terms of this Agreement, the “Term”),
Empire  (or a wholly-owned subsidiary of Empire reasonably acceptable
to Concord, which shall be referred to herein as the “Empire Transaction
Subsidiary”) shall be retained by Raceway Corp. to provide advice and general
managerial oversight with respect to the operations at the harness track (the
“Track”) to be constructed at the Concord Property pursuant to the terms and
conditions of this Agreement.  Notwithstanding the foregoing, Empire
shall have no management responsibility for the Concord Gaming
Facilities.

       

      2.           Raceway
Corp. shall, pursuant to the that certain letter issued by R&W to Raceway
Corp. on January 15, 2009 (the “R&W Letter”), own the Eighth Track License
at such time as the Eighth Track License is issued by R&W to the Raceway
Corp., and certain additional licenses that may be issued by the Lottery of the
State of New York (“Lottery,” and together with R&W, the
“Agencies”).  Raceway Corp. shall own a leasehold interest in and
operate the Track and certain gaming facilities on the Concord Property (the
“Concord Gaming Facilities”) pursuant to the terms and conditions of a lease
agreement (the “Lease Agreement”) between the Raceway Corp. and Concord Kiamesha
LLC, a Delaware limited liability company and wholly-owned subsidiary of Concord
into which Concord shall transfer all of its right, title and interest to the
Concord Property (the “Property Owner”). Pursuant to the Lease Agreement, the
Property Owner shall  lease the Track and the Concord Gaming
Facilities located on the Concord Property to the Raceway
Corp.  Concord Empire LLC, a Delaware limited liability company, shall
be the sole shareholder of the Raceway Corp., and Concord shall be the sole
member of Concord Empire LLC.

       

      3.           In
connection with the foregoing, on even date herewith, each of David P. Hanlon,
Charles A. Degliomini and Cliff Ehrlich (each an “Assignor”) shall execute and
deliver to Concord Empire LLC an Assignment and Assumption Agreement whereby
each Assignor assigned, transferred and set over unto Concord Empire LLC One
Hundred Percent (100%) of such Assignor’s right, title and interest in and to
such Assignor’s subscription rights in and to one (1) share of common stock of
Raceway Corp.

       

      4.           Notwithstanding
anything to the contrary provided for in this Agreement or in any other
agreement between the parties, Concord shall retain full and complete ownership
of the Concord Property, the Track and the Concord Gaming Facilities, and Empire
shall retain full and complete ownership of its racing and gaming business, and
the licenses necessary to conduct such racing and gaming business, at the
Monticello Raceway in Monticello, New York (the “Empire
Operations”).

       

      Section
1.02                Payment Terms.  As
consideration for entering into this Agreement, Concord and Empire agree as
follows:

       

      1.           Empire Track Management
Fee.  Commencing upon the commencement of operations at the
Concord Gaming Facilities (the “Operations Date”) and for the duration of the
Term, and in consideration of Empire’s agreement to provide advice and general
managerial oversight with respect to the Track, Concord shall cause Raceway
Corp. to pay to Empire an annual track management fee in the amount of Two
Million and 00/100 Dollars ($2,000,000.00), such track management fee to be
increased by five percent (5%) on each five (5) year anniversary of the
Operations Date (the “Empire Track Management Fee”). The Empire Track Management
Fee shall be prorated for the initial year in which the Track is open for
business by the number of months in which the Track is open to the public. For
the avoidance of doubt, the following schedule sets forth the amounts due as the
Empire Track Management Fee:

       

      
        
          
          

        

        
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                  Commencing
      on the Operations Date, Years 1 through 5:

                	
                  $2,000,000.00

                
	
                  Years
      6 through 10:

                	
                  $2,100,000.00

                
	
                  Years
      11 through 15:

                	
                  $2,205,000.00

                
	
                  Years
      16 through 20:

                	
                  $2,315,250.00

                
	
                  Years
      21 through 25:

                	
                  $2,431,012.50

                
	
                  Years
      26 through 30:

                	
                  $2,552,563.10

                
	
                  Years
      31 through 35:

                	
                  $2,680,191.30

                
	
                  Years
      36 through 40:

                	
                  $2,814,200.80

                


        

      

      


      The
Empire Track Management Fee shall be paid to Empire notwithstanding whether or
not Concord requests and/or Empire provides satisfactory advice and/or
satisfactory overall managerial oversight with respect to the
Track.

       

      2.           Adjusted Gross Gaming
Revenue Payment. In addition to the Empire Track Management Fee,
commencing on the Operations Date and for the duration of the Term, Concord
shall cause Raceway Corp. to pay to Empire the Adjusted Gross Gaming Revenue
Payment.

       

      As used
herein, “Adjusted Gross Gaming Revenue Payment” shall mean an annual fee in the
amount of two percent (2%) of the Adjusted Gross Gaming Revenue earned at the
Concord Gaming Facilities.

       

      “Adjusted
Gross Gaming Revenue” shall mean the total revenue wagered with respect to video
gaming machines and/or other Alternative Gaming located at the Concord Property
after payout for prizes, less the State Return, the Horsemen Return and the
Breeders Return.

       

      “Alternative
Gaming” shall mean any gaming approved by the State of New York including but
not limited to video lottery terminals (VLTs), video gaming machines, slot
machines, table and card games of whatever nature including but not limited
to poker, craps, roulette and revenue derived from contests and tournaments
conducted which involving such gaming, or native American gaming of any nature,
but excluding revenue derived from racing or simulcasting of
racing.

       

      “Horsemen
Return” shall mean an amount equal to the “Horsemen Alternative Gaming Revenue
Share” set forth in the Horsemen Agreement.

       

      “Breeders
Return” shall mean amounts that shall be due and owing to the New York State
Horse Breeding Fund pursuant to any agreement that shall be made between the
Raceway Corp. and the New York State Horse Breeding Fund.

       

      
        
          
          

        

        
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      “State
Return” shall mean the amount that shall be payable by the Raceway
Corp.  to the State of New York pursuant to that certain law enacted
by the 231st New
York Legislature, approved and effective July 7, 2008, amending chapter 383 of
the laws of 2001 amending the tax law and other laws relating to authorizing the
division of the lottery to conduct a pilot program involving the operation of
video lottery terminals at certain racetracks (NY Legis 286 (2008), as such law
may be amended from time to time.

       

      3.           Adjusted Gross Gaming
Revenue Payment Guaranty.  Commencing upon the Operations Date
and for the duration of the Term, in the event that the Adjusted Gross Gaming
Revenue Payment paid to Empire pursuant to Section 1.02(2) above is less than
Two Million and 00/100 Dollars ($2,000,000.00) per annum, Concord shall guaranty
and pay to Empire the difference between Two Million and 00/100 Dollars
($2,000,000.00) and the Adjusted Gross Gaming Revenue Payment distributed to
Empire with respect to such calendar year (the “AGGRP Shortfall”).

       

      4.           Termination
Payment.  Notwithstanding that the Term of this Agreement has
not previously expired, upon a sale or other voluntary transfer of the Concord
Gaming Facilities to any person or entity who is not an affiliate of Concord
(the “Buyer”), Raceway Corp. may terminate this Agreement upon payment to Empire
of Twenty-Five Million and 00/100 Dollars ($25,000,000.00) (the “Termination
Payment”); provided, that the Buyer shall enter into an agreement with Empire
whereby the Buyer shall agree to pay the greater of (i) the Adjusted Gross
Gaming Revenue Payment and (ii) Two Million and 00/100 Dollars ($2,000,000.00)
per annum to Empire for the duration of the Term of this Agreement; provided,
further, that, notwithstanding anything to the contrary contained in this
Agreement, as a condition precedent to Empire’s receipt of the Termination
Payment, Empire shall execute and deliver to Property Owner such documents as
may be reasonably necessary, in Property Owner’s reasonable discretion, to
terminate the Memorandum of Agreement. Notwithstanding the foregoing, Concord
agrees to use its best efforts to accommodate reasonable requests made by Empire
to structure and/or characterize the payment of the Termination Payment by
Raceway Corp. to Empire in a manner that shall afford Empire with favorable tax
treatment. For the avoidance of doubt, Concord and Empire agree that, upon
payment to Empire of the Termination Payment, neither Concord nor any Buyer
shall have any obligation to pay the Empire Track Management Fee to
Empire.

       

      5.           Alternative
Gaming.  Solely in the event that the Eighth Track License is
no longer required by law in order to enable Raceway Corp. to conduct
Alternative Gaming at the Concord Gaming Facilities, then, notwithstanding that
the Term of this Agreement has not previously expired or anything to the
contrary contained in this Agreement, Empire shall continue to receive the
Adjusted Gross Gaming Revenue Payment pursuant to the terms and conditions set
forth in this Agreement, but shall no longer be entitled to receive the Empire
Track Management Fee or the Termination Payment pursuant to the terms and
conditions set forth in this Agreement.

       

      
        
          
          

        

        
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      Section
1.03                Additional
Consideration - Horsemen Side Agreement.

       

      1.           Notwithstanding
anything to the contrary contained in the Horsemen Agreement or the Horsemen
Side Agreement, until the earlier to occur of the Operations Date and July 31,
2011, Empire shall continue to pay to the Horsemen 8.75% of the net win from
video gaming machine activities at the Monticello Raceway, and Concord shall pay
any VGM Shortfall to the Horsemen during such period.

       

      2.           Commencing
on the Closing and until the earlier to occur of the Operations Date and July
31, 2011, if Empire determines, in good faith, that it does not have sufficient
funds from all sources (including with respect to all cash-flow, credit lines
and savings) to meet its financial obligations specified in clauses (i) through
(iv) below, then Concord shall pay to Empire JV Member up to Four Million and
00/100 Dollars ($4,000,000.00) (but in no event more than Two Million and 00/100
Dollars ($2,000,000.00) in the first twelve-month period), less the amount of
any VGM Shortfall that Concord paid directly to the Horsemen pursuant to Section
1.03(1) above or Section 31(a) of the Horsemen Agreement, and Empire shall apply
such payment toward any of the following: (i) payment of debt service on the 5
1⁄2% Convertible Senior Notes, due in the year 2014 and callable in July of 2009,
issued by Empire (the “Notes”), (ii) payments of debt service with respect to
that certain credit facility provided by the Bank of Scotland in the maximum
principal amount of Ten Million and 00/100 Dollars ($10,000,000.00), due in May
of 2009 (the “Credit Facility”), (iii) payments due to the Horsemen pursuant to
the Horsemen Agreement and/or (iv) payments due to the New York State Horse
Breeding Fund.

       

      3.           After
the Operations Date, MRMI and Concord shall assign the Horsemen Agreement to
Raceway Corp., and Raceway Corp. shall make all payments of the Horsemen
Alternative Gaming Revenue Share (as defined in the Horsemen Agreement) to the
Horsemen pursuant to the terms of the Horsemen Agreement.

       

      4.           After
the Operations Date, Raceway Corp. shall make all payments to the New York State
Horse Breeding Fund with respect to both the Track and the Monticello
Raceway.

       

      5.           Notwithstanding
anything to the contrary contained in this Agreement, (i) the indemnification
provided by Empire and MRMI to Concord pursuant to Section 2 of the Horsemen
Side Agreement, (ii) Section 3 of the Horsemen Side Agreement and (iii) Section
4 of the Horsemen Side Agreement are each hereby incorporated by reference into
this Agreement and made a part hereof.

       

      6.           Unless
otherwise agreed to between Concord and Empire, the overall number of racing
days shall be allocated between the Monticello Raceway at Monticello and the
Track as follows: 50% to Monticello Raceway at Monticello and 50% to the
Track.

       

      7.           On
even date herewith, Concord, MRMI and Empire shall terminate the Horsemen Side
Agreement; provided, that those certain sections set forth in Section 1.03(5) of
this Agreement shall survive such termination and become part of this
Agreement.

       

      
        
          
          

        

        
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      Section
1.04                Closing,
Closing Deliveries and Closing Conditions.

       

      1.           The
closing of the transactions contemplated pursuant to this Agreement (the
“Closing”) shall take place on the date that Property Owner or its affiliates
secures and closes on (but not necessarily funds under) financing necessary to
proceed with construction of a project on the Concord Property having a
projected cost in the minimum aggregate amount of Five Hundred Million and
00/100 Dollars ($500,000,000.00) (including existing equity) (the “Financing”)
from certain third-party lenders (the “Lenders”) in connection with the
development of the Concord Gaming Facilities and other improvements on the
Concord Property (the “Closing Date”). The Closing shall take place at the
offices of DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, 1 North
Lexington Avenue, White Plains, New York 10601.

       

      2.           Unless
waived by Empire, in Empire’s sole discretion, at the Closing, Concord, for
itself and on behalf of Raceway Corp., shall execute and deliver the following:
(i) a certificate confirming that the warranties and representations of Concord
set forth in this Agreement are true and complete on and as of the Closing Date,
and (ii) an incumbency certificate of Concord attaching true, correct and
complete copies of the certificate of limited partnership and limited
partnership agreement of Concord, a good standing certificate issued by the New
York Secretary of State, and a duly authorized resolution of Concord authorizing
the transactions entered into pursuant to this Agreement.  Unless
waived by Concord, in Concord’s sole discretion, at the Closing, Empire, for
itself or on behalf of Empire Transaction Subsidiary, if any and as applicable,
shall execute and deliver the following: (i) a certificate confirming that the
warranties and representations of Empire set forth in this Agreement are true
and complete on and as of the Closing Date, (ii) an incumbency certificate of
Empire attaching true, correct and complete copies of the articles of
incorporation and Bylaws of Empire, a good standing certificate issued by the
Delaware Secretary of State, and a duly authorized resolution of Empire
authorizing the transactions entered into pursuant to this Agreement and (iii)
an incumbency certificate of Empire Transaction Subsidiary, if any, attaching
true, correct and complete copies of the certificate of the organizational
documents of Empire Transaction Subsidiary, a good standing certificate issued
by the applicable Secretary of State, and a duly authorized resolution of Empire
Transaction Subsidiary authorizing the transactions entered into pursuant to
this Agreement.

       

      3.           Concord
agrees that the Empire Track Management Fee shall be senior to payments due in
connection with the Financing. As a condition to Closing, Concord shall secure
the Financing from the Lenders and shall cause the Lenders to deliver to Empire
a written agreement reasonably satisfactory to Empire (the “Recognition
Agreement”) whereby the Lenders shall agree to recognize the Empire Track
Management Fee and agree that the obligation to pay the Empire Track Management
Fee will have priority over payments due pursuant to the Financing and will not
be foreclosed by any action the Lenders take in connection with the Financing.
All other payments due pursuant to this Agreement shall be subordinate to the
Financing; provided, that Concord agrees that the Adjusted Gross Gaming Revenue
Payment (as hereinafter defined) shall be senior to payments made to Property
Owner or due in connection with any project-related financing in excess of Seven
Hundred and Fifty Million and 00/100 Dollars that shall be obtained at Closing
and/or subsequently in the future by the Property Owner from one or more
unaffiliated third-party lenders (the “AGGRP Recognition”).

       

      
        
          
          

        

        
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      4.           In
addition, as a condition to Closing, Property Owner shall execute and deliver to
Empire a memorandum of this Agreement (the “Memorandum of Agreement”) in
recordable form which shall put all future lenders on notice of the requirement
for recognition of the Empire Track Management Fee and for the execution of a
Recognition Agreement.

       

      Section
1.05               Track Management
Agreement.  On or before the Closing Date, Concord and Empire
may negotiate a more detailed management agreement between Empire (or Empire
Transaction Subsidiary, if any) and Raceway Corp. (the “Track Management
Agreement”). To the extent such Track Management Agreement is executed, it shall
be consistent with the terms and conditions of this Agreement, shall be
automatically terminated upon the termination of this Agreement, shall be
assignable by Concord to any Person who shall acquire and operate the Track from
Raceway Corp., and shall set forth additional terms that have been agreed to by
the parties, which may include (i) further clarification with respect to the
advice and overall managerial oversight to be provided by Empire to Concord and
(ii) an agreement among the parties to share certain employees and services with
respect to the harness horseracing track operations at the Monticello Raceway
and the Track, and, in connection therewith, equitably allocate the costs
associated with such employees and services among the parties to such agreement.
In the event that the Track Management Agreement is not fully negotiated and/or
executed on or before the Closing Date, this Agreement shall remain in full
force and effect, and shall automatically and without further action by any of
the parties hereto constitute the Track Management Agreement referred to in this
Agreement.

       

      Section
1.06                Default
and Termination.

       

      1.           In
the event that either Empire or Concord fails to consummate the transactions set
forth in this Agreement notwithstanding the satisfaction or waiver of all
conditions to closing set forth in this Agreement (such failure to constitute a
default pursuant to the terms of this Agreement), the other party may avail
itself of any rights or remedies it may have at law or in equity on account of
such default.

       

      2.           In
the event that the Closing Date has not occurred on or before July 31, 2010,
this Agreement may be terminated by either Empire or Concord by written notice;
provided, that upon the termination of this Agreement, Concord and Empire shall
each hold a fifty percent (50%) ownership interest in the Eighth Track License,
or the rights to receive such Eighth Track License pursuant to the R&W
Letter, as applicable.

       

      Section
1.07                Assignment.

       

      1.           This
Agreement may be assigned by Raceway Corp. to any Person who shall acquire and
operate the Concord Gaming Facilities from Raceway Corp.; provided, that such
assignee shall agree to assume all of Raceway Corp.’s obligations pursuant to
the terms and conditions of this Agreement. This Agreement may not be assigned
by Empire without the prior written consent of Concord.

       

      
        
          
          

        

        
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      For the
avoidance of doubt, upon a sale or other voluntary transfer of the Concord
Gaming Facilities to a Buyer, Concord may assign this Agreement to such Buyer
and, in lieu of making any Termination Payment to Empire, such Buyer shall
assume all of Concord’s rights and obligations under this
Agreement.

       

      Article
II.                     Binding
Agreement

       

      Section
2.01               Binding
Agreement.  Notwithstanding that this Agreement specifies that
the Track Management Agreement may be negotiated after the date of this
Agreement, the parties hereto acknowledge and agree that this Agreement sets
forth the material terms and conditions of the Transaction, and that, in the
event that such Track Management Agreement is not executed by the parties
hereto, the terms of the Transaction set forth in this Agreement shall remain in
full force and effect and shall be binding upon the parties hereto.

       

      Section
2.02                Original
Agreement.  Upon the execution of this Agreement, the Original
Agreement shall be automatically terminated and of no further force or
effect.

       

      Article
III.                    Representations
and Warranties

       

      Section
3.01                Representations and Warranties of
Concord. Subject to the terms and conditions of this Agreement, Concord
hereby warrants and represents to Empire, knowing and intending that Empire is
relying hereon in entering into this Agreement and consummating the transactions
contemplated hereby, that:

       

      (i)                 Due Formation, Existence,
Etc.  Concord is duly formed, validly existing, and in good
standing, and has the requisite power and authority to own, lease, and operate
its properties as it is now owned, leased and operated.  Concord has
full power and authority and has taken all limited partnership and/or limited
liability company action necessary to execute and deliver this Agreement and to
perform the obligations of Concord hereunder, and all limited partnership action
necessary to authorize the person(s) executing this Agreement on behalf of
Concord to execute and deliver this Agreement and all documents to be executed
by Concord pursuant to this Agreement on behalf of Concord and to perform the
obligations of Concord hereunder.  This Agreement is a valid and
binding agreement of Concord enforceable against Concord in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.  The execution and
delivery by Concord of, and the performance and compliance by Concord with, the
terms and provisions of this Agreement do not (a) violate any term, condition or
provision of  Concord’s organizational or governing documents; (b)
violate any judgment, order, injunction, decree, regulation or ruling of any
court or other Governmental Entity to which Concord is subject; or (c) require
any consent or approval under, result in any breach of or any loss of any
benefit under, give rise to other’s right of termination, vesting, amendment,
acceleration, or cancellation of, or cause a violation of any agreement,
promissory note, bond, mortgage, indenture, contract, lease, license, or any
other instrument of obligation to which Concord is a party or by which Concord
is bound, except that, in the case of clauses (b) or (c) above, for any breach,
violation, termination, default, acceleration, creation or change that would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on Concord or its business.

       

      
        
          
          

        

        
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      (ii)                 Consents and
Approval.  No consent, waiver, authorization, permit, or
approval by any third party or governmental entity, which heretofore has not
been obtained, is required in connection with the execution and delivery by
Concord of this Agreement or the performance by Concord of the obligations to be
performed under this Agreement by Concord.

       

      (iii)                 Litigation.  There
is not now pending, nor to the best of Concord’s knowledge, has there been
threatened, any claims, causes of action or other litigation or proceedings
against or affecting Concord  before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding may
reasonably be expected to have a material adverse effect on Concord or its
business, or would interfere with Concord’s ability to consummate the
transactions contemplated by this Agreement, or would affect the use and
development of the Concord Property, except possible claims for workers’
compensation, personal injury or property damage which are covered by insurance
maintained by Concord.

       

      (iv)                 Brokers and
Finders.  Neither Concord nor any of its officers, directors or
employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders fees in connection with the transactions
contemplated in this Agreement.

       

      (v)                 Taxes.  Except
as would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Concord or its business, (i) Concord and each of its
Subsidiaries have duly and timely (subject to any extensions permitted by
applicable law) filed all material Tax Returns required to be filed by any of
them, and all such Tax Returns are true, complete and accurate in all material
respects, (ii) Concord and each of its Subsidiaries have paid all material Taxes
that are required to be paid by any of them or that Concord or any of its
Subsidiaries are obligated to withhold from amounts owing to any employee,
creditor or third party, (iii) neither Concord nor any of its Subsidiaries has
waived any statute of limitations with respect to material Taxes or agreed to
any extension of time with respect to a material Tax assessment or deficiency,
(iv) there are no pending audits, examinations, investigations, deficiencies,
claims or other proceedings in respect of material Taxes relating to Concord or
any of its Subsidiaries, (v) neither Concord nor any of its Subsidiaries has
been treated as a partnership for Tax purposes since the date of its respective
formation, and (vi) none of Concord or any of its Subsidiaries has received or
has been subject to any written ruling relating to material Taxes or entered
into any written and legally binding agreement with any taxing authority
relating to material Taxes, except with respect to sewer taxes payable on the
Concord Property.

       

      
        
          
          

        

        
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      (vi)                 Foreign
Person.  Concord is not a “foreign person” as defined by
Internal Revenue Code Section 1445.

       

      (vii)                 ERISA.  Concord
is not an “employee benefit plan” within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974 (as amended, “ERISA”), a “plan,”
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended, or an entity deemed to hold “plan assets” within the meaning of 29
C.F.R. Sec. 2510.3-101 of any such employee benefit plan or plans.

       

      Empire
acknowledges and agrees that, except as set forth in this Agreement, Concord has
not made, does not make and specifically negates and disclaims any
representations, warranties, promises, covenants, agreements or guaranties of
any kind or character whatsoever, whether express or implied, oral or written,
past or present, of, as to, concerning or with respect to Concord or the Concord
Property.  Additionally, no Person acting on behalf of Concord is
authorized to make, and by execution hereof Empire acknowledges that no person
has made, on behalf of Concord, any representation, agreement, statement,
warranty, guaranty or promise regarding Concord or the Concord Property or the
transactions contemplated herein other than the representations, agreements,
statements, warranties, guaranties and promises contained in this Agreement; and
no such other representation, warranty, agreement, guaranty, statement or
promise, if any, made by any person acting on behalf of Concord shall be valid
or binding upon Concord unless specifically set forth herein.

       

      Except as
otherwise provided in this Agreement, no representations, warranties, covenants,
indemnifications or other obligations of Concord set forth in this Agreement
shall survive the Closing beyond a period of twelve (12) months from the date of
the Closing, except to the extent that Empire shall have delivered notice of a
breach on or before such twelve (12) month anniversary.

       

      Section
3.02               Representations and Warranties of
Empire. Subject to the terms and conditions of this Agreement, Empire
hereby warrants and represents to Concord, knowing and intending that Concord is
relying hereon in entering into this Agreement and consummating the transactions
contemplated hereby, that:

       

      (i)           Due Formation, Existence,
Etc.  Empire is a legal entity duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority to
own, lease and operate its properties and assets and to carry on its business as
presently conducted and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership, leasing or
operation of its assets or properties or conduct of its business requires such
qualification except where such failures to be so qualified, licensed, or in
good standing would not have a material adverse effect on Empire or its
business. Empire has all requisite corporate power and authority and has taken
all corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement.  This Agreement is a valid and
binding agreement of Empire, enforceable against Empire in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability relating to or affecting
creditors’ rights and to general equity principles. The Board of Directors of
Empire has duly approved this Agreement and the transactions contemplated
hereby.  The execution and delivery by Empire of, and the performance
and compliance by Empire with, this Agreement in accordance with its terms do
not (a) violate any term, condition or provision of  Empire’s
organizational or governing documents; (b) violate any judgment, order,
injunction, decree, regulation or ruling of any court or other Governmental
Entity to which Empire is subject; or (c) result in any breach of or any loss of
any benefit under, give rise to other’s right of termination, vesting,
amendment, acceleration, or cancellation of, or cause a violation of any
agreement, promissory note, bond, mortgage, indenture, contract, lease, license,
or any other instrument of obligation to which Empire is a party or by which
Empire is bound, except that, in the case of clauses (b) or (c) above, for any
breach, violation, termination, default, acceleration, creation or change that
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Empire or its business.

       

      
        
          
          

        

        
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      (ii)                 Consents and
Approval.  No consent, waiver, authorization, permit, or
approval by any third party or governmental entity, which heretofore has not
been obtained, is required in connection with the execution and delivery by
Empire of this Agreement or the performance by Empire of the obligations to be
performed under this Agreement by Empire.

       

      (iii)                 Litigation.  There
is not now pending, nor to the best of Empire’s  knowledge, has there
been threatened, any claims, causes of action or other litigation or proceedings
against or affecting Empire before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding may reasonably be
expected to have a material adverse effect on Empire or its business, or would
interfere with Empire’s ability to consummate the transactions contemplated by
this Agreement, except possible claims for workers’ compensation, personal
injury or property damage which are covered by insurance maintained by
Empire.

       

      (iv)                 Brokers and
Finders.  Neither Empire nor any of its respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder’s fees in connection
with the transactions contemplated in this Agreement.

       

      (v)                 Taxes.  Except
as would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on Empire or its business, (i) Empire and each of its
Subsidiaries have duly and timely filed all Tax Returns required to be filed by
any of them, and all such Tax Returns are true, complete and accurate in all
material respects, (ii) Empire and each of its Subsidiaries have paid all Taxes
that are required to be paid by any of them (other than Taxes that are being
diligently contested by appropriate proceedings and for which adequate reserves
have been established) or that Empire or any of its Subsidiaries are obligated
to withhold from amounts owing to any employee, creditor or third party, (iii)
the unpaid Taxes of Empire and its Subsidiaries do not exceed the reserve for
Tax liability (excluding any reserve for deferred Taxes established to reflect
timing differences between book and tax income) reflected in the audited
financial statements of Empire, as adjusted for results of operations and cash
flows through the date hereof, (iv) neither Empire nor any of its Subsidiaries
has waived any statute of limitations with respect to Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency, (v) there are
no pending audits, examinations, investigations, deficiencies, claims or other
proceedings in respect of Taxes relating to Empire or any of its Subsidiaries,
(vi) none of Empire or any of its Subsidiaries has been a member of any group
that has filed a combined, consolidated or unitary Tax Return, other than the
affiliated group of corporations of which Empire is the common parent, (vii)
none of Empire or its Subsidiaries has any liability for Taxes of any person
under Treasury Regulation Section 1.1502-6 (or any comparable provision of
state, local or foreign law), as transferee or successor, by contract or
otherwise, except as a result of the application of Treasury Regulation Section
1.1502-6 (and any comparable provision of state, local or foreign law to Empire
and its Subsidiaries which are members of the affiliated group of corporations
of which Empire is the common parent, (viii) none of Empire or any of its
Subsidiaries has been a distributing corporation or a controlled corporation
with respect to any distribution occurring during the last three years in which
the parties to such distribution treated the distribution as one to which
Section 355 of the Code (or any comparable provision of state, local or foreign
law) applied, (ix) none of Empire or any of its Subsidiaries has made any
election, or is required, to treat any of the assets owned by such entity as
owned by another Person for Tax purposes, and (x) none of Empire or any of its
Subsidiaries has received or has been subject to any written ruling relating to
Taxes or entered into any written and legally binding agreement with any taxing
authority relating to Taxes.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (vi)                 Foreign
Person.  Empire is not a “foreign person” as defined by
Internal Revenue Code Section 1445.

       

      (vii)                 ERISA.  Empire
is not an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a
“plan,” within the meaning of Section 4975 of the Internal Revenue Code of 1986,
as amended, or an entity deemed to hold “plan assets” within the meaning of 29
C.F.R. Sec. 2510.3-101 of any such employee benefit plan or plans.

       

      Concord
acknowledges and agrees that, except as set forth in this Agreement, Empire has
not made, does not make and specifically negates and disclaims any
representations, warranties, promises, covenants, agreements or guaranties of
any kind or character whatsoever, whether express or implied, oral or written,
past or present, of, as to, concerning or with respect to Empire or its
Subsidiaries.  Additionally, no Person acting on behalf of Empire is
authorized to make, and by execution hereof Concord acknowledges that no person
has made, on behalf of Empire, any representation, agreement, statement,
warranty, guaranty or promise regarding Empire or the transactions contemplated
herein other than the representations, agreements, statements, warranties,
guaranties and promises contained in this Agreement, and no such other
representation, warranty, agreement, guaranty, statement or promise, if any,
made by any person acting on behalf of Empire shall be valid or binding upon
Empire unless specifically set forth herein.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      Except as
otherwise provided in this Agreement, no representations, warranties, covenants,
indemnifications or other obligations of Empire set forth in this Agreement
shall survive the Closing beyond a period of twelve (12) months from the date of
the Closing, except to the extent that Concord shall have delivered notice of a
breach on or before such twelve (12) month anniversary.

       

      Section
3.03                Article III Definitions. As
used in this Article III, the following terms have the meanings hereinafter
indicated :

       

      “Governmental
Entity” shall mean any governmental or regulatory authority, agency, commission,
body, court or other governmental entity.

       

      “Lien”
shall mean any easement, encroachment, security interest, pledge, mortgage, lien
(including, without limitation, environmental, Tax and ERISA liens), charge,
judgment, claim, encumbrance, proxy, voting trust or voting
agreement.

       

      “material
adverse effect” shall mean an effect that would prevent, materially delay or
materially impair the ability of either Concord or Empire to consummate the
transactions contemplated by this Agreement.

       

      “Person”
shall mean any individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

       

      “Subsidiaries”
shall mean, with respect to any Person, any other Person, whether incorporated
or unincorporated, of which at least a majority of the securities or ownership
interests having by their terms voting power to elect a majority of the board of
directors or other Persons performing similar functions is directly or
indirectly owned or controlled by such entity or by one or more of its
respective Subsidiaries.

       

      “Tax” or
“Taxes” shall mean all federal, state, local or foreign net or gross income,
gross receipts, net proceeds, sales, use, ad valorem, value added, franchise,
bank shares, withholding, payroll, employment, excise, property, alternative
minimum, environmental or other taxes, assessments, duties, fees, levies or
other governmental charges of any nature whatsoever, whether disputed or not,
together with any interest, penalties, additions to tax or additional amounts
with respect thereto, whether disputed or not, in each case including such taxes
for which a Person is or may be liable (i) as a result of Treasury Regulation
Section 1.1502-6 (or a similar provision of state, local or foreign law), as
transferee or successor, and (ii) as a result of being party to any agreement or
any expressed or implied obligation to indemnify any Person.

       

      “Tax
Returns” shall mean any federal, state, local or foreign returns, reports,
claims for refund, information returns or statements (including any amended
returns or information returns) filed or required to be filed for purposes of a
particular Tax.

       

      
        
          
          

        

        
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      Article
IV.                   Miscellaneous.

       

      Section
4.01                Headings.  The
article and paragraph headings of this Agreement are for convenience only and in
no way limit or enlarge the scope or meaning of the language
hereof.

       

      Section
4.02                Invalidity
and Waiver.  If any portion of this Agreement is held invalid
or inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent
legally possible, effect shall be given to the intent manifested by the portion
held invalid or inoperative.  The failure by either party to enforce
against the other any term or provision of this Agreement shall not be deemed to
be a waiver of such party’s right to enforce against the other party the same or
any other such term or provision in the future.

       

      Section
4.03                Governing
Law.  This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the laws of the State of New
York.

       

      Section
4.04               No Third
Party Beneficiary.  This Agreement is not intended to give or
confer any benefits, rights, privileges, claims, actions, or remedies to any
person or entity as a third party beneficiary, decree, or
otherwise.

       

      Section
4.05               Entirety
and Amendments.  This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
between the parties of any nature.  This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.

       

      Section
4.06               Attorneys’
Fees.  Should either party employ attorneys to enforce any of
the provisions hereof, the party against whom any final judgment is entered
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including reasonable attorneys’ fees, expended or incurred in connection
therewith.

       

      Section
4.07               Construction.  The
parties acknowledge that the parties and their counsel have reviewed and revised
this Agreement and agree that the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any exhibits or amendments
hereto. Each time that this Agreement refers to Empire, the reference shall be
to Empire and all of Empire’s subsidiaries that are directly involved with or
that have been created in connection with the transactions contemplated by this
Agreement, including Empire JV Member.

       

      Section
4.08                Binding
Effect.  This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

       

      Section
4.09               Counterparts.  This
Agreement may be executed in any number of identical counterparts, each of which
shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.

       

      Section
4.10               Further
Assurances.  Subject to the terms and conditions herein
provided, each of the parties hereto shall execute and deliver such documents as
the other party shall reasonably request in order to consummate and make
effective the transactions contemplated hereby.

       

      
        
          
          

        

        
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      Section
4.11               Jurisdiction.  With
respect to any suit, action or proceeding relating to this Agreement
(“Proceedings”) each party irrevocably (a) submits to the exclusive jurisdiction
of the state and federal courts located in the State of New York, in New York
County and (b) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further waives
the right to object, with respect to such Proceedings, that such court does not
have jurisdiction over such party.

       

      Section
4.12               Waiver of
Jury Trial.  EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OTHER PARTY IN
CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT OR THE RELATIONSHIP OF THE PARTIES HEREUNDER.

       

      
        
          
          

        

        
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      WITNESS the execution hereof,
under seal, as of the day and year first above written, in any number of
counterpart copies, each of which counterpart copies shall be deemed an original
for all purposes.

       

      
        	 
      	
                CONCORD
      ASSOCIATES, L.P.

              
	 
      	 
      
	 
      	
                By:  Convention
      Hotels, LLC, its General Partner

                 

                By:
      Catskill Resort Group, LLC, its Managing Member

                 

              
	 
      	
                By:

              	
                
                  /s/
      Louis R. Cappelli

                

              
	 
      	 
      	
                Name:

              	
                Louis
      R. Cappelli

              
	 
      	 
      	
                Title:

              	
                Manager

              


      

      


      


      
        	 
      	
                EMPIRE
      RESORTS, INC.

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	
                
                  /s/
      David P. Hanlon

                

              
	 
      	 
      	
                Name:

              	
                David
      P. Hanlon

              
	 
      	 
      	
                Title:

              	
                President
      and Chief Executive Officer

              


      

      


      


      


      
        
          
          

        

        
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