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                                                                   EXHIBIT 10.37

          -------------------------------------------------------------

                  MORTGAGE MODIFICATION AND SPREADER AGREEMENT

                          Dated as of January 12, 2004

                                     between

                       MONTICELLO RACEWAY MANAGEMENT, INC.

                                  ("Mortgagor")

                                       and

                               THE BERKSHIRE BANK
                                  ("Mortgagee")

                              LOCATION OF PROPERTY:
                      Monticello, Sullivan County,New York

                               EXISTING PREMISES:

                          Section 101, Block 1, Lot 1.1
                     Section 101, Block 1, Lot 1.3 (portion)
                           Section 102, Block 4, Lot 1
                          Section 12, Block 1, Lot 46.2
                           Section 12, Block 1, Lot 48
                           Section 12, Block 1, Lot 64

                              ADDITIONAL PREMISES:

                          Section 101, Block 1, Lot 1.3

          -------------------------------------------------------------
                        After recording, please return to

                                 Blank Rome LLP
                              405 Lexington Avenue
                            New York, New York 10174
                       Attention: Michael J. Feinman, Esq.

            This instrument was prepared by the above-named attorney.

                  MORTGAGE MODIFICATION AND SPREADER AGREEMENT
                  --------------------------------------------

            MORTGAGE MODIFICATION AND SPREADER AGREEMENT (this "AGREEMENT") made
as of  the  12th  day  of  January,  2004,  by and  between  MONTICELLO  RACEWAY
MANAGEMENT,  INC.  a New York  corporation  ("MORTGAGOR"),  having an address at
Monticello Raceway, Route 17B, Monticello, New York 12701 and THE BERKSHIRE BANK
("MORTGAGEE"),  having an  address  at 4 East 39th  Street,  New York,  New York
10016.

                              W I T N E S S E T H:
                              --------------------

            A. Mortgagor,  pursuant to the terms of a certain Agreement of Lease
dated as of October 29, 2003 (the "LEASE"), is the owner of a leasehold interest
in certain real  property  described  on SCHEDULE A-1 annexed  hereto and made a
part hereof (the "EXISTING PREMISES");

            B. Pursuant to a certain  Amendment of Lease dated as of January 12,
2004, the premises demised by the Lease has been expanded to include a leasehold
interest in certain  additional real property,  more  particularly  described on
SCHEDULE A-2 annexed hereto and made a part hereof (the "ADDITIONAL PREMISES");

            C.  Mortgagee  is now the  lawful  owner  and  holder  of a  certain
leasehold  mortgage,  security  agreement,  assignment  of leases  and rents and
fixture filing dated as of October 29, 2003 recorded in the Office of the County
Clerk, Sullivan County, New York (the "MORTGAGE"),  which encumbers the Existing
Premises; and

            D. Mortgagee and Mortgagor have agreed to modify the Mortgage in the
manner  hereinafter set forth and to spread the lien of the Mortgage to encumber
the Additional Premises.

            NOW,  THEREFORE,  in consideration  of the foregoing,  of the mutual
agreements  hereinafter set forth and of other good and valuable  consideration,
the receipt and sufficiency of which is hereby acknowledged,  the parties hereto
hereby agree as follows:

            1. REPRESENTATIONS AND WARRANTIES. Mortgagor represents and warrants
to Mortgagee that:

               (a) As of the date hereof,  the  Mortgage is not in default,  nor
has any event occurred which would be a default  thereunder  with the passage of
time, the giving of notice, or both.

               (b) Mortgagor is the holder of insurable  leasehold  title in and
to the Existing  Premises and the Additional  Premises and has full power,  good
right and lawful  authority to encumber its  leasehold  interest in the Existing
Premises  and the  Additional  Premises in the manner and form set forth in this
Agreement and to execute, deliver and perform this Agreement.

               (c) The execution,  delivery and performance of this Agreement by
Mortgagor  does not and will  not  violate  the  terms of any  other  agreement,
mortgage,  indenture or instrument affecting Mortgagor, the Existing Premises or

the  Additional  Premises or any law, rule,  order,  ordinance or statute of any
governmental  authority,  purporting to have  jurisdiction  over Mortgagor,  the
Existing Premises.

               (d) As of the date' hereof,  the principal  amount secured by the
Mortgage is  $3,439,082.94,  and such amount is secured without any right on the
part of Mortgagor of offset,  counterclaim  or defense,  all of which rights are
hereby expressly waived.

            2 SPREADING OF MORTGAGE LIEN. The lien of the Mortgage shall be, and
the same is, hereby spread to encumber the Existing  Premises and the Additional
Premises  (collectively,  the "OVERALL  PREMISES") in the same manner and to the
same effect as though the  descriptions  of each parcel of the Overall  Premises
had been included with the description of the Existing  Premises in the property
description  contained in the Mortgage and as though the Mortgage had originally
constituted,  and so that the Mortgage  shall and now does  constitute,  a valid
mortgage lien on the Overall Premises.

            3. NO NEW INDEBTEDNESS; MAXIMUM PRINCIPAL AMOUNT.

               (a) The  parties  hereto  hereby  certify  that the  Mortgage  as
modified,  and the lien  thereof as spread to the  Additional  Premises  by this
Agreement  secures'  the  same  indebtedness  and  obligations  secured  by  the
Mortgage,  and  evidences  and  secures  no  further  or other  indebtedness  or
obligation.

               (b)  Notwithstanding  anything to the contrary  contained herein,
the  maximum  principal  sum which is  secured  by the  Mortgage  as of the date
hereof,  or which under any  contingency  may be secured by the  Mortgage at any
time in the future,  shall not exceed the  principal  sum of THREE  MILLION FOUR
HUNDRED THIRTY NINE THOUSAND EIGHTY-TWO AND 94/100 DOLLARS ($3,439,082.94).

            4.  NO ORAL  MODIFICATION.  The  terms  hereof  may  not be  waived,
changed, modified,  terminated or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification, termination or discharge is sought.

            5. WAIVERS BY MORTGAGOR.  To the extent permitted by law,  Mortgagor
hereby  waives and agrees not to assert or take  advantage  of: (a) any right to
require Mortgagee to proceed against Mortgagor or any other person or to proceed
against or exhaust any  security  held by Mortgagee at any time or to pursue any
other remedy in Mortgagee's power or under any other agreement before proceeding
against  Mortgagor  hereunder;  (b) demand,  presentment for payment,  notice of
nonpayment, intent to accelerate,  acceleration,  protest, notice of protest and
all other  notices of any kind, or the lack of any thereof,  including,  without
limiting the generality of the foregoing,  notice of the existence,  creation or
incurring of any new or additional  indebtedness  or obligation or of any action
or non-action on the part of Mortgagor,  Mortgagee,  any endorser or creditor of
Mortgagor or of Mortgagor  or on the part of any other person  whomsoever  under
this or any other  instrument in connection  with any  obligation or evidence of
indebtedness  held by  Mortgagee;  (c) any  defense  based upon an  election  of
remedies by Mortgagee; (d) any right or claim or right to cause a marshalling of

                                       2

the assets of Mortgagor;  and (e) any lack of notice of disposition or of manner
of disposition of any collateral for the obligations secure by the Mortgage,  as
modified hereby.

            6.  RATIFICATION.  Mortgagor  hereby (i)  ratifies  and confirms the
lien,  conveyance  and grant  contained  in and created by the Mortgage and (ii)
agrees that nothing  contained in this  Agreement is intended to or shall impair
the  validity  of the  Indebtedness  or the  lien,  conveyance  and grant of the
Mortgage.  Unless specifically  modified by the terms hereof, the parties hereto
ratify and confirm each and every term of the Mortgage,  which shall continue in
full force and effect.

            7. FURTHER  ASSURANCES.  Mortgagor  shall  execute and  deliver,  at
Mortgagor's  sole  cost  and  expense,  such  additional  documents  as shall be
requested by Mortgagee  from time to time to effectuate the terms and conditions
of  this  Agreement  and  the  Mortgage,  including,  without  limitation,  such
affidavits as shall be necessary to permit this  Agreement to be recorded in the
appropriate   public   records.   Mortgagor   hereby   appoints   Mortgagee  its
attorney-in-fact  to  execute,  acknowledge  and  deliver for and in the name of
Mortgagor any and all of the  instruments  mentioned in this  section,  and this
power, being coupled with an interest, shall be, irrevocable as long as any part
of the obligations secured by the Mortgage remain unsatisfied.

            8. SUCCESSORS AND ASSIGNS; GOVERNING LAW.

               (a) This  Agreement  shall bind, and inure to the benefit of, the
parties hereto, their respective successors and permitted assigns.

               (b)  This  Agreement  shall  be  governed  by  and  construed  in
accordance with the laws of the State of New York.

            9.  COUNTERPARTS.  This  Agreement may be executed in  counterparts,
each of which shall be deemed to be an original at such time as all parties have
executed and delivered at least one counterpart.

                                       3

            IN WITNESS WHEREOF,  this Agreement has been executed by the parties
as of the day and year first written above.

                                            Mortgagor:

                                            MONTICELLO RACEWAY MANAGEMENT, INC.

                                            By: /s/ Cliff Ehrlich
                                                -------------------------------
                                            Name:  Cliff Ehrlich
                                            Title: President

                                            Mortgagee:

                                            THE BERKSHIRE BANK

                                            By: /s/ Peter H. Kim
                                                --------------------
                                            Name:  Peter H. Kim
                                            Title: Vice President

                       MORTGAGE MODIFICATION AND SPREADER

STATE of NEW YORK   )
                    ) ss.:
COUNTY OF SULLIVAN  )

            On the 13 day of January,  2004, before me, the undersigned a Notary
Public in and for said State,  personally  appeared  Cliff  Ehrlich,  personally
known to me on the basis of  satisfactory  evidence to be the  individual  whose
name is  subscribed  to the within  instrument  and  acknowledged  to me that he
executed the same in his capacity,  and that by his signature on the instrument,
the  individual,  or the  person  upon  behalf  of which the  individual  acted,
executed the instrument.

                                             Kim Willison
                                             ------------------------------
                                             Notary Public

                                             KIM WILLISON
                                             NOTARY PUBLIC, STATE OF NEW YORK
                                             NO. 01W16093630
                                             QUALIFIED IN QUEENS COUNTY
                                             MY COMMISSION EXPIRES JUNE 2, 2007

                       MORTGAGE MODIFICATION AND SPREADER

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NEW YORK      )

            On the _____ day of January,  2004,  before me, the  undersigned,  a
Notary  Public in  and for said  State,  personally  appeared  ________________,
personally  known  to me  on  the  basis  of  satisfactory  evidence  to be  the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his  capacity,  and that by his signature on the
instrument,  the  individual,  or the person upon behalf of which the individual
acted, executed the instrument.

                                            ----------------------------
                                            Notary Public

STATE OF NEW YORK       )
                        ) ss.
COUNTY OF NEW YORK      )

            On the 9th day of January, 2004, be re me, the undersigned, a Notary
Public in and for said State, personally appeared Peter H. Kim, personally known
to me on the basis of satisfactory  evidence to be the individual  whose name is
subscribed to the within  instrument and acknowledged to me that he executed the
same  in his  capacity,  and  that  by his  signature  on  the  instrument,  the
individual,  or the person upon behall of which the individual  acted,  executed
the instrument.

                                     /s/ Jeanette Kahan
                                     ---------------------------------
                                         Notary Public

                                  SCHEDULE A-1

ALL that tract or parcel of, land, situate,  in the Town of Thompson,  County of
Sullivan  and State of New York,  a portion  of said  parcel  being  within  the
Village of Monticello, being' bounded and described as follows:

BEGINNING  at a point in the center of a traveled  way,  of Kaufman  Road County
Road No 59, at the  northwest  corner of lands of New York State  Electric & Gas
Corporation,  as  described  in Liber  562 of Deeds at Page 464 and Liber 572 of
Deeds at Page 27;

and  running.  thence from said place of  beginning  the  following  courses and
distances along the center of traveled way of said Kaufman Road

north 17 degrees 41 minutes east, 228.60 feet;

north 16 degrees 13 minutes east, 155.04 feet;

north 13 degrees 59 minutes east,  85.94 feet;

north 11 degrees 26 minutes east, 98.34 feet;

north 9 degrees 16 minutes east, 82.10 feet;

north 8 degrees 06 minutes  east,  99.05 feet;

north 5 degrees 50 minutes east,  107.45 feet;

north 3 degrees 55 minutes east, 172.79 feet;

north 3 degrees 25 minutes east, 105.26 feet;

north 3  degrees  11  minutes  east,  163.50  feet to a point in the  center  of
traveled way of said road at the  northwest  corner of the  premises  originally
described in Liber 552 pg 114;

thence  leaving said road and running.  south 66 degrees 14 minutes east,  47.85
feet passing along the north line of the premises described in said Liber 552 of
Deeds at Page 114 to a point on the bounds of, said Kaufman Road as described in
Liber 596 of Deeds at Page 21

thence the  following  courses and distances  along the easterly  bounds of said
Kaufman Road:

north 3 degrees 02 minutes east,  331.18 feet;

north 2 degrees 11 minutes east, 548.26 feet;

north 4 degrees  37 minutes  east,  302.01  feet to an iron  stake  found at the
southwest  corner of lands of Kaufman and others as  described  in Liber 1045 of
Deeds at Page 229;

                                     Page 1

                                  SCHEDULE A-1
                                   (continued)

thence  leaving said road and running south 66 degrees 30 minutes  east,  891.08
feet,  passing along the south line of.  Kaufman and others parcel to a concrete
highway monument found-on the west bounds of New York State Route 17-Quickway;

thence  south  17  degrees  27  minutes  east,   434.76  feet   passing;   along
sail westerly highway bounds to a concrete highway monument found;

thence continuing along said bounds-south 9 degrees 37 minutes east, 175.95 feet
to a concrete highway monument found;

thence continuing along said highway bounds the following courses and distances:

south 19 degrees 45 minutes west, 125.32 feet to a concrete highway monument

south 17 degrees 38 minutes east, 199.80 feet to a concrete highway monument;

south 26 degrees 15 minutes east, 717.73 feet to a point;

south 29 degrees 50 minutes east, 419.41 feet to a point;

south 20 degrees 30 minutes east, 201.21 feet to a point;

south 37-degrees 07 minutes east, 530.90 feet to a concrete highway monument;

south 42 degrees 08 minutes east, 364.70 feet to a concrete highway monument

south 44 degrees 01 minutes east, 400.66 feet to a concrete highway monument;

south 50 degrees 14 minutes east, 124.99 feet to a point;

and  thence  south 35 degrees 40  minutes  east,  474.10  feet to a point on the
westerly  bounds of said highway at the most northerly  corner of Lands of Mapes
and Lane as  described  in Liber  798 pg  Deeds at Page 951 (it  being  the most
northerly corner of those lands lying west of N.Y.S. Route 17);

thence  leaving  said  highway  bounds  and running  south 43 degrees 08 seconds
west,  491.83 feet  passing to and along a stone wall  evidencing  the bounds of
said Mapes & Lane parcel to a stone wall evidencing the bounds of said Mapes and
Lane Parcel to a stone wall corner;

                                     Page 2

                                  SCHEDULE A-1
                                   (continued)

thence south 62 degrees 45 minutes east,  432.36 feet passing  generally along a
stone wall evidencing the bounds of said Mapes and Lane parcel to a point;

thence south 24 degrees 57 minutes east,  603.60 feet continuing  along lands of
said Mapes and Lane to a stone wall corner;

thence  still  along said lands  south 68 degrees 25 minutes  east,  458.75 feet
passing  along a stone  wall to a point on the  westerly  bounds  of said  State
Highway;

thence south 0 degrees 22 minutes east,  25.17 feet passing along,  said highway
bounds to a point;

thence  continuing along the northerly bounds of said highway,  south 58 degrees
35 minutes west, 602.89 feet to a point;

thence still along said bounds and continuing  along the northerly bounds of New
York State Route 17B the following courses and distances:

south 84 degrees 03 minutes west, 163.86 feet;

north 78 degrees 41 minutes  west,  305.31 feet to a concrete  highway  monument
found;

north 68 degrees 43 minutes  west,  215.81 feet to a concrete  highway  monument
found;

north 65 degrees 13 minutes west, 93.42 feet to a point;

north 68 degrees  21 minutes  west,  90.03 feet to a concrete  highway  monument
found;

north 65 degrees 53 minutes  west,  231.10 feet to a concrete  highway  monument
found;

north 65 degrees 36 minutes west, 352.52 feet to a point;

north 62 degrees 45 minutes  west,  612.98 feet to a concrete  highway  monument
found;

north 58 degrees  02 minutes  west,  89.52 feet to a concrete  highway  monument
found;

north 70 degrees 48 minutes  west,  151.35 feet to a concrete  highway  monument
found;

north 65 degrees 36 minutes west, 352.52 feet to a point;

north 62 degrees 45 minutes  west,  612.98 feet to a concrete  highway  monument
found;

north 58 degrees  02 minutes  west,  89.52 feet to a concrete  highway  monument
found;

                                     Page 3

                                  SCHEDULE A-1
                                   (continued)

north 62 degrees 46 minutes  west,  552.06 feet to a concrete  highway  monument
found;

north 64 degrees  57 minutes  west,  57.95 feet to a concrete  highway  monument
found;

north 60 degrees 34 minutes  west,  317.75 feet to a concrete  highway  monument
found;

north 62 degrees 30 minutes  west,  669.85 feet to a concrete  highway  monument
found;

and north 65 degrees 15 minutes  west,  35.70 feet to, a point on the  northerly
bounds of said N.Y.S.  Route 17B at the southeast corner of lands of the Village
of Monticello as described in Liber 616 of Deeds, at Page 480;

thence leaving said highway bounds and running north 15 degrees 53 minutes east,
41.69 feet passing along the east bounds of said Village parcel to a point;

thence north 68 degrees 45 minutes west,  40.00 feet passing along the northerly
bounds of said  Village  parcel to a point on the east bounds of lands of Jodana
Realty,  Inc.,  as  described in Land Record Liber 1748 page 193 and Land Record
Liber 1636 at page 203;

thence north 15 degrees 53 minutes  east,  251.56 feet  passing  along said east
bounds to an iron pin found;

thence continuing along the north line of said Jodana Realty, Inc. parcel, north
61 degrees 51 minutes west, 194.93 feet to a point in the center or traveled way
of Kaufman Road;

thence north 17 degrees 39 minutes east, 946.54 feet passing along the center of
traveled way of said Kaufman Road to a point at the southwest corner of said New
York State Electric & Gas Corporation parcel;

thence  leaving said road and running south 72 degrees 46 minutes  east,  184.25
feet passing along the south bounds of said Electric & Gas parcel to an iron pin
set;

thence  north 17 degrees 14 minutes  east,  225.00 feet  passing  along the east
bounds of said Electric & Gas parcel to an iron-pin set;

thence north 72 degrees 46 minutes  west,  182.07 feet  passing  along the north
bounds of said Electric & Gas parcel to the point or place of BEGINNING.

            Said Parcel containing approximately 228.84 acres of land.

                                     Page 4

                                  SCHEDULE A-1
                                   (continued)

Subject to easements of record to public utilities and highway use dedication of
record.

The above parcel being subject to certain permanent  drainage  easements for New
York State Route 17-Quickway and New York State Route 17B State Highway No. 890,
said  easements  being shown on a survey map of Monticello  Raceway  prepared by
George H. Fulton,  L. S., in February 1995. Said easements  being  identified by
the following parcel numbers on New York State Highway Maps: No. 78, No. 77, No.
81, No: 76, No. 75, No. 74, No. 73, No. 72, No. 125" and No. 103.

Subject to easements of record to public utilities.

Subject to a temporary highway easement for state Highway No. 5035-N.Y.S.  Route
17-Quickway as set forth on highway Map No. 31 as Parcel No. 109

EXCEPTING  therefrom  ALL that certain  plot,  piece of parcel of land lying and
being in the Village of  Monticello,  Town of  Thompson,  County of Sullivan and
State of New York being more  particularly  bounded and described and designated
as Parcel No 1 (St Regis Mohawk Trust Parcel) on the Final  Revised  Subdivision
Plat of Lands of Catskill Development,  L.L.C.", dated. May 25, 1999, made by T.
M. Depuy, Engineering &Land Surveying,  P.C., and filed in the Office of the
Sullivan  County Clerk on February 4, 2000 as Map No.  8-271,  together with and
subject to easements as shown thereon.  (Said parcel consisting of approximately
29.31 acres of land)

FOR CONVEYANCE ONLY     Being the same premises as described in a Lease made to
not for policy          MONTICELLO  RACEWAY  MANAGEMENT,  INC., a Memorandum  of
                        which is to be recorded in the Sullivan  County  Clerk's
                        Office.

FOR INFORMATION ONLY
County:   Sullivan    A)    Section 101     Block 1     Lot         1.1
County:   Sullivan    B)    Section 101     Block 1     Lot         1.3
County:   Sullivan    C)    Section 102     Block 4     Lot         1
County:   Sullivan    D)    Section 12      Block 1     Lot         46.2
County:   Sullivan    E)    Section 12      Block 1     Lot         48
County:   Sullivan    F)    Section 12      Block l     Lot         64

            (SECTION BLOCK AND LOT INFORMATION FOR INFORMATION ONLY),
            ---------------------------------------------------------

                                     Page 5

                                  SCHEDULE A-2
                                  ------------

                              PROPERTY DESCRIPTION
                               Additional Premises

ALL that certain plot, piece or parcel of land lying and being in the Village of
Monticello,  Town of  Thompson,  County of Sullivan  and State of New York being
more  particularly  bounded and  described  and  designated as Parcel No. 1 (St.
Regis Mohawk Trust  Parcel) on the Final  Revised  Subdivision  Plat of Lands of
Catskill  Development,  L.L.C.",  dated  May 25,  1999,  made  by T.  M.  Depuy,
Engineering  & Land  Surveying,  P.C.,  and filed in the Office of the  Sullivan
County Clerk on February 4, 2000 as Map No. 8-271,  together with and subject to
easements as shown thereon. (Said parcel consisting of approximately 29.31 acres
of land).sec document

                                                                   EXHIBIT 10.40

                               CLOSING MEMORANDUM

            This Closing  Memorandum (this "MEMO  AGREEMENT") is entered into as
of  January  12,  2004 by and among  Catskill  Development,  L.L.C.,  a New York
limited  liability  company  ("CATSKILL"),  Alpha  Monticello,  Inc., a Delaware
corporation  ("ALPHA"),  Americas Tower Partners, a New York general partnership
("ATP"),  Monticello Realty L.L.C., a Delaware limited liability company ("MR"),
Watertone Holdings, LP, a Delaware limited partnership ("WATERTONE"); Fox-Hollow
Lane, L.L.C., a New York limited liability company ("FOX"), Shamrock Strategies,
Inc., a Delaware  corporation  ("SHAMROCK"),  Clifford A. Ehrlich ("CE"),  BY-B,
LLC, a New York limited  liability  company  ("BKB"),  Robert A. Berman  ("RB"),
Philip B. Berman ("PB"),  Scott A. Kaniewski  ("SK"),  Kaniewski  Family Limited
Partnership ("KFLP"), KFP Trust ("KFP"), New York Gaming, LLC, a Georgia limited
liability  company  ("NYG") and Empire  Resorts,  Inc.,  a Delaware  corporation
("EMPIRE").  Each of the  signatories  hereto  is  individually  a  "PARTY"  and
collectively the "PARTIES".  Capitalized terms not otherwise defined herein will
have  the  meanings  assigned  to  such  terms  in the  Securities  Contribution
Agreement (as such term is defined below).

                                    RECITALS

A.          The  Parties   entered  into  that  certain   Amended  and  Restated
            Securities Contribution Agreement, dated as of December 12, 2003, by
            and between the Parties (the "SECURITIES  CONTRIBUTION  AGREEMENT"),
            pursuant  to  which:   (i)  the  Transferors  are  contributing  the
            Interests to Empire;  and (ii) Empire is issuing  Exchange Shares to
            the Transferors in exchange for the Interests.

B.          Contemporaneously  with  the  execution  and  delivery  hereof,  the
            Transaction is being consummated.

C.          The Parties  desire to set forth their  understanding  in connection
            therewith  and have a memorandum  of the actions and  agreements  on
            account thereof.

                                    AGREEMENT

            In consideration  of the foregoing  recitals and the mutual promises
and covenants contained herein, the sufficiency of which is hereby acknowledged,
the Parties agree as follows:

                                    ARTICLE I
                    CLOSING ACTIONS AND DELIVERY OF DOCUMENTS

The following  steps and actions of the Parties were taken at the closing of the
Transaction,  which took place on January  12,  2004 at the  offices of Latham &
Watkins LLP, 885 Third Avenue, New York, New York, 10022:

            1)   delivery of an Opinion from Olshan Grundman Frome  Rosenzweig &
                 Wolosky LLP that neither Empire nor the Transferors  (including
                 any direct or indirect  owner of any of the  Transferors)  will
                 recognize any income,  gain or loss for U.S. federal income tax
                 purposes as a direct result of the Transaction and that Maurice

                 Dabbah  will not  recognize  any gain or loss for U.S.  federal
                 income tax purposes upon any subsequent  resale of the Exchange
                 Shares,  assuming no change in the law and that Empire is not a
                 U.S. Real Property Holding Company at the time of such resale;

            2)   the bylaws of Empire  shall be  amended,  substantially  in the
                 form of Exhibit C to the Securities Contribution Agreement;

            3)   the  certificate of  incorporation  of Empire shall be amended,
                 substantially  in the  form  of  Exhibit  D to  the  Securities
                 Contribution Agreement;

            4)   delivery  of a Letter  Agreement  regarding  the Cayuga  Letter
                 Agreement  providing  for  Empire's  assumption  of  Catskill's
                 obligations under such letter agreement;

            5)   termination of the Service Compensation Agreements;.

            6)   the Notice Letter,  dated as of January 12, 2004, from Catskill
                 to the Cayuga Nation and the Cayuga Catskill  Gaming  Authority
                 regarding  the  assignment  of  agreements,   shall  have  been
                 acknowledged  by the  Cayuga  Nation  and the  Cayuga  Catskill
                 Gaming Authority;

            7)   Empire  shall have  received  certificates  with respect to the
                 representations   and   warranties   made  in  the   Securities
                 Contribution Agreement, dated the Closing Date, and executed by
                 an  executive  officer  of  Catskill  and  each of the  Current
                 Catskill   Members   (other   than  CE,  who  shall  sign  such
                 certificate individually);

            8)   Empire shall have  received a  certificate  with respect to the
                 representations  and warranties  made by the MRD Members in the
                 Securities Contribution Agreement, dated the Closing Date,. and
                 executed by each of the MRD Members;

            9)   Each of the Affiliates  shall have  executed.  and delivered to
                 Empire an Affiliate Agreement;

            10)  Empire   shall  have   received  an  opinion  from  Kane  Reece
                 Associates,  Inc. to the effect that the Transaction is fair to
                 Empire and its stockholders  from a financial point of view and
                 the Special Committee shall have approved the Transaction;

            11)  the Lease shall have been amended, substantially in the form of
                 Exhibit E to the Securities Contribution Agreement;

            12)  the Shared Facilities Agreement shall have been amended whereby
                 MRM shall become a co-party to the Shared Facilities Agreement;

            13)  Empire  shall have  received  an opinion  from each of Latham &
                 Watkins LLP, Patterson,  Belknap, Webb & Tyler LLP and Stites &
                 Harbison,  PLLC, substantially in the form of Exhibits F-A, F-B
                 and  F-C,   respectively,   to  the   Securities   Contribution
                 Agreement;

                                       2

            14)  Catskill and the Transferors  shall have received a certificate
                 with  respect to the  representations  and  warranties  made by
                 Empire  in the  Securities  Contribution  Agreement,  dated the
                 Closing Date, and executed by an executive officer of Empire;

            15)  Catskill  and the  Transferors  shall have  received an opinion
                 from  Olshan  Grundman  Frome  Rosenzweig  &  Wolosky  LLP,
                 counsel  to Empire,  substantially  in the form of Exhibit G to
                 the Securities Contribution Agreement;

            16)  Catskill and the Transferors  shall have received a certificate
                 from  Empire's  transfer  agent  verifying,   in  all  material
                 respects,  the  accuracy of the  outstanding  shares of capital
                 stock  of  Empire  as  set  forth  in  Section  5.8(a)  of  the
                 Securities Contribution Agreement,  subject to modifications as
                 may  be  contemplated  by  Section  6.3(b)  of  the  Securities
                 Contribution Agreement;

            17)  the Transferors shall have received the Exchange Shares;

            18)  delivery of an assignment and assumption agreement, in form and
                 substance  reasonably  satisfactory to it, as to the assumption
                 by Empire of the Liabilities;

            19)  the Employment  Agreements  shall have been amended as provided
                 in Section 6.17 of the Securities Contribution Agreement,  with
                 such amendments to be effective as of the Closing Date; and

            20)  Empire shall have  executed a guarantee  of lease  guaranteeing
                 MRM's obligations under the Lease, substantially in the form of
                 Exhibit H to the Securities Contribution Agreement.

                                   ARTICLE II
                 POST-CLOSING ACTIONS AND DELIVERY OF DOCUMENTS

            As of the Closing Date,  certain  conditions to the Closing have not
been satisfied and certain documents that were to be executed in connection with
the  Closing  have not been  executed.  The  parties  have  agreed  to close the
Transaction  notwithstanding  the failure to satisfy  such  requirements  on the
condition that the delinquent  party agrees to satisfy the obligations set forth
on Exhibit A attached  hereto within ten (30)  calendar days  following the date
hereof. Each of the parties hereby agrees that it shall satisfy the requirements
set forth on Exhibit A attached  hereto  within such thirty  (30)  calendar  day
period.

                                   ARTICLE III
                              POST-CLOSING PAYMENTS

            Empire agrees to, and shall, pay all of the. fees, including,  legal
fees, costs and expenses,  incurred by Catskill,  the Remaining Catskill Members
and the Transferred Companies incident to or in connection with the negotiation,
preparation,  execution, delivery and performance of the Securities Contribution
Agreement and the Catskill Related  Agreements,  including  without  limitation,
legal fees,  and  expenses,  and  payments  made in  connection  with  obtaining
consents,  waivers,  agreements and permits,  any stock transfer,  real property
transfer, documentary transfer or other similar taxes and sales, use or

                                       3

other  taxes  imposed,by  reason of or on account  of, or  arising  out of or in
connection  with the  sale of the  Interests  and any  deficiency,  interest  or
penalty  asserted  with respect  thereto.  The legal fees and expenses  shall be
payable  on  the  date  of  closing  of the  private  placement  transaction  as
contemplated  in that  certain  engagement  letter by and  between  Jefferies  &
Company,  Inc. and Empire,  dated as of October 30, 2003,  but in no event later
than February 29, 2004.

                                   ARTICLE IV
                                  MISCELLANEOUS

1.   FURTHER  ASSURANCES.  Each Party will take such other  actions as any other
     Party may  reasonably  request or as may be  necessary  or  appropriate  to
     consummate  or  implement  the  transactions   contemplated  by  this  Memo
     Agreement or to evidence such events or matters.

2.   GOVERNING  LAWS.  This Memo Agreement and the legal  relations  between the
     Parties will be governed by and  construed in  accordance  with the laws of
     the State of New York  applicable  to contracts  made and performed in such
     State and  without  regard to  conflicts  of law  doctrines,  except to the
     extent that state law as to certain matters is preempted by federal law.

3.   AMENDMENTS;  WAIVERS.  Except  as  expressly  provided  herein,  this  Memo
     Agreement  may be amended only by  agreement in writing of all Parties.  No
     waiver of any  provision  nor consent to any exception to the terms of this
     Memo  Agreement  or any  agreement  contemplated  hereby will be  effective
     unless in writing and signed by all  Parties and then only to the  specific
     purpose,  extent and  instance so  provided.  No failure on the part of any
     Party to exercise or delay in exercising any right hereunder will be deemed
     a waiver  thereof,  nor will any single or partial  exercise  preclude  any
     further or other exercise of such or any other right.

4.   NO  ASSIGNMENT.  Neither this Memo  Agreement nor any rights or obligations
     under it are  assignable by one Party without the prior written  consent of
     the other Parties. Any such assignment without the prior written consent of
     the other Parties will be void ab initio.

5.   NOTICES.  All  notices,  demands  and other  communications  to be given or
     delivered  under or by reason of the provisions of this Memo Agreement will
     be in writing and will be deemed to have been given:  (i) immediately  when
     personally  delivered;  (ii) when  received  by first  class  mail,  return
     receipt requested; (iii) one day after being sent for overnight delivery by
     Federal Express or other overnight  delivery service;  or (iv) when receipt
     is acknowledged,  either electronically or otherwise, if sent by facsimile,
     telecopy or other  electronic  transmission  device.  Notices,  demands and
     communications to the Parties will, unless, another address is specified by
     the Parties hereafter in writing, be sent to the address indicated below:

                                       4

            If to Catskill, addressed to:

            Catskill Development, L.L.C.
            c/o Monticello Raceway
            Route 17B
            Monticello, New York 12701
            Attention: Morad Tahbaz, President
            Fax: (845) 791-1402

            With a copy to (which will not constitute notice):

            Latham & Watkins LLP
            885 Third Avenue, Suite 1000
            New York, New York 10022
            Attention: James I. Hisiger, Esq.
            Fax: (212) 751-4864

            If to ATP or MR, addressed to:

            c/o Americas Tower Partners
            77 East 77th Street
            New York, New York 10021
            Attention: Ralph Bernstein, Managing Director
            Fax: (212) 593-0469

            With a copy. to (which will not constitute notice):

            Latham & Watkins LLP
            885 Third Avenue, Suite 1000
            New York, New York 10022
            Attention: James I. Hisiger, Esq.
            Fax: (212) 751-4864

            and,  with  respect  to MR, a copy to  (which  will  not  constitute
            notice):

            Patterson, Belknap, Webb & Tyler LLP
            1133 Avenue of the Americas
            New York, NY 10036
            Attention: Maureen W. McCarthy, Esq.
            Facsimile:: (212) 336-2222

                                       5

            If to Empire or Alpha, addressed to:

            Empire Resorts, Inc.
            707 Skokie Boulevard, Suite 600
            Northbrook, Illinois 60062
            Attention: Scott A. Kaniewski
            Fax: (847) 418-3805

            With a copy to (which will not constitute notice):

            Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower
            65 East 55th Street
            New York, New York 10022
            Attention: Robert H. Friedman, Esq.
            Fax: (212) 451-2222

            If to SK, KFLP, KFP, NYG, Watertone or BKB, addressed to:

            c/o Scott A. Kaniewski
            2412 Central Park Avenue
            Evanston, Illinois.60201
            Fax: (847) 328-4032

            If to CE, addressed to:

            Clifford A. Ehrlich
            c/o Monticello Raceway
            Route 17B
            Monticello, New York 12701
            Fax:. (845) 791-1402

            If to Fox, addressed to:

            Fox-Hollow Lane, LLC
            c/o Charles Degliomini
            12 Fox Hollow Lane
            Old Westbury, New York 11568
            Fax: (509) 461-7755

            If to Shamrock, addressed to:

            Shamrock Strategies, Inc.
            c/o Christopher Cushing, President
            1401 New York Avenue, NW
            Suite 810
            Washington, DC 20005
            Fax: (202) 789-4242

            If to RB, addressed to:

            735 Starlight Road
            Monticello, New York 12701
            Fax: (845) 791-1547

            If to PB, addressed to:

            c/o Monticello Raceway
            Route 17B
            Monticello, New. York 12701
            Attention: Philip B. Berman
            Fax: (845) 791-1402

                                       6

6.   HEADINGS.   The  descriptive   headings  of  the  Articles,   Sections  and
     subsections  of this Memo  Agreement  are for  convenience  only and do not
     constitute a part of this Memo Agreement.

7.   COUNTERPARTS.  This Memo  Agreement and any  amendment  hereto or any other
     agreement  delivered  pursuant  hereto  may be  executed  in  one  or  more
     counterparts  and  by  different  Parties  in  separate  counterparts.  All
     counterparts  will  constitute  one and the same  agreement and will become
     effective when one or more  counterparts have been signed by each Party and
     delivered to the other Parties.

8.   SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES.   This Memo Agreement
     is  binding  upon and will  inure to the  benefit  of each  Party and their
     respective  successors  or  assigns,  and  nothing in this Memo  Agreement,
     express or implied,  is intended to confer upon any other Person any rights
     or  remedies  of any  nature  whatsoever  under or by  reason  of this Memo
     Agreement.

9.   INTERPRETATION.  Each Party  acknowledges  that it has been  represented by
     counsel in connection  with this Memo Agreement.  Accordingly,  any rule of
     law or any legal decision that would require  interpretation of any claimed
     ambiguities in this Memo Agreement against the Party that drafted it has no
     application and is expressly waived.  The provisions of this Memo Agreement
     will be  interpreted  in a  reasonable  manner to effect  the intent of the
     Parties.

10.  GENERAL RULES OF CONSTRUCTION. For all purposes of this Memo Agreement: (i)
     the terms defined in this Memo Agreement  include the plural as well as the
     singular;  (ii)  all  references  in  this  Memo  Agreement  to  designated
     "Articles,"  "Sections"  and  other  subdivisions  are to  the  designated
     Articles,  Sections  and  other  subdivisions  of the  body  of  this  Memo
     Agreement;   (iii)  pronouns  of  either  -gender  or  neuter  include,  as
     appropriate, the other pronoun forms; (iv) the words "herein," "hereof" and
     "hereunder"  and other words of similar import refer to this Memo Agreement
     as a whole and not to any particular Article, Section or other subdivision;
     (v) "or" is not exclusive;  (vi)  "including" and "includes" will be deemed
     to be  followed  by "but  not  limited  to" and  "but is not  limited  to,"
     respectively;  (vii) any definition of or reference to any law,  agreement,
     instrument or other document  herein will be construed as referring to such
     law, agreement,  instrument or other document as from time to time amended,
     supplemented  or  otherwise  modified;  and  (viii)  any  definition  of or
     reference to any statute  will be construed as referring  also to any rules
     and regulations promulgated thereunder.

                            [SIGNATURE PAGES FOLLOW]

                                       7

            IN WITNESS WHEREOF,  each of the Parties hereto has caused this Memo
Agreement to be executed by its duly authorized  officers as of the day and year
first above written.

                                      CATSKILL DEVELOPMENT, L.L.C.

                                      By:  /s/ Morad Tahbaz
                                           --------------------
                                           Name: Morad Tahbaz
                                           Title: President

                                      ALPHA MONTICELLO, INC.

                                      By:  /s/ Thomas W. Aro
                                           ---------------------
                                           Name:  Thomas W. Aro
                                           Title: President

                                      AMERICAS TOWER PARTNERS

                                      By:  /s/ Joseph E. Bernstein
                                           ---------------------------
                                           Name: Joseph E. Bernstein
                                           Title: Managing Director

                                      MONTICELLO REALTY L.L.C.

                                      By:  By: MANHATTAN DEVELOPMENT
                                           CORPORATION, its Manager

                                      By:  /s/ Maurice Dabbah
                                           -------------------------
                                           Name: Maurice Dabbah
                                           Title: President

                                      WATERTONE HOLDINGS, LP

                                      By:  By: BKB, LLC, its general partner

                                      By:  /s/ Scott A. Kaniewski
                                           ----------------------
                                           Name: Scott A. Kaniewski
                                           Title: Member

                                      FOX-HOLLOW LANE, L.L.C.

                                      By:  /s/ Charles Degliomini
                                           ----------------------
                                           Name: Charles Degliomini
                                           Title: Managing Member

                                      SHAMROCK STRATEGIES, INC.

                                      By:  /s/ Christopher T. Cushing
                                           --------------------------
                                           Name: Christopher T. Cushing
                                           Title: Authorized Representative

                                      /s/ Clifford A. Ehrlich
                                      -----------------------------
                                           Clifford A. Ehrlich

                                      /s/ Robert A. Berman
                                      -----------------------------
                                      Robert A. Berman

                                      /s/ Philip B. Berman
                                      -----------------------------
                                      Philip B. Berman

                                      /s/ Scott A. Kaniewski
                                      ----------------------------
                                      Scott A. Kaniewski

                                      KANIEWSKI FAMILY LIMITED PARTNERSHIP

                                      By: /s/ Scott A. Kaniewski
                                          --------------------------
                                         Name:  Scott A. Kaniewski
                                         Title: General Partner

                                      KFP TRUST

                                      By: /s/ Stacey Kaniewski
                                          ------------------------
                                          Name: Stacey Kaniewski
                                          Title: Trustee

                                      NEW YORK GAMING, LLC

                                      By: /s/ Scott A. Kaniewski
                                          --------------------------
                                          Name:  Scott A. Kaniewski
                                          Title: Manager

                                      EMPIRE RESORTS, INC.

                                      By: /s/ Thomas W. Aro
                                          --------------------------
                                          Name:  Thomas W. Aro
                                          Title:

                                      BKB, LLC

                                      By: /s/ Scott A. Kaniewski
                                          --------------------------
                                          Name:  Scott A. Kaniewski
                                          Title: Member

                                    EXHIBIT A

                      POST-CLOSING ACTIONS AND DELIVERABLES

1.   The  Transferors   shall  have  delivered  to  Empire  executed   Affiliate
     Agreements from ATP and NYL.

2.   Patterson  shall have  delivered  to Empire the executed  legal  opinion of
     Patterson.

3.   Empire shall have  delivered an execution  copy of the  Certificate  of the
     Transfer Agent regarding Empire's Capitalization.

4.   Empire shall have delivered to the Transferors the execution  copies of and
     signature of the Berkshire Bank to the Berkshire Bank Waivers.

5.   The Executed Mortgage  Modification and Spreader  Agreement shall have been
     delivered.

6.   The 255  Affidavit  pursuant  to the  Mortgage  Modification  and  Spreader
     Agreement shall have been delivered.

7.   BKB, LLC shall have delivered the executed  written  consent of the members
     of BKB, LLC.

8.   Scott  A.  Kaniewski  shall  have  delivered  the  signatures  of  Scott A.
     Kaniewski and.  Kaniewski  Family Limited  Partnership to the Assignment by
     Scott A. Kaniewski of some of his interest in BKB, LLCC to KFP Trust.

9.   Scott  A.  Kaniewski  shall  have  delivered  the  signatures  of  Scott A.
     Kaniewski and Kaniewski  Family Limited  Partnership to the Assignment,  by
     Scott A. Kaniewski of some of his interest in BKB, LLC to Kaniewski  Family
     Limited Partnership.

10.  Scott A. Kaniewski shall have delivered the signature of Scott A. Kaniewski
     to the Assignment by Scott A. Kaniewski of some of his interest in BKB, LLC
     to Robert A. Berman.

11.  Scott A. Kaniewski shall have delivered the signature of Scott A. Kaniewski
     to the  Assignment  by Philip Berman of some of his interest in BKB, LLC to
     Robert A. Berman.

12.  BKB,  LLC shall have  delivered  the BKB  signature to the  Assignment  and
     Assumption Agreement between BKB, LLC and Americas Tower Partners regarding
     the transfer of 25% interest in  Monticello  Raceway  Development  Company,
     LLC.

13.  MR and Watertone,  respectively  shall have delivered the execution copy of
     and  notarized  signature  of  Monticello  Realty  L.L.C.  to the  Note and
     Mortgage  Modification  Agreement  regarding the  assignment of interest by

     Watertone  Holdings,  LP to  Scott  A.  Kaniewski,  Robert  A.  Berman  and
     Kaniewski Family Limited Partnership.

14.  ATP,  Watertone and MR shall have  delivered the execution copy of Catskill
     Members' Agreement.

15.  Executed Mortgage Assumption  Agreement of Scott A. Kaniewski,  pursuant to
     the Mortgage Note and Modification Agreement.

16.  Executed Mortgage Assumption Agreement of Robert A. Berman, pursuant to the
     Mortgage Note and Modification Agreement.

17.  Executed  Mortgage   Assumption   Agreement  of  Kaniewski  Family  Limited
     Partnership, pursuant to the Mortgage Note and Modification Agreement.

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