ex101to8k05558_06032009.htm


    Exhibit 10.1

     

    
      
        [KPMG
Corporate Finance LLC Letterhead]

         

        


         

        June
3, 2009

         

        Privileged
and Confidential


         

        Empire
Resorts, Inc.

        204 State
Route 17B

        Monticello,
NY 12701

         

        Attn:      Joseph
Bernstein

        Bruce Berg

         

        Re:  Engagement of KPMG Corporate
Finance

         

        Gentlemen:

         

        This
letter confirms the terms of the agreement (the “Agreement”) by and
between KPMG Corporate Finance LLC (“KPMGCF”) and Empire
Resorts, Inc. (“Empire”) and its subsidiary Monticello Raceway Management Inc.
(“MRMI” and collectively with Empire, the “Company”) whereby the
Company, from the date of this Agreement through the end of the Engagement
Period (as defined below), has retained KPMGCF as the Company’s exclusive
financial advisor to raise for the Company up to $75 million in newly sourced
capital (the “Transaction”) to address pending maturity and contractual issues
relating to the Company’s $65 million obligation to note holders under second
lien notes due July 31, 2014 (callable by individual note holders on July 2
through July 31, 2009), and the transaction costs related thereto (the “Engagement”).

         

        The term
“Transaction”
shall include, with respect to new funds sourced by KPMG pursuant to this
Agreement: (i) a private placement of equity securities or debt obligations of
the Company and/or any affiliate or subsidiary thereof, in one or more related
transactions, to one or more “Accredited Investors” (as such term is defined in
Rule 501 under the Securities Act) and/or source(s) of financing, in the form of
debt obligations (including term and revolving debt and credit support
facilities such as letters of credit), common stock, convertible preferred
stock, convertible debt securities, preferred stock, equity-linked securities,
warrants, equity or equity-linked joint ventures or other equity or
equity-linked arrangements (collectively, “Securities”) and/or
(ii) the direct repurchase or retirement of all or a portion of the existing
debt obligations of the Company.

         

        Neither
the Company nor KPMGCF will offer or sell Securities in a Transaction to any
investor unless it reasonably believes at the time of any offer and sale of the
Securities that each purchaser of the Securities is an “Accredited Investor” or
an otherwise sophisticated investor satisfactory to the Company and
KPMGCF.  Neither the Company (or any person acting on its behalf) nor
KPMGCF will offer or sell the Securities by any form of general solicitation or
general advertising, including the methods described in Rule 502(c) under the
Securities Act.  The Company will file in a timely manner with the
Securities and Exchange Commission (the “SEC”) any notices
with respect to the Securities required by Rule 503 and will furnish to KPMGCF
promptly thereafter a signed copy of each such notice. The Company shall have
the right to accept, limit the capital commitment of, or reject any proposed
purchaser of the Securities.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        All
communications and inquiries from prospective investors regarding a Transaction,
whether directed to Company (including but not limited to its officers, agents
and employees), or Company’s counsel, accountants or other professionals, shall
be re-directed to KPMGCF or KPMGCF shall be given notice of same.

         

        1.           Scope of
Engagement.  KPMGCF’s representation of the Company in
connection with the Engagement will include, at the reasonable request or
direction of the Company and in conjunction with the Company’s legal and other
advisors:

         

        (a)         Analyzing
the Company’s business and financial projections;

         

        (b)         Evaluating
the Company’s strategic and financial alternatives;

         

        (c)         Advising
the Company on strategies for negotiating with the holders of existing debt and
other liabilities of the Company (the “Creditors”) and other
stakeholders of the Company (including, without limitation, the Company’s
suppliers, customers and employees and governmental officials, and their
respective professionals) in connection with any of the services to be provided
by this Agreement;

         

        (d)         Participating
in meetings or negotiations with the Creditors and other stakeholders in
connection with Section
1(c);

         

        (e)         Meeting
with the Company’s Officers or Board of Directors to discuss the proposed
financial restructuring;

         

        (f)          Assisting
the Company in evaluating, structuring, negotiating and implementing the terms
and conditions of the proposed financial restructuring;

         

        (g)         Preparing
descriptive materials to be provided to potential parties to a
Transaction;

         

        (h)         Assisting
the Company in identifying, contacting and screening potential parties to a
Transaction;

         

        (i)          Assisting
the Company to prepare a due diligence data room and to coordinate the due
diligence investigations of potential parties to a Transaction;

         

        (j)          Analyzing
proposals that are received from potential parties to a
Transaction;

         

        (k)         If
applicable, evaluating the prospects for debtor-in-possession financing, cash
collateral usage and adequate protection therefore, and the prospects for exit
financing in connection with any plan of reorganization and any budgets relating
thereto;

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        (l)          If
applicable, assisting the Company in the preparation of a disclosure statement
and plan of reorganization (collectively, a “Plan”) and in the
confirmation of such Plan;

         

        (m)        If
applicable, providing testimony in court, on behalf of the Company, if necessary
or as reasonably requested by the Company, subject to the terms of this
Agreement; and

         

        (n)         Performing
such other services as may be mutually agreed upon.

         

        2.           Additional
Services.  KPMGCF’s services are limited to those specifically
set forth in Section 1 or
subsequently agreed upon in writing by the parties hereto, and KPMGCF shall have
no obligation or responsibility to provide any other services.  Any
services beyond the scope of this Agreement, including any services that the
Company may request in the event of a bankruptcy proceeding, shall be subject to
a written agreement and such fees as agreed to between KPMGCF and the
Company.  KPMGCF is providing its services hereunder as an independent
contractor, and the parties agree that this Agreement does not create an agency
or fiduciary relationship between KPMGCF and the Company.

         

        3.           Representation.  KPMGCF’s
duties hereunder run solely to the Company. All financial advice, written or
oral, provided by KPMGCF to the Company pursuant to this Agreement is intended
solely for the use and benefit of the Company, which agrees that such advice may
not be disclosed publicly (except in court pleadings, if any, to be filed by the
Company in connection with the Transaction) or made available to third parties
without the prior written consent of KPMGCF. At the direction of the Company’s
counsel, certain communications and correspondence between KPMGCF and the
Company, and work product and analyses prepared by KPMGCF for the Company in
connection with this matter, will be considered to have been made in preparation
for litigation over the restructuring of the Company, and accordingly will be
subject to attorney-client and work-product privileges. Any non-public
information provided to KPMGCF shall not be disclosed by KPMGCF without the
prior written consent of the Company.

         

        4.           Term of
Agreement.  This Agreement shall commence as of the Effective
Date (as defined below) and shall continue until September 30, 2009, and may be
extended thereafter upon the mutual written agreement of both parties or
terminated after the expiration of fourteen (14) days after either party gives
written notice of termination to the other party. (the “Engagement
Period”).  The provisions of Section 4 and
Section 5
shall survive any termination of this Agreement to the extent such provisions
relate to the payment of fees due and expenses incurred on or before the
effective date of termination.  The provisions of Section 3 and
Section 8
through Section 22 shall
also survive any termination of this Agreement and shall remain in
effect.  Additionally, if this Agreement is terminated by the Company,
KPMGCF shall be entitled to payment of:  Transaction Fee (as defined
below) if an agreement with respect to a Transaction is entered into, or a
Transaction is announced or consummated, within twelve (12) months of the
effective date of such termination with respect to (i) prospective investors
sourced by KPMGCF pursuant to this Agreement who have executed a nondisclosure
agreement prior to the date of termination of this Agreement relating to their
interest in participating in a Transaction and who have received substantive
transaction information from KPMGCF regarding such Transaction, or (ii) if
Empire waives the requirement of a nondisclosure agreement and KPMGCF has
provided a prospective investor sourced by KPMGCF pursuant to this Agreement
with substantive transaction information regarding such transaction prior to the
date of termination of this Agreement.  Empire may terminate this
agreement upon written notice to KPMGCF in the event that Lorie Beers is no
longer employed by KPMGCF or is no longer responsible for managing the Company’s
account.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        5.           Fees and
Expenses.

         

        (a)         Retainer.  An
earned upon receipt and non-refundable (including, without limitation, upon the
filing by the Company of a voluntary petition for relief under the Bankruptcy
Code (as defined below)) retainer of $75,000 payable in cash upon the signing of
this Agreement.

         

        (b)         Monthly
Fee.  An earned upon receipt monthly fee of $60,000 payable in
cash on the first day of each month thereafter.

         

        (c)         Transaction
Fee.  In addition to all other payments pursuant to this Section 5, (i)
immediately upon consummation of a Restructuring Transaction, the Company shall
pay KPMGCF a cash fee equal to the pro rata portion of the Minimum Fee based on
the percentage of the outstanding debt obligations that are modified (the “Restructuring Fee”)
and (ii) immediately upon consummation of a Recapitalization Transaction, the
Company shall pay KPMGCF a cash fee (the “Recapitalization Fee”
and, together with the Restructuring Fee, the “Transaction Fee”)
equal to the greater of (a) the Minimum Transaction Fee or (b) the sum of the
following percentages of the Recapitalization Consideration (as defined
below):

         

        (i)           6.0%
of any Recapitalization Consideration from $0-$10 million, plus

         

        (ii)          3.0%
of any Recapitalization Consideration between $10 million and $25 million,
plus

         

        (iii)        2.25%
of any Recapitalization Consideration between $25 million and $45 million,
plus

         

        (iv)        2.0%
of any Recapitalization Consideration between $45 million and $65 million,
plus

         

        (v)         1.5
% of any Recapitalization Consideration between $65 and $75
million;

         

        ;provided,
however, for purposes of clarification, the Restructuring Fee and the
Recapitalization Fee shall not both be applied to the same portion of the
indebtedness that is restructured or refinanced.

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        (d)         Notwithstanding
anything to the contrary in this Agreement:

         

        (A) No
Transaction Fee or Minimum Transaction Fee shall be paid to KPMGCF with respect
to any refinancing or acquisition of the first mortgage credit facility of up to
$10 million by the parties listed on Exhibit A attached
hereto, during or after the Engagement Period; and

         

        (B) 50%
of the Transaction Fee shall be paid to KPMGCF, subject to the Minimum
Transaction Fee, with respect to a Transaction with the parties listed on
Exhibit B attached hereto, or their respective parent, subsidiaries, beneficial
owners or other affiliates, which entities have been sourced by Empire prior to
the date of this Agreement, provided the Transaction is executed on or before
June 15, 2009 or 75% of the Transaction Fee shall be paid to KPMGCF, subject to
the Minimum Transaction Fee, provided the Transaction is executed within the
Engagement Period and closed during or after such period.

         

        “Recapitalization
Transaction” means a private or public placement of securities or debt
obligations of the Company and/or any affiliate or subsidiary thereof, in one or
more related transactions, to one or more investor(s) and/or source(s) of
financing, in the form of debt obligations (including term and revolving debt
and credit support facilities such as letters of credit), common stock,
convertible preferred stock, convertible debt securities, preferred stock,
equity-linked securities, warrants, equity or equity-linked joint ventures or
other equity or equity-linked arrangements (collectively, “Securities”).

         

        “Restructuring
Transaction” means any modification to the existing debt obligations
including without limitation, the direct or indirect repurchase of all or a
portion of the existing debt obligations of the Company, modification of the
terms of the existing debt obligations, or the exchange of the existing debt
obligations for new debt obligations or debt or equity securities or any
combination thereof.

         

        “Recapitalization
Consideration” means:

         

        (A)           The
total consideration for the Securities sold which is received, directly or
indirectly, by the Company, including the assumption or extinguishment of
indebtedness, the issuance of guarantees and contingent payment obligations;
and

         

        (B)           Any
amounts paid into escrow and amounts payable in the future whether or not
subject to any contingency.

         

        (e)          “Minimum Transaction
Fee” shall mean a minimum cash fee equal to $500,000 payable to KPMGCF
contemporaneously upon the consummation of a Transaction provided, that the
Company shall be obligated to pay the Minimum Transaction Fee only once. Only
the Minimum Transaction Fee shall be paid to KPMGCF in the event of a settlement
with existing holders of the Company’s second lien notes.  When
calculating the Minimum Transaction Fee, the Company will not be credited with
the Retainer or Monthly Fees paid to KPMG up to the date of closing of the
Transaction.

         

        (f)          Expense
Reimbursement.  In addition to all other payments pursuant to
this Section 5, the
Company shall reimburse KPMGCF for all reasonable out-of-pocket expenses
incurred in connection with the services to be provided under this Agreement,
promptly as billed.  Out-of-pocket expenses shall include, but not be
limited to, all reasonable travel expenses, expenses incurred in connection with
background screening, computer and research charges, attorney fees incurred in
connection with the documentation of this Agreement and obtaining Bankruptcy
Court approval hereof, messenger services and long-distance telephone and
cellular calls incurred by KPMGCF in connection with the services to be provided
to the Company.  Payment of all fees and reimbursed out-of-pocket
expenses shall be made in care of KPMG Corporate Finance LLC, Attention: Rebecca
McGinley, per the following wire transfer instructions:

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        Wire
Transfer Instructions:

         

        BB&T

        200 E Pratt Street, Ste
2051

        Baltimore, MD
21202-6103


         

        ABA
#055003308

        Account
#0005156267076

         

        6.           Confidential
Information.  In connection with KPMGCF’s engagement, the
Company will furnish KPMGCF with all information that KPMGCF reasonably requests
and will provide KPMGCF with access to the Company’s officers, directors,
accountants, counsel and other advisors, and will otherwise cooperate with
KPMGCF in all phases of its financial advisory services.  The Company
recognizes and confirms that in rendering services hereunder, KPMGCF will be
using and relying on, and assuming the accuracy of, without any independent
verification, data, material and other information (collectively, the “Information”)
furnished to KPMGCF by or on behalf of the Company or other third parties
(including their agents, counsel, employees and representatives).  The
Information will be, to the Company’s best knowledge, accurate and complete in
all material respects at the time it is provided, and the Company hereby agrees
to correct any Information so provided to KPMGCF if it subsequently becomes
aware that any such Information was or has become inaccurate or misleading in
any respect.  The Company understands that KPMGCF will not be
responsible for independently verifying the accuracy of the Information and
shall not be liable for inaccuracies in any such Information.  The
Company will assure that all Information supplied to KPMGCF by or on behalf of
the Company will, as of its respective dates, be accurate and complete in all
material respects.

         

        7.           Choice of Law; Jury
Trial.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to any
principles of conflict of laws.  To the extent permitted by law, the
parties to this Agreement waive any right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of the engagement of KPMGCF pursuant to, or the
performance by KPMGCF of the services contemplated by, this
Agreement.

         

        8.           Dispute Resolution;
Jurisdiction.

         

        (a)         Any
controversy arising out of or concerning this Agreement shall be determined by
arbitration upon the initiation of either party, and shall be settled and
conclusively resolved by a single, mutually-acceptable arbitrator who shall be
experienced in corporate finance matters (including mergers and
acquisitions).  The cost of such arbitrator shall be borne equally by
the parties.  The arbitration shall be conducted under the auspices
of, and subject to the rules of, the Financial Industry Regulatory Authority
(“FINRA”).  If the parties are unable to agree upon an arbitrator, the
arbitrator shall be selected in accordance with FINRA rules.  The
arbitration shall be conducted in New York, New York and the written decision of
the arbitrator shall be final and binding on the parties and enforceable in any
court of competent jurisdiction.  If the dispute or controversy
between the parties concerns the determination or calculation of fees payable to
KPMGCF hereunder, KPMGCF and the Company agree that the amounts in dispute shall
be placed in an escrow account upon the consummation of the Transaction (with
any amounts not in dispute being paid to KPMGCF at closing) pending the outcome
of the arbitration.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        (b)         Notwithstanding
the provisions of Section 9(a), in
the event that the Company files a voluntary petition for relief under the
Bankruptcy Code, the parties hereby consent and submit to the exclusive
jurisdiction of the Bankruptcy Court for any actions, suits or proceedings
arising out of or relating to this Agreement and all matters contemplated hereby
and agree not to commence any action, suit or proceeding relating thereto except
in such court.

         

        9.           Severability.  If
it is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) that any term or provision hereof is invalid or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired and shall remain in full force and effect and (b) the invalid or
unenforceable provision or term shall be replaced by a term or provision that is
valid and enforceable and that comes closest to expressing the intention of such
invalid or unenforceable term or provision.

         

        10.         Counterparts.  This
Agreement may be executed simultaneously in two counterparts, and by the parties
hereto in separate counterparts, each of which when executed will be deemed an
original, but all of which taken together will constitute one and the same
instrument.  Any signature delivered by facsimile or electronic mail
shall be deemed to be an original signature hereto.

         

        11.         Publicity.  When
the Transaction is completed, and subject to compliance with applicable
securities laws, KPMGCF may, at its option and expense, place announcements and
advertisements or otherwise publicize the Transaction and KPMGCF’s role in it
(which may include the reproduction of the Company’s logo) on KPMGCF’s internet
website and in such newspapers and periodicals as it may choose stating that
KPMGCF has acted as financial advisor to the Company with respect to the
Transaction.

         

        12.         Entire
Agreement.  This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understanding relating to the matters provided for
herein.  No alteration, waiver, amendment, change or supplement hereto
shall be binding or effective unless the same is set forth in writing signed by
a duly authorized representative of each party.

         

        13.         Attorneys’
Fees.  If any party to this Agreement brings an action directly
or indirectly based upon this Agreement or the matters contemplated hereby
against any other party, the prevailing party shall be entitled to recover from
the non-prevailing party, in addition to any other appropriate amounts, its
reasonable costs and expenses in connection with such proceeding, including, but
not limited to, reasonable attorneys’ fees (including in-house counsel) and
court costs.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

        14.         Indemnification.

         

        (a)         The
Company shall
defend, indemnify and hold harmless KPMGCF, its affiliates, and their respective
directors, officers, members, employees, agents, representatives and controlling
persons (KPMGCF and each such entity or person being an “Indemnified Party”)
from and against any and all losses, claims, damages, expenses and liabilities
(collectively, “Losses”), as incurred, to which such Indemnified Party may
become subject, related to or arising out of activities performed by or on
behalf of an Indemnified Party pursuant to this Agreement, any transactions
contemplated hereby, or the Indemnified Party’s role in connection therewith.
The Company shall have no obligation to indemnify and hold harmless an
Indemnified Party for any Losses found in a final judgment by a Court of
competent jurisdiction to have resulted primarily from actions taken or omitted
to be taken by the Indemnified Party in bad faith or from the Indemnified
Party’s gross negligence or willful misconduct in performing the services
described.

         

        (b)         Promptly
after receipt by an Indemnified Party of notice of any claim or the commencement
of any action, suit or proceeding with respect to which an Indemnified Party may
be entitled to indemnity hereunder, the Indemnified Party will notify the
Company in writing of such claim or of the commencement of such action or
proceeding, provided that the failure to notify the Company shall not relieve it
from any liability under this Agreement except to the extent it has been
materially prejudiced by such failure.  The Company may, upon written notice
to the Indemnified Party, assume the defense of
such claim, action, suit or proceeding, will employ counsel satisfactory to the
Indemnified Party to represent the Indemnified Party, and will pay the fees and
disbursements of such counsel, as incurred.  Each Indemnified Party
shall have the right to retain its own counsel at its own
expense.  Notwithstanding the foregoing, the Company shall not have
the right to assume the defense of such claim, action, suit or proceeding and
shall pay or reimburse as incurred the fees and expenses of not more than one
separate law firm per relevant jurisdiction (including local counsel)
representing such Indemnified Party if (a) the Company shall have failed to
timely assume the defense of such claim, action, suit, or proceeding, or (b) the
named parties to any such claim, action, suit, or proceeding (including any
impleaded parties) include one or more Indemnified Parties and the Company and
the Indemnified Party shall have reasonably concluded that a conflict may arise
between the positions of the Indemnified Party and the Company or that there may
be legal defenses available to it that are different from or additional to those
available to the Company.

         

        (c)         The
Company shall not be liable for any settlement of any claim, action, suit, or
proceeding without its consent (which consent shall not be unreasonably
withheld), but, if settled with its consent or if there be final judgment for a
plaintiff in any claim, suit, action, or proceeding, the Company shall defend,
indemnify, and hold harmless each Indemnified Party from and against any and all
Losses by reason of such settlement or judgment to the extent provided in this
Agreement.  Notwithstanding the immediately preceding sentence, if at
any time an Indemnified Party shall have requested the Company to reimburse such
Indemnified Party for legal or other expenses in connection with investigating,
responding to, or defending any claim, action, suit, or proceeding as
contemplated by this Agreement, the Company shall be liable for any settlement
of any such claim, action, suit, or proceeding without its consent if (a) such
settlement is entered into more than 30 days after receipt by the Company of
such request for reimbursement and (b) the Company shall not have reimbursed
such Indemnified Party in accordance with such request prior to the date of such
settlement.  The Company shall not, without the
Indemnified Party’s prior written consent, settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action or proceeding
in respect of which indemnification could be sought under this Agreement
(whether or not any Indemnified Party is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action or proceeding and does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf
of any Indemnified Party.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

        (d)         In
the event any Indemnified Party is requested or required to appear as a witness
in any action, suit or proceeding brought by or on behalf of or against the
Company or any affiliate or any participant in a Transaction covered hereby in
which such Indemnified Party is not named as a party, the Company agrees to
reimburse the Indemnified Party for all reasonable expenses incurred by it in
connection with such Indemnified Party’s appearing and preparing to appear as a
witness, including, without limitation, the fees and disbursements of its legal
counsel, and to compensate KPMGCF at its then-prevailing hourly
rates.

         

        15.         Contribution.

         

        If for
any reason the indemnification provided in this Agreement is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless, the
Company shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received or
proposed to be received by the Company on one hand and the Indemnified Party on
the other hand in connection with services provided by KPMGCF under this
Agreement.  If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or otherwise, the Company
shall contribute to such amount paid or payable by any Indemnified Party to
reflect not only the relative benefits but also the relative fault of the
Company on the one hand and the Indemnified Parties on the other hand in
connection with any actions or omissions or any other matters that result in any
such Losses as well as any other relevant equitable
considerations.  Relative benefits to the Company, on the one hand,
and to an Indemnified Party, on the other hand, shall be deemed to be in the
same proportion as (a) the total value of the Transaction or proposed
Transaction bears to (b) all fees actually received by KPMGCF under the
Agreement.  Notwithstanding the foregoing, the aggregate contribution
of all Indemnified Parties to all Losses shall not exceed the amount of fees
actually received by KPMGCF under this Agreement.

         

        16.         Reimbursement of Litigation
Expenses.

         

        The
Company also agrees to reimburse KPMGCF, its affiliates, and their respective
directors, officers, members, employees, agents, representatives and controlling
persons for all expenses (including counsel fees and disbursements) as they are
incurred by such entity or person in connection with the investigation of,
preparation for, or defense of any pending or threatened claim, or any action,
investigation, suit or proceeding related to or arising out of activities
performed by or on behalf of such entity or person pursuant to this Agreement,
any transactions contemplated hereby, or its or his role in connection
therewith, whether or not such entity or person is a party and whether or not
such claim, action or proceeding is initiated or brought by or on behalf of the
Company.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        17.         Limitation of
Liability.

         

        The
Company also agrees
that KPMGCF, its affiliates, and their respective directors, officers, members,
employees, agents, representatives and controlling persons shall not be liable
(whether directly or indirectly, in contract or tort or otherwise) to the
Company or its security holders or creditors, for any matter, cause or thing
related to or arising out of the engagement of KPMGCF pursuant to, or the
performance by KPMGCF of the services contemplated by, this Agreement, except to
the extent that KPMGCF is found in a final judgment by a Court of competent
jurisdiction to have acted or failed to act in bad faith or with gross
negligence or willful misconduct in performing the services described in this
Agreement.

         

        The
provisions of Sections
15, 16, 17 and 18 shall be in addition to any liability that the Company
may otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs, and personal representatives of the Company. These
provisions shall be operative in full force and effect regardless of any
termination or expiration of this Agreement.

         

        18.         Successors and
Assigns.  The benefits of this Agreement shall inure to the
respective successors and permitted assigns of the parties hereto and the
obligations and liabilities assumed in this Agreement by the parties hereto
shall be binding upon their respective successors and assigns.  This
Agreement may not be assigned without the prior written consent of the
nonassigning party.

         

        19.         No
Conflict.  KPMGCF has informed you that it is currently
providing services to several industry participants, some of which may be
competitors of the Company. You agree that the Company and its directors and
shareholders will not commence any action, suit or proceeding or make any
demand, complaint or claim against KPMGCF, its subsidiaries or affiliates, or
their partners, directors, officers, or other personnel during or subsequent to
the Engagement Period alleging that KPMGCF was in a conflict of interest by
providing services to both the Company and other industry
participants.

         

        20.         Member
Firms.  KPMGCF may, in its discretion, request that employees
of one of its member firms affiliated with KPMG International (“Member Firms”)
assist KPMGCF in its performance under this Agreement.  KPMGCF will
remain responsible to Company for the conduct of any such Member Firms in
connection with the performance of this Agreement.  Company
acknowledges that Member Firms are not parties to this Agreement and the
obligations set out in this Agreement are intended to be enforceable by Company
only against KPMGCF.

         

        21.         Force
Majeure.  KPMGCF shall have no liability for delays, failure in
performance, or damages due to fire, explosion, lighting, power surges or
failures, strikes or labor disputes, water, acts of god, the elements, war,
civil disturbances, acts of civil or military authorities, telecommunications
failure, fuel or energy shortages, acts or omissions of communications carriers,
or other causes beyond KPMGCF’s control whether or not similar to the
foregoing.

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

        22.          Intellectual
property.  KPMGCF shall retain ownership of the copyright and
all other intellectual property rights in the product of KPMGCF’s services
performed hereunder, whether oral or tangible, and ownership of KPMGCF’s work
papers.  Company shall acquire ownership of any product of the
services performed in its tangible form upon payment in full of KPMGCF’s fees
and full reimbursement of expenses.  For the purposes of delivering
services to Company and other KPMGCF clients, KPMGCF and its related entities
shall be entitled to use, develop or share with each other knowledge, experience
and skills of general application gained through performing the services
hereunder.

         

        This
Agreement shall be effective as of June 3, 2009 (the “Effective
Date”).

         

        
          
            	 
      	
                    EMPIRE
      RESORTS, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	/s/
      Joseph E. Bernstein
	 
      	 
      	
                    Name:

                  	Joseph
      E. Bernstein
	 
      	 
      	
                    Title:

                  	President
      and CEO


          

        

        


        


        
          	 
      	
                  MONTICELLO
      RACEWAY MANAGEMENT INC.

                
	 
      	 
      
	 
      	
                  By:

                	/s/
      Ronald Radcliffe
	 
      	 
      	
                  Name:

                	Ronald
      Radcliffe
	 
      	 
      	
                  Title:

                	Treasurer
      and Secretary


        

        


        


        
          	 
      	
                  KPMG
      CORPORATE FINANCE LLC

                
	 
      	 
      
	 
      	
                  By:

                	/s/
      Lorie R. Beers
	 
      	 
      	
                  Name:

                	Lorie
      R. Beers
	 
      	 
      	
                  Title:

                	Managing
      Director


        

        


        
          
            
            

          

          
            11