Document:

ex1012.htm

    

     

    SUPPLEMENT
NO. 2 dated as of May 7, 2007 (this “Supplement”), to the
Collateral Agreement dated as of September 20, 2006 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Collateral
Agreement”), among BERRY PLASTICS HOLDING CORPORATION (the “Issuer”), WELLS FARGO
BANK, N.A., as collateral agent (in such capacity, the “Collateral Agent”)
for the Secured Parties (as defined therein), ROLLPAK ACQUISITION CORPORATION
and ROLLPAK CORPORATION (each, a “New Subsidiary” and
collectively, the “New
Subsidiaries”).

     

    A. Reference
is made to (i) the Indenture dated as of September 20, 2006 (as supplemented by
the first supplemental indenture dated as of September 20, 2006 by and among the
Issuer (formerly known as BPC Holding Corporation), BPC Acquisition Corp., the
guarantors party thereto and Wells Fargo Bank, N.A. as Trustee (the “Trustee”) and the
second supplemental indenture dated as of April 3, 2007, among the Issuer, the
guarantors party thereto and the Trustee, and as further amended, supplemented
or otherwise modified, the “Indenture”) by and
between BPC Acquisition Corp. and the Trustee providing for the issuance of the
Issuer’s 8 7/8 % Second Priority Senior Secured Fixed Rate Notes due 2014 in the
aggregate principal amount of $525,000,000 and Second Priority Senior Secured
Floating Rate Notes due 2014 in the aggregate principal amount of $225,000,000
and (ii) the Purchase Agreement dated as of September 15, 2006 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“Purchase
Agreement”), among BPC Acquisition Corp., the several parties named in
Schedule I thereto (the “Initial Purchasers”)
and, upon the consummation of the merger on the date of the Collateral
Agreement, the Issuer (formerly BPC Holding Corporation) and the Subsidiary
Parties thereto.

     

    B. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Indenture and the Collateral Agreement referred to
therein.

     

    C. The
Pledgors have entered into the Collateral Agreement in order to induce the
Trustee to enter into the Indenture and the Initial Purchasers to purchase the
Notes. Section 7.16 of the Collateral Agreement provides that additional
Subsidiaries may become Subsidiary Parties under the Collateral Agreement by
execution and delivery of an instrument in the form of this
Supplement.  Each undersigned New Subsidiary is executing this
Supplement in accordance with the requirements of the Indenture to each become a
Subsidiary Party under the Collateral Agreement as consideration for credit
previously extended to the Issuer.

     

    Accordingly,
the Collateral Agent and the New Subsidiaries agree as follows:

     

    SECTION 1. In
accordance with Section 7.16 of the Collateral Agreement, each New Subsidiary by
its signature below shall become a Subsidiary Party and a Pledgor under the
Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party and a Pledgor, and each New Subsidiary hereby (a)
agrees to all the terms and provisions of the Collateral Agreement applicable to
it as a Subsidiary Party and a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct, in all material respects, on and as of the date
hereof.  In

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION 2. furtherance
of the foregoing, each New Subsidiary, as security for the payment and
performance in full of the Obligations (as defined in the Collateral Agreement),
does hereby create and grant to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in and Lien on all of each New Subsidiary’s
right, title and interest in and to the Collateral (as defined in the Collateral
Agreement) of each New Subsidiary.  Each reference to a “Subsidiary
Party” or a “Pledgor” in the Collateral Agreement shall be deemed to include
each New Subsidiary.  The Collateral Agreement is hereby incorporated
herein by reference.

     

    SECTION 3. Each New
Subsidiary represents and warrants to the Collateral Agent and the other Secured
Parties that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or other similar
laws affecting creditors’ rights generally, (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and (iii) implied covenants of good faith and fair
dealing.

     

    SECTION 4. This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but
one contract.  This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of each New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.

     

    SECTION 5. Each New
Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached
hereto is a true and correct schedule of the location of any and all Article 9
Collateral of each New Subsidiary as of the date hereof, (b) set forth on Schedule II attached
hereto is a true and correct schedule of all the Pledged Securities of each New
Subsidiary and (c) set forth under its signature hereto is the true and correct
legal name of each New Subsidiary, its jurisdiction of formation and the
location of its chief executive office.

     

    SECTION 6. Except as
expressly supplemented hereby, the Collateral Agreement shall remain in full
force and effect.

     

    SECTION 7. THIS
SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

     

    SECTION 7. In the
event any one or more of the provisions contained in this Supplement should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and in the
Collateral Agreement shall not in any way be affected or impaired
thereby.  The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

     

    SECTION 8. All
communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Collateral Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION 9. Each New
Subsidiary agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the
reasonable fees, disbursements and other charges of counsel for the Collateral
Agent.

     

    IN
WITNESS WHEREOF, the New Subsidiaries and the Collateral Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE NEW SUBSIDIARIES:

     

    ROLLPAK ACQUISITION
CORPORATION

    

    

    By: /s/  Jeffrey
Thompson________________

         Name:
Jeffrey Thompson

         Title:
Authorized Signatory

    

     

    Legal
Name: Rollpak Acquisition Corporation

     

     

    Jurisdiction
of Formation: Indiana

     

     

    Location
of Chief Executive Office:

     

     

    101
Oakley Street, Evansville, Indiana 47710

     

    

    

    

    

    ROLLPAK
CORPORATION

    

    

    By: /s/  Jeffrey
Thompson________________

         Name:
Jeffrey Thompson

         Title:
Authorized Signatory

    

     

    Legal
Name: Rollpak Corporation

     

     

    Jurisdiction
of Formation: Indiana

     

     

    Location
of Chief Executive Office:

     

     

    101
Oakley Street, Evansville, Indiana 47710

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WELLS
FARGO BANK, N.A., as Collateral Agent

    

    

    By:  /s/  Joseph P.
O’Donnell

    Name:
Joseph P. O’Donnell

    Title:
Vice Presidentex101to8k05558_02062008.htm

    Exhibit
      10.1

     

     

    AGREEMENT
      TO FORM LIMITED LIABILITY COMPANY

     

    and

     

    CONTRIBUTION
      AGREEMENT

     

    Among

     

    Concord
      Associates, L.P.

     

    and

     

    Empire
      Resorts, Inc.

     

    Dated
      as of February 8, 2008

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS
      AGREEMENT TO FORM LIMITED LIABILITY COMPANY AND CONTRIBUTION AGREEMENT
(this “Agreement”) is made as of February 8, 2008 among Concord
      Associates, L.P., a New York limited partnership having an office at c/o
      Cappelli Enterprises, Inc., 115 Stevens Avenue, Valhalla, New York 10595
      (“Concord”) and Empire Resorts, Inc., a Delaware corporation having an office at
      701 North Green Valley Parkway, Suite 200, Henderson, Nevada 89074
      (“Empire”).

     

    RECITALS

     

    A.           Concord
      holds fee title to that certain parcel of land located in Kiamesha Lake, New
      York and described on Schedule A attached hereto and made a part hereof,
      and all buildings, structures and other improvements thereon, consisting of
      approximately 160 acres and commonly known as the Concord Hotel and Resort
      (the
“Concord Property”).

     

    B.           Empire
      owns certain video gaming machine and racing businesses located in Monticello,
      New York on approximately 200 acres and commonly known as the Monticello Raceway
      (the “Empire Land”).  The operation of such business is conducted
      pursuant to certain licenses owned by Empire and its wholly-owned subsidiary,
      Monticello Raceway Management Inc., a New York corporation (“MRMI”), under those
      certain license agreements described on Schedule C attached hereto and
      made a part hereof (the “Empire Licenses”), and includes employees currently
      employed by Empire, and customer lists and marketing materials used by Empire,
      each as is necessary to Empire’s ownership and operation of such businesses (the
“Empire Operations”).

     

    C.           Concord
      and Empire desire to form a limited liability company under the New York Act,
      such limited liability company to be called “Concord Empire LLC” (the
“Company”), and to enter into that certain Operating Agreement attached hereto
      as Schedule B and made a part hereof (the “Operating Agreement”). At the
      Closing, pursuant to the terms of this Agreement and the Operating Agreement,
      Concord shall contribute the Concord Property to the Company and Empire shall
      contribute the Empire Operations to the Company; provided, that at the Closing,
      Empire shall deliver the Empire Licenses to the Escrow Agent pursuant to the
      provisions of Section 20 of this Agreement, and shall instruct the Escrow Agent
      to automatically release the Empire Licenses to the Company upon the issuance
      of
      a Temporary Certificate of Occupancy, such instruction to be
      irrevocable.

     

    D.           Subject
      to the terms of the Operating Agreement, after consummation of the transactions
      contemplated hereby, Concord shall hold a fifty percent (50%) interest in the
      Company and Empire shall hold a fifty percent (50%) interest in the
      Company.

     

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

     

    
      	
               

            	
              1.

            	
              Incorporation
                of Recitals, Schedules and
                Exhibits

            

    

     

    1.1.           Incorporation
      of Recitals

     

    The
      foregoing recitals and all other preambles and recitals set forth herein are
      made part of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2.           Incorporation
      of Exhibits

     

    The
      schedules and exhibits attached hereto are incorporated herein and expressly
      made a part hereof by this reference.

     

    
      	
               

            	
              2.

            	
              Definitions

            

    

     

    2.1.           Defined
      Terms.  The following terms have the meanings hereinafter
      indicated whenever used in this Agreement with initial capital
      letters:

     

    “Agreement”
      shall mean this Agreement to Form Limited Liability Company and Contribution
      Agreement, dated February 1, 2008, between Concord and Empire.

     

    “Appraisal
      Process” shall have the meaning set forth in the Operating
      Agreement.

     

    “Beneficial
      Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
      the Exchange Act, except that in calculating the beneficial ownership of any
      particular “person” (as that term is used in Section 13(d)(3) of the Exchange
      Act), such “person” will be deemed to have beneficial ownership of all
      securities that such “person” has the right to acquire by conversion or exercise
      of other securities, whether such right is currently exercisable or is
      exercisable only upon the occurrence of a subsequent condition.  The
      terms “Beneficially Owns” and “Beneficially Owned” have meanings correlative to
      the foregoing.

     

    “Broker”
      shall have the meaning set forth in Section 15.1 of this Agreement.

     

    “Brownfield
      Tax Credits” shall mean any and all benefits available pursuant to the Brownfield
      Program administered by the NYSDEC, including but not limited to
      Brownfield Real Property Tax Credits provided for by Tax Laws Section 22,
      606(ee) and 606(i) and sections related thereto and any Brownfield Redevelopment
      Tax Credits provided for by Tax Laws Section 21, 606(dd) and 606(i) and sections
      related thereto.

     

    “Capital
      Account” shall have the meaning set forth in the Operating
      Agreement.

     

    “Capital
      Stock” shall mean any and all shares, interests, participations or other
      equivalents (however designated and whether or not voting) of corporate stock,
      including each class of common stock and preferred stock, and any warrants,
      rights or options to purchase any of such instruments or interests.

    

    “Cash
      Flow” shall have the meaning set forth in the Operating Agreement.

     

    “Class
      III Actions” shall have the meaning set forth in Section 22.1 of this
      Agreement.

     

    “Class
      III Licenses” shall have the meaning set forth in Section 22.1 of this
      Agreement.

     

    “Closing”
      shall have the meaning set forth in Section 5.1 of this Agreement.

     

    “Closing
      Date” shall have the meaning set forth in Section 5.1 of this
      Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Closing
      Statement” shall have the meaning set forth in Section 14.1(l) of this
      Agreement.

     

    “Code
      Withholding Section” shall mean collectively, the Internal Revenue Code Section
      1445 and regulations issued thereunder.

     

    “Company”
      shall mean Concord Empire LLC, a New York limited liability
      company.

     

    “Concord”
      shall mean Concord Associates, L.P., a New York limited partnership having
      an
      office at c/o Cappelli Enterprises, Inc., 115 Stevens Avenue, Valhalla, New
      York
      10595.

     

    “Concord
      Contributed Property” shall have the meaning set forth in Section 3(b) of this
      Agreement.

     

    “Concord
      Deed” shall have the meaning set forth in Section 14.1(a) of this
      Agreement.

     

    “Concord
      Default” shall have the meaning set forth in Section 18.1 of this
      Agreement.

     

    “Concord
      Exculpated Parties” shall have the meaning set forth in Section 17 of this
      Agreement.

     

    “Concord
      Insurance Policies” shall have the meaning set forth in Section 3(b)(G) of this
      Agreement.

     

    “Concord
      Licenses” shall have the meaning set forth in Section 3(b)(B) of this
      Agreement.

     

    “Concord
      Plans” shall have the meaning set forth in Section 3(b)(C) of this
      Agreement.

     

    “Concord
      Permitted Exceptions” shall have the meaning set forth in Section 9.1(B) of this
      Agreement.

     

    “Concord
      Personal Property” shall have the meaning set forth in Section 3(b)(E) of this
      Agreement.

     

    “Concord
      Property” shall mean that certain parcel of land located in Kiamesha Lake, New
      York and described on Schedule A attached hereto and made a part hereof,
      and all buildings, structures and other improvements thereon, consisting of
      approximately 160 acres and commonly known as the Concord Hotel and Resort,
      but
      excluding the Brownfield Tax Credits held by Concord or any of Concord’s
      affiliates in connection with such land.

     

    “Concord
      Property Disapproved Exception” shall have the meaning set forth in Section
      9.1(B)(m) of this Agreement.

     

    “Concord
      Property Title Report” shall have the meaning set forth in Section 9.1(B) of
      this Agreement.

     

    “Concord
      Property Title Update” shall have the meaning set forth in Section 9.1(B) of
      this Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Concord
      Service Contracts” shall have the meaning set forth in Section 3(b)(G) of this
      Agreement.

     

    “Concord
      Survey” shall have the meaning set forth in Section 9.1(B) of this
      Agreement.

     

    “Construction
      Contract” shall have the meaning set forth in Section 19.1(b) of this
      Agreement.

     

    “Credit
      Facility” shall have the meaning set forth in Section 14.2(e) of this
      Agreement.

     

    “Credit
      Facility Assignment” shall have the meaning set forth in Section 14.2(e) of this
      Agreement.

     

    “Credit
      Facility Termination” shall have the meaning set forth in Section 14.2(e) of
      this Agreement.

     

    
      “Development
        Plan” shall have the meaning set forth in the Operating Agreement.

       

      “Effective
        Date” shall mean the date on which this Agreement is executed and delivered by
        the parties hereto.

    

     

    “Empire”
      shall mean Empire Resorts, Inc., a Delaware corporation, having an office at
      701
      North Green Valley Parkway, Suite 200, Henderson, Nevada 89074.

     

    “Empire
      Change of Control” means the occurrence of one or more of the following
      events:

     

    (1)           any
      direct or indirect sale, lease, transfer, conveyance or other disposition (other
      than by way of merger or consolidation), in one transaction or a series of
      related transactions, of all or substantially all of the assets of Empire to
      any
      Person or Group other than a transaction in which the transferee is controlled
      by one or more Permitted Holders;

     

    (2)           Empire
      consolidates with, or merges with or into, any Person, or any Person
      consolidates with, or merges with or into, Empire, other than (A) a transaction
      in which the surviving or transferee Person is a Person that is controlled
      by
      the Permitted Holders or (B) any such transaction where the Voting Stock of
      Empire outstanding immediately prior to such transaction is converted into
      or
      exchanged for a majority of the outstanding shares of the Voting Stock of such
      surviving or transferee Person (immediately after giving effect to such
      issuance);

     

    (3)           the
      approval by the holders of Capital Stock of Empire of any plan or proposal
      for
      the liquidation, winding up or dissolution of Empire;

     

    (4)           any
      Person or Group, other than a Permitted Holder, is or becomes the Beneficial
      Owner, directly or indirectly, in the aggregate of more than 50% of the total
      voting power of the Voting Stock of Empire;

     

    (5)           any
      transaction or event (whether by means of an exchange offer, liquidation, tender
      offer, consolidation, merger, binding share exchange, combination,
      reclassification, recapitalization or otherwise) in connection with which all
      or
      substantially all of the shares of Common Stock are exchanged for, converted
      into, acquired for or constitute solely the right to receive, consideration
      which is not all or substantially all common stock that is either (a) listed
      on,
      or immediately after the transaction or event will be listed on, a United States
      national
      securities exchange, or (b) approved, or immediately after the transaction
      or
      event will be approved, for quotation on the Nasdaq Global Market or any similar
      United States system of automated dissemination of quotations of securities
      prices; or

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (6)           individuals
      who on the Effective Date constituted the Board of Directors (together with
      any
      new directors whose election by such Board of Directors or whose nomination
      for
      election by the stockholders of Empire was approved pursuant to a vote of a
      majority of the directors then still in office who were either directors on
      the
      Effective Date or whose election or nomination for election was previously
      so
      approved) cease for any reason to constitute a majority of the Board of
      Directors then in office.

     

    “Empire
      Common Stock” shall have the meaning set forth in Section 22.2 of this
      Agreement.

     

    “Empire
      Default” shall have the meaning set forth in Section 18.2 of this
      Agreement.

     

    “Empire
      Exculpated Parties” shall have the meaning set forth in Section 17 of this
      Agreement.

     

    “Empire
      Land” shall mean the approximately 200 acres of land located in Monticello, New
      York, and all buildings, structures and other improvements thereon, and commonly
      known as the Monticello Raceway; but does not include the Land in Trust Property
      .

     

    “Empire
      Licenses” certain licenses owned by Empire and its wholly-owned subsidiary,
      MRMI, pursuant to those certain license agreements described on Schedule
      C attached hereto and made a part hereof, and  pertaining to
      Empire’s ownership and operating of a harness racing facility and a video gaming
      machine facility, such licenses currently enabling Empire to operate a harness
      racing facility and video gaming machine facility in Monticello, New York known
      as the Monticello Gaming and Raceway facility.

     

    “Empire
      Operations” shall mean the business of operating Empire's video gaming machine
      and racing businesses in Monticello, New York known as the Monticello Gaming
      and
      Raceway facility, including but not limited to the Empire Licenses, the
      employees currently employed by Empire and customer lists and marketing
      materials used by Empire in connection with the ownership and the operation
      of
      such business, but exclusive of the Empire Land and the Land in Trust
      Property.

     

    “Empire
      Requisite Vote” shall have the meaning set forth in Section 13.1(a) of this
      Agreement.

     

    “Empire
      Title/Survey Disapproval Notice” shall have the meaning set forth in Section
      9.1(B)(m) of this Agreement.

     

    “Environmental
      Legal Requirements” shall have the meaning set forth in Section 12.1(o) of this
      Agreement.

     

    “ERISA”  shall
      have the meaning set forth in Section 12.1(t) of this Agreement.

     

    “Escrow
      Agent” shall mean Stewart Title Insurance Company.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended, or any successor
      statute or statutes thereto.

     

    “Gaming
      Authority” means any agency, authority, board, bureau, commission, department,
      office or instrumentality of any nature whatsoever of the United States Federal
      government, any foreign government, any state, province or city or other
      political subdivision or otherwise, whether now or hereafter in existence,
      or
      any officer or official thereof, including, without limitation, the National
      Indian Gaming Commission, the Bureau of Indian Affairs and the Division of
      the
      Lottery of the State of New York, or any other agency, in each case, with
      authority to regulate any gaming operation (or proposed gaming operation) owned,
      managed or operated by the Empire and MRMI.

     

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

     

    “Group”
      shall mean a group of related Persons for purposes of Section 13(d) of the
      Exchange Act.

     

    “Hazardous
      Materials” shall have the meaning set forth in Section 12.1(o) of this
      Agreement.

     

    “Immaterial
      Taking” shall mean the commencement or completion of a condemnation proceeding
      that shall not substantially interfere with the development of the Concord
      Property pursuant to the Site Plan, as determined by Concord in its reasonable
      discretion

     

    “Knowledge”
      or “knowledge” shall mean and be limited to (i) with respect to Empire, when
      used in the phrase “to Empire’s knowledge” or similar phrases, the actual
      knowledge of the following individual:  David Hanlon, and the
      knowledge a reasonably prudent person would be expected to have acting in such
      person’s capacity in the conduct of similar business and (ii) with respect to
      Concord when used in the phrase “to Concord’s knowledge” or similar phrases, the
      actual knowledge of the following individuals:  Louis Cappelli and
      Bruce Berg, and the knowledge a reasonably prudent person would be expected
      to
      have acting in such person’s capacity in the conduct of similar
      business.

     

    “Land
      In
      Trust Property” shall have the meaning set forth in the Operating
      Agreement.

     

    “Lead
      Based Paint” shall have the meaning set forth in Section 12.1(o) of this
      Agreement.

     

    
      “Legalization”
        shall mean the passage of legislation by the State of New York that permits
        legalized gambling at the Concord Property, such legislation to be final,
        unappealable, and not subject to reconsideration by any governmental authority,
        with no injunction, moratorium, or other legal impediment in place that would
        legally preclude Concord or Empire from developing a casino facility comparable
        to a Class III gaming facility on the Concord Property.

    

     

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

     

    “Management
      Fees” shall have the meaning set forth in the Operating Agreement.

     

    “Material
      Adverse Effect” shall mean an effect that would prevent, materially delay or
      materially impair the ability of either Concord or Empire to consummate the
      transactions contemplated by this Agreement, or that would prevent, materially
      delay or materially impair the ability
      of the Company to develop, construct and operate a hotel and convention center
      substantially similar to those described in the Site Plan, and a harness
      racetrack and a Class II gaming facility substantially similar to those
      currently existing on the Empire Land, on the Concord Property after the Closing
      of the transactions contemplated hereby.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Material
      Taking” shall mean the commencement or completion of a condemnation proceeding
      that shall substantially interfere with the development of the Concord Property
      pursuant to the Site Plan.

     

    “Moratorium”
      shall have the meaning set forth in Section 19.3(b) of this
      Agreement.

     

    “MRMI”
      shall mean Monticello Raceway Management, Inc., a New York
      corporation.

     

    “Notes”
      shall have the meaning set forth in Section 19.2(i) of this
      Agreement.

     

    “Operating
      Agreement” shall mean that certain Operating Agreement of the Company attached
      hereto as Schedule B and made a part hereof.

     

    “Other
      Financing Agreement” shall have the meaning set forth in Section 14.1(c) of this
      Agreement.

     

    “Option
      Notice” shall have the meaning set forth in Section 22.2 of this
      Agreement.

     

    “Option
      Purchase Price” shall have the meaning set forth in Section 22.2 of this
      Agreement.

     

    “Permitted
      Holders” shall mean Joseph E. Bernstein, Ralph J. Bernstein, Louis R, Cappelli,
      Scott H. Rechler, Concord Associates, L.P. and their respective
      affiliates.

     

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

     

    “Pro
      Forma Financial Statement” shall mean such pro forma financial statements as are
      used by a lender in making its loan determination.

     

    “Proceedings”
      shall have the meaning set forth in Section 23.15 of this
      Agreement.

     

    “Property”
      shall mean the Concord Property and the
      Empire  Operations.

     

    “Put
      Option” shall have the meaning set forth in Section 22.2 of this
      Agreement.

     

    “Racing
      Authority” means any agency, authority, board, bureau, commission, department,
      office or instrumentality of any nature whatsoever of the United States Federal
      government, any foreign government, any state, province or city or other
      political subdivision or otherwise, whether now or hereafter in existence,
      or
      any officer or official thereof, including, without limitation, the New York
      State Racing and Wagering Board, or any other agency, in each
      case, with authority to regulate any racing operation (or proposed racing
      operation) owned, managed or operated by Empire and MRMI.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Reimbursement
      Amount” shall have the meaning set forth in the Operating
      Agreement.

     

    “Second
      Notice” shall have the meaning set forth in Section 9.1(B)(m) of this
      Agreement.

     

    "Section
      19.3(a) Termination Notice" shall have the
      meaning set forth in Section 19.3(a) of this Agreement.

     

    “Site
      Plan” shall mean that certain 4th Amended
      Site Plan
      Approval attached hereto as Schedule E and made a part
      hereof.

     

    “State
      Agreement” shall have the meaning set forth in Section 14.1(c) of this
      Agreement.

     

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

     

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

     

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

     

    “Temporary
      Certificate of Occupancy” shall mean a temporary certificate of occupancy issued
      to the Company in connection with any Class II gaming facility and harness
      racetrack constructed on the Concord Property.

     

    "Termination
      Payment" shall have the meaning set
      forth in Section 19.3(a) of this Agreement.

     

     “Title
      Company” shall mean Stewart Title Insurance Company and Fidelity National Title
      Insurance Company, as co-insurers; provided, that if either of the
      aforementioned title companies shall decline to offer affirmative insurance
      of
      any Concord Property Disapproved Exception or on any exception to title raised
      by any third-party lender that shall provide financing to the Company in
      connection with the development of the Concord Property that the other title
      company shall be willing to affirmatively insure, then the title company
      offering such affirmative insurance shall be the sole “Title Company” pursuant
      to the terms of this Agreement.

     

    “Tribe”
      shall have the meaning set forth in Section 22.1 of this Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Voting
      Stock” shall mean, with respect to any Person, securities of any class or
      classes of Capital Stock of such Person entitling the holders thereof (whether
      at all times or only so long as no senior class of stock has voting power by
      reason of any contingency) to vote in the election of members of the Board
      of
      Directors (or equivalent governing body) of such Person.

     

    
      	
               

            	
              3.

            	
              Description
                of the Transaction

            

    

     

    (a)                 On
      the Closing Date and upon the terms and conditions set forth herein, Concord
      and
      Empire agree to (i) form the Company for the purpose of owning, operating and
      developing the Property and (ii) enter into the Operating
      Agreement.

     

    (b)                 At
      the Closing, Concord shall contribute the Concord Property, and all buildings,
      structures and improvements located thereon, to the Company in accordance with
      the terms of this Agreement, together with all of its right, title and interest
      in and to (A) the easements, rights, privileges and appurtenances belonging
      thereto, and any abutting strips or gores, any land lying in the bed of any
      street, road or avenue, open or proposed, in front of or adjoining such
      property, and all appurtenant easements for ingress, egress, utilities and
      other
      purposes, (B)  all licenses, franchises, certificates, authorizations,
      approvals, variances, permits and special permits issued or approved by any
      Governmental Entity and relating to the development, operation, ownership,
      maintenance and use of the Concord Property or any part thereof including,
      without limitation, all applications and/or filings for environmental approvals
      and consents, licenses and building permits, and land use and subdivision
      approvals, all to the extent assignable and more completely described in
Exhibit A-1 attached hereto and made a part hereof (the “Concord
      Licenses”), (C) all architectural plans and specifications (including all design
      drawings and concept plans), engineering reports (structural and mechanical),
      surveys, other development plans and site plans and all environmental, zoning,
      feasibility and other reports and studies relating to the condition and
      development of the Concord Property, all to the extent assignable (the “Concord
      Plans”), (D) all guarantees and warranties of manufacturers, contractors,
      materialmen and suppliers in connection therewith to the extent available and
      relating to the Concord Property, (E) all machinery, equipment, fixtures,
      furnishings and other tangible personal property more completely described
      in
Exhibit B-1, and all replacements additions or accessories thereto
      between the date hereof and the Closing Date (collectively, the “Concord
      Personal Property”), (F)intentionally deleted, (G) all service, maintenance,
      supply and management contracts with respect to the Concord Property
      (collectively, the “Concord Service Contracts”) shown on Exhibit D-1
      attached hereto and made a part hereof, and all assignable insurance policies
      with respect to the Concord Property (collectively the “Concord Insurance
      Policies”) shown on Exhibit E-1 attached hereto and made a part hereof,
      and (H) all operating manuals for components (such as mechanical equipment
      or
      landscaping) relating to the maintenance and/or operation of any equipment
      or
      machinery located at the Concord Property (collectively, the “Concord
      Contributed Property”), subject only to the Concord Permitted Exceptions and
      such other matters as any title insurer licensed to do business by the State
      of
      New York shall be willing, without special premium, to omit as exceptions to
      coverage or to except with insurance against collection out of or enforcement
      against the Concord Property.  Notwithstanding anything to the
      contrary contained in this Agreement, the “Concord Contributed Property” shall
      not include the Brownfield Tax Credits held by Concord or any of Concord’s
      affiliates in connection with the Concord Property.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c)                 At
      the Closing, Empire shall contribute the Empire Operations to the Company;
      provided, that, at the Closing Empire shall deliver the Empire Licenses to
      the
      Escrow Agent pursuant to the provisions of Section 20 of this Agreement, and
      shall instruct the Escrow Agent to automatically release the Empire Licenses
      to
      the Company upon the issuance of a Temporary Certificate of Occupancy, such
      instruction to be irrevocable; provided, further, that the Company shall
      continue to operate the Empire Operations at its current location on the Empire
      Land until such time as the Company receives a Temporary Certificate of
      Occupancy.

     

    
      	
               

            	
              4.

            	
              Consideration

            

    

     

    4.1.           Upon
      contribution of the Concord Contributed Property to the Company, execution
      of
      the Operating Agreement, and satisfaction of all other conditions to Closing
      pursuant to the terms of this Agreement, Concord shall be admitted as a member
      of the Company pursuant to the terms of this Agreement and the Operating
      Agreement and, in consideration of the foregoing, Concord shall hold a fifty
      percent (50%) membership interest in the Company, such membership interest
      to be
      evidenced by the execution and delivery by Concord and Empire of the Operating
      Agreement.

     

    4.2.           Upon
      contribution of the Empire Operations to the Company (which shall include the
      placement of the Empire Licenses  in escrow pursuant to Section 20 of
      this Agreement), execution of the Operating Agreement, and satisfaction of
      all
      other conditions to Closing pursuant to the terms of this Agreement, Empire
      shall be admitted as a member of the Company pursuant to the terms of this
      Agreement and the Operating Agreement and, in consideration of the foregoing,
      Empire shall hold a fifty percent (50%) membership interest in the Company,
      such
      membership interest to be evidenced by the execution and delivery by Concord
      and
      Empire of the Operating Agreement.

     

    
      	
               

            	
              5.

            	
              Time
                and Place of Closing

            

    

     

    5.1.           Except
      as otherwise provided in this Agreement, the closing of title pursuant to this
      Agreement (“Closing”) shall take place within thirty (30) days of the
      satisfaction and/or waiver of the conditions to Closing specified in Article
      19
      of this Agreement, which the parties hereto anticipate to be on or before August
      31, 2008, but subject to the provisions of Section 19.3 of this Agreement (the
      “Closing Date”).  Closing shall take place at the offices of DelBello
      Donnellan Weingarten Wise & Wiederkehr, LLP at 1 North Lexington Avenue,
      White Plains, New York 10601.

     

    
      	
               

            	
              6.

            	
              Reserved.

            

    

     

    
      	
               

            	
              7.

            	
              Covenants

            

    

     

    7.1.           Concord
      covenants that between the date of this Agreement and the Closing:

     

    (a)                 Concord
      shall comply or cause to be complied in all material respects with all of its
      obligations under the Concord Licenses, the Concord Service Contracts, the
      Concord Permitted Exceptions and any and all terms and conditions of any
      mortgage or lien encumbering the Concord Property.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)                 Concord
      shall operate the Concord Property in a manner consistent with good practice
      and
      in accordance with its insurance company’s requirements and all legal
      requirements applicable to the Concord Property, and maintain the Concord
      Property in substantially the same condition as exists on the date hereof,
      reasonable wear and tear excepted, and shall keep the same or cause the same
      to
      be kept fully insured against fire and with extended coverage consistent with
      prior practice.

     

    (c)                 Concord
      shall not modify or amend any Concord Service Contract or enter into any new
      service contract unless the same is terminable without penalty by the then
      owner
      of the Concord Property upon not more than 30 days’ notice.

     

    (d)                 No
      fixtures, equipment or personal property included in this sale shall be removed
      from the Concord Property unless the same are replaced with similar items of
      at
      least equal quality prior to the Closing.

     

    (e)                 Concord
      shall not withdraw, settle or otherwise compromise any protest or reduction
      proceeding affecting real estate taxes assessed against the Concord Property
      for
      any fiscal period in which the Closing is to occur or any subsequent fiscal
      period without the prior written consent of Empire, which consent shall not
      be
      unreasonably withheld.  Real estate tax refunds and credits received
      after the Closing Date which are attributable to the fiscal tax year during
      which the Closing Date occurs shall be apportioned between Concord and the
      Company after deducting the expenses of collection thereof, which obligation
      shall survive the Closing.

     

    (f)                 Concord
      shall not enter into any material transaction or agreement relating to the
      Concord Property not in the ordinary course of business.

     

    (g)                 Concord
      shall not enter into any leases of the Concord Property.

     

    (h)                 Concord
      shall allow Empire or Empire’s representatives access to the Concord Property,
      the Concord Licenses, the Concord Plans, and other documents required to be
      delivered under this Agreement upon reasonable prior notice at reasonable
      times.

     

    7.2.           Concord
      covenants that from the date of this Agreement until such time as Empire or
      its
      affiliates, successors or assigns is no longer a member of the Company, that
      Concord shall not build or operate any convention center, convention facility,
      casino, racino, harness or thoroughbred racetrack on the remaining 1,575 acres
      owned by Concord that is adjacent to the Concord Property without the written
      consent of Empire or its affiliates, successors or assigns.

     

    7.3.           Empire
      covenants that between the date of this Agreement and the Closing:

     

    (a)                 Empire
      shall comply or cause to be complied in all material respects with all of its
      obligations under the Empire Licenses.

     

    (b)                 Empire
      shall operate the Empire Operations in a manner consistent with good practice
      and in accordance with all legal requirements applicable to the Empire
      Licenses.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c)                 Empire
      shall not enter into any material transaction or agreement relating to the
      Empire Operations not in the ordinary course of business; provided, that Empire
      shall not knowingly and willfully enter into any transaction or agreement that
      shall be reasonably expected to have an adverse effect on the financial
      condition of the Company or the ability of the Company to proceed with the
      development of the Concord Property pursuant to the Site Plan after Closing,
      and
      Empire shall consult with Concord regarding any transaction and/or agreement
      entered into by Empire in the ordinary course of business that is not terminable
      upon thirty (30) days notice.  In addition, Empire shall consult with
      Concord prior to entering into any transaction or agreement that can reasonably
      be expected to have an impact on the financial condition and/or operations
      of
      the Company after Closing.

     

    (d)                 Empire
      shall allow Concord or Concord’s representatives access to the Empire Operations
      and other documents required to be delivered under this Agreement upon
      reasonable prior notice at reasonable times.

     

    7.4.           Subject
      to their respective obligations under applicable Law (including requirements
      of
      stock exchanges and other similar regulatory bodies), Empire and Concord will
      consult with each other before issuing, or permitting any agent or affiliate
      to
      issue, and provide each other the opportunity to review and make reasonable
      comment upon, any press releases or otherwise making or permitting any agent
      or
      affiliate to make, any public statements with respect to this Agreement and
      the
      transactions contemplated hereby and, except as may be required by applicable
      Law or any listing agreement with the Nasdaq Stock Market, will not issue any
      such press release or make any such public statement prior to such
      consultation.

     

    7.5.           If
      required by law, Empire shall use commercially reasonable efforts to solicit
      the
      approval of this Agreement by the stockholders of Empire and include in any
      proxy statement Empire’s board of director’s declaration of the advisability of
      this Agreement and its recommendation to the stockholders of Empire that they
      adopt this Agreement.

     

    7.6.           Empire
      and Concord shall use commercially reasonable efforts to secure the
      non-subordination of Management Fees with respect to the State Agreement or
      any
      financing arrangements with a third-party lender.

     

    
      	
               

            	
              8.

            	
              Reserved

            

    

     

    
      	
               

            	
              9.

            	
              Title
                to the Property; Form of
                Conveyance

            

    

     

    9.1.           Title
      to the Concord Property.  (A)   At Closing, Concord
      shall convey good and valid fee title to the Concord Property free and clear
      of
      all Liens other than Concord Permitted Exceptions.

     

    (B)           Empire
      agrees to cause the Concord Property to be examined by the Title Company and
      shall direct the Title Company to deliver copies of such title report (the
      “Concord Property Title Report”) to Concord’s attorney simultaneously with the
      delivery of same to Empire, but in no event less than ten (10) days from the
      date of this Agreement, and Empire shall also direct the Title Company to
      deliver copies of any update of the Concord Property Title Report (a “Concord
      Property Title Update”) to Concord’s attorney simultaneously with the delivery
      of same to Empire. Empire shall also cause an updated “as built” ALTA/ACSM
      survey

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    plat
      (collectively, the “Concord Survey”) of the Concord Property, prepared by a
      surveyor registered in New York State showing, to the extent applicable all
      easements of record, parking spaces (including a count thereof), curb cuts,
      setback reductions of record, flood zone designations and such other items
      as
      Empire may reasonably request to be prepared and delivered simultaneously to
      Concord and Empire. At the Closing, Concord shall deliver, and Empire, for
      itself and as a member of the Company, shall be required to accept title to
      the
      Concord Property subject to no Liens, exceptions, encumbrances or defects other
      than the following (collectively, “Concord Permitted Exceptions”):

     

    (a)                 Zoning
      regulations, building restrictions, regulations and ordinances which are not
      violated by the existing structures, provided the same do not result in a
      Material Adverse Effect;

     

    (b)                 Riparian
      rights and easements of others to and over Kiamesha Lake;

     

    (c)                 The
      instruments of record that are listed on Schedule 9.1(B)(c) hereto,
      provided the same do not, individually or in the aggregate, result in a Material
      Adverse Effect;

     

    (d)                 The
      lien of any real estate taxes, water charges, sewer rents, and assessments
      (if
      any) not yet due and payable, provided that apportionment thereof is made as
      provided for in this Agreement;

     

    (e)                 The
      lien of any assessment which is or may become payable, but is not then
      delinquent, in annual installments of which any installment is then a charge
      or
      a lien, provided that apportionment thereof is made as provided in this
      Agreement;

     

    (f)                 Financing
      statements, chattel mortgages and liens on personalty filed more than 5 years
      prior to the Closing Date and not renewed, or filed against property or
      equipment no longer located on the Concord Property;

     

    (g)                 Any
      public or quasi-public utility company rights, easements and franchises for
      electricity, water, steam, gas, telephone or other service or right to use
      and
      maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
      facilities in, over, under and upon the Concord Property, provided the same
      do
      not, individually or in the aggregate, result in a Material Adverse Effect
      and
      provided that none of such rights imposes any monetary obligation on the owner
      of the Concord Property;

     

    (h)                 Any
      other easements, rights of way, declarations, covenants, restrictions,
      encumbrances and other title matters, provided the same do not, individually
      or
      in the aggregate, result in a Material Adverse Effect;

     

    (i)                 Encroachments
      of stoops, areas, cellar steps, trim cornices, lintels, window sills, awnings,
      canopies, ledges, fences, hedges, coping and retaining walls projecting from
      the
      Concord Property over any street or highway or over any adjoining property
      and
      encroachments of similar elements projecting from adjoining property over the
      Concord Property, provided the same do not, individually or in the aggregate,
      result in a Material Adverse Effect;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (j)                 Revocability
      or lack of right to maintain vaults, coal chutes, excavations or sub-surface
      equipment beyond the line of the Concord Property;

     

    (k)                 Any
      state of facts that an accurate survey would disclose, provided that such facts
      do not result in a Material Adverse Effect;

     

    (l)                 Such
      other matters as any title insurer licensed to do business by the State of
      New
      York shall be willing to omit as exceptions to coverage or to except with
      insurance against collection out of or enforcement against the Concord Property;
      and

     

    (m)                 Any
      exception, lien or encumbrance set forth in the Concord Property Title Report,
      any new exception, lien or encumbrance set forth in any Concord Property Title
      Update or any matter disclosed by the Concord Survey, unless (i) within five
      (5)
      business days following Empire’s receipt of the Concord Property Title Report,
      Concord Property Title Update or the Concord Survey, as the case may be, Empire
      shall have delivered a written notice (the “Empire Title/Survey Disapproval
      Notice”) to Concord objecting to an exception set forth in the Concord Property
      Title Report or Concord Property Title Update or matter disclosed by the Concord
      Survey (each such objected exception or matter shall hereafter be referred
      to as
      a “Concord Property Disapproved Exception”), provided said Concord Property
      Disapproved Exception is not already deemed a Concord Permitted Exception
      pursuant to the provisions of Sections 9.1(B)(a)–(l) above.  In the
      event that Empire has not responded to a Concord Property Title Update or
      Concord Property Title Report within such five (5) business day period, Concord
      may deliver a notice (“Second Notice”) stating that that any Empire Title/Survey
      Disapproval Notice must be made within three (3) business days, provided that
      such Second Notice may be sent via facsimile or electronic mail to Empire and/or
      Empire’s counsel, and TIME IS OF THE ESSENCE with respect to Empire’s delivery
      of the Empire Title/Survey Disapproval Notice after such.  Any Empire
      Title/Survey Disapproval Notice delivered more than three (3) business days
      after Empire’s receipt of a Second Notice shall be deemed null and
      void.  In the event that Empire shall have timely delivered a Empire
      Title/Survey Disapproval Notice, Concord shall have the right to attempt to
      remove, but not the obligation to remove, up to the Closing Date, all Concord
      Property Disapproved Exception(s), provided, however,
      notwithstanding anything to the contrary contained in this Section 9.1(m),
      Concord shall be obligated to discharge the lien of any mortgage and to seek
      to
      obtain and deliver to the Title Company a demand for payment from any lien
      holder of record whose monetary lien constitutes a Concord Property Disapproved
      Exception and shall cause the Title Company to pay such demand and discharge
      such lien at the Closing.  Notwithstanding anything to the contrary
      set forth in this Agreement, in the event that Empire delivers an Empire
      Title/Survey Disapproval Notice to Concord with respect to a Concord Property
      Title Update on a date which is less than thirty (30) business days prior to
      the
      Closing, Concord shall have the right, but not the obligation, to adjourn the
      Closing Date for a period not to exceed thirty (30) business days from the
      date
      Concord received the Empire Title/Survey Disapproval Notice in order to attempt
      to remove or remedy all Concord Property Disapproved Exceptions pursuant to
      the
      provisions of the immediately preceding sentence.  In the event
      Concord cannot or does not remove from title (or remedy a survey defect) any
      Concord Property Disapproved Exception by the Closing Date (other than (x)
      any
      mortgage and (y) liens for the payment of money, all of which Concord is
      obligated to cure), Empire shall have the right to either (i) waive such Concord
      Property Disapproved Exceptions, or (ii) terminate this Agreement,
      in which event this Agreement shall be null and void and the parties hereto
      shall be relieved of all further obligations and liability other than any
      arising under Section 15.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (C)           Concord
      shall give, and Empire, for itself and as a member of the Company, shall accept,
      title to the Concord Property such as the Title Company shall be willing to
      insure in accordance with the standard form of policy approved by the New York
      State Department of Insurance or the New York Board of Title Underwriters,
      whichever agency is appropriate, without special or additional premium, subject
      to the Concord Permitted Exceptions and any Concord Property Disapproved
      Exception(s) that continues to exist pursuant to Section 9.1(B)(m) hereof;
      provided, that such title policy shall include affirmative insurance
      that  all recorded covenants, conditions and restrictions affecting
      the Property and all matters shown on the Concord Survey and any updates thereof
      shall not affect the intended use or occupancy of any improvements on the
      premises, that the same have not been violated and that a violation thereof
      will
      not result in forfeiture or reversion of title, and that said covenants,
      conditions, restrictions and survey matters will not prohibit  the
      intended use of the Property as set forth in the Site Plan, and ALTA 9, land
      same as survey, contiguity, access, tax parcel, environmental and non-imputation
      endorsements.  Receipt by the Company of a title policy naming the
      Company as the insured, insuring title to the Concord Property as described
      in
      the foregoing sentence, in the amount of the deemed value of the Concord
      Property and issued by the Title Company on behalf of any one or more reputable
      national title underwriters shall be a condition precedent to Empire’s
      obligations to close the transactions contemplated by this
      Agreement.

     

    9.2.           Conveyance
      of Empire Operations.  At Closing, Empire shall convey the Empire
      Operations to the Company free and clear of all Liens; provided that, at the
      Closing, Empire shall deliver, or shall cause MRMI to deliver, the Empire
      Licenses to the Escrow Agent pursuant to the provisions of Section 20 of this
      Agreement.

     

    9.3.           Empire
      acknowledges and agrees that for purposes of Section 9.1(B), any matter relating
      to the environmental condition of the Concord Property shall not be deemed
      to be
      a title exception and shall not be subject to the provisions of Sections
      9.1(B).  If the Title Company is willing to insure the Company that
      any charges, liens and encumbrances will not be collected out of or enforced
      against the Concord Property, then Concord, shall have the right, in lieu of
      payment and discharge to deposit with the Title Company such funds or assurances
      or to pay such special or additional premiums as the title insurance company
      may
      require in order to so insure.  In such case the liens and
      encumbrances with respect to which the Title Company has agreed so to insure
      shall not be considered objections to title.

     

    
      	
              10.

            	
              Reserved

            

    

     

    
      	
              11.

            	
              Apportionment
                of Taxes and/or PILOT Payments, Rents and Other Charges at
                Closing

            

    

     

    11.1.         (A)  Concord
      shall be entitled to all income produced from the operation of the Concord
      Property which is allocable to the period prior to the Closing Date and shall
      be
      responsible for all expenses allocable to that period.  The Company
      shall be entitled to all income and responsible for all expenses allocable
      to
      the period beginning at 12:01 A.M. on the Closing Date.  At the
      Closing, all items of income and expense listed below with respect to the
Concord
      Property shall be prorated in accordance with the foregoing principles and
      the
      rules for the specific items set forth hereafter computed and apportioned
      between the Company and Concord as of the Closing Date on a per diem and on
      a
      365-day year basis, which agreement shall survive Closing:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

              	
                (i)

              	
                revenues,
                  if any, from telephone booths, vending machines and other income-producing
                  agreements;

              

      

       

      
        	
                 

              	
                (ii)

              	
                real
                  estate taxes, water charges and sewer rents, if any, on the basis
                  of the
                  fiscal period for which assessed, except that if there is a water
                  meter on
                  the Concord Property, apportionment at the Closing shall be based
                  on the
                  last available reading, subject to adjustment after the Closing
                  when the
                  next reading is available;

              

      

       

      
        	
                 

              	
                (iii)

              	
                value
                  of fuel stored on the Concord Property, at the price then charged
                  by
                  Concord’s supplier, including any
                  taxes;

              

      

       

      
        	
                 

              	
                (iv)

              	
                charges
                  under transferable Concord Licenses, Concord Service Contracts,
                  or
                  permitted renewals or replacements thereof;
                  and

              

      

       

      
        	
                 

              	
                (v)

              	
                charges
                  with respect to insurance premiums under the assigned Concord Insurance
                  Policies, if any.

              

      

       

    

    (B)           Empire
      shall be entitled to all income produced from the operation of the Empire
      Operations which is allocable to the period prior to the Closing Date and shall
      be responsible for all expenses allocable to that period.  The Company
      shall be entitled to all income and responsible for all expenses allocable
      to
      the period beginning at 12:01 A.M. on the Closing Date.  At the
      Closing, all items of income and expense listed below with respect to the Empire
      Operations shall be prorated in accordance with the foregoing principles and
      the
      rules for the specific items set forth hereafter computed and apportioned
      between the Company and Empire as of the Closing Date on a per diem and on
      a
      365-day year basis, which agreement shall survive Closing:

     

    
      
        	
                 

              	
                (i)

              	
                charges
                  under transferable Empire Licenses, if
                  any.

              

      

        

    

    If
      the
      Closing shall occur before a new tax rate is fixed, the apportionment of taxes
      at the Closing shall be upon the basis of the old tax rate for the preceding
      period applied to latest assessed valuation.  Promptly after the new
      tax rate is fixed, the apportionment of taxes shall be
      recomputed.  Any discrepancy resulting from such recomputation and any
      errors or omissions in computing apportionments at Closing shall be promptly
      corrected, which obligations shall survive the Closing.

     

    The
      provisions of this Section 11.1 shall survive the Closing for a period of one
      hundred eighty (180) days at which time there will be a one time readjustment,
      if necessary.

     

    11.2.         Intentionally
      Deleted.

     

    11.3.         At
      the Closing, Concord shall deliver the Concord Property free and clear of all
      leases and/or tenancies thereon.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    11.4.         Each
      of Concord and Empire shall be responsible for paying all costs of leasing,
      advertising and marketing the Concord Property and the Empire Land,
      respectively, incurred up to the date of Closing.

     

    11.5.         (A)
      Concord shall be responsible for (i) the costs and expenses associated with
      its
      due diligence; (ii) ensuring the completion of all environmental remediation
      on
      the Concord Property including any related expenses thereto and curing any
      violations that exist on the Concord Property including any related expenses
      thereto; (iii) any recording fees for documentation to be recorded in connection
      with the contribution of the Concord Property to the Company;  and
      (iv) the costs and expenses of its legal counsel, advisors and other
      professionals employed by it in connection with the contribution of the Concord
      Property to the Company; and (B) Empire shall be responsible for (i) the costs
      and expenses associated with its due diligence; (ii) any reasonable fees levied
      by the Escrow Agent in connection with the escrow of the Empire Licenses prior
      to the issuance of a Temporary Certificate of Occupancy; (iii) any recording
      fees for documentation to be recorded in connection with the contribution of
      the
      Empire Operations to the Company;  and (iv) the costs and expenses of
      its legal counsel, advisors and other professionals employed by it in connection
      with the contribution of the Empire Operations to the Company.  The
      Company shall pay all premiums and fees for title examination and title
      insurance obtained and all related charges in connection with the Concord
      Property, all costs in connection with the Concord Survey and all state and
      local transfer Taxes arising from the transfer of the Concord Property to the
      Company.

     

    11.6.         A
      detailed statement shall be prepared at the Closing setting forth the manner
      of
      computation of the pro-rated adjustments. The provisions of this Article 11
      shall survive the Closing.

     

    
      	
              12.

            	
              Warranties
                and Representations by Concord.

            

    

     

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

     

    (a)                 Due
      Formation, Existence, Etc.  Concord is duly formed, validly
      existing, and in good standing, and has the requisite power and authority to
      own, lease, and operate its properties as it is now owned, leased and
      operated.  Concord has full power and authority and has taken all
      limited partnership and/or limited liability company action necessary to execute
      and deliver this Agreement and to perform the obligations of Concord hereunder,
      and all limited partnership action necessary to authorize the person(s)
      executing this Agreement on behalf of Concord to execute and deliver this
      Agreement and all documents to be executed by Concord pursuant to this Agreement
      on behalf of Concord and to perform the obligations of Concord
      hereunder.  This Agreement is a valid and binding agreement of Concord
      enforceable against Concord in accordance with its terms, subject to bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium and similar Laws
      of
      general applicability relating to or affecting creditors’ rights and to general
      equity principles.  The execution and delivery by Concord
      of, and the performance and compliance by Concord with, the terms and provisions
      of this Agreement do not (a) violate any term, condition or provision
      of  Concord’s organizational or governing documents; (b) violate any
      judgment, order, injunction, decree, regulation or ruling of any court or other
      Governmental 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Entity
      to
      which Concord is subject; or (c) require any consent or approval under, result
      in any breach of or any loss of any benefit under, give rise to other’s right of
      termination, vesting, amendment, acceleration, or cancellation of, result in
      the
      creation of any Lien on the Concord Property pursuant to, or cause a violation
      of any agreement, promissory note, bond, mortgage, indenture, contract, lease,
      license, or any other instrument of obligation to which Concord is a party
      or by
      which Concord is bound, except that, in the case of clauses (b) or (c) above,
      for any breach, violation, termination, default, acceleration, creation or
      change that would not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect on Concord. This Section 12.1(a) shall survive
      the Closing for a period of twelve (12) months.

     

    (b)                 Permits
      and Approvals.  Concord has all material zoning and governmental
      approvals, site plans and other similar approvals, necessary to develop and
      construct a hotel and convention center containing up to 1,580,000 square feet,
      and a Class II gaming facility on the Concord Property, including, without
      limitation, the 4th Amended
      Site Plan
      Approval attached hereto as Schedule E, and all of such items have been
      issued and are valid and in full force and effect.  All of the
      foregoing are assignable and transferable to the Company without the consent
      or
      approval of any person or entity or the payment of any material fee or charge
      (it being understood and agreed that Concord shall pay any such fees or charges
      at Closing). This Section 12.1(b) shall survive the Closing for a period of
      twelve (12) months.

     

    (c)                 Consents
      and Approval.  No consent, waiver, authorization, permit, or
      approval by any third party or governmental entity, which heretofore has not
      been obtained, is required in connection with the execution and delivery by
      Concord of this Agreement or the performance by Concord of the obligations
      to be
      performed under this Agreement by Concord. This Section 12.1(c) shall survive
      the Closing for a period of twelve (12) months.

     

    (d)                 Licenses.  Exhibit
      A-1 is a true, correct and complete list of each of the material Concord
      Licenses, as amended and in effect, each of the material Concord Licenses is
      in
      full force and effect, and Concord does not know of, and neither Concord nor
      any
      agent or employee of Concord has received notice of, any intention on the part
      of the issuing authority to cancel, suspend or modify any of such Concord
      Licenses or to take any action or institute any proceedings to effect such
      a
      cancellation, suspension or modification.  The Concord Licenses
      identified in Exhibit A-1 comprise all licenses, franchises,
      certifications, authorizations, approvals and permits required by any
      governmental or quasi-governmental authority for the use and operation of the
      Concord Property as the same is presently used and operated, and the Concord
      Property is operated and occupied in compliance with each of the Concord
      Licenses, except for such noncompliance that would not cause a Material Adverse
      Effect. This Section 12.1(d) shall survive the Closing for a period of twelve
      (12) months.

     

    (e)                 Leases.  There
      are no leases or occupancy agreements affecting the Concord
      Property.

     

    (f)                 Service
      Contracts.  Exhibit D-1 contains a list of all of the
      Concord Service Contracts affecting the Concord Property, and Empire has been
      provided with a copy of each of the Concord Service Contracts, and amendments
      and modifications thereof, and such copies are true, correct and complete in
      all
      material respects.  Concord is not in material default and has not
      received any written notice of default under any of the Concord Service
      Contracts that has not been cured, and all of the Concord Service Contracts
      are
      in full force and effect and are terminable without material cost to Concord
      upon not more than thirty (30) days’ notice thereunder.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (g)                 Title.  Except
      as set forth in Exhibit J attached to this Agreement and made a part
      hereof, Concord owns fee simple title to the Concord Property free and clear
      of
      Liens, other than the Concord Permitted Exceptions. This Section 12.1(g) shall
      survive the Closing for a period of twelve (12) months.

     

    (h)                 Title
      to Concord Licenses and Concord Service Contracts.  The interest
      of Concord in the Concord Service Contracts and Concord Licenses is free and
      clear of all Liens and has not been assigned to any other Person, except with
      respect to Concord Permitted Exceptions. This Section 12.1(h) shall survive
      the
      Closing for a period of twelve (12) months.

     

    (i)                 Personal
      Property.  All of the Concord Personal Property, if any, to be
      contributed by Concord to the Company has been paid for in full and is free
      of
      all liens, claims and encumbrances.

     

    (j)                 No
      Tenants or Occupants.  Except for Concord, there are no persons in
      possession or occupancy of the Concord Property, nor are there any persons
      who
      have possessory or other occupancy rights with respect to the Concord
      Property.

     

    (k)                 Compliance
      with Laws.  Concord has not received any written notice from any
      governmental agency or authority that the Concord Property (or any portion
      thereof) is in violation of (i) any of the requirements of restrictive covenants
      or other encumbrances affecting the Concord Property (or any portion thereof)
      and (ii) any laws bearing on the ownership, operation or use of the Concord
      Property, including, without limitation, those relating to environmental
      conditions, health, safety, building, fire, zoning, accessibility and land
      use.

     

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

     

    (m)                 Condemnation.  There
      is no existing, pending or to the best of Concord’s knowledge, threatened (a)
      condemnation of all or any part of the Concord Property, (b)
      widening, change of grade or limitation on use of streets abutting the Concord
      Property, (c) special Tax or assessment to be levied against the Concord
      Property, (d) change in the zoning classification of the Concord Property,
      or
      (e) change in the tax assessment of the Concord Property; provided, that Concord
      has been informed that the sewer tax applicable to the Concord Property shall
      be
      reassessed.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (n)                 Purchase
      Options.  Concord has not entered into any presently effective
      contracts regarding the sale, conveyance, transfer or disposition of the Concord
      Property (except for the within Agreement).  Concord has not granted
      to anyone, and no one possesses, any option to purchase or right of first
      refusal to purchase Concord Property.  Concord has not entered into
      any occupancy contract, leases or the like with respect to the Concord Property
      and no one has any right to use or occupy the Concord Property.

     

    (o)                 Environmental
      Matters.  Exhibit I-1 sets forth all reports, notifications
      and other documents received by Concord in connection with any Hazardous
      Materials (as defined below) or underground storage tanks located in, on or
      under the Concord Property. The term “Hazardous Materials” shall include without
      limitation (a) asbestos or asbestos-containing materials, polychlorinated
      biphenyls, petroleum or petroleum products or byproducts, flammable explosives,
      radioactive materials, Lead Based Paint, mold, infectious substances or raw
      materials which include hazardous constituents or (b) any hazardous, toxic
      or
      harmful substances, wastes, materials, pollutants, contaminants, or any other
      substances or materials which are regulated by, or  may form the basis
      of liability under, any Environmental Legal Requirement.

     

    The
      term
“Environmental Legal Requirements” shall mean all federal, state and local Legal
      Requirements relating to contamination or the protection of human health and
      the
      environment, including, without limitation, the Comprehensive Environmental
      Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601
etseq.), the Resource Conservation and Recovery Act of 1976 (42
      U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33
      U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et
      seq.), the Emergency Planning and Community-Right-to-Know Act (42 U.S.C. §
11001 etseq.), the Endangered Species Act (16 U.S.C. § 1531 et
      seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the
      Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the
      Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), and
      those relating to paint containing more than .05% lead by dry weight (“Lead
      Based Paint”) and the regulations promulgated pursuant to said laws, all as
      amended from time to time.

     

    (p)                 Insurance.  Exhibit
      E-1 is a list of all insurance policies presently affording coverage with
      respect to the Concord Property, and the information contained thereon is
      complete and accurate in all material respects as of the date
      hereof.

     

    (q)                 Brokers
      and Finders.  Neither Concord nor any of its officers, directors
      or employees has employed any broker or finder or incurred any liability for
      any
      brokerage fees, commissions or finders fees in connection with the transactions
      contemplated in this Agreement. This Section 12.1(q) shall survive the Closing
      for a period of twelve (12) months.

     

    (r)                 Taxes.  Except
      as would not, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect on Concord, (i) Concord and each of its
      Subsidiaries have duly and timely (subject to any extensions permitted by
      applicable law) filed all material Tax Returns required to be filed by any
      of
      them, and all such Tax Returns are true, complete and accurate in all material
      respects, (ii) Concord and each of its Subsidiaries have paid all material
      Taxes
      that are required to be paid by any of them or that Concord or 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    any
      of
      its Subsidiaries are obligated to withhold from amounts owing to any employee,
      creditor or third party, (iii) intentionally deleted, (iv) neither Concord
      nor
      any of its Subsidiaries has waived any statute of limitations with respect
      to
      material Taxes or agreed to any extension of time with respect to a material
      Tax
      assessment or deficiency, (v) there are no pending audits, examinations,
      investigations, deficiencies, claims or other proceedings in respect of material
      Taxes relating to Concord or any of its Subsidiaries, (vi) there are no Liens
      for material Taxes on the Concord Property, except for Taxes not yet due and
      payable, (vii) neither Concord nor any of its Subsidiaries has been treated
      as a
      partnership for Tax purposes since the date of its respective formation, (viii)
      none of Concord or any of its Subsidiaries has received or has been subject
      to
      any written ruling relating to material Taxes or entered into any written and
      legally binding agreement with any taxing authority relating to material Taxes,
      except with respect to sewer taxes payable on the Concord Property, (ix) neither
      Concord or any of its Subsidiaries has made any election, or is required, to
      treat the Concord Property as owned by another Person for Tax purposes, (x)
      the
      Concord Property does not directly or indirectly secure any debt the interest
      on
      which is tax-exempt under Section 103(a) of the Code, and (xiv) the Concord
      Property is not a “tax-exempt use property” within the meaning of Section 168(h)
      of the Code.

     

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

     

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

     

    12.2.         Empire
      acknowledges and agrees that, except as set forth in this Agreement, Concord
      has
      not made, does not make and specifically negates and disclaims any
      representations, warranties, promises, covenants, agreements or guaranties
      of
      any kind or character whatsoever, whether express or implied, oral or written,
      past or present, of, as to, concerning or with respect to the Concord
      Property.  Additionally, no Person acting on behalf of Concord is
      authorized to make, and by execution hereof Empire acknowledges that no person
      has made, on behalf of Concord, any representation, agreement, statement,
      warranty, guaranty or promise regarding the Concord Property or the transactions
      contemplated herein other than the representations, agreements, statements,
      warranties, guaranties and promises contained in this Agreement; and no such
      other representation, warranty, agreement, guaranty, statement or promise,
      if
      any, made by any person acting on behalf of Concord shall be valid or binding
      upon Concord unless specifically set forth herein.  Empire further
      acknowledges and agrees that Empire has inspected the Concord Property, is
      fully
      familiar with the physical condition and state of repair thereof, and, to the
      extent permitted by law, the contribution of the Concord Property to the Company
      as provided for herein is made on an “as is” condition and basis with all faults
      except as expressly provided in this Agreement.

     

    12.3.         At
      the Closing, and as a condition thereof, without limitation of any other
      obligation of Concord contained in this Agreement, Concord shall warrant and
      represent to Empire and the Company on the date of Closing in writing that
      all
      warranties and representations made by Concord in this Agreement continue to
      be
      true and correct in all material respects as of the date of Closing as if they
      were made on the date of such Closing.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    12.4.         Concord
      shall indemnify and defend Empire and the Company against and hold Empire and
      the Company harmless from any and all claims, losses, costs, damages,
      liabilities and expenses (including, without limitation, reasonable counsel
      fees
      and counsel fees incurred to enforce this indemnity) arising out of a breach
      by
      Concord of its warranties, representations and covenants hereunder.
      Notwithstanding anything to the contrary contained in this Agreement, Concord
      shall indemnify and defend Empire and the Company against, and hold Empire
      and
      the Company harmless from, any and all losses, costs, damages, liabilities
      and
      expenses (including, without limitation, reasonable counsel fees and counsel
      fees incurred to enforce this indemnity) arising in connection with the
      ownership and operation by Concord of the Concord Property prior to the Closing
      Date.

     

    12.5.         Except
      as otherwise provided in this Agreement, no representations, warranties,
      covenants, indemnifications or other obligations of Concord set forth in this
      Agreement shall survive the Closing, and no action based thereon shall be
      commenced after the Closing.  In the event that a representation,
      warranty, covenant or indemnification of Concord survives the Closing pursuant
      to the terms of this Agreement, such representation, warranty, covenant or
      indemnification shall not survive beyond a period of twelve (12) months from
      the
      date of the Closing, except to the extent that Empire shall have delivered
      notice of a breach on or before such twelve (12) month anniversary.

     

    
      	
              13.

            	
              Warranties
                and Representations by Empire

            

    

     

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

     

    (a)                 Due
      Formation, Existence, Etc.  Empire is a legal entity duly
      organized, validly existing and in good standing under the laws of its
      respective jurisdiction of organization and has all requisite corporate or
      similar power and authority to own, lease and operate its properties and assets
      and to carry on its business as presently conducted and is qualified to do
      business and is in good standing as a foreign corporation in each jurisdiction
      where the ownership, leasing or operation of its assets or properties or conduct
      of its business requires such qualification except where such failures to be
      so
      qualified, licensed, or in good standing would not have a Material Adverse
      Effect on Empire. Empire has all requisite corporate power and authority and
      has
      taken all corporate action necessary in order to execute, deliver and perform
      its obligations under this Agreement, subject only to the approval of this
      Agreement and the transactions contemplated herein by a majority of the votes
      cast at the Stockholders Meeting, as defined herein (such affirmative vote,
      the
“Empire Requisite Vote”).  The Empire Requisite Vote is the only vote
      of the holders of any class or series of capital stock of Empire necessary
      to
      adopt, approve or authorize this Agreement and the transactions contemplated
      hereby.  This Agreement is a valid and binding agreement of Empire,
      enforceable against Empire in accordance
      with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar Laws of general applicability relating
      to
      or affecting creditors’ rights and to general equity principles. Subject to
      Section 7.5 hereof, the Board of Directors of Empire has duly approved this
      Agreement and the transactions contemplated hereby.  The execution and
      delivery by Empire of, and the 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    performance
      and compliance by Empire with, this Agreement in accordance with its terms
      do
      not (a) violate any term, condition or provision of  Empire’s
      organizational or governing documents; (b) violate any judgment, order,
      injunction, decree, regulation or ruling of any court or other Governmental
      Entity to which Empire is subject; or (c) except as set forth on Exhibit
      13.1(a) attached hereto and made a part hereof require any consent or
      approval under, result in any breach of or any loss of any benefit under, give
      rise to other’s right of termination, vesting, amendment, acceleration, or
      cancellation of, result in the creation of any Lien on the Empire Licenses
      pursuant to, or cause a violation of any agreement, promissory note, bond,
      mortgage, indenture, contract, lease, license, or any other instrument of
      obligation to which Empire is a party or by which Empire is bound, except that,
      in the case of clauses (b) or (c) above, for any breach, violation, termination,
      default, acceleration, creation or change that would not, individually or in
      the
      aggregate, reasonably be expected to have a Material Adverse Effect on Empire.
      This Section 13.1(a) shall survive the Closing for a period of twelve (12)
      months.

     

    (b)                 Consents
      and Approval.  Except as set forth on Exhibit 13.1(b)
      attached hereto and made a part hereof, no consent, waiver, authorization,
      permit, or approval by any third party or governmental entity, including but
      not
      limited to any Racing Authority or Gaming Authority, which heretofore has not
      been obtained is required in connection with the execution and delivery by
      Empire of this Agreement or the performance by Empire of the obligations to
      be
      performed under this Agreement by Empire, including but not limited to the
      transfer of the Empire Operations to the Company. This Section 13.1(b) shall
      survive the Closing for a period of twelve (12) months.

     

    (c)                 Licenses.  Schedule
      C is a true, correct and complete list of all of the Empire Licenses issued
      to Empire and MRMI by the Racing Authority and the Gaming Authority, and each
      of
      the Empire Licenses is in full force and effect, and Empire does not know of,
      and neither Empire nor any agent or employee of Empire has received notice
      of,
      any intention on the part of the issuing authority to cancel, suspend or modify
      any of such Empire Licenses or to take any action or institute any proceedings
      to effect such a cancellation, suspension or modification. This Section 13.1(c)
      shall survive the Closing for a period of twelve (12) months.

     

    (d)                 Title
      to Empire Licenses.  Except as set forth on Exhibit 13.1(d)
      attached hereto and made a part hereof, the interest of Empire in the Empire
      Licenses is free and clear of all Liens and has not been assigned to any other
      Person. This Section 13.1(d) shall survive the Closing for a period of twelve
      (12) months.

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (f)                 Purchase
      Options.  Empire has not entered into any presently effective
      contracts regarding the sale, conveyance, transfer or disposition of the Empire
      Operations (except for the within Agreement).  Empire has not granted
      to anyone, and no one possesses, any option to purchase or right of first
      refusal to purchase the Empire Operations.

     

    (g)                 Brokers
      and Finders.  Neither Empire nor any of its officers, directors or
      employees has employed any broker or finder or incurred any liability for any
      brokerage fees, commissions or finder’s fees in connection with the transactions
      contemplated in this Agreement. This Section 13.1(g) shall survive the Closing
      for a period of twelve (12) months.

     

    (h)                 Taxes.  Except
      as would not, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect on Empire, (i) Empire and each of its Subsidiaries
      have
      duly and timely filed all Tax Returns required to be filed by any of them,
      and
      all such Tax Returns are true, complete and accurate in all material respects,
      (ii) Empire and each of its Subsidiaries have paid all Taxes that are required
      to be paid by any of them (other than Taxes that are being diligently contested
      by appropriate proceedings and for which adequate reserves are reflected in
      the
      Empire Reports) or that Empire or any of its Subsidiaries are obligated to
      withhold from amounts owing to any employee, creditor or third party, (iii)
      the
      unpaid Taxes of Empire and its Subsidiaries do not exceed the reserve for Tax
      liability (excluding any reserve for deferred Taxes established to reflect
      timing differences between book and tax income) reflected in the financial
      statements contained in the Empire Reports filed prior to the date of this
      Agreement, as adjusted for results of operations and cash flows through the
      date
      hereof, (iv) neither Empire nor any of its Subsidiaries has waived any statute
      of limitations with respect to Taxes or agreed to any extension of time with
      respect to a Tax assessment or deficiency, (v) there are no pending audits,
      examinations, investigations, deficiencies, claims or other proceedings in
      respect of Taxes relating to Empire or any of its Subsidiaries, (vi) there
      are
      no Liens for Taxes on the Empire Property, except for Taxes not yet due and
      payable, (vii) none of Empire or any of its Subsidiaries has been a member
      of
      any group that has filed a combined, consolidated or unitary Tax Return, other
      than the affiliated group of corporations of which Empire is the common parent,
      (viii) except as set forth on Exhibit 13.1(h)(viii) attached hereto and
      made a part hereof, none of Empire or its Subsidiaries has any liability for
      Taxes of any person under Treasury Regulation Section 1.1502-6 (or any
      comparable provision of state, local or foreign law), as transferee or
      successor, by contract or otherwise, except as a result of the application
      of
      Treasury Regulation Section 1.1502-6 (and any comparable provision of state,
      local or foreign law to Empire and its Subsidiaries which are members of the
      affiliated group of corporations of which Empire is the common parent, (ix)
      none
      of Empire or any of its Subsidiaries has been a distributing corporation or
      a
      controlled corporation with respect to any distribution occurring during the
      last three years in which the parties to such distribution treated the
      distribution as one to which Section 355 of the Code (or any comparable
      provision of state, local or foreign law) applied, (x) none of Empire or any
      of
      its Subsidiaries has made any election, or is required, to treat any of the
      assets owned by such entity as owned by another Person for Tax purposes, (xi)
      none of Empire or any of its Subsidiaries has received or has been subject
      to
      any written ruling relating to Taxes or entered into any written and legally
      binding agreement
      with any taxing authority relating to Taxes, (xii) the Empire Property does
      not
      directly or indirectly secure any debt the interest on which is tax-exempt
      under
      Section 103(a) of the Code, and (xiv) the Empire Property is not a “tax-exempt
      use property” within the meaning of Section 168(h) of the Code.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    13.3.         At
      the Closing, and as a condition thereof, without limitation of any other
      obligation of Empire contained in this Agreement, Empire shall warrant and
      represent to Concord and the Company on the date of Closing in writing that
      all
      representations made by Empire in this Agreement continue to be true and correct
      in all material respects as of the date of Closing as if they were made on
      the
      date of such Closing.

     

    13.4.         Empire
      shall indemnify and defend Concord and the Company against, and hold Concord
      and
      the Company harmless from, any and all claims, losses, costs, damages,
      liabilities and expenses (including, without limitation, reasonable counsel
      fees
      and counsel fees incurred to enforce this indemnity) arising out of a breach
      by
      Empire of its warranties, representations and covenants hereunder.
      Notwithstanding anything to the contrary contained in this Agreement, Empire
      shall indemnify and defend Concord and the Company against, and hold Concord
      and
      the Company harmless from, any and all losses, costs, damages, liabilities
      and
      expenses (including, without limitation, reasonable counsel fees and counsel
      fees incurred to enforce this indemnity) arising in connection with the
      ownership and operation by Empire of its video gaming machine and racing
      businesses on the Empire Land, and its use of the Empire License prior to the
      Closing Date.

     

    13.5.         Except
      as otherwise provided in this Agreement, no representations, warranties,
      covenants, indemnifications or other obligations of Empire set forth in this
      Agreement shall survive the Closing, and no action based thereon shall be
      commenced after the Closing.  In the event that a representation,
      warranty, covenant or indemnification of Empire survives the Closing pursuant
      to
      the terms of this Agreement, such representation, warranty, covenant or
      indemnification shall not survive beyond a period of twelve (12) months from
      the
      date of the Closing, except to the extent that Concord shall have delivered
      notice of a breach on or before such twelve (12) month anniversary.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              14.

            	
              Closing
                Deliveries

            

    

     

    14.1.         At
      the Closing, Concord shall deliver the following:

     

    (a)                 A
      bargain and sale deed with covenants (the “Concord Deed”), duly executed and
      acknowledged by Concord, in proper form for recording in the State of New York
      conveying the Concord Property to the Company subject only to the Concord
      Permitted Exceptions.

     

    (b)                 The
      duly executed Operating Agreement.

     

    (c)                 Either
      (i) one or more agreements with the State of New York or any of its political
      subdivisions or any agency thereof pursuant to which any such entity shall
      agree
      to provide, either alone or in conjunction with a third-party lender, financing
      or other assistance to the Company in connection with the Company’s proposed
      development of the Concord Property and consistent with the scope of such
      proposed development pursuant to the Development Plan (the “State Agreement”)
      and/or (ii) one or more agreements with a third-party lender pursuant to which
      such third-party lender(s) shall agree to provide, either alone or in
      conjunction with such financing or other assistance as may be provided by the
      State of New York or its entities, financing to the Company in connection with
      the proposed development of the Concord Property and consistent with the scope
      of such proposed development pursuant to the Development Plan (the “Other
      Financing Agreement”).

     

    (d)                 A
      bill of sale in the form of Exhibit H-1 relating to the Concord Personal
      Property.

     

    (e)                 To
      the extent they are then in Concord’s possession and not posted at the Concord
      Property, and to the extent not previously delivered by Concord to the Company,
      certificates, licenses, permits, authorizations and approvals issued for or
      with
      respect to the Concord Property by governmental and quasi-governmental
      authorities having jurisdiction.

     

    (f)                 Such
      affidavits as the Title Company shall reasonably require in order to omit from
      its title insurance policy all exceptions for judgments, bankruptcies or other
      returns against persons or entities whose names are the same as or similar
      to
      Concord’s name.

     

    (g)                 Evidence
      satisfactory to the Title Company that all necessary approvals, licenses and/or
      consents have been obtained and such other evidence satisfactory to the Title
      Company of Concord’s authority and the authority of the signatory on behalf of
      Concord to convey the Concord Property pursuant to this Agreement.

     

    (h)                 A
      certification of non-foreign status, in form required by the Code Withholding
      Section, signed under penalty of perjury.  Concord understands that
      such certification will be retained by the Company and will be made available
      to
      the Internal Revenue Service on request.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (i)                 Concord
      shall deliver possession of the Concord Property to the Company in the condition
      required by this Agreement.

     

    (j)                 An
      assignment by Concord to the Company of the Concord Service Contracts, the
      Concord Insurance Policies, the Concord Licenses and the Concord Plans, together
      with all guaranties and warranties benefiting the Concord Property which are
      then in effect and are assignable by Concord.

     

    (k)                 A
      certificate of Concord confirming that the warranties and representations of
      Concord set forth in this Agreement are true and complete on and as of the
      Closing Date (the statements made in such certificate shall be subject to the
      same limitations on survival as are applicable to Concord’s representations and
      warranties under Section 12.5 of this Agreement).

     

    (l)                 An
      original of a closing statement setting forth the closing adjustments and
      prorations and the application thereof at the Closing (the “Closing
      Statement”).

     

    (m)                 Any
      other documents required by this Agreement to be delivered by
      Concord.

     

    14.2.        
      At the Closing, Empire shall, without limitation of Empire’s obligations under
      this Agreement, deliver the following:

     

    (a)                 An
      assignment by Empire to the Company of the Empire Operations, free and clear
      of
      any Lien or other encumbrance, and the delivery of the Empire Licenses to the
      Escrow Agent pursuant to Section 20 of this Agreement, together with an
      irrevocable instruction to the Escrow Agent to automatically release the Empire
      Licenses to the Company upon the issuance of a Temporary Certificate of
      Occupancy.

     

    (b)                 The
      duly executed Operating Agreement.

     

    (c)                 Copies
      of any consent, waiver, authorization, permit, or approval obtained from any
      third party or governmental entity, including but not limited to any Racing
      Authority or Gaming Authority, authorizing transfer of the Empire Operations
      to
      the Company.

     

    (d)                 Either
      (i) the State Agreement and/or (ii) the Other Financing Agreement.

     

    (e)                 Either
      (i) certain documents from Empire reasonably required by the Bank of Scotland
      in
      connection with the assignment by Empire of that certain credit facility
      provided by the Bank of Scotland in the maximum principal amount of Ten Million
      and 00/100 Dollars ($10,000,000.00), due in January of 2009 (the “Credit
      Facility”) to the Company, and the Company’s assumption of such Credit Facility
      (the “Credit Facility Assignment”) or (ii) any and all
      payments required by the Bank of Scotland in connection with the full repayment
      of all amounts outstanding under of the Credit Facility and the termination
      thereof (the “Credit Facility Termination”).

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (f)                 A
      certification of non-foreign status, in form required by the Code Withholding
      Section, signed under penalty of perjury.  Empire understands that
      such certification will be retained by the Company and will be made available
      to
      the Internal Revenue Service on request.

     

    (g)                 A
      certificate of Empire confirming that the warranties and representations of
      Empire set forth in this Agreement are true and complete on and as of the
      Closing Date (the statements made in such certificate shall be subject to the
      same limitations on survival as are applicable to Empire’s representations and
      warranties under Section 13.5 of this Agreement).

     

    (h)                 An
      original of the Closing Statement.

     

    (i)                 Any
      other documents required by this Agreement to be delivered by
      Empire.

     

    14.3           At
      the Closing, each of Concord and Empire, without limitation of either party’s
      obligations under this Agreement, shall cause the Company to deliver the
      following:

     

    (a)                
      Either (i) the State Agreement and/or (ii) the Other Financing
      Agreement.

     

    (b)               
      Checks to the order of the appropriate officers in payment of all applicable
      real property transfer taxes applicable to the contribution of the Concord
      Property to the Company and copies of any required tax returns therefor, which
      checks shall be certified or official bank checks if required by the taxing
      authority.

     

    (c)                 
      The Credit Facility Assignment, if any.

     

    
      	
              15.

            	
              Broker

            

    

     

    15.1.         Concord
      represents and warrants to Empire that it has not dealt or negotiated with,
      or
      engaged on its own behalf or for its benefit, any broker, finder, consultant,
      advisor, or professional in the capacity of a broker or finder (each a “Broker”)
      in connection with this Agreement or the transactions contemplated
      hereby.  Concord hereby agrees to indemnify, defend and hold Empire
      and the Company harmless from and against any and all claims, demands, causes
      of
      action, losses, costs and expenses (including reasonable attorneys’ fees, court
      costs and disbursements) arising from any claim for commission, fees or other
      compensation or reimbursement for expenses made by a Broker engaged by or
      claiming to have dealt with Concord in connection with this Agreement or the
      transactions contemplated hereby.

     

    15.2.         Empire
      represents and warrants to Concord that it has not dealt or negotiated with,
      or
      engaged on its own behalf or for its benefit, any Broker in connection with
      this
      Agreement or the transactions contemplated hereby.  Empire hereby
      agrees to indemnify, defend and hold Concord and the Company harmless from
      and
      against any and all claims, demands, causes of action,
      losses, costs and expenses (including reasonable attorneys’ fees, court costs
      and disbursements) arising from any claim for commission, fees or other
      compensation or reimbursement for expenses made by any Broker engaged by or
      claiming to have dealt with Empire in connection with this Agreement or the
      transactions contemplated hereby.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    15.3.         The
      representations and obligations under this Article 15 shall survive the Closing
      or, if the Closing does not occur, the termination of this
      Agreement.

     

    
      	
              16.

            	
              Casualty
                and Condemnation Prior to
                Closing

            

    

     

    16.1.         In
      the event that all or part of the Concord Property is taken by, or made the
      subject of, any condemnation or eminent domain proceeding between the date
      of
      this Agreement and the Closing Date, Concord shall promptly notify Empire,
      and
      the following provisions shall apply:

     

    (a)           If
      a Material Taking of the Concord Property occurs, Empire, by written notice
      to
      Concord delivered within ten (10) days after Empire receives written notice
      of
      such taking, may elect to terminate this Agreement.  If Empire shall
      so elect, this Agreement shall be null and void and the parties hereto shall
      be
      relieved and released of and from any further liability hereunder and with
      respect to each other, other than any liability, which is expressly stated
      to
      survive the termination of this Agreement.

     

    (b)           If
      (i) an Immaterial Taking  of the Concord Property occurs, or (ii) a
      Material Taking of the Concord Property occurs and Empire does not timely elect
      to terminate this Agreement, then, in any such event, Concord shall pay or
      assign to the Company at the Closing any condemnation award received or
      receivable from any Governmental Entity in connection with any such condemnation
      or eminent domain proceeding, all claims against any Governmental Entity as
      a
      result of the losses suffered as a result of such condemnation or eminent domain
      proceeding.

     

    16.2.         Concord
      shall maintain in effect until the Closing Date its existing insurance policies
      with respect to the Concord Property.  In the event of damage to the
      Concord Property by fire or any other casualty insured under Concord’s policies,
      Concord shall promptly notify Empire.  Concord shall pay or assign to
      the Company at the Closing all monies received or receivable from the insurance
      companies which wrote such policies, in each case, with respect to the Concord
      Property and all claims against such insurance companies as a result of the
      losses covered by such policies and shall pay to the Company at the Closing
      the
      cost of repairing any uncovered damage, including any deductible under such
      policies.

     

    
      	
              17.

            	
              Condition
                of the Property;
                Representations

            

    

     

    EMPIRE
      EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
      NEITHER CONCORD NOR ANY PERSON ACTING ON BEHALF OF CONCORD NOR ANY PERSON OR
      ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY EMPIRE IN
      CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER, DIRECTOR,
      PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE, ACCOUNTANT,
      ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT OR, SUCCESSOR OR
ASSIGN
      OF
      ANY OF THE FOREGOING PARTIES (CONCORD AND ALL OF THE OTHER PARTIES DESCRIBED
      IN
      THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER THAN EMPIRE) SHALL BE REFERRED
      TO
      HEREIN COLLECTIVELY AS THE “CONCORD EXCULPATED PARTIES”) HAS MADE OR SHALL BE
      DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER
      EXPRESSED OR IMPLIED, BY 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    OPERATION
      OF LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY,
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE
      CONCORD PROPERTY, THE PERMITTED USE OF THE CONCORD PROPERTY OR THE ZONING AND
      OTHER LAWS, REGULATIONS AND RULES APPLICABLE THERETO OR THE COMPLIANCE BY THE
      CONCORD PROPERTY THEREWITH, THE REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED
      WITH THE CONCORD PROPERTY, OR OTHERWISE RELATING TO THE CONCORD PROPERTY OR
      THE
      TRANSACTIONS CONTEMPLATED HEREIN.  EMPIRE FURTHER ACKNOWLEDGES THAT,
      EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL MATERIALS WHICH HAVE BEEN
      PROVIDED BY ANY OF THE CONCORD EXCULPATED PARTIES HAVE BEEN PROVIDED WITHOUT
      ANY
      WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED AS TO THEIR CONTENT,
      SUITABILITY FOR ANY PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS AND, EXCEPT
      AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EMPIRE SHALL NOT HAVE ANY RECOURSE
      AGAINST CONCORD OR ANY OF THE OTHER CONCORD EXCULPATED PARTIES IN THE EVENT
      OF
      ANY ERRORS THEREIN OR OMISSIONS THEREFROM.  EMPIRE, AS A MEMBER OF THE
      COMPANY, SHALL DIRECT THE COMPANY TO ACCEPT THE CONCORD PROPERTY “AS IS” BASED
      SOLELY ON EMPIRE’S OWN INDEPENDENT INVESTIGATION AND INSPECTION OF THE CONCORD
      PROPERTY AND NOT IN RELIANCE ON ANY INFORMATION PROVIDED BY CONCORD OR ANY
      OF
      THE OTHER CONCORD EXCULPATED PARTIES, EXCEPT FOR THE REPRESENTATIONS EXPRESSLY
      SET FORTH HEREIN.

     

    CONCORD
      EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
      NEITHER EMPIRE NOR ANY PERSON ACTING ON BEHALF OF EMPIRE NOR ANY PERSON OR
      ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY CONCORD
      IN
      CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER, DIRECTOR,
      PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE, ACCOUNTANT,
      ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT OR, SUCCESSOR OR ASSIGN
      OF
      ANY OF THE FOREGOING PARTIES (EMPIRE AND ALL OF THE OTHER PARTIES DESCRIBED
      IN
      THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER THAN CONCORD) SHALL BE REFERRED
      TO HEREIN COLLECTIVELY AS THE “EMPIRE EXCULPATED PARTIES”) HAS MADE OR SHALL BE
      DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER
      EXPRESSED OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE
      EMPIRE OPERATIONS OR THE LAWS, REGULATIONS AND RULES APPLICABLE THERETO, THE
      REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH THE EMPIRE OPERATIONS,
      OR
      OTHERWISE RELATING TO THE EMPIRE OPERATIONS OR THE TRANSACTIONS CONTEMPLATED
      HEREIN.  CONCORD FURTHER ACKNOWLEDGES THAT, EXCEPT AS
      EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL MATERIALS WHICH HAVE BEEN PROVIDED
      BY
      ANY OF THE EMPIRE EXCULPATED PARTIES HAVE BEEN PROVIDED WITHOUT ANY WARRANTY
      OR
      REPRESENTATION, EXPRESSED OR IMPLIED AS TO THEIR CONTENT, SUITABILITY FOR ANY
      PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS AND, EXCEPT AS EXPRESSLY SET
      FORTH IN THIS AGREEMENT, CONCORD SHALL NOT HAVE ANY RECOURSE AGAINST EMPIRE
      OR
      ANY OF THE OTHER EMPIRE EXCULPATED PARTIES IN THE EVENT OF ANY ERRORS THEREIN
      OR
      OMISSIONS THEREFROM.  CONCORD, AS A MEMBER OF THE COMPANY, SHALL
      DIRECT THE COMPANY TO ACCEPT THE EMPIRE OPERATIONS “AS IS” BASED SOLELY ON
      CONCORD’S OWN INDEPENDENT INVESTIGATION AND INSPECTION OF THE EMPIRE OPERATIONS
      AND NOT IN RELIANCE ON ANY INFORMATION PROVIDED BY EMPIRE OR ANY OF THE OTHER
      EMPIRE EXCULPATED PARTIES, EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH
      HEREIN.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    The
      delivery of items specified in Section 14.1 and 14.3 of this Agreement, and
      the
      acceptance thereof by Empire or the Company, as applicable, shall be deemed
      the
      full performance and discharge of every obligation on the part of Concord to
      be
      performed hereunder, except those obligations of Concord which are expressly
      stated in this Agreement to survive the Closing. The delivery of items specified
      in Section 14.2 and 14.3 of this Agreement, and the acceptance thereof by
      Concord or the Company, as applicable, shall be deemed the full performance
      and
      discharge of every obligation on the part of Empire to be performed hereunder,
      except those obligations of Empire which are expressly stated in this Agreement
      to survive the Closing.

     

    
      	
              18.

            	
              Default

            

    

     

    18.1.         If
      on the Closing Date, Concord has not fully performed its obligations hereunder,
      and has not cured the same within fifteen (15) days of written notice thereof
      from Empire (a “Concord Default”), Empire shall have the right to elect one of
      the following rights and remedies:

     

    (a)                 Empire
      shall have the right to waive the breach or default and proceed to Closing
      in
      accordance with the provisions of this Agreement; or

     

    (b)                 If
      the default has a Material Adverse Effect, Empire shall have the right to
      terminate this Agreement; and/or

     

    (c)                 Empire
      may avail itself of any rights or remedies it may have at law or in equity
      on
      account of Concord’s breach or default.

     

    18.2.         If
      on the Closing Date, Empire has not fully performed its obligations hereunder,
      and has not cured the same within fifteen (15) days of written notice thereof
      from Concord (an “Empire Default”), Concord shall have the right to elect one of
      the following rights and remedies:

     

    (a)                 Concord
      shall have the right to waive the breach or default and proceed to Closing
      in
      accordance with the provisions of this Agreement; or

     

    (b)                 If
      the default has a Material Adverse Effect, Concord shall have the right to
      terminate this Agreement; and/or

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (c)                 Concord
      may, as its sole remedy, bring an action for specific performance of the terms
      of this Agreement; provided, that, notwithstanding the foregoing, if there
      shall
      occur any Empire Change of Control prior to such time as either such Empire
      Default has been cured by Empire or such Empire Default has been waived by
      Concord pursuant to the terms of this Section 18.2, then Concord may avail
      itself of any rights or remedies it may have at law or in equity on account
      of
      Empire’s breach or default.

     

    18.3.         The
      parties hereto agree that irreparable damage would occur in the event that
      any
      party fails to consummate the transactions contemplated by this Agreement in
      accordance with the terms of this Agreement and that the parties shall be
      entitled to specific performance in such event, in addition to any other remedy
      at law or in equity.

     

    
      	
              19.

            	
              Conditions
                Precedent to Closing.

            

    

     

    19.1.         Conditions
      to Concord’s Obligations.  Notwithstanding anything to the
      contrary contained in this Agreement, the obligations of Concord to consummate
      the transactions contemplated pursuant to the terms of this Agreement and the
      Operating Agreement shall be subject to the satisfaction or waiver by Concord
      on
      or prior to the Closing Date of all of the following conditions:

     

    (a)                 The
      representations and warranties of Empire contained in Section 13.1 of this
      Agreement shall be true and correct as of the date hereof and as of the Closing
      as though made on and as of the Closing (except that those representations
      and
      warranties which address matters only as of a particular date need only be
      true
      and correct as of such date).  Concord shall have received a
      certificate of the Chief Executive Officer or Chief Financial Officer of Empire
      to that effect.

     

    (b)                 The
      Company and George A. Fuller Company shall have entered into a mutually
      agreeable construction management agreement reated to the Project with such
      commercially reasonable and customary terms as the Company and George A. Fuller
      Company shall agree to include; provided, that such agreement shall (i) contain
      a guaranteed maximum price, (iii) shall be on an AIA form and shall amend the
      General Conditions of such AIA form to provide for reimbursement to George
      A.
      Fuller Company at 1.2 times the aggregate costs incurred by George A. Fuller
      Company in connection with the General Conditions incurred with respect to
      the
      development and/or construction of the Concord Property and (ii) specify that
      George A. Fuller Company shall provide payment and performance bonds reasonably
      satisfactory in form and substance to each of the third-party lenders that
      shall
      provide financing to the Company in connection with the proposed development
      of
      the Concord Property and the Company and any other necessary guarantees that
      are
      required by any such third-party lender (the “Construction
      Contract”).

     

    (c)                 The
      Company and Concord shall have entered into a mutually agreeable development
      management agreement related to the Project with such commercially reasonable
      and customary terms as the Company and Concord shall agree to
      include.

     

    (d)                 The
      Empire Operations shall be conveyed to the Company and shall be free and clear
      of any Liens; provided, that the Empire Licenses shall be delivered to the
      Escrow Agent pursuant to the provisions of Section 20 of this Agreement, to
      be
      automatically conveyed to the Company upon the issuance to the Company of a
      Temporary Certificate of Occupancy.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (e)                 Empire
      shall have performed all of its obligations and covenants under this Agreement
      except those the failure of which to be performed shall not have had or be
      reasonably likely to have a Material Adverse Effect, as determined in good
      faith
      by Concord in Concord’s reasonable discretion.

     

    
      
        (f)                 Empire
          shall have executed and delivered at Closing the documents, instruments
          agreements set forth in Section 14.2 hereof.

      

       

      (g)              
         Concord shall have received from its Management Committee written notice
        approving the transaction, including without limitation, a determination
        that
        the transaction is  fair to Concord, and all other consents,
        approvals, filings, registrations and notices required to be obtained or
        made by
        Concord in connection with this Agreement shall have been obtained or made
        and
        shall be in full force and effect.

    

     

    (h)                All
      consents, approvals, filings, registrations and notices required to be obtained
      or made by Empire under applicable racing and gaming laws in connection with
      this Agreement and the transfer of the Empire Licenses to the Company,
      including, without limitation, from the New York State Racing and Wagering
      Board
      and the Division of the Lottery of the State of New York, shall have been
      obtained or made and shall be in full force and effect.

     

    (i)                 The
      Company shall become a “Volunteer” pursuant to a Brownfield Agreement to be
      entered into with the New York State Department of Environmental Conservation,
      and Concord shall be satisfied, in Concord’s reasonable discretion, that the
      transactions contemplated pursuant to the terms of this Agreement, including
      the
      transfer of the Concord Property to the Company, shall not adversely effect
      Concord’s ability to receive any Brownfield Tax Credits with respect to any
      environmental remediation on the Concord Property.

     

    (j)                 No
      decision, order or similar ruling shall have been issued (and remain in effect)
      restraining or enjoining the transactions contemplated by this Agreement or
      the
      Operating Agreement, or that would prevent, materially delay or materially
      impair the ability of the Company to develop, construct and operate a hotel,
      a
      convention center, a harness racetrack, and a Class II gaming facility on the
      Concord Property, after the Closing of the transactions contemplated
      hereby.

     

    (k)                 The
      State of New York shall have extended the term of the Empire Licenses for a
      period of no less than thirty (30) years or any such other period of time as
      shall be required by any third-party lender which, by itself or together with
      the State of New York, shall provide financing to the Company consistent with
      the scope of the proposed development of the Concord Property pursuant to the
      Development Plan.

     

    19.2.         Conditions
      to Empire’s Obligations.  Notwithstanding anything to the contrary
      contained in this Agreement, the obligations of Empire to consummate the
      transactions contemplated pursuant to the terms of this Agreement and the
      Operating Agreement shall be subject to the satisfaction or waiver by Empire
      on
      or prior to the Closing Date of all of the following conditions:

     

    (a)                 The
      representations and warranties of Concord contained in Section 12.1 of this
      Agreement shall be true and correct as of the date hereof and as of the Closing
      as though made on and as of the Closing (except that those representations
      and
      warranties which address
      matters only as of a particular date need only be true and correct as of such
      date).  Empire shall have received a certificate of the Chief
      Executive Officer or Chief Financial Officer of Concord to that
      effect.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (b)                 The
      Company shall receive a policy of title insurance from the Title Company
      pursuant to the terms and conditions of Section 9.1(C) of this Agreement, and
      the Concord Property shall be conveyed to the Company and shall be free and
      clear of any Liens other than the Concord Permitted Exceptions.

     

    (c)                 Concord
      shall have performed all of its obligations and covenants under this Agreement
      except those the failure of which to be performed shall not have had or be
      reasonably likely to have a Material Adverse Effect, as determined in good
      faith
      by Empire in Empire’s reasonable discretion.

     

    (d)                 Concord
      shall have executed and delivered at Closing the documents, instruments
      agreements set forth in Section 14.1 hereof.

     

    (e)                 No
      decision, order or similar ruling shall have been issued (and remain in effect)
      restraining or enjoining the transactions contemplated by this Agreement or
      the
      Operating Agreement, or that would prevent, materially delay or materially
      impair the ability of the Company to develop, construct and operate a hotel,
      a
      convention center, a harness racetrack, and a Class II gaming facility on the
      Concord Property after the Closing of the transactions contemplated
      hereby.

     

    (f)                 
      Empire shall have received from its financial advisors, a written opinion
      addressed to Empire, its Board of Directors and stockholders to the effect
      that
      the consideration to be received by Empire’s stockholders is fair to the
      Empire’s stockholders from a financial point of view.

     

    (g)                 If
      required by law, the Empire Requisite Vote shall have been
      obtained.

     

    (h)                 All
      consents, approvals, filings, registrations and notices required to be obtained
      or made by Empire under applicable racing and gaming laws or any other laws
      in
      connection with this Agreement and the transfer of the Empire Operations to
      the
      Company, including, without limitation, from the New York State Racing and
      Wagering Board and the Division of the Lottery of the State of New York, shall
      have been obtained or made and shall be in full force and effect.

     

    (i)                 
      Empire shall have either repurchased the Sixty Five Million and 00/100 Dollars
      ($65,000,000.00) of 5 1⁄2% Convertible Senior Notes, due in the year 2014 and
      callable in July of 2009, issued by Empire (the “Notes”) or shall have
      obtained the consent of the holders of the Notes to the transactions
      contemplated pursuant to the terms of this Agreement.  Notwithstanding
      the foregoing, the Company shall not be obligated to assume any existing
      obligation of Empire under the Notes at Closing.

     

    (j)                 
      In the event that a Credit Facility Termination is not signed at or prior to
      Closing, then Empire shall have obtained the consent of the Bank of Scotland,
      if
      required, to enter into the Credit Facility Assignment.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (k)                 The
      Pro Forma Financial Statement of the Company shall reflect that Empire is
      expected to receive annual distributions of Cash Flow in an amount that equals
      or exceeds the Reimbursement Amount after the Closing Date (or, in the case
      of a
      partial year, the applicable percentage of the Reimbursement
      Amount).

     

    (l)                 The
      financing secured by the Company at Closing in connection with the development
      of the Concord Property shall authorize the Company to
      distribute  FIFTY MILLION and 00/100 DOLLARS ($50,000,000.00) to
      Empire as a return of Empire’s initial capital contribution to the Company on
      the Closing Date, and the Company shall make such distribution to Empire on
      the
      Closing Date.

     

    (m)                 Empire
      and the Company shall have entered into a mutually agreeable gaming management
      agreement related to the Project on such commercially reasonable and customary
      terms as Empire and the Company shall agree to include.

     

    (n)                 Empire
      and the Company shall have entered into a mutually agreeable hotel management
      agreement related to the Project on such commercially reasonable and customary
      terms as Empire and the Company shall agree to include.

     

    (o)                 Empire
      and the Company shall have entered into a mutually agreeable casino development
      agreement related to the Project on such commercially reasonable and customary
      terms as Empire and the Company shall agree to include.

     

    (p)                 Empire
      shall in its sole good faith discretion be satisfied that Concord has received
      and continues to possess all necessary governmental approvals for the
      development and construction of a project on the Concord Property consisting
      of
      all of the following improvements consistent with the scope of the Development
      Plan: (i) a hotel, (ii) a convention center, (iii) a casino and (iv) harness
      racetrack (referred to in this Section 19 as the "Project").

     

    19.3          Termination

     

    
      (a)           This
        Agreement may be terminated by either Concord or Empire, by written notice
        (the
“Section 19.3(a) Termination Notice”), with a copy of such written notice to be
        sent to Louis R. Cappelli, c/o Cappelli Enterprises, Inc., 115 Stevens Avenue,
        Valhalla, New York 10595, if, on or before May 1, 2008, Concord has neither
        (i)
        received from its Management Committee written notice approving the transaction
        and otherwise satisfied the conditions set forth in Section 19.1(g) of this
        Agreement, nor (ii) waived the conditions set forth in Section 19.1(g) of
        this
        Agreement; provided, that, as consideration for the rights granted to Concord
        pursuant to Section 19.1(g) of this Agreement and this Section 19.3(a), if
        Concord fails to either satisfy or waive the conditions set forth in Section
        19.1(g) of this Agreement on or before May 1, 2008 and either Concord or
        Empire
        exercises the termination rights granted under this Section 19.3(a), then
        Louis
        R. Cappelli shall pay to Empire the sum of One Million and 00/100 Dollars
        ($1,000,000.00),  plus all costs and expenses (including but not
        limited to reasonable attorneys fees), if any, incurred by Empire in the
        event
        that such payment is not made as herein provided (the “Termination Payment”)
        within ten (10) days of the date of receipt of the Section 19.3(a) Termination
        Notice.

    

     

    (b)                
      This Agreement may be terminated by either Empire or Concord, by written notice,
      unless, on or before June 30, 2008, (i) either the State of New York has
      provided for an appropriation or some other form of assistance in its annual
      budget that will enable State supported financing for the Company’s proposed
      development of the Concord Property consistent with the scope of such proposed
      development pursuant to the Development Plan or Concord has secured a signed
      financing commitment from any third-party lender for the Company’s proposed
      development of the Concord Property, which by itself or together with such
      State
      supported financing, is consistent with the scope of such proposed development
      pursuant to the Development Plan, and (ii) Pro Forma Financial Statements
      evidencing Cash Flow after debt service of at least $10 million and a 1.3 times
      debt service coverage ratio (assuming customary definitions for debt service
      and
      debt service coverage ratio) are available that reflect the terms of such
      financing; provided, that if at any time between the Effective Date of this
      Agreement and June 30, 2008 the conditions provided for in (i) and (ii) above
      have occurred and an injunction, moratorium, or other legal impediment of
      general application is imposed (whether by action of public authority or
      pursuant to private action, a “Moratorium”) that either (a) precludes either
      Empire or Concord from proceeding
      with the transactions set forth pursuant to the terms of this Agreement, (b)
      precludes Concord from proceeding with the approvals process and/or (c) would
      preclude Concord from developing the Concord Property pursuant to the
      Development Plan at Closing, then the time period provided for above shall
      be
      extended by one (1) day for each day that such Moratorium remains in effect
      so
      long as the parties continue to diligently work toward the resolution and/or
      removal of any such Moratorium; provided, further, that if either Concord and/or
      Empire shall directly cause or suffer there to exist any Moratorium, then the
      other party shall have the right to terminate this Agreement if the conditions
      set forth this Section 19.3(b) have not been satisfied on or before June 30,
      2008 regardless of the existence of such Moratorium.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (c)                
      In the event that the Closing Date has not occurred on or before August 31,
      2008, this Agreement may be terminated by Empire, by written notice, if on
      or
      before August 31, 2008 the terms and conditions of the Indenture pursuant to
      which the Notes have been issued have not been amended, waived, modified or
      extended, or a sufficient amount of Notes have not been redeemed, in each case
      to the satisfaction of Empire, in Empire’s sole discretion. The existence of any
      Moratorium shall not affect Empire’s rights pursuant to this Section
      19.3(c).

     

                                   
      (d)               
 In the event that the Closing Date has not occurred on or before October
      31, 2008,  this Agreement may be terminated by Empire, by written
      notice, if on or before October 31, 2008, either (i) the Bank of Scotland has
      not agreed to extend the term of the Credit Facility for a period of one (1)
      year or such longer period of time as a Moratorium may exist, or (ii) Concord
      and/or its affiliates shall not have assumed the obligations of Empire under
      the
      Credit Facility. The existence of any Moratorium shall not affect Empire’s
      rights pursuant to this Section 19.3(d).

     

                   
      (e)               
In the event that the Closing Date has not occurred on or before December 31,
      2008, this Agreement may be terminated by either Empire or Concord, by written
      notice; provided, that if a Moratorium has been imposed, then the Closing Date
      shall be extended for so long as the parties continue to diligently work toward
      the resolution and/or removal of any such Moratorium, but no later than December
      31, 2010; provided, further, that if either Concord and/or Empire shall directly
      cause there to exist any Moratorium, then such other party shall have the right
      to terminate this Agreement if the Closing has not occurred on or before
      December 31, 2008 regardless of the existence of such Moratorium.

     

    
      	
              20.

            	
              Escrow.

            

    

     

    Empire
      and the Escrow Agent shall enter into a mutually agreeable escrow agreement
      on
      such commercially reasonable and customary terms as Empire, Concord and the
      Escrow Agent shall agree to include, which escrow agreement shall provide that
      upon the issuance of a Temporary Certificate of Occupancy to the Company, the
      Escrow Agent shall automatically, and without requiring any further action
      to be
      undertaken by Empire, Concord or the Company, release the Empire Licenses to
      the
      Company, and such instruction shall be irrevocable by Empire.

    
       

      
        	
                21.

              	
                 Notices

              

      

    

     

    Any
      notice or communication which may be or is required to be given pursuant to
      the
      terms of this Agreement shall be in writing and shall be sent to the respective
      party at the addresses set forth below, postage prepaid, by certified mail,
      return receipt requested, by a nationally recognized overnight courier service
      that provides tracing and proof of receipt of 

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    items
      mailed or by facsimile provided that if notices are given by facsimile a copy
      thereof must be sent on the same day by nationally recognized overnight courier
      service that provides tracing and proof of receipt of items mailed for next
      business day delivery. Notices shall be effective upon the date of receipt
      or
      refusal of receipt. Either party may change the address to which notices to
      it
      shall be sent by a notice sent in accordance with the requirements of this
      Section.

     

    
      
        	
                To
                  Concord:

              	 
	 	
                Concord
                  Associates, L.P.

              
	 	
                C/o
                  Cappelli Enterprises, Inc.

              
	 	
                115
                  Stevens Avenue

              
	 	
                Valhalla,
                  New York  10595

              
	 	
                Attention:
                  Louis R. Cappelli

              
	 	
                Fax
                  No.:  914-747-2743

              
	 	 
	
                With
                  a copy to:

              	 
	 	
                DelBello
                  Donnellan Weingarten

              
	 	
                Wise
                  & Wiederkehr, LLP

              
	 	
                One
                  North Lexington Avenue

              
	 	
                White
                  Plains, New York  10601

              
	 	
                Attn:  Alfred
                  E. Donnellan, Esq.

              
	 	
                Fax
                  No.:  914-681-0200

              
	 	 
	
                To
                  Empire:

              	 
	 	
                Empire
                  Resorts, Inc.

              
	 	
                C/o
                  Monticello Raceway

              
	 	
                Route
                  17B

              
	 	
                Monticello,
                  New York  12701

              
	 	
                Attention:
                  David Hanlon

              
	 	
                Fax
                  No.:  845-807-0000

              
	 	 
	
                With
                  a copy to:

              	 
	 	
                Olshan
                  Grundman Frome Rosenzweig & Wolosky LLP

              
	 	
                65
                  East 55th Street

              
	 	
                New
                  York, New York 10022

              
	 	
                Attn:
                  Robert H. Friedman, Esq.

              
	 	
                Fax
                  No.:  (212) 451-2222

              
	 	 

      

    

     

    
      	
              22.

            	
              Class
                III Gaming Facility.

            

    

     

    22.1           Concord
      is aware that, at a certain point in the future, the St. Regis Mohawk Tribe
      (the
“Tribe”) may obtain all necessary licenses and approvals (the “Class III
      Licenses”) that shall  be
      required to operate a Class III gaming facility on the Land in Trust
      Property.  Concord hereby agrees to endorse the construction of a
      Class III gaming facility on the Land in Trust Property, and hereby agrees
      to
      support the Tribe in its efforts to obtain the Class III
      Licenses.  Concord acknowledges that Empire may plan and develop
      resort, hotel, entertainment and/or retail facilities on the Empire Land (the
      “Class III Actions”), and Concord hereby endorses the Class III Actions and the
      aforesaid development of the Empire Land.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

       

    

    22.2           In
      furtherance of Concord’s commitment pursuant to Section 22.1 of this Agreement,
      commencing on the Effective Date, Empire shall have the right to require Concord
      to purchase (the “Put Option”) up to one million (1,000,000) shares of the
      common stock of Empire (the “Empire Common Stock”) at a price of ONE and 00/100
      DOLLAR ($1.00) per share (the “Option Purchase Price”); provided, that Empire
      shall covenant to use any and all funds received from Concord as a result of
      Empire’s exercise of the Put Option to fund the Class III
      Actions.  Empire shall exercise such option by sending written notice
      (the “Option Notice”) to Concord stating that it is exercising the Put Option
      ten (10) business days prior to the date that it shall exercise the Put
      Option.  The Option Purchase Price for the Empire Common Stock shall
      be paid by wire transfer of immediately available funds and Empire shall convey
      the Empire Common Stock to Concord or its designee free and clear of all liens
      and encumbrances.  Each of Empire and Concord agrees to cooperate and
      to take all actions and execute all documents reasonably necessary or
      appropriate to reflect the purchase of the Empire Common Stock by
      Concord.  All transfer, stamp and recording taxes and fees imposed on
      either Empire or Concord as a result of the Put Option shall be payable by
      Concord.  Concord shall make such investment representations to Empire
      as may reasonably required in connection with such issuance.

     

    
      	
              23.

            	
              Miscellaneous

            

    

     

    
      23.1           Legalization.  If
        at any time prior to Closing both (i) a Moratorium exists and (ii) Legalization
        occurs, then each of Concord and Empire shall use best efforts to close a
        transaction substantially similar to the transactions outlined in this
        Agreement, but amended to contemplate the development of a casino facility
        comparable to a Class III gaming facility, sugh gaming facility to operate
        table
        games (including but not limited to Baccarat, Blackjack and Craps) on the
        Concord Property, as soon as reasonably practical notwithstanding that certain
        conditions to Closing outlined in Sections 19.1 and 19.2 of this Agreement
        have
        not been satisfied.

    

     

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

     

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

     

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

     

    23.5.          Survival.  The
      provisions of this Agreement that contemplate performance after the Closing
      and
      the obligations of the parties not fully performed at the Closing shall survive
      the Closing and shall not be deemed to be merged into or waived by the
      instruments of Closing.

     

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

     

    23.7.          Entirety
      and Amendments.  This Agreement embodies the entire agreement
      between the parties and supersedes all prior agreements and understandings
      relating to the Property.  This Agreement may be amended or
      supplemented only by an instrument in writing executed by the party against
      whom
      enforcement is sought.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

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

     

    23.9.          Construction.  The
      parties acknowledge that the parties and their counsel have reviewed and revised
      this Agreement and agree that the normal rule of construction to the effect
      that
      any ambiguities are to be resolved against the drafting party shall not be
      employed in the interpretation of this Agreement or any exhibits or amendments
      hereto.

     

    23.10.          Calculation
      of Time Periods.  Unless otherwise specified, in computing any
      period of time described herein, the day of the act or event after which the
      designated period of time begins to run is not to be included and the last
      day
      of the period so computed is to be included at unless such last day is a
      Saturday, Sunday or legal holiday for national banks in the State of New York,
      in which event the period shall run until the end of the next day which is
      neither a Saturday, Sunday, or legal holiday.  The last day of any
      period of time described herein shall be deemed to end at 5:00 p.m. New York
      time.

     

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

     

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

     

    23.13.        No
      Recordation.  Concord and Empire each agrees that neither this
      Agreement nor any memorandum or notice hereof shall be recorded.

     

    23.14.        Further
      Assurances.  Subject to the terms and conditions herein provided,
      each of the parties hereto shall execute and deliver such documents as the
      other
      party shall reasonably request in order to consummate and make effective the
      transactions contemplated hereby; provided, however, that the
      execution and delivery of such documents by such party shall not result in
      any
      additional liability or cost to such party.  The provisions of this
      Section 23.13 shall survive the Closing.

     

    23.15.        Assignment.  The
      benefits of this Agreement may not be assigned by either Concord or Empire
      without the other party’s prior written consent.

     

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

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    23.17.        WAIVER
      OF JURY TRIAL.

     

    EACH
      PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
      COUNTERCLAIM BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER ARISING
      OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP OF EMPIRE
      AND CONCORD HEREUNDER.

     

    [Signature
      pages follow]

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              CONCORD
                ASSOCIATES, L.P.

            
	 	 
	 	
              By:  Convention
                Hotels, LLC, its General Partner

            
	 	 
	 	 
	 	
              By:

            	/s/
              Louis
              R. Cappelli
	 	 	
              Name:

            	
              Louis
                R. Cappelli

            
	 	 	
              Title:

            	
              Managing
                Member

            

    

    

    

    
      	 	
              EMPIRE
                RESORTS, INC.

            
	 	 
	 	 
	 	
              By:

            	/s/
              David
              P. Hanlon
	 	 	
              Name:

            	
              David
                P. Hanlon

            
	 	 	
              Title:

            	
              President
                and Chief Executive Officer

            

    

     

    
      

      
        	 	
                The
                  obligations puruant to Section 19.3(a) of this Agreement only are
                  hereby
                  ACCEPTED AND AGREED:

              
	 	 
	 	 
	 	
                /s/
                  Louis R. Cappelli

              
	 	 Louis
                R. Cappelli

      

    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Schedule
      B

     

    OPERATING
      AGREEMENT

     

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    LIMITED
      LIABILITY COMPANY AGREEMENT

     

    OF

     

    CONCORD
      EMPIRE
      LLC

     

    This
      Limited Liability Company Agreement of Concord Empire LLC (the
“Agreement”), a New York limited liability company (the
“Company”), is made and entered into this ____ day of _____________,
      2008, by Concord Associates, L.P., a New York limited partnership having an
      office at c/o Cappelli Enterprises, Inc., 115 Stevens Avenue, Valhalla, New
      York
      10595 (“Concord”) and Empire Resorts, Inc., a Delaware corporation having
      an office at 701 North Green Valley Parkway, Suite 200, Henderson, Nevada 89074
      (“Empire”). Concord and Empire may sometimes be referred to individually
      as a “Member” or collectively as the “Members”.

     

    WITNESSETH:

     

    WHEREAS,
      the Company was formed by the filing of the Certificate of Formation of the
      Company with the Secretary of State of New York on ________________, 2008,
      in
      accordance with the Act;

     

    WHEREAS,
      the parties hereto desire to enter into this Agreement to provide for the
      respective rights, obligations and interests of the parties to each other and
      to
      the Company and the manner in which the Company and its assets shall be governed
      and operated.

     

    NOW,
      THEREFORE, in consideration of the premises hereof, and of the mutual covenants
      and agreements contained herein, the receipt, adequacy and sufficiency of which
      are hereby acknowledged, the parties hereto, intending to be legally bound
      hereby, agree as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1           Defined
      Terms.  The following terms have the meanings hereinafter
      indicated whenever used in this Agreement with initial capital
      letters:

     

    “Act”
      shall mean New York Limited Liability Company Law, McKinney’s Consolidated Laws
      of New York § 201, et seq., as amended and in force from time to
      time.

     

    “Additional
      Capital Contribution” shall have the meaning set forth in Section
      5.2.

     

    “Adjacent
      Land Project” shall have the meaning set forth in Section 11.2.

     

    “Adjusted
      Capital Account Deficit” shall mean, with respect to any Member, the deficit
      balance, if any, in such Member’s Capital Account as of the end of the relevant
      Fiscal Year, after giving effect to the following adjustments:

     

    (a)           Crediting
      to such Capital Account any amounts that such Member is obligated to restore
      pursuant to this Agreement or is deemed to be obligated to restore pursuant
      to Regulations Sections 1.704-1(b)(2)(ii)(b)(3),
      1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and

     

     

    
      
        
        

      

      
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    (b)           Debiting
      to such Capital Account the items described in Regulations Sections
      1.704-1(b)(2)(ii) (d)(4), (5) and (6).

     

    The
      foregoing definition of Adjusted Capital Account Deficit is intended to comply
      with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and
      shall be interpreted consistently therewith.

     

    “Affiliate”
      shall mean, with respect to a Person, another Person that directly or indirectly
      controls, is controlled by or is under common control with such first
      Person.  For purposes of this definition, “control” (including, with
      correlative meanings, the terms “controlling”, “controlled by” and “under common
      control with”), as applied to any Person, means the possession, directly or
      indirectly, of the power to vote a majority of the securities having voting
      power for the election of directors of such Person or otherwise to direct or
      cause the direction of the management and policies of that Person, whether
      through ownership of voting securities, by contract or otherwise.

     

    “Agreement”
      shall mean this Limited Liability Company Agreement, including all exhibits
      and
      schedules attached hereto, as amended, modified or otherwise supplemented,
      from
      time to time.

     

    “Appraisal
      Process” shall mean the process pursuant to which the parties shall
      determine the fair market value of the Concord Property and the Empire
      Operations, and any subsequent contribution of real property to the Company
      or
      to any other joint venture company formed by the Members pursuant to Article
      11
      of this Agreement, which process shall include the following:

     

    (i)           Promptly
      following the Effective Date of the Formation Agreement, each of Concord and
      Empire shall select an independent appraiser.  Each appraiser shall
      determine, within forty-five (45) days after submission of the issue, the fair
      market value of each of the Concord Property and the Empire Operations as of
      the
      Effective Date, at a price a willing buyer would pay a willing seller
      (determined free and clear of all monetary liens and encumbrances) in an arm’s
      length transaction. The fair market value of the Empire Operations shall be
      determined based on the current use of the Empire License at the Empire Property
      and Empire’s existing operations, reduced by the amount outstanding under the
      Credit Facility on the effective date of the Credit Facility Assignment if
      the
      Credit Facility is assigned to the Company, but assuming that legislation is
      enacted that shall permit Empire to retain forty percent (40%) of revenues
      of
      the first FIFTY MILLION and 00/100 DOLLARS ($50,000,000.00) earned from the
      operation of its video gaming machine business.  However, if
      legislation is enacted that shall permit Empire to retain in excess of forty
      percent (40%) of revenues of the first FIFTY MILLION and 00/100 DOLLARS
      ($50,000,000.00) earned from the operation of its video gaming machine business
      prior to or within forty-five (45) days after the Effective Date of this
      Agreement, the fair market value shall be

     

     

    
      
        
        

      

      
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    based
      on
      such legislation that is so enacted; provided, however, that the deemed value
      of
      the Empire Operations shall be the greater of (i) the fair market value of
      the
      Empire Operations as determined pursuant to the foregoing and after deducting
      the amount outstanding under the Credit Facility on the effective date of the
      Credit Facility Assignment if the Credit Facility is assigned to the Company
      or
      (ii) FIFTY MILLION and 00/100 DOLLARS ($50,000,000.00), less the amount
      outstanding under the Credit Facility on the effective date of the Credit
      Facility Assignment if the Credit Facility is assigned to the Company. The
      fair
      market value of the Concord Property shall be determined based on the
      Governmental Approvals that have been obtained to pursue the Development Plan
      on
      the Concord Property (which, by way of clarification, shall not assume approval
      to build a Class II or Class III casino notwithstanding any such approvals
      that
      have been obtained by Concord); provided, however, that the deemed value of
      the
      Concord Property shall be the greater of (i) the fair market value of the
      Concord Property as determined pursuant to the foregoing or (ii) FIFTY MILLION
      and 00/100 DOLLARS ($50,000,000.00).

     

    (ii)           In
      the event the fair market value for each appraisal is within 10% of each other,
      the average of the two (2) shall be deemed the fair market value of Concord
      Property or the Empire Operations, as applicable.  If the two (2)
      appraisals are more than 10% different, the two (2) appraisers shall jointly
      appoint a third independent appraiser on the forty-sixth (46th) day after their
      appointment and, if the two (2) appraisers fail to appoint or agree upon the
      third appraiser on such day, an appraiser shall be appointed by the
      Members.

     

    (iii)           If
      within thirty (30) days after the appointment of the third appraiser, the two
      (2) appraisers cannot agree upon a mutually acceptable fair market value for
      either the Concord Property or the Empire Operations, then the third appraiser
      shall independently determine the fair market value of such property as of
      the
      Effective Date within the subsequent thirty (30) day period, and the two (2)
      values that are closest shall be averaged to determine the fair market value;
      provided, however, if the appraisal of the third appraiser is the arithmetic
      mean of the appraisals of the other two (2) appraisers, the third appraisal
      shall be used.

     

    “Asset
      Value” shall mean, with respect to any asset of the Company (other than
      cash), the adjusted basis of such asset as of the relevant date for federal
      income tax purposes, except as follows:

     

    (a)           the
      Asset Value of the Concord Property and the Asset Value of the Empire Operations
      shall be determined within ninety (90) days of the Effective Date pursuant
      to
      the Appraisal Process and then set forth on Exhibit B;

     

    (b)           the
      Asset Values of all Company assets (including intangible assets such as
      goodwill) may be adjusted to equal their respective fair market values as of
      the
      following times:

     

     

    
      
        
        

      

      
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    (i)           the
      acquisition of an additional interest in the Company by any new or existing
      Member in exchange for more than a de minimus Capital
      Contribution;

     

    (ii)           the
      distribution by the Company to a Member of more than a de minimus amount
      of money or Company property as consideration for an interest in the Company;
      or

     

    (iii)           the
      liquidation of the Company within the meaning of Regulations Section
      1.704-1(b)(2)(iv)(f)(5)(ii);

     

    (c)           the
      Asset Value of any Company asset distributed in kind to any Member shall be
      the
      gross fair market value of such asset on the date of distribution, as determined
      by the Members;

     

    (d)           the
      Asset Values of any Company assets shall be increased (or decreased) to reflect
      any adjustments to the adjusted basis of such assets pursuant to Code Section
      734(b) or Code Section 743(b), but only to the extent that such adjustments
      are
      taken into account in determining Capital Accounts pursuant to Regulations
      Section 1.704-1(b)(2)(iv)(m); provided that Asset Values shall not be
      adjusted pursuant to Code Section 743(b) to the extent that the Members makes
      a
      corresponding adjustment under subparagraph (b)(ii); and

     

    (e)           if
      the Asset Value of an asset has been determined or adjusted pursuant to
      subsection (a) or (b) above, such Asset Value shall thereafter be adjusted
      by
      the Depreciation taken into account with respect to such asset for purposes
      of
      computing Profits and Losses and other items allocated pursuant to Article
      VII.

     

    The
      foregoing definition of Asset Value is intended to comply with the requirements
      of Regulations Section 1.704-1(b)(2)(iv) and shall be interpreted and applied
      consistently therewith.

     

    “Brownfield
      Tax Credits” shall mean any and all benefits available pursuant to the Brownfield
      Program administered by the NYSDEC, including but not limited to
      Brownfield Real Property Tax Credits provided for by Tax Laws Section 22,
      606(ee) and 606(i) and sections related thereto and any Brownfield Redevelopment
      Tax Credits provided for by Tax Laws Section 21, 606(dd) and 606(i) and sections
      related thereto.

     

    “Business
      Day” shall mean any day except Saturday and Sunday or a federal holiday on
      which commercial banks are required or authorized to remain closed.

     

    “Buy-Out
      Transfer” shall have the meaning set forth in Section
      8.4(b)(ii).

     

    “Buy/Sell
      Closing” shall have the meaning set forth in Section
      8.4(b)(ii).

     

    “Buy/Sell
      Closing Date” shall have the meaning set forth in Section
      8.4(b)(ii).

     

    “Buy/Sell
      Closing Notice” shall have the meaning set forth in Section
      8.4(b)(ii).

     

     

    
      
        
        

      

      
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    “Buy/Sell
      Notice” shall have the meaning set forth in Section 8.4(a).

     

    “Buying
      Member” shall have the meaning set forth in Section 8.4(a).

     

    “Capital
      Account” shall mean, with respect to any Member (and without duplication),
      the Capital Account maintained for such Member in accordance with the following
      provisions:

     

    (f)           From
      time to time, the Capital Account of each Member shall be increased by (i)
      the
      amount of any cash contributed by the Member to the Company, (ii) the Asset
      Value of any property contributed by the Member to the Company  (net
      of liabilities that the Company is deemed to have assumed or taken subject
      to,
      under and pursuant to Section 752 of the Code), and (iii) allocations to the
      Member of Profit (or items thereof) and other income and gain pursuant to
      Section 7.1, including income and gain exempt from tax, and income and gain
      described in Regulations Section 1.704-1(b)(2)(iv)(g), but excluding items
      of
      income and gain described in Regulations Section 1.704-1(b)(4)(i).

     

    (g)           The
      Capital Account of each Member shall be decreased by (i) the amount of any
      cash
      distributed to such Member, (ii) the fair market value (as determined by the
      Members) of any property distributed to such Member (net of any liabilities
      that
      such Member is deemed to have assumed or taken subject to, under and pursuant
      to
      Section 752 of the Code) and (iii) allocations to the Member of Loss (or items
      thereof) and other loss and deductions pursuant to Section 7.1, including loss
      and deduction described in Regulations Section 1.704-1(b)(2)(iv)(g),
      but excluding items of loss and deduction described in Regulations Sections
      1.704-1(b)(4)(i) and (iii).

     

    (h)           A
      single Capital Account shall be maintained for each Member, which Capital
      Account shall reflect all allocations, distributions, or other adjustments
      required by this definition with respect to the Membership Interest owned by
      such Member.

     

    (i)           Upon
      any transfer of all or part of a Membership Interest, as permitted by this
      Agreement, the Capital Account (or portion thereof) of the transferor that
      is
      attributable to the transferred interest (or portion thereof) shall carry over
      to the transferee, as prescribed by Regulations Section
      1.704-1(b)(2)(iv)(l).

     

    (j)           Except
      as otherwise required by the Act or this Agreement, no Member shall have any
      liability to restore all or any portion of a deficit balance in a Capital
      Account.

     

    (k)           Notwithstanding
      anything to the contrary in this definition, it is the intention of the Members
      that the Capital Accounts of the Members be maintained strictly in accordance
      with the capital account maintenance requirements of Regulations Section
      1.704-1(b)(2)(iv), and that such Capital Accounts be adjusted to the extent
      required by the provisions of such regulations or any successor provisions
      thereto.

     

    “Capital
      Contribution” shall mean the sum of the Initial Capital Contribution and any
      Additional Capital Contribution made by a Member of the Company.

     

     

    
      
        
        

      

      
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    “Capital
      Event” shall mean (i) a sale of all or any part of or an interest in the
      Concord Property and all improvements thereon, exclusive of sales or other
      dispositions of tangible personal
      property in the ordinary course of business; (ii) placement and funding of
      any
      indebtedness of the Company secured by some or all of its assets with respect
      to
      borrowed money, excluding short term borrowing in the ordinary course of
      business; (iii) condemnation of all or any part of or an interest in the Concord
      Property through the exercise of the power of eminent domain; or (iv) any loss
      of all or a portion of the Concord Property or an interest in the Concord
      Property by casualty, failure of title or otherwise.

     

    “Cash
      Flow” shall mean, with respect to any period, (i) all cash received by the
      Company from any source or withdrawn from reserves during such period (as
      determined by the Members) minus (ii) the sum of (x) any increase in working
      capital, (y) additions to reserves made during such period (as reasonably
      determined by the Members), and (z) operating expenses, capital expenditures,
      debt service (including on Member loans) and other cash expenditures of the
      Company, including but not limited to the Construction Fee, the New York State
      Return and the Horsemen Return,  but excluding the Management
      Fee.

     

    “Casino
      Development Fee” shall mean an amount equal to five percent (5%) of all
      development costs incurred in connection with the development of any racing
      and
      gaming facilities located at the Concord Property.

     

    “Cause”
      shall mean fraud or willful gross misconduct or a willful breach of a material
      obligation, representation or warranty of a Member under this Agreement unless
      cured within thirty (30) days of notice thereof.

     

    “Certificate”
      shall mean the Certificate of Formation of the Company.

     

    “Closing
      Date” shall have the meaning set forth in the Formation
      Agreement.

     

    “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to time,
      and
      any successor statutory provisions.

     

    “Company”
      shall mean Concord Empire LLC, a New York limited liability
      company.

     

    “Company
      Minimum Gain” shall mean the amount determined in accordance with
      Regulations Section 1.704-2(d) by (a) computing with respect to each Nonrecourse
      Liability of the Company the amount of income or gain, if any, that would be
      realized by the Company if it disposed of the property securing such Nonrecourse
      Liability in full satisfaction thereof, and (b) aggregating all separate amounts
      so computed.

     

    “Concord”
      shall mean Concord Associates, L.P., a New York limited partnership having
      an
      office at c/o Cappelli Enterprises, Inc., 115 Stevens Avenue, Valhalla, New
      York
      10595.

     

    “Concord
      Cash Equity Preferred Return” shall mean a cumulative (non-compounded)
      return equal to twelve percent (12%) per annum, based on the aggregate
      Additional Capital Contributions, less the amount of any distribution made
      to
      Concord pursuant to Section 6.2(g) of this Agreement, commencing on the
      Effective Date.

     

     

    
      
        
        

      

      
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    “Concord
      First Returns” shall have the meaning set forth in Section 7.1(a)(I)(iii) of
      this Agreement.

     

    “Concord
      Management Responsibilities” shall mean any and all actions reasonably
      related to or done in connection with the development of the Concord Property
      pursuant to the Development Plan, including but not limited to (i) retaining
      all
      contractors, engineers, architects and other professionals, (ii) overseeing
      all
      construction, (iii) obtaining any and all financing from third party lenders
      on
      commercially reasonable terms and conditions, (iv) obtaining any and all
      building permits, certificates of occupancy, site plans, floor plans and any
      and
      all other licenses, permits and governmental approvals and authorizations,
      (v)
      approving any site plans or other design drawings produced in connection
      therewith, (vi) obtaining any necessary environmental approvals in connection
      with the development of the Concord Property and (vii) managing the development
      and construction of the Concord Property on a day to day basis, each of the
      foregoing as may be deemed necessary or desirable by Concord in consultation
      with Empire; provided, that any changes to any of (a) the number of rooms or
      units contained in the hotel, (b) the number of square feet contained in the
      convention center, (c) the inclusion of a Class II or Class III gaming facility
      substantially similar to the Class II gaming facility described in the Site
      Plan, and (d) the inclusion of a harness racetrack in the Project, each as
      set
      forth in the Development Plan, shall be made by Concord with the consent of
      Empire.  Notwithstanding the foregoing, Concord shall, in consultation
      with Empire, make any and all decisions with respect to (I) the overall design
      of the improvements to be made on the Concord Property, including but not
      limited to the placement of any such improvements on the Concord Property,
      and
      (II) any and all other details with respect to the design, development and/or
      construction of the Concord Property that are not mentioned in clauses (a)
      through (d) above and that are reasonably related to or done in connection
      with
      the development of the Concord Property pursuant to the Development
      Plan.

     

    “Concord
      Preferred Return” shall mean the meaning set forth in Section
      7.1(a)(I)(iv).

     

    “Concord
      Property” shall mean the land located in Kiamesha Lake, New York and
      described on Exhibit C attached hereto and made a part hereof, commonly
      known as the Concord Hotel and Resort, consisting of approximately 160 acres,
      together with all Governmental Approvals obtained by Concord prior to the
      Effective Date, but excluding the Brownfield Tax Credits held by Concord in
      connection with such land.

     

    “Concord
      Real Property Preferred Return” shall mean a cumulative (non-compounded)
      return equal to eight percent (8%) per annum, based on the aggregate Initial
      Capital Contribution less the amount of any distribution made to Concord
      pursuant to Sections 6.2(i) or 6.4 of this Agreement, made by Concord to the
      Company, commencing on the Effective Date.

     

    “Concord
      Reimbursement Contribution” shall have the meaning set forth in Section
      5.2(d) of this Agreement.

     

    “Construction
      Contract” shall have the meaning set forth in the Formation
      Agreement

     

     

    
      
        
        

      

      
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    “Construction
      Fee” shall mean, a fee payable to George A. Fuller Company or its Affiliate
      in consideration for acting as the general contractor with respect to the
      development of the Concord Property in an amount equal to a market rate for
      a
      project of this type and magnitude (which the parties anticipate will be five
      percent (5%)) on the aggregate costs of all labor,
      materials, equipment, fixtures and furnishings incurred in connection with
      the
      construction and development of the Concord Property.

     

    “Contributing
      Member” shall have the meaning set forth in Section 5.4(a).

     

    “Credit
      Facility” shall have the meaning set forth in Section 14.2(e) of the
      Formation Agreement.

     

    “Credit
      Facility Assignment” shall mean the assignment by Empire of that the Credit
      Facility to the Company, and the Company’s assumption of such Credit
      Facility.

     

    “Demand
      Notice” shall have the meaning set forth in Section 12.16(b).

     

    “Deposit”
      shall have the meaning set forth in Section 8.4(b)(i).

     

    “Depreciation”
      shall mean, for each Fiscal Year or part thereof, an amount equal to the
      depreciation, amortization, or other cost recovery deduction allowable for
      federal income tax purposes with respect to an asset for such Fiscal Year or
      part thereof, except that if the Asset Value of an asset differs from its
      adjusted basis for federal income tax purposes at the beginning of such Fiscal
      Year, the depreciation, amortization or other cost recovery deduction for such
      Fiscal Year or part thereof shall be an amount which bears the same ratio to
      such Asset Value as the federal income tax depreciation, amortization or other
      cost recovery deduction for such Fiscal Year or part thereof bears to such
      adjusted tax basis.  If such asset has a zero adjusted tax basis, the
      depreciation, amortization or other cost recovery deduction for each Fiscal
      Year
      shall be determined under a method selected by the Members.

     

    “Development
      Fee” shall mean an amount equal to five percent (5%) of all development
      costs incurred in connection with the development of the Concord Property,
      but
      excluding all amounts payable as the Casino Development Fee.

     

    “Development
      Plan” shall mean the plan to develop and construct on the Concord Property
      at least all of the following improvements: (i) a hotel containing 500 rooms
      or
      units, (ii) a convention center containing two-hundred thousand (200,000) square
      feet, (iii) a Class II  or Class III gaming facility (items (i)-(iii)
      substantially similar to those described in the Site Plan), and (iv) a harness
      racetrack (substantially similar to that presently existing at the Monticello
      Raceway), and may include other improvements, including, without limitation,
      residential and retail facilities, together with parking sufficient to support
      the foregoing.

     

    “Dispute”
      shall have the meaning set forth in Section 12.16.

     

    “Effective
      Date” shall mean [_____], 2008, which shall be the Closing Date pursuant to
      the terms and conditions of the Formation Agreement.

     

    “Election
      Notice” shall have the meaning set forth in Section 8.4(a).

     

     

     

    
      
        
        

      

      
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    “Empire”
      shall mean Empire Resorts, Inc., a Delaware Corporation having an office at
      701
      North Green Valley Parkway, Suite 200, Henderson, Nevada 89074.

     

    “Empire
      Cash Equity Preferred Return” shall mean a cumulative (non-compounded)
      return equal to twelve percent (12%) per annum, based on the aggregate
      Additional Capital Contributions, less the amount of any distribution made
      to
      Empire pursuant to Section 6.2(g) of this Agreement commencing on the Effective
      Date.

     

    “Empire
      First Returns” shall have the meaning set forth in Section 7.1(a)(I)(iii) of
      this Agreement.

     

    “Empire
      License” shall mean certain licenses owned by Empire and its wholly-owned
      subsidiary, Monticello Raceway Management, Inc., a New York corporation,
      pertaining to Empire’s ownership and operating of a harness racing facility and
      a video gaming machine facility, such licenses currently enabling Empire to
      operate a harness racing facility and video gaming machine facility in
      Monticello, New York known as the Monticello Gaming and Raceway
      facility.

     

    “Empire
      Management Responsibilities” shall mean any and all actions reasonably
      related to or done in connection with (i) the management and operation of the
      Concord Property as a racing and gaming facility and the maintenance of any
      and
      all racing and gaming licenses, (ii) the management and operation of any hotel
      existing at or constructed upon the Concord Property, (iii) the selection of
      the
      manager (which may be Empire itself) of any hotel located at the Concord
      Property and (iv) the day to day operation and management of the hotel and
      gaming facility components of the Project. In addition, Empire shall undertake
      any and all necessary and/or desirable actions in connection with (a) obtaining
      any Governmental Approval necessary in connection with the relocation of the
      harness racetrack and the video gaming machine facility from certain real
      property owned by Empire and located in Monticello, New York and known as the
      Monticello Gaming and Raceway facility to the Concord Property and (b) obtaining
      any consents, approvals or authorizations with respect to the transfer of the
      Empire License to the Company.

     

    “Empire
      Operations” shall mean the video gaming machine and racing businesses owned
      by Empire in Monticello, New York known as the Monticello Gaming and Raceway
      facility, including but not limited to the Empire Licenses, the employees
      currently employed by Empire and customer lists and marketing materials used
      by
      Empire in connection with the ownership and the operation of such
      business.

     

    “Empire
      Operations Preferred Return” shall mean a cumulative (non-compounded) return
      equal to eight percent (8%) per annum, based on the fair market value of the
      Empire Operations contributed by Empire to the Company, less the amount of
      any
      distribution made to Empire pursuant to Sections 6.2(i) or 6.4 of this
      Agreement, commencing on the Effective Date.

     

    “Empire
      Property” shall mean the approximately 200 acres of land located in
      Monticello, New York, and all buildings, structures and other improvements
      thereon, and commonly known as the Monticello Raceway, but excluding the Land
      in
      Trust Property.

     

     

    
      
        
        

      

      
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    “Empire
      Preferred Return” shall mean the meaning set forth in Section
      7.1(a)(I)(iv).

     

    “Empire
      Reimbursement Contribution” shall have the meaning set forth in Section
      5.2(c) of this Agreement.

     

    “Fiscal
      Year” shall mean the taxable year of the Company, which initially shall be
      the calendar year.

     

    “FMV
      Amount” shall have the meaning set forth in Section 8.4(a).

     

    “Formation
      Agreement” shall mean the Agreement to Form Limited Liability Company and
      Contribution Agreement, dated as of February 8, 2008, between Concord and
      Empire.

     

    “Gaming
      Management Fee” shall mean an amount which would be charged at market rate
      by an independent third party or such other amount that may be permitted under
      the terms of any qualified management agreement to which the Company shall
      at
      any time be a party.

     

    “Governmental
      Approvals” shall mean any authorization, application, consent, approval,
      order, consent decree, license, franchise, lease, ruling, permit, tariff, rate,
      certification, exemption, filing or registration by or with any Governmental
      Entity.

     

    “Governmental
      Entity” shall have the meaning ascribed to such term in the Formation
      Agreement.

     

    “Horsemen”
      shall mean the Monticello Harness Horsemen’s Association.

     

    “Horsemen
      Return” shall mean an amount equal to eight and one-quarter percent (8.25%),
      or such other amount legislated, of the aggregate gross revenues generated
      by
      the video gaming machines located at any Class II gaming facility constructed
      on
      the Concord Property.

     

    “Hotel
      Management Fee” shall mean an amount equal to three percent (3%) of revenues
      generated by any hotel located at the Concord Property, plus five percent (5%)
      of the gross operating  profit, as determined based on the audited
      financial statements of the Company.

     

    “Initial
      Capital Contribution” shall have the meaning set forth in Section
      5.1(b).

     

    “Initiating
      Member” shall have the meaning set forth in Section 8.4(a).

     

    “Land
      in Trust Property” shall mean the approximately 29.31 acres of land allotted
      for a Class III casino.

     

    “Legislation”
      shall mean any legislation passed by the State of New York that increases the
      current statutory distribution of gross revenues from video gaming machine
      operations provided to Empire from 32% of the first $50.0 million in gross
      revenues to 40% of the first $50.0 million in gross revenues or such greater
      percentage as may be determined by the State of New York.

     

    “Lenders”
      shall have the meaning set forth in Section 3.2.

     

     

    
      
        
        

      

      
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    “Liquidating
      Trustee” shall have the meaning set forth in Section 10.2(a).

     

    “Major
      Decisions” shall have the meaning set forth in Section 4.5(c).

     

    “Management
      Fee” shall mean the sum of the Development Fee, the Hotel Management Fee and
      the Gaming Management Fee, the Casino Development Fee and any other fees which
      the Company is entitled to receive.

     

    “Member
      Nonrecourse Debt” shall mean debt of the Company determined in accordance
      with the principles of Regulations Section 1.704-2(b)(4).

     

    “Member
      Nonrecourse Deductions” shall mean any and all items of loss, deduction or
      expenditure (including such items described in Section 705(a)(2)(B) of the
      Code)
      that, in accordance with the principles of Regulations Section 1.704-2(i)(2),
      are attributable to a Member Nonrecourse Debt.

     

    “Members”
      shall mean each of Concord and Empire, and any other Person that hereafter
      is
      admitted as a Member pursuant to Article VIII hereof.

     

    “Membership
      Interest” shall mean a Member’s entire interest in the Company including the
      Member’s right to share in the Profits and Losses and distributions of the
      Company, and the Member’s right to vote or consent to, or otherwise participate
      in, any decision or action of or by the Members granted pursuant to this
      Agreement or the Act.  The current percentage Membership Interests of
      the Members of the Company are set forth on Exhibit E attached
      hereto.  Exhibit E shall be amended by the Members from time to
      time to reflect changes in the percentage Membership Interests as set forth
      herein including changes resulting from issuances, redemptions, purchases and
      sales of Membership Interests in the Company pursuant to the terms of this
      Agreement.

     

    “Minimum
      Gain Attributable to Member Nonrecourse Debt” shall mean that amount
      determined in accordance with the principles of Regulations Sections
      1.704-2(i)(3), (4) and (5).

     

    “New
      York State Return” shall mean an amount equal to approximately seventy
      percent (70%), or such other percentage that shall be agreed to by the State
      of
      New York from time to time, of the aggregate gross revenues generated by the
      video gaming machines located at any Class II gaming facility constructed on
      the
      Concord Property.

     

    “Non-Contributing
      Member” shall have the meaning set forth in Section 5.4(a).

     

    “Nonrecourse
      Deductions” shall mean that amount determined in accordance with Regulations
      Section 1.704-2(b)(1).

     

    “Nonrecourse
      Liability” shall mean any liability of the Company treated as a nonrecourse
      liability under Regulations Section 1.704-2(b)(3).

     

    “Payment
      Amount” shall have the meaning set forth in Section 8.4(b)(i).

     

     

    
      
        
        

      

      
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    “Person”
      shall mean any individual, partnership, limited liability company, corporation,
      trust or other entity.

     

    “Pre-Construction
      Expenses” shall mean any and all expenses incurred by Concord, in Concord’s
      sole and reasonable discretion, but in consultation with Empire, between
      February 8, 2008 and the Effective Date, that are reasonably related to the
      development of the Concord Property pursuant to the Development
      Plan.

     

    “Pre-Construction
      Expense Return” shall mean either (i) if any Pre-Construction Expense was
      financed by a third-party lender, the cost of capital payable by Concord or
      any
      of Concord’s affiliates to such third-party lender (including any and all
      interest and fees payable by Concord or its affiliates to such third-party
      lender) based on the aggregate amount of Pre-Construction Expenses funded by
      such third-party lender, less the amount of any distribution made to Concord
      pursuant to Section 6.2(g) of this Agreement as a reimbursement of any such
      Pre-Construction Expense or (ii) if financing from a third-party lender was
      not
      available on commercially reasonable terms (taking into account the interest
      rate, fees, and other lender requirements), a cumulative (non-compounded) return
      equal to twelve percent (12%) per annum, based on the aggregate amount of
      Pre-Construction Expenses incurred by Concord and not funded by any third-party
      lender, less the amount of any distribution made to Concord pursuant to Section
      6.2(g) of this Agreement as a reimbursement of any such Pre-Construction
      Expense.

     

    “Priority
      Member Loan” means, with respect to the Contributing Member, any advance
      made by the Contributing Member and designated or characterized by the
      Contributing Member as a Priority Member Loan pursuant to Section 5.4(a) hereof,
      and constituting the Non-Contributing Member’s share of such amount advanced by
      the Contributing Member pursuant to Section 5.4(a) hereof.

     

    “Priority
      Member Loan Return” means a cumulative return, calculated in the same manner
      as interest at a rate of fifteen percent (15%) per annum.

     

    “Profits
      and Losses” shall mean, for each Fiscal Year or other period, an amount
      equal to the Company’s taxable income or loss for such Fiscal Year or period,
      determined in accordance with Code Section 703(a) (for this purpose, all items
      of income, gain, loss, or deduction required to be stated separately pursuant
      to
      Code Section 703(a)(1) shall be included in taxable income or loss), with the
      following adjustments:

     

    (l)           Any
      income of the Company that is exempt from federal income tax and not otherwise
      taken into account in computing Profits and Losses shall be added to such
      taxable income or loss;

     

    (m)           Any
      expenditures of the Company described in Code Section 705(a)(2)(B) or treated
      as
      Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section
      1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
      Profits or Losses, shall be subtracted from such taxable income or
      loss;

     

    (n)           In
      the event the Asset Value of any Company asset is adjusted pursuant to clause
      (b) or clause (d) of the definition thereof, the amount of such adjustment
      shall
      be taken into account as gain or loss from the disposition of such asset for
      purposes of computing Profits and Losses;

     

     

    
      
        
        

      

      
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    (o)           Gain
      or loss resulting from any disposition of Company property with respect to
      which
      gain or loss is recognized for federal income tax purposes shall be computed
      by
      reference to the Asset Value of the property disposed of, notwithstanding that
      the adjusted tax basis of such property differs from its Asset
      Value;

     

    (p)           In
      lieu of depreciation, amortization and other cost recovery deductions taken
      into
      account in computing such taxable income or loss, there shall be taken into
      account Depreciation for such Fiscal Year or other period;

     

    (q)           To
      the extent an adjustment to any adjusted tax basis of any Company asset pursuant
      to Code Section 734(b) or Code Section 743(b) is required pursuant to
      Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
      determining Capital Accounts as a result of a distribution other than in
      liquidation of a Member’s Membership Interest in the Company, the amount of the
      adjustment shall be treated as an item of gain (if the adjustment increases
      the
      basis of the asset) or loss (if the adjustment decreases the basis of the
      assets) from the disposition of the asset and shall be taken into account for
      purposes of computing Profits and Losses; and

     

    (r)           Any
      items that are specially allocated pursuant to Section 7.1(c) shall not be
      taken
      into account in computing Profits and Losses.

     

    “Project”
      shall mean the “project” designated as such by Concord in the Development
      Plan.

     

    “Property”
      shall mean the Concord Property.

     

    “Regulations”
      shall mean any and all temporary and final regulations promulgated under the
      Code, as amended from time to time (including corresponding provisions of
      succeeding regulations).

     

    “Regulatory
      Allocations” shall have the meaning set forth in Section
      7.1(c)(vii).

     

    “Reimbursement
      Amount” shall have the meaning set forth in Section 6.1(b) of this
      Agreement.

     

    “Selling
      Member” shall have the meaning set forth in Section 8.4(a).

     

    “Site
      Plan” shall mean the meaning set forth in the Formation
      Agreement.

     

    “Stabilization”
      shall mean that the hotel, convention center and Class II or Class III gaming
      facility have been operating for three (3) full calendar years.

     

    “State
      Agreement” shall mean one or more agreements with the State of New York
      pursuant to which the State of New York or any of its political subdivisions
      or
      any agency thereof shall agree to provide financing to the Company in connection
      with the Company’s proposed development of the Concord Property and consistent
      with the scope of such proposed development pursuant to the Development
      Plan.

     

     

    
      
        
        

      

      
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    “Total
      Concord Cash Return” shall mean the meaning set forth in Section
      7.1(a)(I)(v).

     

    “Total
      Concord Return” shall mean the meaning set forth in Section
      7.1(a)(I)(vi).

     

    “Total
      Empire Cash Return” shall mean the meaning set forth in Section
      7.1(a)(I)(v).

     

    “Total
      Empire Return” shall mean the meaning set forth in Section
      7.1(a)(I)(vi).

     

    “Transfer”
      shall mean any, direct or indirect, sale, assignment, gift, hypothecation,
      pledge or other disposition, whether voluntary or by operation of law, of a
      Membership Interest or any portion thereof; provided, that any pledge,
      assignment or hypothecation of Membership Interests to any third-party lending
      institution pursuant to the terms of this Agreement and in connection with
      any
      primary, secondary or mezzanine financing or refinancing of the Project and/or
      the operations of the Company shall not constitute a Transfer pursuant to the
      terms of this Agreement.

     

    “Transferring
      Member” shall mean a Member who Transfers its Membership
      Interest.

     

    “Tribe”
      shall mean the St. Regis Mohawk Tribe.

     

    1.2           Generic
      Terms.  Unless the context clearly indicates otherwise, where
      appropriate the singular shall include the plural and the masculine shall
      include the feminine or neuter, and vice versa, to the extent necessary to
      give
      the terms defined in this Article I and the terms otherwise used in this
      Agreement their proper meanings.  Article, Section, Subsection,
      paragraph, clause, Schedule and Exhibit references are to this Agreement unless
      otherwise specified.

     

    ARTICLE
      II

    ORGANIZATIONAL
      MATTERS

     

    2.1           Formation;
      Continuation.  The Company has been formed and shall continue to
      exist for the limited purposes described herein and shall be governed by and
      operated in accordance with the Act.  The Members shall execute and
      make all filings required by the Act or other applicable law with respect to
      the
      continuation and operation of the Company after the Effective Date.

     

    2.2           Name.  The
      name of the Company is “Concord Empire LLC” and all Company business shall be
      conducted under that name or such other names that comply with applicable law
      as
      the Members may select from time to time.

     

    2.3           Principal
      Place of Business.  The principal place of business of the Company
      shall be located at 115 Stevens Avenue, Valhalla, New York 10595.  The
      Company may change its principal place of business or have such other offices
      as
      the Members may designate from time to time.

     

     

    
      
        
        

      

      
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    2.4           Registered
      Office.  The address of the registered office of the Company in
      the State of New York is c/o Cappelli Enterprises, Inc., 115 Stevens Avenue,
      Valhalla, New York  10595,
      or
      at such other location (which need not be a place of business of the Company)
      as
      the Members may designate from time to time.

     

    2.5           Term.  The
      term of the Company shall commence upon the filing of the Certificate and shall
      continue until dissolved in accordance with Article X of this Agreement or
      the
      Act.

     

    2.6           Taxation.  No
      Member shall file any tax report or return, or take any other action (including
      filing or causing to be filed an election under Regulations Section 301.7701-3),
      that would cause the Company to be treated as an association taxable as a
      corporation for any federal, state or local income tax purposes.

     

    2.7           No
      State Law Partnership.   The Members intend that the Company
      shall not be a partnership (including, without limitation, a limited
      partnership) or a joint venture, and that as a result of participating as a
      Member hereunder, no Member shall be treated as a partner or joint venturer
      of
      any other Member, for any purpose other than federal, state and local income
      tax
      purposes, and the provisions of this Agreement shall not be construed
      otherwise.

     

    ARTICLE
      III

    BUSINESS
      OF THE COMPANY

     

    3.1           Purpose.  The
      business of the Company shall be to: (a) finance, own, manage, lease, operate,
      dispose of and otherwise use and enjoy the Concord Property, (b) develop the
      Concord Property pursuant to the Development Plan, and to obtain all financing
      that is necessary or advisable in connection therewith, (c)  maximize
      the value of the Empire Licenses  and (d) engage in any and all
      activities reasonably related to or incidental to the foregoing.

     

    3.2           Payment
      of Fees.  Pursuant to Section 4.5 of this Agreement, Concord shall
      perform the Concord Management Responsibilities, and, in connection therewith,
      shall be entitled to receive certain distributions pursuant to Section 6.1(e)
      and 6.2(e) of this Agreement.  Pursuant to Section 4.5 of this
      Agreement, Empire shall perform the Empire Management Responsibilities, and,
      in
      connection therewith, shall be entitled to receive certain distributions
      pursuant to Section 6.1(e) and 6.2(e) of this Agreement.  The Company
      shall pay each of the aforementioned fees pursuant to Sections 6.1 and 6.2
      of
      this Agreement.  Notwithstanding the foregoing, George A. Fuller
      Company or its Affiliate shall act as the general contractor with respect to
      the
      development of the Concord Property and, in connection therewith, shall be
      entitled to receive the Construction Fee, such fee to be paid to George A.
      Fuller Company or its designee prior to any distribution of Cash Flow pursuant
      to Sections 6.1 and 6.2 of this Agreement as expenses are
      incurred.  In connection therewith, George A. Fuller Company or its
      Affiliate shall provide any institutional lender that shall provide financing
      in
      connection with the development of the Concord Property or the holders of any
      bonds issued in connection with the financing of the development of the Concord
      Property (collectively, the “Lenders”) and the Company with payment and
      performance bonds reasonably satisfactory in form and substance to each of
      the
      Lenders and the Company.

     

     

    
      
        
        

      

      
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      ARTICLE
        IV

      MEMBERS,
        MEETINGS OF THE MEMBERS AND MANAGEMENT

    

     

    4.1           Members.  The
      Members of the Company are listed on Exhibit B attached hereto, each of
      which has executed this Agreement as of the date hereof and is admitted to
      the
      Company as a Member.

     

    4.2           Additional
      Members.  No Person shall be admitted to the Company as an
      additional or substitute Member without the written consent of those Persons
      who
      are then Members and as otherwise provided herein.

     

    4.3           Meetings.  Meetings
      of Members may be held at the principal place of business of the Company or
      such
      place or places, within or outside the State of New York, as shall be determined
      by a majority of the Membership Interests and stated in the notice thereof.
      Notice of the time, date, place and purpose of meeting shall be given to each
      Member by the Member(s) calling the meeting by personal delivery, telephone
      or
      fax sent to the address of each Member set forth in Exhibit B at least
      five Business Days in advance of the meeting; provided, however, no notice
      need
      be given to a Member who waives notice before or after the meeting or who
      attends the meeting without protesting at or before its commencement the
      inadequacy of notice to such Member. Members of the Company may participate
      in a
      meeting by means of conference telephone or similar communications equipment
      by
      means of which all persons participating in the meeting can hear each other,
      and
      such participation shall constitute presence in person at such
      meeting.

     

    (a)           Record
      Date.   For the purpose of determining the Members entitled
      to notice of or to vote at any meeting of Members or any adjournment of such
      meeting, or Members entitled to receive payment of any distribution pursuant
      to
      Article 6 of this Agreement, or to make a determination of Members for any
      other
      purpose, the date on which notice of the meeting is mailed or the date on which
      the resolution declaring Distribution is adopted, as the case may be, shall
      be
      the record date for making such a determination. When a determination of Members
      entitled to vote at any meeting of Members has been made pursuant to this
      Section, the determination shall apply to any adjournment of the
      meeting.

     

    (b)           Quorum.         
      Members holding not less than a majority of all Membership Interests,
      represented in person or by proxy, shall constitute a quorum at any meeting
      of
      Members. In the absence of a quorum at any meeting of Members, a majority of
      the
      Membership Interests so represented may adjourn the meeting from time to time
      for a period not to exceed sixty days without further notice. However, if the
      adjournment is for more than sixty days, or if after the adjournment a new
      record date is fixed for the adjourned meeting, a notice of the adjourned
      meeting shall be given to each Member of record entitled to vote at such
      meeting. At an adjourned meeting at which a quorum shall be present or
      represented, any business may be transacted that might have been transacted
      at
      the meeting as originally noticed. The Members present at a meeting may continue
      to transact business until adjournment, notwithstanding the withdrawal during
      the meeting of Membership Interests whose absence results in less than a quorum
      being present.

     

     

    
      
        
        

      

      
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      4.4           Action
        by Members Without a Meeting.  Whenever the Members of the Company
        are required or permitted to take any action by vote, such action may be
        taken
        without a meeting, without prior notice and without a vote, if a consent
        or
        consents in writing, setting forth the action so taken, shall be signed by
        the
        Members who hold the voting interests having not less than the minimum number
        of
        votes that would be necessary to authorize or take such action at a meeting
        at
        which all of the Members entitled to vote therein were present and voted.
        Such
        consent and/or consents shall be delivered to the office of the Company at
        its
        principal place of business. Delivery made to the office of the Company shall
        be
        by hand or by certified or registered mail, return receipt
        requested.  Prompt notice of the taking of the action without a
        meeting by less than unanimous written consent shall be given to each Member
        who
        has not consented in writing but who would have been entitled to vote thereon
        had such action been taken at a meeting.

    

    
    

    4.5           Action
      by the Members.  Except as otherwise set forth in this Agreement,
      all action to be taken by the Members shall be taken at a meeting of the Members
      by vote of a majority-in-interest of the Members.  Notwithstanding the
      foregoing, (i) Concord shall have full power and authority to do all things
      and
      to perform all acts reasonably necessary or advisable, and to act for and bind
      the Company, with respect to the Concord Management Responsibilities, and in
      connection therewith, to receive the certain distributions pursuant to Section
      6.1(e) and 6.2(e) of this Agreement and (ii) Empire shall have full power and
      authority to do all things and to perform all acts reasonably necessary or
      advisable, and to act for and bind the Company with respect to the Empire
      Management Responsibilities, and in connection therewith, to receive certain
      distributions pursuant to Section 6.1(e) and 6.2(e) of this
      Agreement.  Each of Concord and Empire will continue to possess the
      authority to perform the Concord Management Responsibilities and the Empire
      Management Responsibilities, respectively, unless such Member is removed by
      the
      other Member for Cause and, upon such removal, such other Member shall assume
      all rights and responsibilities to perform the Concord Management
      Responsibilities or the Empire Management Responsibilities, as applicable.
      The
      Members hereby agree that George A. Fuller Company or its Affiliate shall have
      full power and authority to act as the general contractor with respect to the
      development of the Concord Property and, in connection therewith, shall be
      entitled to receive the Construction Fee, payable pursuant to Section 3.2 of
      this Agreement.

     

    (a)           Each
      of the Members recognizes that the other Member and its respective Affiliates
      have or may in the future have other business interests, activities and
      investments, some of which may be in conflict or competition with the business
      of the Company, and that the other Member and its respective Affiliates are
      entitled to carry on such other business interests, activities and investments,
      without any obligation to offer any interest in such activities to the Company
      or to the other Member.

     

    (b)           Any
      Person dealing with the Company or any Member may, unless such Person has actual
      knowledge to the contrary, rely upon a certificate signed by the Members of
      the
      Company as to (i) the identity of any Member; (ii) any factual matters relevant
      to the affairs of the Company; (iii) the Persons who are authorized to execute
      and deliver any document on behalf of the Company; or (iv) any action taken
      or
      omitted by the Company or any Member.

     

    (c)           Notwithstanding
      the foregoing, the Members agree that the unanimous consent of the Members
      shall
      be required with respect to the following (the “Major Decisions”):

     

    (i)           any
      amendment, modification or supplement to this Agreement;

     

    (ii)           a
      change in the nature of the business of the Company;

     

    (iii)         selling
      or issuing any additional Membership Interests in the Company; provided, that
      any pledge, assignment or hypothecation of Membership Interests to any
      third-party lending institution in connection with any primary, secondary or
      mezzanine financing or refinancing of the Project and/or the operations of
      the
      Company shall not constitute a sale of Membership Interests
      hereunder;

     

    (iv)         engaging
      in mergers or consolidations or the sale of the assets of the Company (including
      without limitation the sale of the Property or any substantial part thereof)
      outside of the ordinary course of its business, except as otherwise provided
      in
      Section 8.4;

     

    (v)          acquiring
      any real property in addition to the Concord Property;

     

    (vi)         instituting
      a legal suit on behalf of or in the name of the Company or settling any claims
      against the Company made by third parties;

     

    (vii)        consenting
      to any assessment or statement of audit charges proposed by the Internal Revenue
      Service of any state or local authority which would result in the altering
      of
      any amount entered on a tax return of the Company more than
      $25,000.00;

     

    (viii)       determining
      to dissolve the Company pursuant to Section 10.1;

     

    (ix)          causing
      the Company to commence a proceeding seeking any decree, relief, order or
      appointment in respect to the Company under the federal bankruptcy laws, as
      now
      or hereafter constituted, or under any other federal or state bankruptcy,
      insolvency or similar law, or the appointment of a receiver, liquidator,
      assignee, custodian, trustee, sequestrator (or similar official) for the Company
      or for any substantial part of the Company’s business or property, or to cause
      the Company to consent to any such decree, relief, order or appointment
      initiated by any Person other than the Company;

     

    (x)           after
      the completion of the Project and the issuance of a temporary certificate of
      occupancy to the Company in connection with each of the improvements constructed
      on the Concord Property pursuant to the Development Plan, and only in the event
      that the balance of Concord’s Capital Account equals the balance of Empire’s
      Capital Account, either at the time of entering into such financing agreement
      or
      as a result of such financing agreement, determining to enter into any agreement
      with a third-party lending institution in connection with any
      primary, secondary or mezzanine financing or refinancing of the Project and/or
      the operations of the Company;

     

    (xi)          causing
      the Company to retain a third party, such as Marriott or Starwood, to manage
      any
      hotel located at the Concord Property and determining the fee that shall be
      paid
      to such third party manager;

     

    (xii)         the
      approval of the Construction Contract;  or

     

    (xiii)        the
      approval of any annual budget of the Company and the approval of any press
      release issued by the Company.

     

    4.6           Prior
      to the completion of the Project and the issuance of a temporary certificate
      of
      occupancy to the Company in connection with each of the improvements constructed
      on the Concord Property pursuant to the Development Plan, Concord shall, in
      consultation with Empire, have full power and authority to do all things and
      to
      perform all acts reasonably necessary or advisable, and to act for and bind
      the
      Company, with respect to the day to day operation and management of the Company;
      provided, that none of the Concord Management Responsibilities, the Empire
      Management Responsibilities or the Major Decisions shall be included in
      Concord’s general management responsibilities pursuant to this Section 4.6;
      provided, further, that notwithstanding the foregoing, Empire and Concord shall
      jointly select  any auditor of the Company’s financial books and
      records, which auditor shall conduct an annual audit of the
      Company.  After the completion of the Project and the issuance of a
      temporary certificate of occupancy to the Company in connection with each of
      the
      improvements constructed on the Concord Property pursuant to the Development
      Plan, all decisions with respect to the day to day operation and management
      of
      the Company shall be jointly made by Empire and Concord, or by one or more
      employees and/or committees jointly appointed by Empire and Concord to perform
      all acts reasonably necessary or advisable, and to act for and bind the Company,
      with respect to the day to day operation and management of the Company;
      provided, that none of the Concord Management Responsibilities, the Empire
      Management Responsibilities or the Major Decisions shall be included in such
      general management responsibilities pursuant to this Section 4.6.
      Notwithstanding the foregoing, after the completion of the Project and the
      issuance of a temporary certificate of occupancy to the Company in connection
      with each of the improvements constructed on the Concord Property pursuant
      to
      the Development Plan, and only in the event that the balance of Concord’s
      Capital Account does not equal the balance of Empire’s Capital Account, the
      Member with the highest positive Capital Account balance, in consultation with
      the other Member, shall make all decisions with respect to entering into any
      primary, secondary or mezzanine financing or refinancing of the Project and/or
      the operations of the Company with any third-party lending
      institution.  Notwithstanding anything to the contrary contained in
      this Agreement, the Company shall prepare an annual budget each year, such
      annual budget to be approved by the Members in accordance with Section
      4.5(c)(xiii) of this Agreement.

     

    4.7           Limitation
      of Liability; Indemnification.

     

    (a)           No
      Member, or any Affiliate, agent, officer, partner, employee, member,
      representative, director or shareholder of any Member shall be liable,
      responsible or accountable in damages or otherwise to the Company or any Member
      for (i) any act performed
      in good faith within the scope of the authority conferred by this Agreement,
      (ii) any failure or refusal to perform any acts except those required by the
      terms of this Agreement, or (iii) any performance or omission to perform any
      acts in reliance in good faith on the advice of independent accountants or
      legal
      counsel for the Company.

     

     

    
      
        
        

      

      
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    (b)           Except
      as otherwise expressly provided in the Act, the debts, obligations and
      liabilities of the Company, whether arising in contract, tort or otherwise,
      shall be solely the debts, obligations and liabilities of the Company, and
      no
      Member shall be obligated personally for any such debt, obligation or liability
      of the Company, solely by reason of being a Member of the Company.

     

    (c)           The
      Company shall, to the fullest extent permitted by applicable law, using solely
      the Company’s assets, indemnify, defend and hold harmless each Member against
      any losses, claims, damages or liabilities to which such Member may become
      subject in connection with any matter arising out of or incidental to any act
      performed or omitted to be performed by any such Member in connection with
      this
      Agreement or the Company’s business or affairs; provided, however, that such act
      or omission (i) was taken in good faith, was reasonably believed by the
      applicable Member to be in the best interest of the Company and was within
      the
      scope of authority granted to such Member, (ii) was not attributable in whole
      or
      in part to such Member’s breach of this Agreement or a knowing violation of law,
      in either case which has a material adverse effect upon the value of, or causes
      material damage to, the Company or the Property, and (iii) was not attributable
      in whole or in part to such Member’s fraud, willful misconduct or gross
      negligence.

     

    (d)           The
      Members and the Company agree that the duties and obligations imposed on the
      Members as such shall be those set forth in this Agreement, which is intended
      to
      govern the relationship among the Company and the Members, notwithstanding
      any
      provision of the Act, fiduciary duties or common law to the
      contrary.

     

    (e)           The
      provisions of this Section 4.7 shall survive the termination or expiration
      of
      this Agreement.

     

    4.8           Expenses.  Except
      for any costs to be borne by any third party under any agreement with the
      Company, the Company shall be responsible for paying, and shall pay, all direct
      costs and expenses related to the business of the Company, including but not
      limited to any real property transfer taxes associated with the transfer of
      the
      Concord Property to the Company. Notwithstanding the foregoing, Concord shall
      pay for all expenses with respect to  (i) curing any violations on the
      Concord Property and (ii) any environmental remediation on the Concord
      Property.  With respect to any environmental remediation that shall be
      incurred pursuant to a Brownfield Agreement to be entered into with the New
      York
      State Department of Environmental Conservation, Concord shall be entitled to
      retain all Brownfield Tax Credits earned in connection with such environmental
      remediation.

     

     

    
      
        
        

      

      
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      ARTICLE
        V

      CONTRIBUTIONS/FINANCING

    

     

    5.1           Initial
      Capital Contributions and Capital Accounts.  (a)  On the
      Effective Date of this Agreement, Concord shall contribute the Concord Property
      to the Company and Empire shall contribute the Empire Operations to the
      Company.  The Asset Value of the Concord Property and the Asset Value
      of the Empire Operations shall be determined based upon one or more third-party
      valuations of the fair market value of such asset at the time of contribution
      obtained by the parties pursuant to the Appraisal Process, such Appraisal
      Process to be done at the cost and expense of the Company and conducted by
      independent appraisers who shall be members of a nationally accredited
      association of appraisers, each with at least ten (10) years experience in
      the
      valuation of assets similar to the Concord Property and the Empire Operations,
      respectively.

     

    (b)           The
      Asset Value of the Concord Property, as adjusted pursuant to Section 5.1(a),
      shall constitute the initial contribution of capital (an “Initial Capital
      Contribution”) of Concord to the Company, and such value shall be set forth in
Exhibit B attached hereto and credited to Concord’s Capital
      Account.  In addition, the aggregate amount of the Pre-Construction
      Expenses incurred by Concord in connection with the development of the Concord
      Property pursuant to the Development Plan shall constitute an Additional Capital
      Contribution of Concord to the Company, and such amount shall be set forth
      in
Exhibit B attached hereto and credited to Concord’s Capital
      Account.  The Asset Value of the Empire Operations, as adjusted
      pursuant to Section 5.1(a), shall constitute the Initial Capital Contribution
      of
      Empire to the Company, and such value shall be set forth in Exhibit B
      attached hereto and credited to Empire’s Capital Account.

     

    (c)           Notwithstanding
      the foregoing, it is understood between Concord and Empire that Concord owns
      one
      or more parcels of land adjoining the Concord Property that shall not be
      contributed to the Company, and that such parcels are improved with two golf
      courses, the International Golf Course and the Monster Golf
      Course.  The Company shall have the right to access the International
      Golf Course for use by hotel guests who will receive preferential treatment
      with
      respect to the assignment of tee times and who will be charged a rate no greater
      than the most favorable then-current market rate charged by Concord or its
      successors for any use thereof and shall have such other use of such facility
      as
      Concord or its successors shall determine is reasonable under the circumstances.
      The Company shall have the right to access the Monster Golf Course for use
      by
      hotel guests who will be charged a rate by Concord or its successors no greater
      than the most favorable then-current market rate charged by Concord or its
      successors for any use thereof and shall have such other use of such facility
      as
      Concord shall determine is reasonable under the circumstances.

     

    5.2           Additional
      Capital Contributions.  Any additional contribution of capital to
      the Company (an “Additional Capital Contribution”) shall be made as
      follows:

     

    (a)           
      No Member shall be required or permitted to make any Additional Capital
      Contributions to the Company unless such Additional Capital Contribution shall
      be authorized by a majority-in-interest of the Members.  If any such
      Additional Capital Contribution
      is so authorized, each Member shall, within thirty (30) Business Days after
      the
      effective date of such authorization, contribute the amount of the total
      requested Additional Capital Contributions multiplied by its respective
      percentage Membership Interest. All Additional Capital Contributions requested
      pursuant to this Section 5.2(a) shall be made by wire transfer of funds to
      the
      Company account designated by the Members.  Each Additional Capital
      Contribution made by any Member to the Company shall be set forth in the books
      and records of the Company and credited to such Member’s Capital
      Account

     

     

    
      
        
        

      

      
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    (b)           Notwithstanding
      the foregoing Section 5.2(a), prior to the completion of the Project and the
      issuance of a temporary certificate of occupancy to the Company in connection
      with each of the improvements constructed on the Concord Property pursuant
      to
      the Development Plan, if Concord determines, in its sole and reasonable
      judgment, that the Company shall require additional capital in order to fund
      any
      development and/or construction cost associated with the development of the
      Concord Property pursuant to the Development Plan, then Concord shall be
      permitted to unilaterally request, without the consent of Empire, that an
      Additional Capital Contribution be made by the Members and, within thirty (30)
      Business Days after such request is made, each Member shall contribute the
      amount of the total requested Additional Capital Contributions multiplied by
      its
      respective percentage Membership Interest by wire transfer of funds to the
      Company account designated by Concord; provided, that prior to calling for
      any
      Additional Capital Contribution pursuant to this Section 5.2(b), Concord shall
      use its best efforts to obtain financing from a third-party lender on
      commercially reasonable terms (taking into account the interest rate, fees,
      and
      other lender requirements) to fund such development and/or construction costs
      associated with the development of the Concord Property pursuant to the
      Development Plan.

     

    (c)           
      Notwithstanding anything to the contrary contained in this Agreement, at the
      end
      of each calendar year, the Company shall cause Empire’s Capital Account to
      either be (I) credited in the amount of the difference between (a) the
      Reimbursement Amount (or, in the case of a partial year, the applicable
      percentage of the Reimbursement Amount) and (b) the sum received by Empire
      pursuant to Sections 6.1(b) and 6.2(b) of this Agreement during such calendar
      year (such difference, the “Empire Reimbursement Contribution”), provided that
      such difference is a positive number, or (II) debited in the amount of the
      Empire Reimbursement Contribution, provided that such difference is a negative
      number.  Any amount so credited shall be treated as an Additional
      Capital Contribution made by Empire to the Company pursuant to the terms of
      this
      Agreement and any amount so debited shall reduce the aggregate amount of
      Additional Capital Contributions that are deemed to have been made by Empire
      to
      the Company.  All amounts that shall be credited to Empire’s Capital
      Account pursuant to this Section 5.2(c) shall be deemed to be an Additional
      Capital Contribution made by Empire to the Company that shall earn the Empire
      Cash Equity Preferred Return.

     

     

    
      
        
        

      

      
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    (d)           
      Notwithstanding anything to the contrary contained in this Agreement, at the
      end
      of each calendar year, the Company shall cause Concord’s Capital Account to
      either be (I) credited in the amount of the difference between (a) the
      Reimbursement Amount (or, in the case of a partial year, the applicable
      percentage of the Reimbursement Amount)
      and (b) the sum received by Concord pursuant to Sections 6.1(c) and 6.2(c)
      of
      this Agreement during such calendar year (such difference, the “Concord
      Reimbursement Contribution”), provided that such difference is a positive
      number, or (II) debited in the amount of the Concord Reimbursement Contribution,
      provided that such difference is a negative number.  Any amount so
      credited shall be treated as an Additional Capital Contribution made by Concord
      to the Company pursuant to the terms of this Agreement and any amount so debited
      shall reduce the aggregate amount of Additional Capital Contributions that
      are
      deemed to have been made by Concord to the Company. All amounts that shall
      be
      credited to Concord’s Capital Account pursuant to this Section 5.2(d) shall be
      deemed to be an Additional Capital Contribution made by Concord to the Company
      that shall earn the Concord Cash Equity Preferred Return.

     

    5.3           Time
      When Capital Contribution to be Returned.  No time is agreed upon
      as to when the Capital Contributions of the Members are to be
      returned.  The Members shall not have the right to demand return of
      their Capital Contributions nor shall the Members have the right to demand
      and
      receive property other than cash in return for their Capital
      Contributions.

     

    5.4           Capital
      Contributions and Remedies.

     

    (a)           If
      any Member (a “Non-Contributing Member”) fails to timely make all or any portion
      of any Capital Contribution (or any portion thereof) required pursuant to
      Sections 5.2(a) or 5.2(b) hereof within the time period required by such
      Section, and the other Member (the “Contributing Member”) has made its pro rata
      share of such Capital Contribution, if required, then the Contributing Member
      may, at its election:

     

    (i)           Advance
      the Non-Contributing Member’s pro rata share of such required Capital
      Contribution, in which event the Capital Contribution made by the Contributing
      Member on behalf of the Non-Contributing Member in respect of the related
      request therefor (i.e., only the Non-Contributing Member’s pro rata portion
      thereof) shall be designated as a Priority Member Loan entitled to a Priority
      Member Loan Return thereon (provided, however, such Priority Member Loan will
      be
      considered and treated as a loan to the Non-Contributing Member followed by
      a
      Capital Contribution by the Non-Contributing Member to the Company for federal
      income tax purposes); provided, however, that the Non-Contributing Member may
      at
      any time repay all or any portion of the Capital Contribution previously made
      by
      the Non-Contributing Member and the amount of the Capital Contribution
      previously designated as a Priority Member Loan shall be reduced accordingly;
      and

     

    (ii)           To
      the extent not repaid directly by any Non-Contributing Member within one hundred
      twenty (120) calendar days of the date on which it was advanced by the
      Contributing Member, the Priority Member Loan shall be repaid out of any
      subsequent distributions of Cash Flow made pursuant to this Agreement to which
      any Non-Contributing Member for whose account the Priority Member Loan was
      made
      would otherwise be entitled other than the Reimbursement Amount (but such
      distributions actually paid to the Contributing Member shall, nonetheless,
      constitute a distribution to any such Non-Contributing Member
      for purposes of this Agreement), and such payments shall be applied first to
      the
      payment of accrued but unpaid Priority Member Loan Returns and then to the
      payment of the outstanding principal, until the Priority Member Loan is repaid
      in full.

     

     

    
      
        
        

      

      
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    (b)           Each
      Member acknowledges and agrees that the other Member would not be entering
      into
      this Agreement were it not for (i) the Members agreeing to make the Capital
      Contributions provided for in Sections 5.1 and 5.2 of this Agreement, and (ii)
      the remedy provisions above in this Section 5.4.  Each Member
      acknowledges and agrees that in the event a Member fails to make its Capital
      Contributions pursuant to this Agreement, the other Member will suffer
      substantial damages and the remedy provisions set forth above are fair, just
      and
      equitable in all respects and administratively superior to any other method
      for
      determining such damages.

     

    5.5           Member
      Loans.  A Member may make loans to the Company in such amounts and
      upon such commercially reasonable terms and conditions authorized by the
      Members.  Any loan made by a Member shall not be treated as a Capital
      Contribution for any purpose under this Agreement, nor shall any such loan
      entitle a Member to any increase in its share of the Profits and Losses or
      distributions of the Company.  Any loan from a Member shall be
      repayable on commercially reasonable terms and conditions agreed to by the
      Members and shall bear interest at a commercially reasonable rate as determined
      in the reasonable discretion of the Members.

     

    ARTICLE
      VI

    DISTRIBUTIONS

     

    6.1           Cash
      Flow.  Subject to Section 10.2, at such times as they shall
      determine (but in no event less than monthly), the Members shall distribute
      Cash
      Flow (to the extent and if available) in the following manner and order of
      priority:

     

    (a)           First,
      payments of interest and, if applicable, principal shall be made when due to
      any
      financial institution or governmental entity, as applicable, that has made
      any
      loan or financing available to the Company for the development of the Concord
      Property;

     

    (b)           Second,
      to Empire until Empire has received distributions pursuant to this Section
      6.1(b) in an aggregate amount of any previously unpaid portion of either (i)
      if
      the Legislation is not enacted by the State of New York, FOUR MILLION and 00/100
      DOLLARS ($4,000,000.00) per annum or (ii) if the Legislation is enacted by
      the
      State of New York, EIGHT MILLION and 00/100 DOLLARS ($8,000,000.00) per annum
      (as applicable, either FOUR MILLION and 00/100 DOLLARS ($4,000,000.00) or EIGHT
      MILLION and 00/100 DOLLARS ($8,000,000.00) shall be referred to herein as the
      “Reimbursement Amount”) or, in the case of a partial year, the applicable
      percentage of the Reimbursement Amount;

     

    (c)           Third,
      distributions shall be made to Concord until Concord has received distributions
      pursuant to this Section 6.1(c) in an aggregate amount of any previously unpaid
      portion of the Reimbursement Amount or, in the case of a partial year, the
      applicable percentage of the Reimbursement Amount;

     

     

    
      
        
        

      

      
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    (d)           Fourth,
      in the event there are any Priority Member Loans outstanding at the time of
      the
      distribution or payment pursuant to this Section 6.1, distributions shall be
      made to the Contributing Member who advanced the Priority Member Loan to the
      Company in an amount equal to such Member’s Priority Member Loan Return on, plus
      return of, Priority Member Loans (with payments made pursuant to this Section
      6.1(d) deemed to be made first with respect to the Priority Member Loan Return
      and then with respect to the Capital Contributions attributable to the Priority
      Member Loan);

     

    (e)           Fifth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.1(e)
      in an amount equal to fifty percent (50%) of the aggregate amount of any
      previously unpaid portion of the Management Fee and Empire has received
      distributions pursuant to this Section 6.1(e) in an amount equal to fifty
      percent (50%) of the aggregate amount of any previously unpaid portion of the
      Management Fee.

     

    (f)           Sixth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.1(f)
      in an amount equal to any previously unpaid portion of the Concord Cash Equity
      Preferred Return plus any previously unpaid portion of the Pre-Construction
      Expense Return and Empire has received distributions pursuant to this Section
      6.1(f) in an amount equal to any previously unpaid portion of the Empire Cash
      Equity Preferred Return;

     

    (g)           Seventh,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.1(g)
      in an amount equal to any previously unpaid portion of the Concord Real Property
      Preferred Return and Empire has received distributions pursuant to this Section
      6.1(g) in an amount equal to any previously unpaid portion of the Empire
      Operations Preferred Return;

     

    (h)           Eighth,
      the balance shall be distributed to the Members pro rata in accordance with
      their Membership Interests.

     

    6.2           Distribution
      of Proceeds. Notwithstanding Section 6.1, proceeds received by the Company
      as a result of a Capital Event shall be distributed to the Members as promptly
      after the occurrence of the event giving rise thereto as the Members deem
      reasonably prudent. The distribution of such proceeds shall be as
      follows:

     

    (a)           First,
      retire the debt of the Company due to any financial institution or governmental
      entity, as applicable, that has made any loan or financing available to the
      Company pertaining to any Project of the Company directly affected by such
      Capital Event, and set up any reserve which the Members deem reasonably
      necessary to provide for any contingent or unforeseen liabilities or obligations
      unforeseen of the Company in connection with such Capital Event; provided,
      however, that at the expiration of such period of time as the Members may deem
      advisable the balance of such reserve shall be distributed in the manner
      otherwise set forth herein in Section 6.2;

     

     

    
      
        
        

      

      
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    (b)           Second,
      to Empire until Empire has received distributions pursuant to this Section
      6.2(b) in an aggregate amount of any previously unpaid portion of the
      Reimbursement Amount payable to Empire pursuant to Section 6.1(b) of this
      Agreement;

     

    (c)           Third,
      distributions shall be made to Concord until Concord has received distributions
      pursuant to this Section 6.2(c) in an aggregate amount of any previously unpaid
      portion of the Reimbursement Amount payable to Concord pursuant to Section
      6.1(c) of this Agreement;

     

    (d)           Fourth,
      in the event there are any Priority Member Loans outstanding at the time of
      the
      distribution or payment pursuant to this Section 6.2, distributions shall be
      made to the Contributing Member who advanced the Priority Member Loan to the
      Company in an amount equal to such Member’s Priority Member Loan Return on, plus
      return of, Priority Member Loans (with payments made pursuant to this Section
      6.2(d) deemed to be made first with respect to the Priority Member Loan Return
      and then with respect to the Capital Contributions attributable to the Priority
      Member Loan);

     

    (e)           Fifth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.2(e)
      in an amount equal to fifty percent (50%) of the aggregate amount of any
      previously unpaid portion of the Management Fee and Empire has received
      distributions pursuant to this Section 6.2(e) in an amount equal to fifty
      percent (50%) of the aggregate amount of any previously unpaid portion of the
      Management Fee;

     

    (f)           Sixth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.2(f)
      in an amount equal to any previously unpaid portion of the Concord Cash Equity
      Preferred Return plus any previously unpaid portion of the Pre-Construction
      Expense Return and Empire has received distributions pursuant to this Section
      6.2(f) in an amount equal to any previously unpaid portion of the Empire Cash
      Equity Preferred Return;

     

    (g)           Seventh,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.2(g)
      in an amount equal to (i) the aggregate amount of any Pre-Construction Expenses
      less the amount of any distribution made to Concord pursuant to this Section
      6.2(g) as a reimbursement of any such Pre-Construction Expense, if any plus
      (ii)
      its aggregate Additional Capital Contributions made by Concord to the Company
      in
      connection with any Project of the Company directly affected by such Capital
      Event less the amount of any distribution made to Concord pursuant to this
      Section 6.2(g) as a reimbursement of any such Additional Capital Contribution,
      if any, and Empire has received distributions pursuant to this Section 6.2(g)
      in
      an amount equal to its aggregate Additional Capital
      Contributions  made by Empire to the Company in connection with any
      Project of the Company directly affected by such Capital Event less the amount
      previously distributed to Empire pursuant to this Section 6.2(g), if
      any;

     

    (h)           Eighth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section
6.2(h)
      in
      an amount equal to any previously unpaid portion of the Concord Real Property
      Preferred Return and Empire has received distributions pursuant to this Section
      6.2(h) in an amount equal to any previously unpaid portion of the Empire
      Operations Preferred Return;

     

     

    
      
        
        

      

      
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    (i)           Ninth,
      pro rata distributions shall be made simultaneously to each of Concord and
      Empire until Concord has received distributions pursuant to this Section 6.2(i)
      in an amount equal to its aggregate Initial Capital Contribution made by Concord
      to the Company in connection with any Project of the Company directly affected
      by such Capital Event, less the amount previously distributed to Concord
      pursuant to Section 6.4 below or pursuant to this Section 6.2(i), if any, and
      Empire has received distributions pursuant to this Section 6.2(i) in an amount
      equal to its aggregate Initial Capital Contribution made by Empire to the
      Company in connection with any Project of the Company directly affected by
      such
      Capital Event less the amount previously distributed to Empire pursuant to
      Section 6.4 below or pursuant to this Section 6.2(i), if any;

     

    (j)           Tenth,
      the balance shall be distributed to the Members pro rata in accordance with
      their Membership Interests.

     

    6.3           Amounts
      Withheld for Taxes.  Notwithstanding any provision of this
      Agreement to the contrary, the Company shall withhold from all distributions
      and
      other payments to any Member or any Person any and all amounts required to
      be
      withheld under federal, state or local law.  All amounts withheld
      pursuant to this Section 6.3 shall be treated as a distribution to the Member
      pursuant to this Article VI for all purposes under this Agreement.

     

    6.4           Initial
      Distribution of Capital.  On the Effective Date of this Agreement,
      the Company shall make distributions to Empire in a manner consistent with
      the
      Formation Agreement.  At such time as any payment is made pursuant to
      this Section 6.4, the balance of Empire’s Capital Account shall be modified to
      reflect that such payment was made.  In addition, on the Effective
      Date of this Agreement, the Company may, at Concord’s election, make
      distributions to Concord in an amount up to Concord’s Initial Capital
      Contribution to the Company; provided, that funds are available to make any
      such
      distribution pursuant to the terms and conditions set forth by any financing
      arrangement entered into by the Company in connection with the development
      of
      the Concord Property after distributions are made to Empire as provided for
      above. At such time as any payment is made pursuant to this Section 6.4, the
      balance of Concord’s Capital Account shall be modified to reflect that such
      payment was made.

     

    

    ARTICLE
      VII

    ALLOCATIONS

     

    7.1           Book
      Allocations.  Sections 7.1(a) and (b) set forth the general rules
      for book allocations to the Members, including allocations with respect to
      operations and liquidation of the Company.  Section 7.1(c) sets forth
      various special rules that supersede the general rules of Sections 7.1(a) and
      (b).

     

    (a)           (I)
      Profit.  Profits for each Fiscal Year shall be allocated as
      follows:

     

     

    
      
        
        

      

      
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        (i)           First,
          to Empire, as necessary, to cause the Capital Account balance of Empire to equal
          the aggregate Reimbursement Amount previously received by
          Empire;

      

    

                   

    (ii)           Second,
      to Concord, as necessary, to cause the Capital Account balance of Concord to
      equal the aggregate Reimbursement Amount previously received by
      Concord;

     

    (iii)          Third,
      after giving effect to the allocations made pursuant to Section 7.1(a)(I)(i)
      and
      7.1(a)(I)(ii), pro rata (i) to Concord, as necessary, to cause the Capital
      Account balance of Concord to equal (a) the aggregate Reimbursement Amount
      previously received by Concord plus (b) the sum of the Pre-Construction Expense
      Return plus the Concord Cash Equity Preferred Return previously received by
      Concord (such sum, the “Concord First Returns”) and (ii) to Empire, as
      necessary, to cause the Capital Account balance of Empire to equal (a) the
      aggregate Reimbursement Amount previously received by Empire plus (b) the Empire
      Cash Equity Preferred Return previously received by Empire (such sum, the
“Empire First Returns”);

     

    (iv)         Fourth,
      after giving effect to the allocations made pursuant to Section 7.1(a)(I)(i)
      through 7.1(a)(I)(iii), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal the sum of (a) the Concord First
      Returns previously received by Concord, plus (b) the Concord Real Property
      Preferred Return previously received by Concord (such sum, the “Concord
      Preferred Return”) and (ii) to Empire, as necessary, to cause the Capital
      Account balance of Empire to equal the sum of (a) the Empire First Returns
      previously received by Empire plus (b) the Empire Operations Preferred Return
      previously received by Empire (such sum, the “Empire Preferred
      Return”);

     

    (v)          Fifth,
      after giving effect to the allocations made pursuant to Sections 7.1(a)(I)(i)
      through 7.1(a)(I)(iv), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal the sum of (a) the Concord Preferred
      Return plus (b) (I) the aggregate amount of any Pre-Construction Expenses less
      the amount of any distribution made to Concord pursuant to Section 6.2(g) of
      this Agreement as a reimbursement of any such Pre-Construction Expense, plus
      (II) the aggregate Additional Capital Contributions made by Concord to the
      Company less the amount of any distribution made to Concord pursuant to Section
      6.2(g) of this Agreement as a reimbursement of any such Additional Capital
      Contribution (such sum, the “Total Concord Cash Return”) and (ii) to Empire, as
      necessary, to cause the Capital Account balance of Empire to equal the sum
      of
      (a) the Empire Preferred Return plus (b) the aggregate Additional Capital
      Contributions  made by Empire to the Company reduced by any
      distributions made to Empire pursuant to Section 6.2(g) (such sum, the “Total
      Empire Cash Return”);

     

     

    
      
        
        

      

      
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    (vi)         Sixth,
      after giving effect to the allocations made pursuant to Sections 7.1(a)(I)(i)
      through 7.1(a)(I)(v), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal the sum of (a) the Total
Concord
      Cash Return plus (b) the aggregate Initial Capital Contribution made by Concord
      to the Company, reduced by any distributions made to Concord pursuant to Section
      6.2(i) (such sum, the “Total Concord Return”) and (ii) to Empire, as necessary,
      to cause the Capital Account balance of Empire to equal the sum of (a) the
      Total
      Empire Cash Return plus (b) the aggregate Initial Capital
      Contribution  made by Empire to the Company, reduced by any
      distributions made to Empire pursuant to Section 6.2(i) (such sum, the “Total
      Empire Return”); and

     

    (vii)        Seventh,
      allocated to the Members pro rata in accordance with their Membership
      Interests.

     

    (II)  Notwithstanding
      the foregoing, profits realized by the Company as a result of the occurrence
      of
      any of the events described in clause (i) and (ii) of the definition of Capital
      Event, shall be allocated as follows:

     

    (viii)       First,
      to the Members in proportion to, and to the extent of, any deficit balances
      in
      their respective Capital Accounts until all such Capital Accounts have been
      restored to zero;

     

    (ix)           Second,
      after giving effect to the allocations made pursuant to Section 7.1(a)(II)(i),
      to Empire, as necessary, to cause the Capital Account balance of Empire to
      equal
      the aggregate Reimbursement Amount previously received by Empire;

     

    (x)           Third,
      after giving effect to the allocations made pursuant to Section 7.1(a)(II)(i),
      to Concord, as necessary, to cause the Capital Account balance of Concord to
      equal the aggregate Reimbursement Amount previously received by
      Concord;

     

    (xi)           Fourth,
      after giving effect to the allocations made pursuant to Sections 7.1(a)(II)(i)
      through 7.1(a)(II)(iii), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal the Concord First Returns previously
      received by Concord and (ii) to Empire, as necessary, to cause the Capital
      Account balance of Empire to equal the Empire First Returns previously received
      by Empire;

     

    (xii)           Fifth,
      after giving effect to the allocations made pursuant to Sections
      7.1(a)(II)(i)  through 7.1(a)(II)(iv), pro rata (i) to Concord, as
      necessary, to cause the Capital Account balance of Concord to equal the Concord
      Preferred Return and (ii) to Empire, as necessary, to cause the Capital Account
      balance of Empire to equal the Empire Preferred Return;

     

    (xiii)        Sixth,
      after giving effect to the allocations made pursuant to Sections 7.1(a)(II)(i)
      through 7.1(a)(II)(v), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal Total Concord Cash Return
      and (ii) to Empire, as necessary, to cause the Capital Account balance of Empire
      to equal the Total Empire Cash Return;

     

     

    
      
        
        

      

      
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    (xiv)       Seventh,
      after giving effect to the allocations made pursuant to Sections 7.1(a)(II)(i)
      through 7.1(a)(II)(vi), pro rata (i) to Concord, as necessary, to cause the
      Capital Account balance of Concord to equal the Total Concord Return and (ii)
      to
      Empire, as necessary, to cause the Capital Account balance of Empire to equal
      the Total Empire Return; and

     

    (xv)        Eighth,
      allocated to the Members pro rata in accordance with their Membership
      Interests.

     

    (b)           Losses.  Losses
      for each Fiscal Year shall be allocated as follows:

     

    (i)           First,
      pro rata (i) to Concord, as necessary, to cause the Capital Account balance
      of
      Concord to equal the Total Concord Return and (ii) to Empire, as necessary,
      to
      cause the Capital Account balance of Empire to equal the Total Empire
      Return;

     

    (ii)           Second,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      , pro
      rata (i) to Concord, as necessary, to cause the Capital Account balance of
      Concord to equal Total Concord Cash Return and (ii) to Empire, as necessary,
      to
      cause the Capital Account balance of Empire to equal the Total Empire Cash
      Return;

     

    (iii)         Third,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      through 7.1(b)(ii), pro rata (i) to Concord, as necessary, to cause the Capital
      Account balance of Concord to equal the Concord Preferred Return and (ii) to
      Empire, as necessary, to cause the Capital Account balance of Empire to equal
      the Empire Preferred Return;

     

    (iv)         Fourth,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      through 7.1(b)(iii), pro rata (i) to Concord, as necessary, to cause the Capital
      Account balance of Concord to equal the Concord First Returns previously
      received by Concord and (ii) to Empire, as necessary, to cause the Capital
      Account balance of Empire to equal the Empire First Returns previously received
      by Empire;

     

    (v)          Fifth,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      through 7.1(b)(iv), to Concord, as necessary, to cause the Capital Account
      balance of Concord to equal the aggregate Reimbursement Amount previously
      received by Concord;

     

    (vi)         Sixth,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      through 7.1(b)(iv), to Empire, as necessary, to cause the Capital Account
      balance of Empire to equal the aggregate Reimbursement Amount previously
      received by Empire;

     

     

    
      
        
        

      

      
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    (vii)        Seventh,
      after giving effect to the allocations made pursuant to Sections 7.1(b)(i)
      through 7.1(b)(vi), pro rata (i) to Concord, as necessary, to cause the
      Concord’s Capital Account balance to equal zero and (ii) to Empire, as
      necessary, to cause the Empire’s Capital Account balance to equal
      zero;

     

    (viii)       Eighth,
      allocated to the Members pro rata in accordance with their Membership
      Interests.

     

    (c)           Special
      Rules.  Notwithstanding Sections 7.1(a) and (b), during any
      taxable period in which the Company is treated as a partnership for income
      tax
      purposes, the following special allocation rules shall apply under the
      circumstances described:

     

    (i)           Limitation
      on Loss Allocations.  The Losses allocated to any Member pursuant
      to Section 7.1(b) with respect to any Fiscal Year shall not exceed the maximum
      amount of Losses that can be so allocated without causing such Member to have
      an
      Adjusted Capital Account Deficit at the end of such Fiscal Year.  All
      Losses in excess of the limitation set forth in this Section 7.1(c)(i) shall
      be
      allocated first, to the Member who will not be subject to this limitation,
      and
      second, any remaining amount to the Members in the manner required by the Code
      and the Regulations. If any Loss is allocated pursuant to this Section
      7.1(c)(i), then the Members receiving such Loss allocation shall be specially
      allocated to the extent available items of Company income and gain for such
      period (and, if necessary, subsequent periods) in proportion to and to the
      extent of such Loss allocations.

     

    (ii)           Company
      Minimum Gain.  Except as otherwise provided in Regulations Section
      1.704-2(f), if there is a net decrease in Company Minimum Gain during any
      Company taxable period, each Member shall be specially allocated items of
      Company income and gain for such period (and, if necessary, subsequent periods)
      in proportion to and to the extent of, an amount equal to the portion of such
      Member’s share of the net decrease in Company Minimum Gain, determined in
      accordance with Regulations Section 1.704-2(g).  This Section
      7.1(c)(ii) is intended to comply with the chargeback of items of income and
      gain
      requirement in Regulations Section 1.704-2(f) and shall be interpreted
      consistently therewith.

     

    (iii)         Minimum
      Gain Attributable to Member Nonrecourse Debt.  Except as otherwise
      provided in Regulations Section 1.704-2(i)(4), if there is a net decrease in
      Minimum Gain Attributable to Member Nonrecourse Debt during any Company taxable
      period, each Member with a share of Minimum Gain Attributable to Member
      Nonrecourse Debt shall be specially allocated items of Company income and gain
      for such period (and, if necessary, subsequent periods) in proportion to, and
      to
      the extent of, an amount equal to the portion of such Member’s share of the net
      decrease in the Minimum Gain Attributable to Member Nonrecourse Debt, determined
      in accordance with Regulations Section 1.704-2(i)(4).  This Section
      7.1(c)(iii) is intended to comply with the chargeback of items
      of
      income and gain requirement in Regulations Section 1.704-2(i)(4) and shall
      be
      interpreted consistently therewith.

     

     

    
      
        
        

      

      
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    (iv)         Qualified
      Income Offset.  In the event any Member unexpectedly receives any
      adjustments, allocations, or distributions described in Regulations Sections
      1.704-1(b)(2)(ii)(d)(4),(5) or (6), and such adjustment,
      allocation or distribution causes or increases an Adjusted Capital Account
      Deficit for such Member, then before any other allocations are made under this
      Agreement or otherwise, such Member shall be allocated  items of
      Company income and gain (consisting of a pro rata portion of each item of
      Company income, including gross income and gain) in an amount and manner
      sufficient to eliminate, to the extent required by the Regulations, such
      Adjusted Capital Account Deficit of such Member as quickly as
      possible.

     

    (v)          Nonrecourse
      Deductions.  Nonrecourse Deductions for any taxable period shall
      be allocated to the Members in the same ratios that Profits and Losses, as
      applicable, are allocated for such period in accordance with Regulations Section
      1.704-2(b)(1).

     

    (vi)         Member
      Nonrecourse Deductions.  Member Nonrecourse Deductions for any
      taxable period shall be allocated 100% to the Member that bears the economic
      risk of loss (as defined in Regulations Section 1.704-2(b) with respect to
      the
      Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
      attributable in accordance with Regulations Section 1.704-2(i)).  If
      more than one Member bears the economic risk of loss with respect to a Member
      Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall
      be allocated between or among such Members in accordance with the ratios in
      which they share such economic risk of loss.

     

    (vii)        Curative
      Allocations.  The allocations set forth in Sections 7.1(c)(i)
      through 7.1(c)(vi) (the “Regulatory Allocations”) are intended to comply with
      certain requirements of Regulations Sections 1.704-1(b) and
      1.704-2(b).  Notwithstanding any other provisions of this Section 7.1
      (other than the Regulatory Allocations), the Regulatory Allocations shall be
      taken into account in allocating other items of income, gain, loss, and
      deduction among the Members so that, to the extent possible, the net amount
      of
      such allocations of other items and the Regulatory Allocations to each Member
      shall be equal to the net amount that would have been allocated to such Member
      if the Regulatory Allocations had not occurred.

     

    (viii)       Compliance
      with Substantial Economic Effect and Fractions Rules
      Requirements.  It is intended that the allocations set forth in
      the Agreement satisfy the “substantial economic effect” requirement of Code
      Section 704(b) and the “fractions rule” of Code Section 514(c)(9)(E) and
      Regulations Section 1.514(c)-2.  However, in the event that counsel to
      the Company determines that such requirements are not satisfied, the Members
      may, in their reasonable discretion, modify such allocations in order to comply
      with such requirements  and to avoid the
      allocation of Company items to any “qualified organization” (within the meaning
      of Code Section 514(c)(9)(C)) to be such that the qualified organization’s
      maximum share (for any taxable year) of overall Company income is greater than
      its minimum share of overall Company loss, subject to exceptions for (i) certain
      permitted “chargebacks” or certain permitted disproportionate allocations to
      offset preferred returns and (ii) losses attributable to certain events such
      as
      tort liabilities which are deemed unlikely to occur.

     

     

    
      
        
        

      

      
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    7.2           Tax
      Allocations.

     

    (a)           In
      General.  Allocations for tax purposes of items of income, gain,
      loss, deduction, and basis therefor, shall be made in the same manner as
      allocations for book purposes set forth in Section 7.1.  Allocations
      pursuant to this Section 7.2 are solely for purposes of U.S. federal, state
      and
      local income taxes and shall not affect, or in any way be taken into account
      in
      computing, any Member’s Capital Account or share of Profits, Losses, other items
      or distributions pursuant to any provision of this Agreement.

     

    (b)           Elimination
      of Book/Tax Disparities.  During any taxable period in which the
      Company is treated as a partnership for income tax purposes, in determining
      a
      Member’s allocable share of Company taxable income, the Member’s allocable share
      of each item of Profit and Loss shall be properly adjusted to reflect the
      difference between such Member’s share of the adjusted tax basis and the Asset
      Value of Company assets used in determining such item.  This Section
      7.2(b) is intended to comply with the requirements of Code Section 704(c) and
      Regulations Section 1.704-1(b)(2)(iv)(g) and shall be interpreted consistently
      therewith.  Any elections or other decisions relating to such
      allocations shall be made by the Members in any manner that reasonably reflects
      the purpose and intention of this Agreement.

     

    (c)           Conformity
      of Reporting.  The Members are aware of the income tax
      consequences of the allocations made by this Section 7.2 and hereby agree to
      be
      bound by the provisions of this Section 7.2 in reporting their shares of Company
      profits, gains, income, losses, deductions, credits and other items for income
      tax purposes.

     

    7.3           Transferred
      Interests.  If any Membership Interest (or portion thereof) is
      sold, assigned or transferred during any Fiscal Year, then Profit, Loss, each
      item thereof and all other items realized by the Company during such Fiscal
      Year
      shall be divided and allocated between the Members by taking into account their
      varying interests during the Fiscal Year in accordance with Code Section 706(d),
      using any conventions permitted by law and selected by the Members.

     

    7.4           Section
      754 Election.  In the event of a Transfer of a Membership Interest
      in the Company permitted under this Agreement, the Company shall, at the request
      of the Transferring Member, file an election under Section 754 of the Code
      to
      adjust the bases of the assets of the Company in accordance with the provisions
      of Section 743 of the Code.  Any costs associated with such election
      (such as accounting fees) shall be borne by the Transferring
      Member.

     

     

    
      
        
        

      

      
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    7.5           Brownfield
      Tax Credits.  Notwithstanding anything to the contrary contained
      in this Agreement, all Brownfield Tax Credits shall be specifically allocated
      to
      Concord. In the event
      that the Company pays expenses of any necessary environmental remediation on
      the
      Concord Property and Concord or any of its Affiliates receives an Environmental
      Remediation Credit under the Brownfield Cleanup Program for such expense,
      Concord shall pay, or shall cause its Affiliate to pay, to Empire fifty percent
      (50%) of the amount of any such Brownfield Tax Credit received and/or earned
      by
      Concord or any of its Affiliates in connection with the environmental
      remediation undertaken by the Company on the Concord Property, but excluding
      any
      Tangible Property Tax Credit received under the Brownfield Cleanup Program,
      not
      to exceed fifty percent (50%) of the cost of any such remediation, within thirty
      (30) days of the date that such Brownfield Tax Credit was received and/or
      earned.

     

    7.6           Tax
      Matters Member.  For purposes of Code Sections 6221 through 6223,
      Concord and Empire are hereby jointly designated as the “tax matters partner” of
      the Company.  The rights of the tax matter partner regarding the tax
      matters of the Company shall also include, without limitation, the right to
      select the allocation method under Section 704(c) of the Internal Revenue Code
      and the right to conduct the Company’s business in such a manner as the tax
      matter partner shall determine to avoid or to reasonably minimize unrelated
      business taxable income to the members of the Company.

     

    ARTICLE
      VIII

    TRANSFER
      MATTERS

     

    8.1           General.  No
      Member may directly or indirectly Transfer all or any portion of its Membership
      Interest except in accordance with this Article VIII.

     

    8.2           Permitted
      Transfers.  Subject to Section 8.3,

     

    (a)           the
      Transfer of a Membership Interest by a Member, other than pursuant to Section
      8.4, shall require the consent of the other Member; and

     

    (b)           each
      Person owning a direct or indirect equity interest in either of the Members
      shall have the right, from time-to-time and in its sole discretion, without
      the
      consent of the other Member, to Transfer all or any portion of its direct or
      indirect equity interest in the applicable Member in whole or in part to (i)
      each other, and (ii) trusts or other entities established for the benefit of
      family members, for estate planning purposes; and

     

    (c)           Empire
      shall have the right to transfer up to 1/3rd of their
      Membership Interest in the Company to the Tribe without the prior consent of
      Concord.

     

    8.3           Transfer
      Requirements.  Notwithstanding anything to the contrary contained
      herein, the Company shall not recognize for any purpose any purported Transfer
      unless:

     

    (a)           the
      Company shall have been furnished with the documents effecting such Transfer
      executed and acknowledged by both transferor and transferee, together with
      the
      written agreement of the transferee to become a party to and be bound by this
      Agreement, as amended or supplemented from time to time;

     

     

    
      
        
        

      

      
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    (b)           such
      Transfer shall have been made in accordance with all applicable laws and
      regulations and all necessary governmental consents shall have been obtained
      and
      requirements satisfied, including without limitation, compliance with the
      Securities Act of 1933, as amended, and applicable state blue sky and securities
      laws;

     

    (c)           such
      Transfer will not cause the Company to have more than 100 partners (within
      the
      meaning of Regulations Section 1.7704-1(h)) or does not otherwise cause the
      Company to be treated as a “publicly traded partnership” within the meaning of
      Section 7704 of the Code;

     

    (d)           all
      necessary instruments reflecting such admission shall have been filed in each
      jurisdiction in which such filing is necessary in order to qualify the Company
      to conduct business or to preserve the limited liability of the
      Members;

     

    (e)           such
      Transfer would not, if made within the United States, be registered under the
      Securities Act of 1933 and will not cause the Company to be required to register
      as an “investment company” under the Investment Company Act of 1940;
      and

     

    (f)           such
      Transfer does not violate the applicable provisions of this
      Agreement.

     

    The
      non-transferring Member may request an opinion of counsel (the cost of which
      shall be borne by the Transferring Member) with respect to any of the foregoing
      or any other matters that the non-transferring Member reasonably deems
      appropriate in respect of any such Transfer.  In addition, any of the
      foregoing provisions may be waived if each Member of the Company consents to
      such waiver.

     

    As
      promptly as practicable after the admission of any Person as a Member, the
      books
      and records of the Company shall be changed to reflect such
      admission.  All reasonable costs and expenses incurred by the Company
      in connection with any Transfer of any Membership Interest and, if applicable,
      the admission of any transferee as a Member shall be paid by such
      transferee.

     

    8.4           Buy-Sell.

     

    (a)           Determination
      of Price.  At any time after Stabilization, upon a deadlock of the
      Members for more than thirty (30) days on the Major Decisions in Section 4.5(c),
      either Member (the “Initiating Member”), by written notification given to the
      other Member (the “Buy/Sell Notice”), may call for a buy-out procedure as
      described in this Section 8.4.  In the Buy/Sell Notice, the Initiating
      Member shall state such Member’s belief as to the amount (the “FMV Amount”) that
      a disinterested third party buyer would pay in cash in an arm’s-length
      transaction for all of the assets (including the Company’s interest in the
      Property) of the Company. Within forty-five (45) days after the date on which
      the Buy/Sell Notice is given, the other Member shall give notice (the “Election
      Notice”) to the Initiating Member as to whether the other Member elects to sell
      such other Member’s Membership Interest to the Initiating Member at a price
      derived from the FMV Amount or whether such other Member elects to purchase
      the
      Initiating Member’s Membership Interest at a price derived from the FMV Amount.
      Based on such notice, either
      such other Member or the Initiating Member will be the “Selling Member” and the
      other Member will be the “Buying Member.”

     

     

    
      
        
        

      

      
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    (b)           Payment
      Amount and Procedures.

     

    (i)           The
      purchase price to be paid to the Selling Member by the Buying Member for the
      purchase of the Selling Member’s Membership Interest shall be the amount (the
“Payment Amount”) that such Selling Member would receive if the assets of
      the Company, subject to their liabilities, were sold to a third party for a
      purchase price equal to the FMV Amount, the Company were liquidated, all
      liabilities to the Members and third parties were discharged and the proceeds
      of
      the FMV Amount were distributed in accordance with the Members’ Membership
      Interests. Within ten (10) days after the giving of the Election Notice, the
      Buying Member shall deposit with the Selling Member’s attorney a nonrefundable
      deposit (the “Deposit”) in the amount of ten percent (10%) of the Payment
      Amount.

     

    (ii)           Once
      the Buying Member is prepared to make the payment of the Payment Amount, the
      Buying Member shall give a written notification (the “Buy/Sell Closing
      Notice”) to the Selling Member, provided, however, that in no event shall
      the Buy/Sell Closing Notice be given more than one hundred eighty (180) days
      after the date on which the Election Notice is given. The Buy/Sell Closing
      Notice shall state (a) that the Buying Member is ready, willing and able to
      pay
      the Payment Amount to the Selling Member and (b) the date, not less than ten
      (10) nor more than thirty (30) days from the giving of the Buy/Sell Closing
      Notice (the “Buy/Sell Closing Date”) upon which the closing (the
“Buy/Sell Closing”) of the purchase and sale of the Selling Member’s
      Membership Interest to the Buying Member for the Payment Amount shall occur.
      At
      the Buy/Sell Closing, (a) the Membership Interest of the Selling Member shall
      be
      transferred, assigned, sold and conveyed to the Buying Member free and clear
      of
      any liens or encumbrances, by instrument reasonably satisfactory to the Buying
      Member (the “Buy-Out Transfer”), (b) simultaneously with the Buy-Out
      Transfer, the Buying Member will pay to the Selling Member in cash in full,
      at
      such location and in such manner as the Buying Member may reasonably determine,
      an amount equal to the Payment Amount (including the Deposit which will be
      released at the closing), (c) all voting authority appurtenant to the Selling
      Member’s Membership Interest shall be deemed to be vested with the Buying
      Member, and the Buy-Out Transfer shall be deemed to have occurred without any
      further act or deed of either the Buying Member or the Selling
      Member.

     

    (c)           Sale
      of Property. If the Buying Member does not purchase the Membership Interest
      of the Selling Member in accordance herewith, the Buying Member shall forfeit
      the Deposit and the Selling Member shall have the authority to cause the Company
      to market and sell the Property at a price, payable in cash, equal to or greater
      than the FMV Amount, within one hundred eighty (180) days of the earlier of
      (i)
      the last date on which the Buy/Sell Closing could have occurred pursuant to
      Section 8.4(b) and (ii) the date on which the Buying Member notifies the Selling
      Member that it will not purchase such Membership Interest.

     

     

    
      
        
        

      

      
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    (d)           Termination
      of Other Agreements.  All agreements with the Selling Member or
      its Affiliates will (at the election of the Buying Member) be terminated on
      the
      date the Selling Member’s Membership Interest is purchased, and all debt owed to
      the Selling Member or any of its Affiliates shall be repaid in full by the
      Company at the closing of the purchase and sale under this Section
      8.4.

     

    ARTICLE
      IX

    BOOKS
      AND RECORDS; BANK ACCOUNTS

     

    9.1           Books
      and Records.  The books and records of the Company shall, at the
      cost and expense of the Company, be kept or caused to be kept by the Members
      at
      the principal place of business of the Company.  Such books and
      records will be kept on the basis of a calendar year, and will reflect all
      Company transactions and be appropriate and adequate for conducting the
      Company’s business.

     

    9.2           Bank
      Accounts.  All funds of the Company will be deposited in its name
      in an account or accounts maintained with such bank or banks selected by the
      Members.  The funds of the Company will not be commingled with the
      funds of any other Person.  Checks will be drawn upon the Company
      account or accounts only for the purposes of the Company and shall be signed
      by
      authorized representatives of the Company as determined by the
      Members.

     

    ARTICLE
      X

    DISSOLUTION
      AND LIQUIDATION

     

    10.1           Dissolution.  Subject
      to Section 4.5(c), the Company shall be dissolved upon the written consent
      of
      the Members.

     

    10.2           Distribution
      Upon Dissolution.

     

    (a)           Upon
      dissolution of the Company, no further business shall be conducted except for
      the taking of such action as shall be necessary for the winding up of the
      affairs of the Company and the distribution of assets pursuant to the provisions
      of this Section.  The Members shall appoint a “Liquidating
      Trustee” by unanimous vote.  The Liquidating Trustee shall have
      full authority to wind up the affairs of the Company and to make distributions
      provided herein.

     

    (b)           Upon
      dissolution of the Company, the Liquidating Trustee shall either sell the assets
      of the Company at the best price available, or the Liquidating Trustee may
      distribute to the Members all or any portion of the Company’s assets in
      kind.  If any assets are to be distributed in kind, the Liquidating
      Trustee shall ascertain the fair market value of such assets, and each Member’s
      Capital Account shall be charged or credited, as the case may be, as if such
      asset had been sold for cash at such fair market value and the Profit or Loss
      recognized thereby had been allocated to and among the Members in accordance
      with Article VII.

     

     

    
      
        
        

      

      
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    (c)           The
      net proceeds resulting from the liquidation of the assets of the Company shall
      be distributed in the same manner set forth in Section 6.2(a), and then to
      all
      Members in proportion to their positive Capital Account balances; provided,
      however, if the Capital Account balances of the Members determined on a
      tentative basis (after giving effect to all contributions, distributions and
      allocations for all periods), differ from the amounts that would be distributed
      to them pursuant to the provisions of Section 6.2 hereof, then notwithstanding
      anything to the contrary herein (except the allocations described Section 7.1(c)
      of this Agreement), items of income, gain, loss and deduction shall be specially
      allocated among the Members for the fiscal year in which the dissolution of
      the
      Company occurs (and, if necessary, prior fiscal years) in order to conform
      the
      Capital Account balances of the Members to the amounts that would be distributed
      to them pursuant to the provisions of Section 6.2.  Notwithstanding
      the foregoing, if any Member shall be indebted to the Company, then, until
      payment of such indebtedness by said Member, the Liquidating Trustee shall
      retain such Member’s distributive share of the Company properties and assets
      and, after applying the cost of operation of such properties and assets during
      the period of such liquidation against the income therefrom, the balance of
      such
      income shall be applied in liquidation of such indebtedness.  However,
      if at the expiration of two (2) months after notice of such outstanding
      indebtedness has been given to such Member, such amount has not been paid or
      otherwise liquidated in full, the Liquidating Trustee may sell the assets
      allocable to such Member at public or private sale at the best price immediately
      obtainable, such best price to be determined in the sole judgment of the
      Liquidating Trustee.  As much of the proceeds of such sale as shall be
      necessary to liquidate such indebtedness shall then be so applied, and the
      balance of such proceeds, if any, shall be distributed to such
      Member.  Any gain or loss realized for federal income tax purposes
      upon the disposition of such assets shall, to the extent permitted by law,
      be
      allocated to such Member, and to the extent not so permitted, to the Members
      in
      accordance with Article VII hereof.

     

    10.3           Cancellation
      of Certificate.  Upon the completion of the distribution of
      Company assets as provided in this Article X, the Company shall be terminated,
      and the Members shall cause the cancellation of the Certificate and all
      amendments thereto, and shall take such other actions as may be necessary or
      appropriate to terminate the Company.

     

    ARTICLE
      XI

    PARTICIPATION

     

    11.1           Reserved.

     

    11.2           Each
      of Empire and Concord shall negotiate in good faith regarding Empire’s right to
      participate in any hotel development project arising out of or in connection
      with the remaining 1,575 acres owned by Concord that is adjacent to the Concord
      Property (an “Adjacent Land Project”) as a one-half (1/2) partner and to
      acquire a fifty percent (50%) ownership interest in any entity that shall
      undertake such Adjacent Land Project, and that the participation by Empire
      in
      any such Adjacent Land Project shall be on terms and conditions substantially
      similar to the terms and conditions contained in this Agreement and in the
      Formation Agreement, as such agreements may be modified to address any unique
      conditions existing at the Adjacent Land Project and any material changes in
      the
      market that shall cause any of the terms provided for herein or in the Formation
      Agreement to be commercially unreasonable; provided, that the parties hereby
      agree that the appraised fair market value of any Adjacent Land Project shall
      be

     

     

    
      
        
        

      

      
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    determined
      based on its use for the development of a hotel, assuming that all Governmental
      Approvals necessary to pursue an Adjacent Land Project on the remaining 1,575
      acres owned by Concord have been obtained.  Notwithstanding anything
      contained in this Section 11.2 or in the Formation Agreement, Empire hereby
      agrees Concord has obtained preliminary site plan approval for a hotel-spa
      facility that shall consist of up to 200 rooms and that shall be constructed
      by
      Concord on the remaining 1,575 acres owned by Concord that is adjacent to the
      Concord Property, and that Empire shall not have any right to participate in
      the
      development of such hotel-spa facility.

     

    (a)           Concord
      shall not sell, assign or otherwise transfer any of its interests with respect
      to any hotel development project involving an Adjacent Land Project to any
      other
      person or entity other than Empire until such time as either (i) each of Concord
      and Empire agree that all negotiations between the parties have ceased and
      that
      Empire has relinquished its participation rights under this Section 11.2, (ii)
      each of Concord and Empire shall have entered into an agreement whereby Empire
      is permitted to participate in any Adjacent Land Project pursuant to the terms
      and conditions of this Section 11.2 or (iii) should legal action regarding
      the
      participation rights set forth in this Section 11.2 be instituted, the date
      of
      entry of a final judgment by a court of competent jurisdiction.

     

    ARTICLE
      XII

    GENERAL

     

    12.1           Covenants,
      Representations and Warranties of the Members. The Members agree and
      acknowledge that their Membership Interests are being acquired by them for
      investment purposes only and not with a view to any sale thereof; that they
      have
      had adequate opportunity to obtain from representatives of the Company and
      others all information necessary for purposes of evaluating the merits and
      risks
      of holding a Membership Interest; that they are able to bear the economic risk
      of holding their Membership Interests hereunder for an indefinite period; that
      the Membership Interests are illiquid assets and that there is no market in
      which to effectuate a resale thereof or any portion thereof; and that, in any
      event, the resale of their Membership Interests cannot be effectuated except
      pursuant to compliance with the registration requirements under the federal
      Securities Act of 1933, as amended, or an exemption therefrom.

     

    12.2           Further
      Assurances.  Each Member agrees to execute, acknowledge, deliver,
      file, record and publish such further instruments and documents, and do all
      such
      other acts and things as may be required by law, or as may be required to carry
      out the intent and purposes of this Agreement.

     

    12.3           Title
      to Company Property.  All property owned by the Company,
      including, whether real or personal, tangible or intangible, shall be deemed
      to
      be owned by the Company as an entity, and no Member, individually, shall have
      any ownership of such property.  The Company may hold any of its
      assets in its own name or in the name of its nominee, which nominee may be
      one
      or more Persons.

     

    12.4           Severability.  Every
      provision of this Agreement is intended to be severable.  Any
      provision of this Agreement, which is illegal, invalid, prohibited or
      unenforceable in any jurisdiction, will, as to such jurisdiction, be ineffective
      to the extent of such illegality, invalidity, prohibition
      or unenforceability without invalidating or impairing the remaining provisions
      hereof or affecting the validity or enforceability of such provision in any
      other jurisdiction.  If any term or provision hereof is illegal or
      invalid for any reason whatsoever, such illegality or invalidity will not affect
      the validity of the remainder of this Agreement.

     

     

    
      
        
        

      

      
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    12.5           Governing
      Law.  This Agreement and rights and obligations of the parties
      hereto with respect to the subject matter hereof will be interpreted and
      enforced in accordance with, and governed exclusively by, the laws of the State
      of New York, excluding the conflicts of law provisions thereof.

     

    12.6           Successors
      and Assigns.  This Agreement will be binding upon and inure to the
      benefit of the parties hereto and their permitted successors, heirs, and
      assigns.

     

    12.7           Waiver
      of Action for Partition.  Each of the Members irrevocably waives
      during the term of the Company any right that it may have to maintain any action
      for partition with respect to any property of the Company.

     

    12.8           Headings.  The
      headings of the Articles, Sections and paragraphs of this Agreement have been
      inserted for convenience of reference only and do not constitute a part of
      this
      Agreement.

     

    12.9           Counterparts.  This
      Agreement may be executed in any number of counterparts and by different parties
      in separate counterparts, with the same effect as if all parties had signed
      the
      same documents, each of which will be considered an original, but all such
      counterparts together will constitute but one and the same
      Agreement.

     

    12.10         Entire
      Agreement.  This Agreement and the Formation Agreement constitute
      the entire agreement among the parties hereto with respect to the subject matter
      hereof.  This Agreement, the Formation Agreement and the exhibits
      hereto and thereto supersede all prior written and all prior and contemporaneous
      oral agreements, understandings, negotiations and representations between the
      parties with respect to such subject matter.

     

    12.11         Amendment.  This
      Agreement may be amended only by an instrument in writing signed by all of
      the
      Members.

     

    12.12         Notices.  Any
      notice or communication which may be or is required to be given pursuant to
      the
      terms of this Agreement shall be in writing and shall be sent to the respective
      party at the addresses set forth below, postage prepaid, by certified mail,
      return receipt requested, by a nationally recognized overnight courier service
      that provides tracing and proof of receipt of items mailed or by facsimile
      provided that if notices are given by facsimile a copy thereof must be sent
      on
      the same day by nationally recognized overnight courier service that provides
      tracing and proof of receipt of items mailed for next Business Day delivery.
      Notices shall be effective upon the date of receipt or refusal of receipt.
      Either party may change the address to which notices to it shall be sent by
      a
      notice sent in accordance with the requirements of this Section
      12.12.

     

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

     

    
      
        	
                To
                  Empire:

              	
                Empire
                  Resorts, Inc.

              
	 	
                c/o
                  Monticello Raceway

              
	 	
                Route
                  17B

              
	 	
                Monticello,
                  New York  12701

              
	 	
                Attention:
                  David Hanlon

              
	 	
                Fax
                  No.: (845) 807-0000

              
	 	 
	
                With
                  a copy to:

              	
                Olshan
                  Grundman Frome Rosenzweig & Wolosky LLP

              
	 	
                65
                  East 55th Street

              
	 	
                New
                  York, New York 10022

              
	 	
                Attn:
                  Robert H. Friedman, Esq.

              
	 	
                Fax
                  No.:  (212) 451-2222

              
	 	 
	
                To
                  Company:

              	
                Concord
                  Associates, L.P.

              
	 	
                c/o
                  Cappelli Enterprises, Inc.

              
	 	
                115
                  Stevens Avenue

              
	 	
                Valhalla,
                  New York 10595

              
	 	
                Attn:
                  Louis R. Cappelli

              
	 	
                Fax
                  No.: (917) 747-2743

              
	 	 
	
                With
                  a copy to:

              	
                DelBello
                  Donnellan Weingarten

              
	 	
                Wise
                  & Wiederkehr, LLP

              
	 	
                One
                  North Lexington Avenue

              
	 	
                White
                  Plains, New York  10601

              
	 	
                Attn:  Alfred
                  E. Donnellan, Esq.

              
	 	
                Fax
                  No.:  914-684-0288

              

      

    

     

    12.13                      Construction.  None
      of the provisions of this Agreement shall be for the benefit of, or enforceable
      by, any creditors of the Company or other third parties.

     

    12.14                      Waiver.  No
      consent or waiver, express or implied, by any Member to or of any breach or
      default by any other Member in the performance by such other Member of its
      obligations under this Agreement shall be deemed or construed to be a consent
      to
      or waiver of any other breach or default in the performance by such other Member
      of the same or any other obligation of such other Member under this
      Agreement.  Failure on the part of any Member to complain of any act
      or failure to act of any other Member or to declare any other Member in default,
      irrespective of how long such failure continues, shall not constitute a waiver
      by such Member of its rights under this Agreement.

     

    12.15                      Consequential
      Damages.  Notwithstanding anything to the contrary elsewhere in
      this Agreement, no Member nor its Affiliates shall, in any event, be liable
      to
      any other Member or any of its respective Affiliates for any indirect,
      incidental, special or consequential damages, including, but not limited to,
      loss of revenue, cost of capital, loss of business reputation or opportunity
      whether such liability arises out of contract, tort (including negligence),
      strict liability or otherwise.

     

     

    
      
        
        

      

      
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    12.16                      Disputes.   All
      claims, disputes, deadlocks and other matters in question arising out of, or
      relating to, this Agreement or the breach hereof  (a “Dispute”)
      shall be decided by arbitration in accordance with this Section 12.16 unless
      otherwise mutually agreed to by the parties hereto. The agreement by the parties
      to arbitrate pursuant to this Section 12.16 shall be enforceable under
      prevailing law.

     

    (a)           Any
      Dispute subject to arbitration shall be immediately submitted to arbitration
      as
      herein provided, and in no event later than five (5) business days after the
      Dispute has occurred. If the Members have not jointly initiated arbitration
      within such five (5) business days, the arbitration may be initiated by a Member
      by giving notice to the others in accordance with Section 12.16(b)
      below.  The Members hereby agree that such arbitration proceeding
      shall be prosecuted without delay and that such proceeding shall be concluded
      and decision rendered thereon within thirty (30) days after the commencement
      thereof, it being recognized and agreed that any delay will materially and
      adversely affect the financial and other interests of the Company. Any
      arbitration under this Agreement shall take place in New York, New York under
      the authority of, and in accordance with the rules of, the American Arbitration
      Association.  The decision of the arbitrator shall be binding upon the
      parties. The costs and expenses of the arbitration proceedings and all legal
      fees, costs and expenses incurred in connection with any dispute under this
      Agreement prior to arbitration shall be paid by the non prevailing party or
      as
      otherwise equitably apportioned by the arbitrator.

     

    (b)           Written
      notice of demand (the “Demand Notice”) to arbitrate by any party to this
      Agreement shall be given to the other party and simultaneously filed with the
      American Arbitration Association. The Demand Notice shall be given within a
      reasonable time after the Dispute in question has arisen and in no event shall
      such Demand Notice be given after the date when institution of legal or
      equitable proceedings based on such Dispute shall be barred by the applicable
      statute of limitations.

     

    (c)           All
      claims related to or dependent upon each other and in existence at the time any
      matter is brought to arbitration shall be presented to and heard by the
      arbitrators even though the parties are not the same, unless a specific contract
      prohibits such consolidation.

     

    [The
      remainder of this page has been intentionally left
      blank.]

     

     

    
      
        
        

      

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

     

    
      	 	
              Concord
                Associates, L.P.

            
	 	 
	 	
              By:  Convention
                Hotels, LLC, its General Partner

            
	 	 
	 	
              By:

            	 
	 	 	
              Name:

            	
              Louis
                R. Cappelli

            
	 	 	
              Title:

            	
              Managing
                Member

            
	 	 
	 	 
	 	 
	 	
              Empire
                Resorts, Inc.

            
	 	 
	 	 
	 	 
	 	
              By:

            	 
	 	 	
              Name:

            	
              David
                P. Hanlon

            
	 	 	
              Title:

            	
              President
                and Chief Executive Officer

            

    

     

     

    
      
        
        

      

      
        83

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