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                                                                   EXHIBIT 10.13

                               SECURITY AGREEMENT
                               ------------------

            This Security Agreement  ("Agreement") dated as of October 29, 2003,
by  and  between  CATSKILL   DEVELOPMENT,   LLC,  a  limited  liability  company
("Debtor"),  with its chief executive  office at c/o Monticello  Raceway,  Route
17B, Monticello, NY 12701, and THE BERKSHIRE BANK ("Secured Party").

                                   BACKGROUND
                                   ----------

            A. Secured  Party,  as lender,  and Monticello  Raceway  Management,
Inc., as borrower (the "Borrower") are parties to that certain Loan and Security
Agreement  dated as of even date  herewith  (as amended,  modified,  replaced or
restated from time to time,  the "Loan  Agreement").  In  connection  therewith,
Debtor has agreed under the terms of Amendment No. 1 to Management  Agreement of
even date herewith  between Debtor and Borrower to grant a security  interest in
the Collateral (as defined below) to secure the Borrower's Obligations. The Loan
Agreement and all related  agreements,  instruments  and documents are hereafter
referred to as the "Loan Documents".  All capitalized terms used but not defined
in clauses  (a)  through  (m) in  Section  1.1  herein  shall have the  meanings
ascribed thereto in the UCC and all other capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Loan Agreement.

            B. Debtor  desires to grant to Secured Party  security  interests in
the property described herein to secure all of the Obligations of Borrower.

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

                          SECTION 1 - SECURITY INTEREST

            1.1 GRANT OF SECURITY  INTEREST;  COLLATERAL:  As  security  for the
Obligations  of Borrower,  Debtor  hereby  assigns and grants to Secured Party a
continuing lien on and security interest in, upon and to the following  property
relating to the business and operations of the Racetrack,  all whether now owned
or hereafter created, acquired or arising (the "Collateral"):

                (a) ACCOUNTS. - All Accounts;

                (b) CHATTEL PAPER - All Chattel Paper;

                (c) DOCUMENTS - All Documents;

                (d) INSTRUMENTS - All Instruments;

                (e) INVENTORY - All Inventory;

                (f) GENERAL INTANGIBLES - All General Intangibles;

                (g) DEPOSIT ACCOUNTS - All Deposit Accounts;

                (h) GOODS - All Goods;

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                (i)  LETTER OF  CREDIT  RIGHTS - All  Letter  of Credit  Rights;

                (j) SUPPORTING OBLIGATIONS - All Supporting Obligations;

                (k)  COMMERCIAL   TORT  CLAIMS  -  All  Commercial  Tort  Claims
identified and described on Schedule 1 hereto (as amended or  supplemented  from
time to time); and

                (1)  PROCEEDS - The  Proceeds  (including,  without  limitation,
insurance proceeds),  whether cash or non-cash, of all of the foregoing property
described in clauses (a) through (k).

            1.2 OTHER ACTIONS:

                (a)  Secured  Party  is  hereby  authorized  to  file  financing
statements and amendments to financing  statements without Debtor's signature in
accordance with the Uniform  Commercial Code ("UCC"),  as in effect in the State
of New  York.  Debtor  hereby  authorizes  Secured  Party to file all  financing
statements and amendments to financing  statements  describing the Collateral in
any filing  office as  Secured  Party,  in its sole  discretion  may  determine,
including   financing   statements   listing  "All  Assets"  in  the  collateral
description therein.  Debtor agrees to comply with the requirements of all state
and federal laws and  reasonable  requests of Secured Party in order for Secured
Party to have and  maintain  a valid  and  perfected  security  interest  in the
Collateral  including,  without limitation,  executing or causing to be executed
such documents as Secured Party may require to obtain control (as defined in the
UCC) over all deposit accounts, letter of credit rights and investment property.

                (b) In addition to the foregoing,  Debtor shall,  promptly after
request by Secured Party, do anything further that may be reasonably required by
Secured  Party to  effectuate  the  intentions  and  objects of this  Agreement,
including,   without  limitation,  the  execution  and  delivery  of  any  other
agreement,  documents and instruments  required to evidence,  perfect or protect
Secured Party's lien and security interest in the Collateral. At Secured Party's
request,  Debtor shall also promptly  deliver  (with  execution by Debtor of all
necessary  documents  or forms to reflect,  implement  or enforce  the  security
interest of Secured Party described  herein) to Secured Party all items of which
Secured Party must receive  possession to obtain a perfected  security interest,
including  without  limitation,  all  notes,  stock  powers,  letters of credit,
certificates  and  documents  of  title,  chattel  paper,   warehouse  receipts,
instruments, and any other similar instruments constituting Collateral.

            1.3  FILING  SECURITY  AGREEMENT:  A carbon,  photographic  or other
reproduction  or other copy of this  Agreement  or of a financing  statement  is
sufficient as and may be filed in lieu of a financing statement.

            1.4 POWER OF ATTORNEY:  Each of the officers of Secured Party or its
representative is hereby  irrevocably  made,  constituted and appointed the true
and lawful attorney for Debtor  (without  requiring it to act as such) with full
power of  substitution  to do the  following:  (a) execute in the name of Debtor
documents  necessary  to perfect (or  continue to evidence  the  perfection)  of
Secured Party's security  interest;  (b) endorse the name of Debtor upon any and
all checks, drafts, money orders and other instruments for the payment of monies
that are payable to Debtor and constitute  collections  on Debtor's  accounts or
other  Collateral  relating to the Racetrack;  and (c) during the continuance of

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any Event of Default,  do such other and  further  acts and deeds in the name of
Debtor that Secured Party may reasonably  deem necessary or desirable to enforce
any Account or other  Collateral or otherwise  enforce  Secured  Party's  rights
hereunder.

                   SECTION 2 - REPRESENTATIONS AND WARRANTIES

            2.1 Debtor represents and warrants to Secured Party that:

                (a) CORPORATE  ORGANIZATION - Debtor is duly organized,  validly
existing and in good standing under the laws of the State of New York.  Debtor's
proper legal name is as set forth in the preamble to this Agreement.  Debtor's .
organization identification number is ____________________.

                (b)  NON-CONTRAVENTION  - The  making  and  performance  of this
Agreement will not (immediately,  with the passage of time or with the giving of
notice or both):

                     (i) violate  the  certificate  of  formation  or  operating
agreement  of Debtor or result in a default  under any  contract,  agreement  or
instrument  to which  Debtor is a party or by which Debtor or its Property is or
may be bound, or

                     (ii) result in the creation or  imposition  of any security
interest in, or lien or encumbrance upon, any of the Property of Debtor,  except
such as are in favor of Secured Party;

                (c) POWER AND  AUTHORITY - Debtor has the power and authority to
enter into and perform this  Agreement and to incur the  obligations  herein and
therein provided for, and has taken all proper and necessary  action,  corporate
or  otherwise,  to authorize the  execution,  delivery and  performance  of this
Agreement;

                (d)   ENFORCEABLE  -  This  Agreement  is  valid,   binding  and
enforceable  against Debtor in accordance with its respective  terms,  except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,  moratorium  and  similar  laws  affecting  the  enforcement  of
creditors' rights generally and by generally equitable principles;

                (e) CONSENTS AND APPROVALS - All necessary  consents,  approvals
or authorizations of, or filing, registration or qualification with, any Person,
required to be obtained by Debtor in connection  with the execution and delivery
of this Agreement or the undertaking or performance of any obligation  hereunder
has been obtained;

                (f)  PERFECTION - This Agreement is effective to create in favor
of Secured Party legal,  valid and enforceable  security  interest in all right,
title and interest of Debtor in the  Collateral,  and when financing  statements
have been filed under Debtor's name in the appropriate  filing offices,  Secured
Party will have a perfected  security interest in the Collateral in which a lien
may be perfected by the filing of a financing statement; and

                (g) No security interest,  lien or other encumbrance exists with
respect to any of the Collateral.

                                        3

                              SECTION 3 - COVENANTS

            3.1 Debtor covenants that:

                (a)  FINANCIAL  RECORDS - Debtor shall keep current and accurate
books of records and accounts in which full and correct  entries will be made of
all of its business  transactions,  and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP;

                (b)  EXISTENCE  AND GOOD STANDING - Debtor shall do (or cause to
be done) all things  necessary to preserve and keep in full force and effect its
existence  and  good  standing.   Debtor  agrees  not  to  change  its  name  or
jurisdiction of origination without ten (10) days prior notice to Secured Party;

                (c) MERGER,  CONSOLIDATION,  DISSOLUTION OR LIQUIDATION - Except
for the  Consolidation  Transaction,  Debtor shall not merge or consolidate with
any other Person or commence a dissolution or liquidation;

                (d) SALE OF  PROPERTY  - Debtor  shall not engage in any sale or
other  disposition of its Collateral,  except with respect to the  Consolidation
Transaction;

                (e) LIENS AND  ENCUMBRANCES  - Debtor  shall not:  (i) execute a
negative pledge  agreement with any person  covering any of the  Collateral,  or
(ii) cause or permit or agree or consent to cause or permit in the future  (upon
the happening of a contingency or otherwise) the  Collateral,  whether now owned
or hereafter acquired,  to be subject to any claim or encumbrance (except to the
extent  a  claim  or  encumbrance  arises  as  a  result  of  the  Consolidation
Transaction) or any lien or security interest; and

                (f) OTHER  AGREEMENTS - Debtor shall not become or be a party to
any contract or agreement which at the time of becoming a party to such contract
or  agreement   materially  impairs  Debtor's  ability  to  perform  under  this
Agreement, except with respect to the Consolidation Transaction.

                               SECTION 4 - DEFAULT

            4.1 EVENTS OF DEFAULT:  Upon the  occurrence of an Event of Default,
Secured  Party  shall  have the  option  to  declare  all  existing  and  future
liabilities,  indebtedness  and obligations of Debtor to Secured Party,  whether
matured or contingent,  related or unrelated,  due or to become due, immediately
due and payable, all without demand,  notice,  presentment or protest or further
action of any kind.

            4.2 RIGHTS AND REMEDIES ON DEFAULT: In addition to all other rights,
options and  remedies  granted to Secured  Party under this  Agreement  (each of
which is also then  exercisable by Secured  Party),  Secured Party may, upon the
occurrence of an Event of Default, exercise any other rights granted to it under
the UCC  and any  other  applicable  law,  including,  without  limitation,  the
following rights and remedies:

                (a) the right to take  possession of, send notices,  and collect
directly the Collateral,  with or without judicial process  (including,  without

                                        4

limitation  the right to notify the United States  postal  authority to redirect
all mail addressed to Debtor to an address designated by Secured Party);

                (b) by its own means or with judicial assistance, enter Debtor's
premises  and take  possession  of the  Collateral,  or render it  unusable,  or
dispose of the  Collateral  on such  premises  without any  liability  for rent,
storage,  utilities or other sums, and Debtor shall not resist or interfere with
such action;

                (c) require  Debtor at Debtor's  expense to assemble  all or any
part of the  Collateral  and make it  available  to  Secured  Party at any place
designated by Secured Party.

            Debtor hereby agrees that a notice  received by it at least ten (10)
days before the time of any intended  public sale or of the time after which any
private sale or other  disposition  of the  Collateral  is to be made,  shall be
deemed to be reasonable notice of such sale or other  disposition.  If permitted
by applicable  law, any perishable  inventory or Collateral  which  threatens to
speedily  decline in value or which is sold on a  recognized  market may be sold
immediately  by Secured Party without prior notice to Debtor.  Debtor  covenants
and  agrees not to  interfere  with or impose any  obstacle  to Secured  Party's
exercise of its rights and remedies  with respect to the  Collateral,  after the
occurrence of an Event of Default.

            4.3  NATURE  OF  REMEDIES:  Secured  Party  shall  have the right to
proceed  against all or any portion of the Collateral in any order and may apply
such  Collateral  to  the  Obligations  as  well  as  any  existing  and  future
obligations  of Debtor to Secured Party  hereunder in any order.  All rights and
remedies  granted  Secured Party  hereunder and under any agreement  referred to
herein, or otherwise  available at law or in equity,  shall be deemed concurrent
and cumulative, and not alternative remedies, and Secured Party may proceed with
any number of  remedies  at the same time until all  Obligations  as well as any
existing  and  future  obligations  of Debtor to  Secured  Party  hereunder  are
satisfied in full. The exercise of any one right or remedy shall not be deemed a
waiver or release of any other  right or remedy,  and  Secured  Party,  upon the
occurrence  of an Event of  Default,  may  proceed  against  Debtor,  and/or the
Collateral,  and/or Debtor at any time, under any agreement,  with any available
remedy and in any order.

                            SECTION 5 - MISCELLANEOUS

            5.1 GOVERNING LAW: This  Agreement,  and all related  agreements and
documents  shall be governed by and construed in accordance with the laws of the
State of New York,  without  regard to its  otherwise  applicable  principles of
conflicts of laws.  The  provisions of this  Agreement and other  agreements and
documents  referred to herein are to be deemed severable,  and the invalidity or
unenforceability  of any  provision  shall not  affect or impair  the  remaining
provisions which shall continue in full force and effect.

            5.2 WAIVER:  No omission or delay by Secured Party in exercising any
right or power under this  Agreement  or any  other  document  will  impair such
right or power  or be  construed  to be a  waiver  of any  default,  or Event of
Default or an acquiescence  therein,  and any single or partial  exercise of any
such right or power will not preclude other or further  exercise  thereof or the
exercise of any other right,  and no waiver of Secured Party's rights  hereunder
will be valid  unless in writing and signed by Secured  Party,  and then only to
the extent specified.

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            5.3 MODIFICATION:  No modification  hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.

            5.4 SIGNATORIES:  Each individual  signatory  hereto  represents and
warrants that he is duly  authorized to execute this  Agreement on behalf of his
principal  and that he executes  the  Agreement  in such  capacity  and not as a
party.

            5.5  SUCCESSORS AND ASSIGNS:  All provisions  herein shall inure to,
become binding upon Debtor,  Secured Party, and their respective  successors and
assigns,  except that Debtor may not assign its rights or obligations under this
Agreement without the prior written consent of Secured Party.

            5.6  CONSENT TO  JURISDICTION:  Debtor  irrevocably  consents to the
jurisdiction of the Courts of the State of New York or any federal court located
in New York  County,  New York in any and all  actions and  proceedings  whether
arising  hereunder or under any other  agreement or undertaking  and irrevocably
agrees to  service of  process  to the  address  of Debtor  set forth  herein by
certified mail,  return receipt  requested  (deemed  received three (3) Business
Days after  deposited in the U.S.  mail) or by nationally  recognized  overnight
courier (deemed received on the Business Day after delivery to such courier).

            5.7 WAIVER OF JURY TRIAL:  DEBTOR AND SECURED PARTY HEREBY WAIVE ANY
AND ALL RIGHTS ANY MAY HAVE TO A JURY TRIAL IN  CONNECTION  WITH ANY  LITIGATION
COMMENCED BY OR AGAINST  SECURED PARTY WITH RESPECT TO RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO.

            5.8 DEBTOR ACKNOWLEDGEMENTS.

                (a)  Debtor  hereby  waives  notice  of (i)  acceptance  of this
Agreement,  (ii) the existence or incurring from time to time of any Obligations
secured  hereunder,  (iii) the existence of any Event of Default,  the making of
demand, nonpayment, or the taking of any action by Secured Party, under the Loan
Agreement, and (iv) default and demand hereunder.

                (b) Debtor further  acknowledges that Debtor (i) has examined or
had the  opportunity  to examine the Loan  Agreement and related  agreements and
(ii) waives any defense which may exist  resulting from the Debtor's  failure to
receive  or  examine  at  any  time  the  Loan  Documents  or  any   amendments,
supplements, restatements or replacements therefor.

                (c) Debtor  acknowledges  that in entering  into this  Agreement
Debtor is not relying upon any statement, representation, warranty or opinion of
any kind from  Secured  Party as to the present or future  financial  condition,
performance,  assets,  liabilities  or  prospects of Borrower or as to any other
matter.

            5.9 SECURED PARTY  ACTIONS.  Debtor hereby  consents and agrees that
Secured Party may at any time or from time to time in Secured Party's discretion
(a) extend or change  the time of payment  and/or  change the  manner,  place or
terms of payment of any or all Obligations,  (b) amend,  supplement,  restate or
replace the Loan  Agreement or any related  agreements,  (c) renew or extend any
financing  now or  hereafter  reflected  by the Loan  Agreement  or the maturity

                                        6

thereof or increase (without limit of any kind and whether related or unrelated)
or decrease loans and extensions of credit to Borrower, (d) modify the terms and
conditions  under which loans and  extensions of credit may be made to Borrower,
(e) settle, compromise or grant releases for liabilities of Borrower, and/or any
other Person or Persons liable with Borrower for, any Obligations, (f) exchange,
compromise,  release or surrender,  or  subordinate  or release any lien on, any
property  (including any collections  therefrom or proceeds thereof) of Borrower
or any other Person or Persons now or hereafter securing any of the Obligations,
and (g) apply any and all  payments  and  proceeds of any property of any Person
securing  any or all of the  Obligations  received by Secured  Party at any time
against the Obligations in any order as Secured Party may determine;  all of the
foregoing  in such manner and upon such terms as Secured  Party may see fit, and
without  notice to or further  consent from Debtor,  who hereby agrees to be and
shall  remain  bound  upon this  Agreement  notwithstanding  any such  action on
Secured Party's part.

            5.10 SCOPE OF LIABILITY. The liability of Debtor hereunder shall not
be  reduced,  impaired  or  affected  in any way by reason of (a) any failure to
obtain,  retain or  preserve,  or the lack of prior  enforcement  of, any rights
against any Person or Persons liable for the Obligations (including Borrower and
Debtor) or in any property, (b) the invalidity,  unenforceability or voidability
of any Obligations or any liens or rights in any property  pledged by any Person
or  Persons,  (c) any  delay in  making  demand  upon  Borrower  or any delay in
enforcing,  or any failure to enforce,  any rights against Borrower or any other
Person or Persons  liable for any or all of the  Obligations  or in any property
pledged by any Person or Persons,  even if such rights are thereby lost, (d) any
failure,  neglect or  omission  on Secured  Party's  part to obtain,  perfect or
continue any lien upon,  protect,  exercise rights  against,  or realize on, any
property of Borrower,  Debtor or any other party securing the  Obligations,  (e)
the  existence or  nonexistence  of any  defenses  which may be available to the
Borrower  with  respect to the  Obligations,  (f) the  granting of any waiver or
forbearance  at any time and for any period with respect to any  performance  by
Borrower  or  any  Event(s)  of  Default  under  the  Loan  Agreement,  (g)  the
commencement  of any  bankruptcy,  reorganization,  liquidation,  dissolution or
receivership  proceeding  or case filed by or against  Borrower or Debtor or (h)
any other fact,  event,  condition or omission  which may give rise to a defense
against Secured Party. Secured Party's right to receive payments and proceeds of
Collateral  is free  and  clear  of any  deduction,  offset,  defense,  claim or
counterclaim    of   any   kind.

                        SIGNATURES ON THE FOLLOWING PAGE

                                        7

            IN WITNESS  WHEREOF,  the  undersigned  parties have  executed  this
Agreement the day and year first above written.

                                         CATSKILL DEVELOPMENT, LLC

                                         By: /s/ Joseph Bernstein
                                             ------------------------
                                         Name:   Joseph Bernstein
                                         Title:  Executive Vice President

AGREED:

THE BERKSHIRE BANK

By:___________________
Name:_________________
Title:________________

                                       8

            IN WITNESS  WHEREOF,  the  undersigned  parties have  executed  this
Agreement the day and year first above written.

                                          CATSKILL DEVELOPMENT, LLC

                                          By:______________________________

                                          Name:____________________________

                                          Title:___________________________

AGREED:

THE BERKSHIRE BANK

By /s/ Peter H. Kim
   -----------------

Name:_________________

Title:________________sec document

                                                                   EXHIBIT 10.14

                               GUARANTY AGREEMENT

            This Guaranty Agreement ("Agreement") is made and executed this 29th
day of October, 2003 by Robert A. Berman ("Guarantor") in favor of The Berkshire
Bank ("Lender")  having a place of business at 4 East 39th Street,  New York, NY
10016.

            The undersigned Guarantor undertakes and agrees as follows:

            1.  OBLIGATIONS  GUARANTEED.  To induce  Lender to establish  and/or
continue  financing  arrangements with and consider making or continuing certain
loans  and  extending  or  continuing  to  extend  credit  from  time to time to
Monticello  Raceway  Management,  Inc.  ("Borrower"),  and for  other  good  and
valuable  consideration,  the Guarantor,  intending to be legally bound,  hereby
absolutely and unconditionally guarantees and becomes surety for the payment and
performance when due (at maturity,  upon  acceleration,  or otherwise) of all of
the  Obligations of Borrower of every kind or nature,  whether joint or several,
due or to become due, absolute or contingent, now existing or hereafter arising,
and whether principal,  interest,  fees, costs, expenses or otherwise (including
without   limitation  any  interest  and/or  expenses  accruing   following  the
commencement of any insolvency, receivership,  reorganization or bankruptcy case
or  proceeding  relating to Borrower,  whether or not a claim for  post-petition
interest and/or  expenses is allowed in such case or proceeding).  The Guarantor
shall  also pay or  reimburse  Lender  on demand  for all  costs  and  expenses,
including without limitation  attorneys' fees, incurred by Lender at any time to
enforce, protect, preserve, or defend Lender's rights hereunder and with respect
to any property securing this Agreement. All payments hereunder shall be made in
lawful  money of the United  States,  in  immediately  available  funds.  Unless
otherwise  defined  herein,  all  capitalized  terms  shall have the  respective
meanings given to such terms in that certain Loan and Security  Agreement  dated
the date hereof  between  Borrower  and Lender (as it may  hereafter be amended,
supplemented, restated or replaced from time to time, the "Loan Agreement").

            2.  REPRESENTATIONS  AND  WARRANTIES.  The Guarantor  represents and
warrants that:

                (a) The Guarantor's  execution and performance of this Agreement
shall not (i) violate or result in a default or breach  (immediately or with the
passage  of time)  under any  contract,  agreement  or  instrument  to which the
Guarantor is a party, or by which the Guarantor is bound, (ii) violate or result
in a default or breach under any order,  decree,  award,  injunction,  judgment,
law,  regulation or rule, (iii) cause or result in the imposition or creation of
any lien upon any  property  of the  Guarantor,  or (iv)  violate or result in a
breach of the articles of incorporation or by-laws of the Guarantor.

                (b) The Guarantor has the full power and authority to enter into
and perform  under this  Agreement,  which has been  authorized by all necessary
corporate action on behalf of the Guarantor.

                (c)  No  consent,   license  or   approval   of,  or  filing  or
registration with, any governmental authority is necessary for the execution and
performance hereof by the Guarantor.

                (d) This Agreement  constitutes the valid and binding obligation
of the Guarantor enforceable in accordance with its terms.

                (e) This  Agreement  promotes  and  furthers  the  business  and
interests of the Guarantor and the creation of the  obligations  hereunder  will
result in direct financial benefit to the Guarantor.

                (f) The only stock of Empire Resorts,  Inc.  entitled to vote is
the  outstanding  common  stock,  other than the de minimus  amount of preferred
stock entitled to vote.

            3. GUARANTOR ACKNOWLEDGEMENTS.

                (a) The Guarantor hereby waives notice of (i) acceptance of this
Agreement,  (ii) the existence or incurring from time to time of any Obligations
guaranteed hereunder, (iii) the existence of any Event of Default, the making of
demand,  nonpayment,  or the  taking  of any  action by  Lender,  under the Loan
Agreement, and (iv) default and demand hereunder.

                (b) The Guarantor  further  acknowledges  that the Guarantor (i)
has examined or had the  opportunity  to examine the Loan  Agreement and related
agreements  and (ii)  waives  any  defense  which may exist  resulting  from the
Guarantor's failure to receive or. examine at any time the Loan Documents or any
amendments, supplements, restatements or replacements therefor.

                (c) The  Guarantor  acknowledges  that  in  entering  into  this
Agreement  the  Guarantor  is not relying  upon any  statement,  representation,
warranty  or  opinion  of any kind  from  Lender  as to the  present  or  future
financial condition,  performance,  assets, liabilities or prospects of Borrower
or as to any other matter.

            4. TENDER  ACTIONS.  The Guarantor  hereby  consents and agrees that
Lender may at any time or from time to time in Lender's discretion (a) extend or
change the time of payment  and/or change the manner,  place or terms of payment
of any or all Obligations,  (b) amend,  supplement,  restate or replace the Loan
Agreement or any related  agreements,  (c) renew or extend any  financing now or
hereafter  reflected by the Loan  Agreement or the maturity  thereof or increase
(without  limit of any kind and whether  related or unrelated) or decrease loans
and extensions of credit to Borrower,  (d) modify the terms and conditions under
which  loans and  extensions  of credit  may be made to  Borrower,  (e)  settle,
compromise  or grant  releases for  liabilities  of  Borrower,  and/or any other
Person or Persons  liable with  Guarantor  for, any  Obligations,  (f) exchange,
compromise,  release or surrender,  or  subordinate  or release any lien on, any
property  (including any collections  therefrom or proceeds thereof) of Borrower
or any other Person or Persons now or hereafter securing any of the Obligations,
and (g) apply any and all  payments  and  proceeds of any property of any Person
securing  any or all of the  Obligations  received by Lender at any time against
the  Obligations in any order as Lender may  determine;  all of the foregoing in

                                       2

such manner and upon such terms as Lender may see fit, and without  notice to or
further  consent from the  Guarantor,  who hereby  agrees to be and shall remain
bound upon this Agreement notwithstanding any such action on Lender's part.

            5. SCOPE OF GUARANTY.  The  Agreement is an agreement of  suretyship
and a guaranty of payment and not of collection.  The liability of the Guarantor
hereunder is absolute,  primary,  unlimited and  unconditional  and shall not be
reduced, impaired or affected in any way by reason of (a) any failure to obtain,
retain or preserve,  or the lack of prior enforcement of, any rights against any
Person  or  Persons  liable  for the  Obligations  (including  Borrower  and the
Guarantor)  or  in  any  property,  (b)  the  invalidity,   unenforceability  or
voidability of any Obligations or any liens or rights in any property pledged by
any Person or Persons, (c) any delay in making demand upon Borrower or any delay
in  enforcing,  or any failure to enforce,  any rights  against  Borrower or any
other  Person or  Persons  liable  for any or all of the  Obligations  or in any
property pledged by any Person or Persons, even if such rights are thereby lost,
(d) any  failure,  neglect or omission on  Lender's  part to obtain,  perfect or
continue any lien upon,  protect,  exercise rights  against,  or realize on, any
property of Borrower, the Guarantor or any other party securing the Obligations,
(e) the existence or  nonexistence of any defenses which may be available to the
Borrower  with  respect to the  Obligations,  (f) the  granting of any waiver or
forbearance  at any time and for any period with respect to any  performance  by
Borrower  or  any  Event(s)  of  Default  under  the  Loan  Agreement,  (g)  the
commencement  of any  bankruptcy,  reorganization,  liquidation,  dissolution or
receivership proceeding or case filed by or against Borrower or any Guarantor or
(h) any  other  fact,  event,  condition  or  omission  which may give rise to a
suretyship  defense.  Guarantor  promises  and  undertakes  to make all payments
hereunder  free  and  clear  of  any  deduction,   offset,   defense,  claim  or
counterclaim of any kind.

            6.  REINSTATEMENT.  If any or all  payments  or proceeds of property
securing  any or all of the  Obligations  made from time to time to Lender  with
respect to any obligation  hereby  guaranteed are at any time recovered from, or
repaid  by,  Lender  in  whole  or in  part in any  bankruptcy,  reorganization,
receivership,  insolvency or similar case or proceeding instituted by or against
Borrower,  this Agreement  shall continue to be fully  applicable to (or, as the
case may be,  reinstated to be applicable to) such obligation to the same extent
as if the recovered or repaid  payment(s) or proceeds had never been  originally
paid to Lender.

            7. CUMULATIVE REMEDIES.  All rights and remedies hereunder and under
the Loan Agreement, and related agreements,  are cumulative and not alternative,
and Lender may  proceed in any order  from time to time  against  Borrower,  the
Guarantor  and/or  any other  Person  or  Persons  liable  for any or all of the
Obligations and their respective assets. Lender shall not have any obligation to
proceed at any time or in any manner against,  or exhaust any or all of Lender's
rights against, Borrower or any other Person or Persons liable for any or all of
the   Obligations   prior  to  proceeding   against  the  Guarantor   hereunder.
Notwithstanding  anything to the contrary  contained in this  Agreement,  Lender
shall not exercise any of its rights or remedies  against  Guarantor  under this
Agreement,  unless and until Guarantor owns (directly or indirectly  through his
majority ownership interest in Watertone  Holdings,  L.P.) less than ten percent

                                       3

(10%) of the outstanding common voting stock of Empire Resorts,  Inc. ("Empire")
or, prior to the closing of the Consolidation Transaction, less than ten percent
(10%) of the outstanding common voting stock or membership interest, as the case
may  be,  of  Empire  and  Catskill  Development,  LLP,  on  a  combined  basis.
Immediately  upon such an occurrence,  all of Lender's rights and remedies under
this  Agreement  shall be  immediately  available  to Lender (upon the terms and
conditions set forth in this Agreement), without further notice to Guarantor.

            8. SUBROGATION. Any and all rights of any nature of the Guarantor to
subrogation,  reimbursement  or  indemnity  and any  right of the  Guarantor  to
recourse to any assets or property  of, or payment  from,  Borrower or any other
Person or Persons  liable for any or all of the  Obligations  as a result of any
payments made or to be made  hereunder  for any reason shall be  unconditionally
subordinated  to all of  Lender's  rights  under  the  Loan  Agreement  and  the
Guarantor shall not at any time exercise any of such rights unless and until all
of the Obligations have been unconditionally paid in full. Any payments received
by the  Guarantor  in violation of this Section 7 shall be held in trust for and
immediately remitted to Lender

            9. TENDER RECORDS.  Lender's books and records of any and all of the
Obligations,  absent manifest error,  shall be prima facie evidence  against the
Guarantor of the indebtedness owing or to become owing to Lender hereunder.

            10.  CONTINUING   GUARANTOR.   This  Agreement  shall  constitute  a
continuing  surety  obligation with respect to all Obligations from time to time
incurred  or arising  and shall  continue in effect  until all  Obligations  are
indefeasibly  paid and satisfied  and the liability of the Guarantor  under this
Agreement may not be revoked or terminated.

            11. SETOFF.  The Guarantor  agrees that Lender shall have a right of
setoff  against  any and all  property  of the  Guarantor  now or at any time in
Lender's  possession,  including without  limitation  deposit accounts,  and the
proceeds thereof, as security for the obligations of the Guarantor hereunder.

            12.  ACCELERATION.  If an Event of Default  occurs and is continuing
under the Loan Agreement,  then all of the Guarantor's liabilities of every kind
or nature to Lender hereunder shall, at Lender's option,  become immediately due
and payable and Lender may at any time and from time to time, at Lender's option
(regardless  of whether the liability of Borrower or any other Person or Persons
liable for any or all of the  Obligations  has matured or may then be enforced),
take any and/or all  actions  and  enforce  all  rights and  remedies  available
hereunder  or  under  applicable  law to  collect  the  Guarantor's  liabilities
hereunder.

            13. ENFORCEMENT TIMING.  Failure or delay in exercising any right or
remedy against the Guarantor  hereunder  shall not be deemed a waiver thereof or
preclude the exercise of any other right or remedy  hereunder.  No waiver of any
breach of any provision of this Agreement  shall be construed as a waiver of any
subsequent breach or of any other provision.

            14.  SUCCESSORS  AND ASSIGNS.  This  Agreement  shall (a) be legally
binding upon the Guarantor, and the Guarantor's successors and assigns, provided
that the  Guarantor's  obligations  hereunder  may not be  delegated or assigned
without  Lender's prior written  consent and (b) benefit any and all of Lender's
successors and assigns.

                                       4

            15. ENTIRE  AGREEMENT.  This Agreement  embodies the whole agreement
and  understanding  of the parties hereto relative to the subject matter hereof.
No  modification or waiver of any provision  hereof shall be enforceable  unless
approved by Lender in writing.

            16.  GOVERNING  LAW AND  JURY  TRIAL.  THIS  AGREEMENT  SHALL IN ALL
RESPECTS BE INTERPRETED,  CONSTRUED AND GOVERNED BY THE SUBSTANTIVE  LAWS OF THE
STATE OF NEW YORK.  THE  GUARANTOR  IRREVOCABLY  KNOWINGLY AND  VOLUNTARILY  (I)
SUBMITS TO THE NONEXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES  DISTRICT COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK FOR
THE PURPOSES OF ANY  LITIGATION OR PROCEEDING  HEREUNDER OR CONCERNING THE TERMS
HEREOF AND (II) WAIVES THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY LITIGATION,
CLAIMS OR PROCEEDING  HEREUNDER OR  CONCERNING  THE TERMS HEREOF OR OTHERWISE IN
CONNECTION WITH THE GUARANTOR'S DEALINGS WITH LENDER.

            17. NOTICES.

                (a) In any action or proceeding brought by Lender to enforce the
terms hereof,  the Guarantor waives personal service of the summons,  complaint,
and any motion or other  process,  and agrees that notice  thereof may be served
(i) in person,  (ii) by registered or certified mail, return receipt  requested,
or (iii) by nationally  recognized  overnight courier (in the case of (i) above,
on the date of delivery, in the case of (ii) above, on the 3rd day after deposit
in the U.S. mail, and in the case of (iii) above,  on the Business Day following
delivery to the courier). Service may be made at the address of the Guarantor on
the  signature  page  hereof or such other  address at which  Guarantor  is then
located.

                (b) Any and all notices  which may be given to the  Guarantor by
Lender  hereunder shall be sent to the Guarantor at the address of the Guarantor
set forth on the  signature  page  hereof  (or such  other  address at which the
Guarantor  is then  located)  and shall be deemed  given to and received (on the
date delivered) by the Guarantor if sent by facsimile transmission or if sent in
the manner provided for service of process in paragraph 17(a) above.

            18. MAXIMUM  LIABILITY.  To the extent that applicable law otherwise
would  render  any  of  the  obligations  of  Guarantor   hereunder  invalid  or
unenforceable, Guarantor's obligations hereunder shall be limited to the maximum
amount which does not result in such invalidity or  unenforceability,  provided,
however, that Guarantor's obligations hereunder shall be presumptively valid and
enforceable to their fullest extent in accordance  with the terms hereof,  as if
this Section 18 were not a part of this Agreement.

                                       5

            19.   SEVERABILITY.   The  invalidity  or  unenforceability  of  any
provision hereof shall not affect the remaining provisions which shall remain in
full force and effect.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]

                                       6

            DATED the date and year first above written.

                                           By:  /s/ Robert A. Berman (Seal)
                                                --------------------
                                                Robert A. Berman

                                           Address: __________________________

                                                    __________________________

                                                    __________________________

                     [Signature page to Guaranty Agreement]

                                       S-1

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