EXHIBIT 10.16

                              EMPIRE RESORTS, INC.

                          SECURITIES PURCHASE AGREEMENT

            This Securities Purchase Agreement (this "AGREEMENT") is dated as of
January 26,  2004,  among Empire  Resorts,  Inc.,  a Delaware  corporation  (the
"COMPANY"),  and the purchasers identified on the signature pages hereto (each a
"PURCHASER" and collectively the "PURCHASERS"); and

            WHEREAS,  subject  to the  terms  and  conditions  set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below),
and Rule 506  promulgated  thereunder,  the Company desires to issue and sell to
the  Purchasers,  and each  Purchaser,  severally  and not  jointly,  desires to
purchase from the Company in the  aggregate,  $30,375,000 of Common Stock on the
Closing Date.

            NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained
in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

            1.1 DEFINITIONS.  In addition to the terms defined elsewhere in this
Agreement,  for all purposes of this  Agreement,  the  following  terms have the
meanings indicated in this Section 1.1:

               "ACTION" shall have the meaning  ascribed to such term in Section
            3.1(j).

               "AFFILIATE" means any Person that, directly or indirectly through
            one or more intermediaries, controls or is controlled by or is under
            common control with a Person as such terms are used in and construed
            under Rule 144.

               "BUSINESS DAY" means any day except Saturday,  Sunday and any day
            which  shall be a federal  legal  holiday or a day on which  banking
            institutions  in the State of New York are authorized or required by
            law or other governmental action to close.

               "CLOSING"  means  the  closing  of the  purchase  and sale of the
            Common Stock pursuant to Section 2.1.

               "CLOSING DATE" means the date of the Closing,  which shall be the
            date hereof.

               "COMMISSION" means the Securities and Exchange Commission.

               "COMMON  STOCK" means the common stock of the Company,  $0.01 par
            value per share, and any securities into which such common stock may
            hereafter be reclassified.

               "COMMON STOCK EQUIVALENTS" means any securities of the Company or
            the  Subsidiaries  which would entitle the holder thereof to acquire
            at any time Common Stock,  including without  limitation,  any debt,







            preferred stock, rights, options,  warrants or other instrument that
            is at any time  convertible  into or exchangeable  for, or otherwise
            entitles the holder thereof to receive, Common Stock.

               "COMPANY  COUNSEL"  means  Olshan  Grundman  Frome  Rosenzweig  &
            Wolosky LLP, counsel to the Company.

               "DISCLOSURE  SCHEDULES" means the Disclosure  Schedules  attached
            hereto.

               "EFFECTIVE DATE" means the date that the  Registration  Statement
            is first declared effective by the Commission.

               "EXCHANGE  ACT" means the  Securities  Exchange  Act of 1934,  as
            amended.

               "INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed to
            such term in Section 3.1(o).

               "LIENS" means a lien,  charge,  security  interest,  encumbrance,
            right of first refusal or other restriction.

               "MATERIAL ADVERSE EFFECT" shall have the meaning ascribed to such
            term in Section 3.1(b).

               "MATERIAL  PERMITS" shall have the meaning  ascribed to such term
            in Section 3.1(m).

               "PER SHARE  PURCHASE  PRICE" equals $7.50,  subject to adjustment
            for  reverse  and  forward  stock  splits,  stock  dividends,  stock
            combinations and other similar transactions of the Common Stock that
            occur after the date of this Agreement.

               "PERSON" means an individual or corporation,  partnership, trust,
            incorporated or unincorporated  association,  joint venture, limited
            liability company, joint stock company,  government (or an agency or
            subdivision thereof) or other entity of any kind.

               "REGISTRATION  STATEMENT" means a registration  statement meeting
            the requirements set forth in the Registration  Rights Agreement and
            covering the resale by the Purchasers of the Shares.

               "REGISTRATION  RIGHTS  AGREEMENT" means the  Registration  Rights
            Agreement, dated as of the date of this Agreement, among the Company
            and each Purchaser, in the form of Exhibit A hereto.

               "RULE 144" means Rule 144 promulgated by the Commission  pursuant
            to the  Securities  Act,  as such Rule may be  amended  from time to
            time,  or any similar rule or  regulation  hereafter  adopted by the
            Commission having substantially the same effect as such Rule.

               "SEC  REPORTS"  shall have the  meaning  ascribed to such term in
            Section 3.1(h).

               "SECURITIES" means the Shares.

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               "SECURITIES ACT" means the Securities Act of 1933, as amended.

               "SHARES"  means the shares of Common  Stock issued or issuable to
            each Purchaser pursuant to this Agreement.

               "SUBSCRIPTION  AMOUNT" means, as to each  Purchaser,  the amounts
            set forth below such  Purchaser's  signature  block on the signature
            page hereto,  in United States dollars and in immediately  available
            funds.

               "SUBSIDIARY"  means any  "significant  subsidiary"  as defined in
            Rule 1-02(w) of Regulation S-X  promulgated by the Commission  under
            the Exchange Act.

               "TRADING DAY" means (i) a day on which the Common Stock is traded
            on a Trading Market,  or (ii) if the Common Stock is not listed on a
            Trading  Market,  a day on which the  Common  Stock is traded on the
            over-the-counter  market,  as reported by the OTC Bulletin Board, or
            (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
            day on which the  Common  Stock is  quoted  in the  over-the-counter
            market as reported by the National Quotation Bureau Incorporated (or
            any similar  organization  or agency  succeeding  its  functions  of
            reporting prices); provided, that in the event that the Common Stock
            is not listed or quoted as set forth in (i),  (ii) and (iii) hereof,
            then Trading Day shall mean a Business Day.

               "TRADING  MARKET"  means the  following  markets or  exchanges on
            which the Common  Stock is listed or quoted for  trading on the date
            in  question:  the  American  Stock  Exchange,  the New  York  Stock
            Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market.

               "TRANSACTION DOCUMENTS" means this Agreement and the Registration
            Rights  Agreement and any other documents or agreements  executed in
            connection with the transactions contemplated hereunder.

                                  ARTICLE II.
                                PURCHASE AND SALE

            2.1 CLOSING.  Subject to the terms and  conditions set forth in this
Agreement,  at the Closing,  the Purchasers  shall  purchase,  severally and not
jointly,  and the Company  shall  issue and sell,  in the  aggregate,  4,050,000
shares of Common  Stock,  with each such share being  purchased at the Per Share
Purchase Price. Each Purchaser shall purchase from the Company,  and the Company
shall  issue  and sell to each  Purchaser,  a  number  of  Shares  equal to such
Purchaser's  Subscription  Amount  divided  by the Per Share  Purchase  Price as
determined  pursuant  to  Section  2.2(a).  As  soon  as  practicable  following
satisfaction  of the  conditions  set forth in Section  2.2 and  Article VI, the
Closing  shall  occur at the  offices  of  Mayer,  Brown,  Rowe & Maw LLP,  1675
Broadway,  New York, New York 10019, or such other location as the parties shall
mutually agree.

            2.2 CLOSING DELIVERIES.

                (a) At the  Closing  the  Company  shall  deliver or cause to be
      delivered to each Purchaser the following:

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                    (i) this Agreement duly executed by the Company;

                    (ii) a  certificate  evidencing  a number of Shares equal to
            such  Purchaser's  Subscription  Amount  divided  by the  Per  Share
            Purchase Price, registered in the name of such Purchaser;

                    (iii) the Registration Rights Agreement duly executed by the
            Company; and

                    (iv) the legal  opinion(s) of Company  Counsel,  executed by
            such counsel and delivered to the Purchasers,  in form and substance
            reasonably satisfactory to all Purchasers.

                 (b) At the Closing each Purchaser  shall deliver or cause to be
      delivered to the Company the following:

                    (i) this Agreement duly executed by such Purchaser;

                    (ii) such Purchaser's Subscription Amount as to such Closing
            by  wire  transfer  to the  account  designated  in  writing  by the
            Company;

                    (iii) the  Registration  Rights  Agreement  duly executed by
            such Purchaser; and

                    (iv) completed Investor Questionnaires, in the form attached
            as Exhibit B hereto, duly executed by such Purchaser.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

            7.4  REPRESENTATIONS  AND  WARRANTIES OF THE COMPANY.  Except as set
forth in the SEC Reports or under the  corresponding  section of the  Disclosure
Schedules  delivered   concurrently  herewith,  the  Company  hereby  makes  the
following  representations  and  warranties  as of the date hereof and as of the
Closing Date to each Purchaser:

                 (a) SUBSIDIARIES. The Company owns, directly or indirectly, all
      of the  capital  stock  of each  Subsidiary  free and  clear of any  lien,
      charge,  security interest,  encumbrance,  right of first refusal or other
      restriction  (collectively,  "Liens"),  and all the issued and outstanding
      shares of capital  stock of each  Subsidiary  are  validly  issued and are
      fully paid, non-assessable and free of preemptive and similar rights.

                 (b)  ORGANIZATION  AND  QUALIFICATION.  Each of the Company and
      each  Subsidiary is an entity duly  incorporated  or otherwise  organized,
      validly  existing and in good standing under the laws of the  jurisdiction
      of its  incorporation or organization (as applicable),  with the requisite
      power and authority to own and use its  properties and assets and to carry
      on its  business  as  currently  conducted.  Neither  the  Company nor any
      Subsidiary  is in violation  of any of the  provisions  of its  respective
      certificate or articles of incorporation,  bylaws or other  organizational
      or charter  documents.  Each of the Company and the  Subsidiaries  is duly
      qualified  or licensed to conduct  business  and is in good  standing as a

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      foreign  corporation  or other  entity in each  jurisdiction  in which the
      nature  of the  business  conducted  or  property  owned by it makes  such
      qualification necessary, except where the failure to be so qualified or in
      good  standing,  as the  case may be,  would  not  have or  reasonably  be
      expected  to  result in (i) a  material  adverse  effect on the  legality,
      validity or  enforceability of any Transaction  Document,  (ii) a material
      adverse effect on the results of operations, assets, business or financial
      condition of the Company and the Subsidiaries,  taken as a whole, or (iii)
      adversely impair the Company's  ability to perform in any material respect
      on a timely basis its obligations  under any Transaction  Document (any of
      (i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT").

                 (c) AUTHORIZATION;  ENFORCEMENT.  The Company has the requisite
      corporate  power  and  authority  to  execute  and  deliver  each  of  the
      Transaction documents and to enter into and to consummate the transactions
      contemplated by each of the Transaction Documents to which it is party and
      otherwise  to carry out its  obligations  thereunder.  The  execution  and
      delivery of each of the  Transaction  Documents  to which it is a party by
      the Company and the  consummation by it of the  transactions  contemplated
      thereby have been duly  authorized by all necessary  action on the part of
      the  Company  and no  further  action is  required  by the  Company or its
      stockholders in connection therewith.  Each Transaction Document including
      this Agreement has been (or upon delivery will have been) duly executed by
      the Company and, when delivered in accordance with the terms hereof,  will
      constitute  the valid and binding  obligation  of the Company  enforceable
      against the Company in accordance  with its terms except (i) as limited by
      applicable bankruptcy,  insolvency,  reorganization,  moratorium and other
      laws of general  application  affecting  enforcement of creditors'  rights
      generally  and (ii) as limited by laws  relating  to the  availability  of
      specific performance, injunctive relief or other equitable remedies.

                 (d) NO CONFLICTS.  The execution,  delivery and  performance of
      the  Transaction  Documents  to which it is a party by the Company and the
      consummation by the Company of the  transactions  contemplated  thereby do
      not and  will  not (i)  conflict  with or  violate  any  provision  of the
      Company's or any  Subsidiary's  certificate or articles of  incorporation,
      bylaws or other  organizational  or charter  documents,  or (ii)  conflict
      with,  or  constitute  a default (or an event that with notice or lapse of
      time or both would become a default)  under,  or give to others any rights
      of termination,  amendment,  acceleration or cancellation (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other instrument (evidencing a Company or Subsidiary debt or otherwise) or
      other  understanding  to which the Company or any Subsidiary is a party or
      by which any property or asset of the Company or any  Subsidiary  is bound
      or  affected,  or (iii)  conflict  with,  or result in or  constitute  any
      violation of, any award, decision,  judgment,  decree,  injunction,  writ,
      order,  subpoena,  ruling,  verdict or arbitration award entered,  issued,
      made or rendered by any federal, state, local or foreign government or any
      other Governmental Entity (each an "ORDER"), or any Law, applicable to the
      Company  or any  of  its  subsidiaries,  or to  any  of  their  respective
      properties or assets, or to any Securities;  (a) result in the creation or
      imposition  of (or the  obligation to create or impose) any Lien on any of
      the properties or assets of the Company or any of its subsidiaries,  or on
      any of the  Securities;  or (b) conflict  with, or result in or constitute

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      any violation of, or result in the  termination,  suspension or revocation
      of,  any   Authorization   applicable   to  the  Company  or  any  of  its
      subsidiaries,  or to any of their respective  properties or assets,  or to
      any of the Securities,  or result in any other impairment of the rights of
      the  holder  of any  such  Authorization;  except  in the  case of each of
      clauses  (ii)  and  (iii),  such  as  would  not,  individually  or in the
      aggregate,  have or reasonably be expected to result in a Material Adverse
      Effect.

                 (e) FILINGS,  CONSENTS AND APPROVALS.  Assuming the accuracy of
      the  representation  of each Purchaser set forth in Section 3.2 hereof, no
      registration  (including any  registration  under the  Securities  Act) or
      filing with, or any notification to, or any approval, permission, consent,
      ratification,  waiver,  authorization,   order,  finding  of  suitability,
      permit, license, franchise, exemption, certification or similar instrument
      or document (each,  an  "AUTHORIZATION")  of or from, any court,  arbitral
      tribunal, arbitrator, administrative or regulatory agency or commission or
      other  governmental  or regulatory  authority,  agency or governing  body,
      domestic or foreign,  including  without  limitation  any Indian  tribe or
      gaming  commission,  authority  or control  board (each,  a  "GOVERNMENTAL
      ENTITY"), or any other person, or under any statute, law, ordinance, rule,
      regulation or agency  requirement of any  Governmental  Entity,  including
      without limitation any gaming regulation or regulatory  requirement (each,
      a  "LAW"),  on the  part  of the  Company  or any of its  subsidiaries  is
      required in  connection  with the  execution or delivery by the Company of
      the  Transaction  Documents  or  the  performance  by the  Company  of its
      obligations  under each of the Transaction  Documents  except as would not
      have  a  material  effect  on  the  Company  or  its  performance  of  its
      obligations under the Transaction Documents.

                 (f) ISSUANCE OF THE  SECURITIES.  The Securities have been duly
      authorized   and,  when  issued  and  paid  for  in  accordance  with  the
      Transaction  Documents,  will be duly and validly  issued,  fully paid and
      nonassessable,  free and clear of all Liens,  except for such restrictions
      on transfer or ownership imposed by applicable federal or state securities
      laws or  applicable  gaming laws.  The Company has reserved  from its duly
      authorized  capital  stock the  maximum  number of shares of Common  Stock
      issuable pursuant to this Agreement.

                 (g)  CAPITALIZATION.  As of the  date  hereof,  the  authorized
      capital  stock of the Company  consists of 80,000,000  shares,  75,000,000
      shares of which are common stock,  $0.01 par value per share and 5,000,000
      shares of which are  preferred  stock,  $0.01 par value per  share.  As of
      January 12, 2004,  after giving effect to the  consolidation  described in
      the Form S-4/A filed by the Company  with the  Commission  on December 18,
      2003, there were 21,912,868  shares of common stock issued and outstanding
      and 1,774,954 shares of preferred stock issued and outstanding. Other than
      as contemplated in this Agreement,  the Company has not issued any capital
      stock since the filing of the Form S-4/A on  December  18, 2003 other than
      pursuant to the exercise of employee  stock  options  under the  Company's
      stock  option  plans,  the issuance of shares of Common Stock to employees
      pursuant to the Company's employee stock purchase plan and pursuant to the
      conversion or exercise of outstanding Common Stock Equivalents.  No Person
      has any right of first refusal,  preemptive right, right of participation,
      or any similar right to participate in the  transactions  contemplated  by
      the  Transaction  Documents.  Except as disclosed in SECTION 3.1(g) of the
      Disclosure Schedule,  there are no outstanding options,  warrants,  script
      rights to subscribe to, calls or commitments  of any character  whatsoever
      relating to, or  securities,  rights or  obligations  convertible  into or
      exchangeable  for,  or giving  any Person  any right to  subscribe  for or

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      acquire,   any  shares  of  Common  Stock,   or  contracts,   commitments,
      understandings  or  arrangements by which the Company or any Subsidiary is
      or may  become  bound to issue  additional  shares  of  Common  Stock,  or
      securities or rights  convertible  or  exchangeable  into shares of Common
      Stock;  provided,  however,  that  the  Company  will  issue  warrants  to
      Jefferies & Company,  Inc as of the Closing  Date as  contemplated  in the
      immediately following sentence.  The issue and sale of the Securities will
      not  obligate  the  Company  to  issue  shares  of  Common  Stock or other
      securities  to any Person  (other  than the shares of Common  Stock  being
      issued to the Purchasers  hereunder and warrants  exercisable  for 250,000
      shares of Common  Stock,  at an exercise  price of $7.50 per share,  to be
      issued as of the Closing to Jefferies & Company, Inc.) and will not result
      in a right of any holder of  Company  securities  to adjust the  exercise,
      conversion, exchange or reset price under such securities.

                 (h) SEC REPORTS;  FINANCIAL  STATEMENTS.  The Company has filed
      all reports  required to be filed by it under the  Securities  Act and the
      Exchange Act,  including  pursuant to Section 13(a) or 15(d) thereof,  for
      the two years  preceding  the date hereof (or such  shorter  period as the
      Company  was  required  by law  to  file  such  material)  (the  foregoing
      materials,  including the exhibits thereto, being collectively referred to
      herein as the "SEC REPORTS" and, together with the Disclosure Schedules to
      this  Agreement,  the  "DISCLOSURE  MATERIALS")  on a timely  basis or has
      timely  filed a valid  extension  of such time of filing and has filed any
      such SEC  Reports  prior to the  expiration  of any  such  extension.  The
      Company has informed each Purchaser prior to the date hereof of any filing
      by the Company of any SEC Reports  within the 10 days  preceding  the date
      hereof.  As of their  respective  dates,  the SEC Reports  complied in all
      material  respects with the  requirements  of the  Securities  Act and the
      Exchange Act and the rules and  regulations of the Commission  promulgated
      thereunder,  and none of the SEC Reports, when filed, contained any untrue
      statement of a material  fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in light of the circumstances  under which they were made, not misleading.
      The financial statements of the Company included in the SEC Reports comply
      in all material respects with applicable  accounting  requirements and the
      rules and  regulations of the Commission with respect thereto as in effect
      at the time of filing.  Such  financial  statements  have been prepared in
      accordance  with generally  accepted  accounting  principles  applied on a
      consistent  basis during the periods involved  ("GAAP"),  except as may be
      otherwise specified in such financial  statements or the notes thereto and
      except that unaudited  financial  statements may not contain all footnotes
      required  by  GAAP,  and  fairly  present  in all  material  respects  the
      financial position of the Company and its consolidated  subsidiaries as of
      and for the dates thereof and the results of operations and cash flows for
      the periods then ended, subject, in the case of unaudited  statements,  to
      normal, immaterial, year-end audit adjustments.

                 (i)  MATERIAL  CHANGES.  Since the date of the  latest  audited
      financial statements included within the SEC Reports,  except as disclosed
      in the SEC Reports, (i) there has been no event, occurrence or development
      that has had or that could  reasonably be expected to result in a Material
      Adverse  Effect,  (ii)  the  Company  has  not  incurred  any  liabilities
      (contingent  or  otherwise)  other  than (A) trade  payables  and  accrued
      expenses incurred in the ordinary course of business  consistent with past
      practice and (B) liabilities that would not be required to be reflected in
      the Company's  financial  statements pursuant to GAAP or that would not be

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      required to be disclosed in filings  made with the  Commission,  (iii) the
      Company has not altered its method of accounting, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its stockholders or purchased, redeemed or made any agreements to purchase
      or redeem  any shares of its  capital  stock and (v) the  Company  has not
      issued any equity securities to any officer, director or Affiliate, except
      pursuant to existing Company stock option plans. The Company does not have
      pending before the Commission  any request for  confidential  treatment of
      information.

                 (j) LITIGATION.  Except as disclosed in the SEC Reports,  there
      are no actions,  suits,  inquiries,  notices of violation,  proceedings or
      investigations  pending or, to the  knowledge of the  Company,  threatened
      against  or  affecting  the  Company,  any  Subsidiary  or  any  of  their
      respective properties before or by any court, arbitrator,  governmental or
      administrative  agency or regulatory  authority (federal,  state,  county,
      local or foreign) (collectively,  an "ACTION") which (i) adversely affects
      or  challenges  the  legality,  validity or  enforceability  of any of the
      Transaction  Documents or the  Securities or (ii) could,  if there were an
      unfavorable  decision,  have or  reasonably  be  expected  to  result in a
      Material Adverse Effect.  Neither the Company nor any Subsidiary,  nor any
      director  or  officer  thereof,  is or has been the  subject of any Action
      involving a claim of  violation  of or  liability  under  federal or state
      securities  laws or a claim of breach  of  fiduciary  duty.  There has not
      been,  and to the  knowledge  of the  Company,  there  is not  pending  or
      contemplated, any investigation by the Commission involving the Company or
      any current or former  director or officer of the Company.  The Commission
      has not issued any stop order or other order suspending the  effectiveness
      of any registration statement filed by the Company or any Subsidiary under
      the Exchange Act or the Securities Act.

                 (k) LABOR  RELATIONS.  No material  labor dispute exists or, to
      the  knowledge  of the  Company,  is imminent  with  respect to any of the
      employees of the Company which could reasonably be expected to result in a
      Material Adverse Effect.

                 (l)  COMPLIANCE.  Neither the Company nor any Subsidiary (i) is
      in default  under or in violation  of (and no event has occurred  that has
      not been waived that,  with notice or lapse of time or both,  could result
      in a default by the Company or any Subsidiary  under), nor has the Company
      or any Subsidiary  received  notice of a claim that it is in default under
      or that it is in violation of, any  agreement,  credit  facility,  debt or
      other instrument (evidencing a Company or Subsidiary debt or otherwise) or
      other  understanding  to which the Company or any Subsidiary is a party or
      by which any property or asset of the Company or any  Subsidiary  is bound
      or affected  (whether or not such default or violation  has been  waived),
      (ii) is in violation of any order of any court, arbitrator or governmental
      body, or (iii) to the Company's knowledge,  is or has been in violation of
      any statute, rule or regulation of any governmental  authority,  including
      without limitation all foreign,  federal, state and local laws relating to
      taxes,  environmental protection,  occupational health and safety, product
      quality  and safety and  employment,  labor  matters  and gaming  matters,
      except in each case as would not,  individually or in the aggregate,  have
      or  reasonably  be expected to result in a Material  Adverse  Effect.  The
      Company  is  in  compliance  with  the  applicable   requirements  of  the
      Sarbanes-Oxley  Act of  2002  and the  rules  and  regulations  thereunder
      promulgated by the Commission,  except where such noncompliance  would not
      have or reasonably be expected to result in a Material Adverse Effect.

                                       8





                 (m)  REGULATORY  PERMITS.  The  Company  and  the  Subsidiaries
      possess  all  certificates,  authorizations  and  permits  issued  by  the
      appropriate  federal,  state,  local  or  foreign  regulatory  authorities
      necessary to conduct their  respective  businesses as described in the SEC
      Reports,  except where the failure to possess such permits  would not have
      or  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect
      ("MATERIAL  PERMITS"),  and neither the  Company  nor any  Subsidiary  has
      received  any  notice  of  proceedings   relating  to  the  revocation  or
      modification of any Material Permit.

                 (n) TITLE TO ASSETS. The Company and the Subsidiaries have good
      and marketable title in fee simple to all real property owned by them that
      is material to their  respective  businesses and good and marketable title
      in all  personal  property  owned  by  them  that  is  material  to  their
      respective  businesses,  in each case free and clear of all Liens,  except
      for Liens as do not materially  affect the value of such property,  do not
      materially  interfere  with the use made and  proposed  to be made of such
      property by the Company and the Subsidiaries and, in each case, would not,
      individually or in the aggregate, reasonably be expected to have or result
      in a  Material  Adverse  Effect.  To the  Company's  knowledge,  any  real
      property  and  facilities   held  under  lease  by  the  Company  and  the
      Subsidiaries  are held by them under  valid,  subsisting  and  enforceable
      leases of which the Company and the Subsidiaries are in compliance except,
      in each case, as would not  reasonably be expected to result in a Material
      Adverse Effect.

                 (o) PATENTS AND  TRADEMARKS.  The Company and the  Subsidiaries
      own (and are the record owner of) or possess adequate licenses to use, all
      patents, patent applications,  trademarks, trademark applications, service
      marks,  trade  names,  copyrights,   licenses,  confidential  information,
      technology  and  other  similar   rights  (and  all  goodwill   associated
      therewith)  that are necessary or that are used in  connection  with their
      respective  businesses  as  described  in the SEC  Reports  and  which the
      failure to so own or have would, individually or in the aggregate, have or
      reasonably   be   expected  to  result  in  a  Material   Adverse   Effect
      (collectively,  the "INTELLECTUAL  PROPERTY RIGHTS").  Neither the Company
      nor  any  Subsidiary  has  received  a  written  notice  that  any  of the
      Intellectual  Property Rights violates or infringes upon or conflicts with
      the rights of any Person.  Except as set forth in the SEC  Reports,  or as
      would not reasonably be expected to result in a Material  Adverse  Effect,
      to the knowledge of the Company, all such Intellectual Property Rights are
      enforceable and there is no existing infringement by another Person of any
      of the Intellectual Property Rights.

                 (p) INSURANCE.  The Company and the Subsidiaries are insured by
      insurers of recognized  financial  responsibility  against such losses and
      risks and in such amounts as are prudent and  customary in the  businesses
      in which the Company and the Subsidiaries are engaged. Neither the Company
      nor any  Subsidiary  has any reason to believe that it will not be able to
      renew its existing insurance coverage as and when such coverage expires or
      to obtain  similar  coverage from similar  insurers as may be necessary to
      continue its business without a significant increase in cost.

                 (q) TRANSACTIONS  WITH AFFILIATES AND EMPLOYEES.  Except as set
      forth in the SEC Reports, none of the officers or directors of the Company
      and, to the knowledge of the Company, none of the employees of the Company
      is presently a party to any transaction with the Company or any Subsidiary
      (other than for services as employees, officers and directors),  including

                                       9





      any contract,  agreement or other arrangement providing for the furnishing
      of services to or by, providing for rental of real or personal property to
      or from, or otherwise requiring payments to or from any officer,  director
      or such employee or, to the knowledge of the Company,  any entity in which
      any officer,  director, or any such employee has a substantial interest or
      is an officer,  director,  trustee or  partner,  in each case in excess of
      $60,000  other  than (a) for  payment  of  salary or  consulting  fees for
      services  rendered,  (b)  reimbursement for expenses incurred on behalf of
      the Company and (c) for other employee  benefits,  including  stock option
      agreements under any stock option plan of the Company.

                 (r) INTERNAL ACCOUNTING  CONTROLS.  The Company and each of its
      subsidiaries maintains a system of internal accounting controls sufficient
      to provide  reasonable  assurance  that (i)  transactions  are executed in
      accordance  with  management's  general or specific  authorizations,  (ii)
      transactions are recorded as necessary to permit  preparation of financial
      statements in conformity  with GAAP and to maintain asset  accountability,
      (iii) access to assets is permitted only in accordance  with  management's
      general or specific  authorization,  and (iv) the recorded  accountability
      for assets is compared with the existing  assets at  reasonable  intervals
      and  appropriate  action is taken  with  respect to any  differences.  The
      Company has established  disclosure controls and procedures (as defined in
      Exchange Act Rules  13a-14 and 15d-14) for the Company and  designed  such
      disclosure  controls and  procedures to ensure that  material  information
      relating to the Company, including its subsidiaries,  is made known to the
      certifying  officers by others within those entities,  particularly during
      the period in which the  Company's  Form 10-K or 10-Q, as the case may be,
      is being prepared.  The Company's  certifying  officers have evaluated the
      effectiveness of the Company's controls and procedures as of a date within
      90 days prior to the filing  date of the Form 10-Q for the  quarter  ended
      September  30,  2003 (such  date,  the  "EVALUATION  DATE").  The  Company
      presented  in  its  most  recently  filed  Form  10-K  or  Form  10-Q  the
      conclusions of the  certifying  officers  about the  effectiveness  of the
      disclosure  controls and procedures  based on their  evaluations as of the
      Evaluation Date. Since the Evaluation Date, there have been no significant
      changes in the  Company's  internal  controls  (as such term is defined in
      Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company's
      knowledge,  in other factors that could significantly affect the Company's
      internal controls.

                 (s) SOLVENCY.  Based on the financial  condition of the Company
      as of  the  Closing  Date  (and  assuming  that  the  Closing  shall  have
      occurred), (i) the Company's fair saleable value of its assets exceeds the
      amount that will be required to be paid on or in respect of the  Company's
      existing  debts  and  other   liabilities   (including   known  contingent
      liabilities) as they mature;  (ii) the Company's  assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year as now  conducted  and as  proposed  to be  conducted  including  its
      capital needs taking into account the particular  capital  requirements of
      the business conducted by the Company,  and projected capital requirements
      and capital  availability  thereof; and (iii) the current cash flow of the
      Company,  together with the proceeds the Company would receive, were it to
      liquidate  all of its assets,  after taking into  account all  anticipated
      uses of the cash,  would be sufficient to pay all amounts on or in respect
      of its debt when such  amounts are  required to be paid.  The Company does
      not intend to incur  debts  beyond  its  ability to pay such debts as they

                                       10





      mature  (taking  into account the timing and amounts of cash to be payable
      on or in respect of its debt).

                 (t) CERTAIN FEES.  Other than fees paid to Jefferies & Company,
      Inc., no brokerage or finder's fees or commissions  are or will be payable
      by the Company to any broker,  financial  advisor or  consultant,  finder,
      placement agent,  investment banker,  bank or other Person with respect to
      the transactions contemplated by this Agreement. The Purchasers shall have
      no obligation  with respect to any fees or with respect to any claims made
      by or on behalf of other Persons for fees of a type  contemplated  in this
      Section that may be due in connection with the  transactions  contemplated
      by this Agreement.

                 (u) CERTAIN REGISTRATION MATTERS.  Assuming the accuracy of the
      Purchasers'   representations   and   warranties   set  forth  in  Section
      3.2(b)-(e),  no registration  under the Securities Act is required for the
      offer and sale of the Shares by the  Company to the  Purchasers  under the
      Transaction  Documents.  The Company is eligible to register the resale of
      its Common Stock for resale by the Purchasers  under Form S-3  promulgated
      under the Securities Act.

                 (v) REGISTRATION  RIGHTS.  No Person has any right to cause the
      Company  to  effect  the  registration  under  the  Securities  Act of any
      securities of the Company.

                 (w) LISTING AND MAINTENANCE  REQUIREMENTS.  Except as specified
      in the SEC  Reports,  the  Company  has  not,  in the  twenty-four  months
      preceding  the date  hereof,  received  notice from any Trading  Market on
      which the Common  Stock is or has been listed or quoted to the effect that
      the  Company  is  not  in  compliance  with  the  listing  or  maintenance
      requirements of such Trading Market.  The Company is, and has no reason to
      believe  that it will not in the  foreseeable  future  continue  to be, in
      compliance with all such listing and maintenance requirements. The Company
      is in  compliance  with  the  listing  and  maintenance  requirements  for
      continued listing of the Common Stock on the Nasdaq National Market.

                 (x)  INVESTMENT  COMPANY.  The Company is not, and after giving
      effect  to the  sale  of the  Securities  and the  application  of the net
      proceeds  therefrom,  will not be,  an  "investment  company"  within  the
      meaning of the Investment Company Act of 1940, as amended, or an Affiliate
      of an "investment company."

                 (y)  APPLICATION OF TAKEOVER  PROTECTIONS.  The Company and its
      Board of Directors  have taken all necessary  action,  if any, in order to
      render inapplicable any control share acquisition,  business  combination,
      poison pill (including any distribution under a rights agreement) or other
      similar  anti-takeover   provision  under  the  Company's  Certificate  of
      Incorporation  (or similar charter  documents) or the laws of its state of
      incorporation  or any agreement to which the Company is a party that is or
      could become  applicable to the  Purchasers as a result of the  Purchasers
      and the Company  fulfilling  their  obligations or exercising their rights
      under  the  Transaction   Documents,   including  without  limitation  the
      Company's issuance of the Securities and the Purchasers'  ownership of the
      Securities.

                                       11





                 (z) NO  ADDITIONAL  AGREEMENTS.  The Company  does not have any
      agreement  or  understanding  with  any  Purchaser  with  respect  to  the
      transactions  contemplated  by the  Transaction  Documents  other  than as
      specified in this Agreement.

                 (aa) DISCLOSURE. The Company confirms that, neither the Company
      nor  any  other  Person  acting  on its  behalf  has  provided  any of the
      Purchasers  or  their  agents  or  counsel  with  any   information   that
      constitutes or might  constitute  material,  non-public  information.  The
      Company  understands  and confirms  that the  Purchasers  will rely on the
      foregoing  representations  and  covenants  in effecting  transactions  in
      securities  of the  Company.  All  disclosure  provided to the  Purchasers
      regarding  the Company,  its business  and the  transactions  contemplated
      hereby, including the Disclosure Schedules to this Agreement, furnished by
      or on behalf of the  Company  are true and  correct and do not contain any
      untrue  statement of a material  fact or omit to state any  material  fact
      necessary in order to make the  statements  made therein,  in light of the
      circumstances under which they were made, not misleading.

                 (bb)  REGULATION  D. None of the Company or any  affiliate  (as
      defined  in Rule  501(b)  of  Regulation  D  ("REGULATION  D")  under  the
      Securities  Act)  of the  Company  has  directly,  or  through  any  agent
      (provided that no representation is made as to the Agent or its affiliates
      or any person acting on its behalf), (a) sold, offered for sale, solicited
      offers to buy or  otherwise  negotiated  in  respect of any  security  (as
      defined in the  Securities  Act) which is or will be  integrated  with the
      sale of the Securities in a manner that would require the  registration of
      the  Securities  under the  Securities  Act or; (b) engaged in or used any
      form of general solicitation or general advertising (within the meaning of
      Regulation D) in  connection  with the sale of the  Securities,  including
      articles,  notices or other  communications  published  in any  newspaper,
      magazine or similar medium or broadcast over  television or radio,  or any
      seminar or  meeting  whose  attendees  have been  invited  by any  general
      solicitation or general advertising.

                 (cc)  CLOSING  OF  MERGER.  The  Company  has  consummated  its
      acquisition of Monticello  Raceway  Management,  Inc.,  Monticello  Casino
      Management,  LLC, Monticello Raceway Development  Company,  LLC and Mohawk
      Management,  LLC, on the terms and conditions described in Amendment No. 4
      to Form S-4, as filed by the Company with the  Commission  on December 18,
      2003.

            3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

                 (a) ORGANIZATION;  AUTHORITY.  Such Purchaser is an entity duly
      organized,  validly  existing and in good  standing  under the laws of the
      jurisdiction  of  its  organization   with  the  requisite   corporate  or
      partnership  power  and  authority  to enter  into and to  consummate  the
      transactions  contemplated  by the  applicable  Transaction  Documents and
      otherwise to carry out its obligations thereunder. The execution, delivery
      and performance by such Purchaser of the transactions contemplated by this
      Agreement has been duly authorized by all necessary  corporate or, if such
      Purchaser  is  not a  corporation,  such  partnership,  limited  liability
      company or other  applicable  like action,  on the part of such Purchaser.
      Each of this Agreement and the Registration Rights Agreement has been duly

                                       12





      executed  by such  Purchaser,  and when  delivered  by such  Purchaser  in
      accordance  with  terms  hereof,  will  constitute  the valid and  legally
      binding obligation of such Purchaser, enforceable against it in accordance
      with its terms.

                 (b)  INVESTMENT   INTENT.   Such  Purchaser  is  acquiring  the
      Securities as principal for its own account for  investment  purposes only
      and not with a view to or for distributing or reselling such Securities or
      any part thereof,  without prejudice,  however, to such Purchaser's right,
      subject  to the  provisions  of this  Agreement,  at all  times to sell or
      otherwise  dispose of all or any part of such  Securities  pursuant  to an
      effective  registration  statement  under the  Securities  Act or under an
      exemption  from  such   registration  and  otherwise  in  compliance  with
      applicable  federal and state securities laws.  Subject to the immediately
      preceding   sentence,   nothing   contained   herein  shall  be  deemed  a
      representation  or warranty by such  Purchaser to hold the  Securities for
      any period of time.  Such Purchaser is acquiring the Securities  hereunder
      in the ordinary  course of its business.  Such Purchaser does not have any
      agreement or  understanding,  directly or  indirectly,  with any Person to
      distribute any of the Securities.

                 (c) PURCHASER  STATUS.  At the time such  Purchaser was offered
      the  Securities,  it was,  and at the  date  hereof  it is an  "accredited
      investor"  as  defined  in Rule  501(a)  under the  Securities  Act.  Such
      Purchaser  is not  required  to be  registered  as a  broker-dealer  under
      Section 15 of the Exchange Act.

                 (d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser,  either alone
      or together with its representatives,  has such knowledge,  sophistication
      and  experience in business and  financial  matters so as to be capable of
      evaluating  the  merits  and risks of the  prospective  investment  in the
      Securities,  and has so evaluated the merits and risks of such investment.
      Such  Purchaser is able to bear the economic  risk of an investment in the
      Securities  and, at the present time, is able to afford a complete loss of
      such investment.

                 (e) GENERAL SOLICITATION.  Such Purchaser is not purchasing the
      Securities  as a result  of any  advertisement,  article,  notice or other
      communication   regarding  the  Securities  published  in  any  newspaper,
      magazine  or  similar  media  or  broadcast  over  television  or radio or
      presented  at any  seminar or any other  general  solicitation  or general
      advertisement.

                 (f) REGISTRATION REQUIRED. Such Purchaser hereby covenants with
      the Company not to make any sale of the Shares without  complying with the
      provisions hereof and of the Registration  Rights  Agreement,  and without
      effectively  causing  the  prospectus   delivery   requirement  under  the
      Securities  Act to be  satisfied  (unless  such  Purchaser is selling such
      Shares  in  a  transaction   not  subject  to  the   prospectus   delivery
      requirement),  and  such  Purchaser  acknowledges  that  the  certificates
      evidencing the Shares will be imprinted with a legend that prohibits their
      transfer except in accordance therewith.

                 (g) ACCESS TO INFORMATION.  Such Purchaser acknowledges that it
      has  reviewed  the  Disclosure  Materials  and has been  afforded  (i) the
      opportunity  to ask such  questions as it has deemed  necessary of, and to
      receive answers from,  representatives of the Company concerning the terms
      and  conditions  of the offering of the Shares and the merits and risks of
      investing in the Securities;  (ii) access to information about the Company

                                       13





      and the Subsidiaries and their respective financial condition,  results of
      operations,  business, properties,  management and prospects sufficient to
      enable it to evaluate its investment;  and (iii) the opportunity to obtain
      such  additional  information  that the Company  possesses  or can acquire
      without  unreasonable  effort  or  expense  that is  necessary  to make an
      informed investment decision with respect to the investment.  Neither such
      inquiries  nor any other  investigation  conducted by or on behalf of such
      Purchaser or its representatives or counsel shall modify,  amend or affect
      such Purchaser's right to rely on the truth,  accuracy and completeness of
      the Disclosure Materials and the Company's  representations and warranties
      contained in the Transaction Documents.

                 (h) CERTAIN  FEES.  Except for the fees that will be payable by
      the Company under Section 3.1(t),  such Purchaser has not entered into any
      agreement  or  arrangement  that  would  entitle  any  broker or finder to
      compensation  by the  Company in  connection  with the sale of the Company
      Securities to such Purchaser

                 (i)  NO  TAX,  LEGAL  OR  INVESTMENT  ADVICE.   Such  Purchaser
      understands  that  nothing  in the  Transaction  Documents  or  any  other
      materials  presented to such Purchaser in connection with the purchase and
      sale of the Securities  constitutes tax, legal, or investment advice. Such
      Purchaser has consulted such tax, legal, and investment advisors as it, in
      its sole  discretion,  has deemed  necessary or  appropriate in connection
      with its purchase of Securities.

                 (j) Such Purchaser  represents and warrants that it is aware of
      the  following  Telephone  Interpretation  in the SEC  Manual of  Publicly
      Available Telephone Interpretations (July 1997):

                 A.65. Section 5

                 An issuer filed a Form S-3 registration statement for
                 a secondary offering of common stock which is not yet
                 effective.  One of the selling shareholders wanted to
                 do a short sale of common stock "against the box" and
                 cover the short sale with registered shares after the
                 effective date. The issuer was advised that the short
                 sale  could  not  be  made  before  the  registration
                 statement  becomes  effective,   because  the  shares
                 underlying  the short  sale are  deemed to be sold at
                 the time such sale is made.  There would,  therefore,
                 be a  violation  of  Section  5 if  the  shares  were
                 effectively sold prior to the effective date.

                 (k) Such Purchaser  represents and warrants that, in connection
      with its purchase of the  Securities,  it has complied with all applicable
      provisions of the Act, the rules and  regulations  promulgated  by the SEC
      thereunder, including Regulation M, and applicable state securities laws.

            The Company  acknowledges  and agrees that each  Purchaser  does not
make or has not made any  representations  or  warranties  with  respect  to the
transactions contemplated hereby other than those specifically set forth in this
Section 3.2.

                                       14





                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

            4.1 TRANSFER RESTRICTIONS.

                 (a) The Securities  may only be disposed of in compliance  with
      state and federal  securities  laws,  including  pursuant to an  exemption
      therefrom.  In connection  with any transfer of the Securities  other than
      pursuant to an effective registration statement, pursuant to paragraph (k)
      of  Rule  144,  to the  Company,  to an  Affiliate  of a  Purchaser  or in
      connection with a pledge as  contemplated  in Section 4.1(b),  the Company
      may require the transferor thereof to provide to the Company an opinion of
      counsel  selected  by the  transferor,  the  form and  substance  of which
      opinion shall be  reasonably  satisfactory  to the Company,  to the effect
      that such  transfer  does not  require  registration  of such  transferred
      Securities under the Securities Act. As a condition of transfer,  any such
      transferee  shall  agree  in  writing  to be  bound  by the  terms of this
      Agreement  and shall have the rights of a Purchaser  under this  Agreement
      and the Registration Rights Agreement.

                 (b)  The  Purchasers  agree  to the  imprinting,  so long as is
      required by this Section  4.1(b),  of a legend on any of the Securities in
      the following form:

                 THESE  SECURITIES  HAVE NOT BEEN  REGISTERED WITH THE
                 SECURITIES AND EXCHANGE  COMMISSION OR THE SECURITIES
                 COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
                 FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933,
                 AS AMENDED (THE "SECURITIES ACT"), AND,  ACCORDINGLY,
                 MAY NOT BE  OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
                 EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
                 A  TRANSACTION  NOT  SUBJECT  TO,  THE   REGISTRATION
                 REQUIREMENTS  OF THE SECURITIES ACT AND IN ACCORDANCE
                 WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
                 A LEGAL OPINION OF COUNSEL TO THE  TRANSFEROR TO SUCH
                 EFFECT,  THE  SUBSTANCE OF WHICH SHALL BE  REASONABLY
                 ACCEPTABLE TO THE COMPANY.  THESE  SECURITIES  MAY BE
                 PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
                 WITH A REGISTERED  BROKER-DEALER OR OTHER LOAN WITH A
                 FINANCIAL   INSTITUTION   THAT   IS  AN   "ACCREDITED
                 INVESTOR"   AS  DEFINED  IN  RULE  501(a)  UNDER  THE
                 SECURITIES ACT.

                 The Company  acknowledges  and agrees that a Purchaser may from
      time to time pledge  and/or grant a security  interest  pursuant to a bona
      fide margin agreement in a bona fide margin account and, if required under
      the terms of such  arrangement,  agreement or account,  such Purchaser may
      transfer pledged or secured Securities to the pledgees or secured parties.
      Such a pledge or transfer  would not be subject to approval of the Company
      and no legal  opinion of legal  counsel of the pledgee,  secured  party or
      pledgor  shall  be  required  in  connection  therewith.  However,  at the
      discretion  of  the  Company,  such  legal  opinion  may  be  required  in
      connection with a subsequent  transfer  following default by the Purchaser
      transferee of the pledge.  No notice shall be required of such pledge.  At

                                       15





      the appropriate  Purchaser's expense, the Company will execute and deliver
      such reasonable  documentation as a pledgee or secured party of Securities
      may  reasonably  request in  connection  with a pledge or  transfer of the
      Securities,  including,  if the  Securities  are  subject to  registration
      pursuant to the Registration Rights Agreement,  the preparation and filing
      of any  required  prospectus  supplement  under Rule  424(b)(3)  under the
      Securities  Act or other  applicable  provision of the  Securities  Act to
      appropriately amend the list of Selling Stockholders thereunder.

                 (c)  Certificates  evidencing  the Shares shall not contain any
      legend  (including  the legend set forth in Section  4.1(b)),  (i) while a
      registration statement (including the Registration Statement) covering the
      resale of such  security is effective  under the  Securities  Act, or (ii)
      following  any sale of such Shares  pursuant to Rule 144, or (iii) if such
      Shares are eligible for sale under Rule 144(k),  or (iv) if such legend is
      not  required  under   applicable   requirements  of  the  Securities  Act
      (including judicial interpretations and pronouncements issued by the Staff
      of the  Commission).  The Company shall cause its counsel to issue a legal
      opinion to the Company's  transfer agent promptly after the Effective Date
      if required by the Company's  transfer  agent to effect the removal of the
      legend hereunder.  The Company agrees that following the Effective Date or
      at such time as such  legend  is no longer  required  under  this  Section
      4.1(c),  it will, no later than three Trading Days  following the delivery
      by a  Purchaser  to the  Company  or the  Company's  transfer  agent  of a
      certificate  representing  Shares,  as  the  case  may  be,  issue  with a
      restrictive  legend (such date,  the "LEGEND  REMOVAL  DATE"),  deliver or
      cause to be delivered to such  Purchaser a certificate  representing  such
      Securities  that is free  from all  restrictive  and  other  legends.  The
      Company may not make any notation on its records or give  instructions  to
      any  transfer  agent of the  Company  that  enlarge  the  restrictions  on
      transfer set forth in this Section.

                 (d) Each  Purchaser,  severally  and not jointly with the other
      Purchasers,  agrees  that  the  removal  of the  restrictive  legend  from
      certificates  representing  Securities as set forth in this Section 4.1 is
      predicated  upon the Company's  reliance that the Purchaser  will sell any
      Securities  pursuant  to  either  the  registration  requirements  of  the
      Securities Act, including any applicable prospectus delivery requirements,
      or an exemption therefrom.

            4.2  FURNISHING OF  INFORMATION.  As long as any Purchaser  owns the
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange  Act.  Upon the request of any such holder of  Securities,  the Company
shall  deliver  to such  holder a  written  certification  of a duly  authorized
officer as to whether it has complied  with the preceding  sentence.  As long as
any Purchaser  owns  Securities,  if the Company is not required to file reports
pursuant to such laws,  it will prepare and furnish to the  Purchasers  and make
publicly  available  in  accordance  with Rule  144(c)  such  information  as is
required for the Purchasers to sell the  Securities  under Rule 144. The Company
further  covenants  that it will  take  such  further  action  as any  holder of
Securities may reasonably request,  all to the extent required from time to time
to enable such Person to sell such  Securities  without  registration  under the
Securities Act within the limitation of the exemptions provided by Rule 144.

            4.3  INTEGRATION.  The  Company  shall not  sell,  offer for sale or
solicit  offers to buy or  otherwise  negotiate  in respect of any  security (as
defined in Section 2 of the  Securities  Act) that would be integrated  with the

                                       16





offer or sale of the Securities in a manner that would require the  registration
under the Securities Act of the sale of the Securities to the Purchasers or that
would be integrated with the offer or sale of the Securities for purposes of the
rules  and  regulations  of any  Trading  Market  such  that  it  would  require
shareholder  approval  prior to the  closing  of such other  transaction  unless
shareholder   approval  is  obtained  before  the  closing  of  such  subsequent
transaction.

            4.4 FURTHER ISSUANCES.  Except as otherwise contemplated herein, the
Company will not issue,  sell, offer or agree to sell, or otherwise  dispose of,
directly or indirectly, securities of the Company that are substantially similar
to the Common Stock or any  securities  convertible  into,  or  exercisable,  or
exchangeable  for, Common Stock; or publicly announce an intention to effect any
such  transaction,  during the period  beginning as of the Closing and ending on
the date which is the later to occur of (a) 120 days  following the Closing Date
and (b) the Effective Date (as defined in the  Registration  Rights  Agreement);
provided,  however,  that the Company may (i) issue Common Stock pursuant to any
stock option plan,  stock option  agreement,  stock  ownership  plan or dividend
reinvestment plan of the Company that is currently in effect and is disclosed in
the SEC  Reports  or in  SECTION  4.4 of the  Disclosure  Schedules;  (ii) issue
options to  purchase  Common  Stock  pursuant  to any stock  option plan that is
currently in effect and is disclosed in the SEC Reports or in SECTION 4.4 of the
Disclosure  Schedules;  (iii) issue Common Stock issuable upon the conversion of
securities or the exercise of warrants  outstanding  at the Closing;  (iv) issue
Common Stock or any other security  substantially similar to the Common Stock to
a seller in connection with an acquisition  transaction,  and (v) engage in such
other transactions, if any, agreed in writing by the Lead Purchaser.

            4.5 SECURITIES  LAWS  DISCLOSURE;  PUBLICITY.  The Company shall, by
8:30 a.m. Eastern time on the Business Day following the date of this Agreement,
issue a press  release  or file a  Current  Report  on Form  8-K,  in each  case
reasonably acceptable to each Purchaser disclosing the transactions contemplated
hereby and make such other  filings and notices in the manner and time  required
by the Commission.  The Company and each Purchaser shall consult with each other
in issuing any press  releases  with  respect to the  transactions  contemplated
hereby,  and neither the  Company nor any  Purchaser  shall issue any such press
release or otherwise make any such public statement without the prior consent of
the Company, with respect to any press release of any Purchaser,  or without the
prior  consent  of each  Purchaser,  with  respect  to any press  release of the
Company,  which  consent  shall not  unreasonably  be  withheld,  except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide  the  other  party  with  prior  notice  of  such  public  statement  or
communication.  Notwithstanding  the  foregoing,  the Company shall not publicly
disclose the name of any Purchaser,  or include the name of any Purchaser in any
filing with the Commission or any regulatory  agency or Trading Market,  without
the prior written consent of such  Purchaser,  except (i) as required by federal
securities law in connection with the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure is required
by law or Trading  Market  regulations,  in which case the Company shall provide
the Purchasers  with prior notice of such  disclosure  permitted under subclause
(i) or (ii).  Subject to the  foregoing,  neither the Company nor any  Purchaser
shall issue any press  releases or any other public  statements  with respect to
the transactions contemplated hereby; provided,  however, that the Company shall
be  entitled,  without the prior  approval of any  Purchaser,  to make any press
release or other  public  disclosure  with respect to such  transactions  (i) in
substantial  conformity with the 8-K Filing and contemporaneously  therewith and
(ii) as is required by applicable law and regulations (provided that in the case

                                       17





of clause (i) each  Purchaser  shall be consulted  by the Company in  connection
with any such press release or other public disclosure prior to its release).

            4.6  SHAREHOLDERS  RIGHTS PLAN. No claim will be made or enforced by
the Company or any other  Person that any  Purchaser  is an  "Acquiring  Person"
under any  shareholders  rights plan or similar plan or arrangement in effect or
hereafter  adopted  by the  Company,  or that any  Purchaser  could be deemed to
trigger the provisions of any such plan or  arrangement,  by virtue of receiving
Securities under the Transaction  Documents or under any other agreement between
the Company and the Purchasers.

            4.7 NON-PUBLIC  INFORMATION.  The Company  covenants and agrees that
neither it nor any other Person  acting on its behalf will provide any Purchaser
or its  agents  or  counsel  with  any  information  that the  Company  believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be  relying  on the  foregoing  representations  in  effecting  transactions  in
securities of the Company.

            4.8 USE OF  PROCEEDS.  Except  as set  forth in  SECTION  4.8 of the
Disclosure  Schedules,  the Company  shall use the net proceeds from the sale of
the Securities  hereunder for the development of a video lottery  terminal (VLT)
facility in the  existing  grandstand  at  Monticello  Raceway,  pre-development
expenses  for a  Native  American  casino,  fees  and  expenses  related  to the
transactions   contemplated  by  this  Agreement  and  the  Registration  Rights
Agreement and for working capital and general corporate purposes,  provided that
such  net  proceeds   shall  not  be  used  to  redeem  any  Company  equity  or
equity-equivalent  securities  or  to  settle  any  outstanding  litigation.  In
addition,  the  Company may use a portion of the  proceeds to repay  outstanding
indebtedness,  including but not limited to indebtedness  under (i) the Loan and
Security Agreement between Monticello Raceway Management, Inc. and The Berkshire
Bank,  dated as of  October  29,  2003,  in the  aggregate  principal  amount of
$3,500,000, which unpaid principal balance bears interest at a per annum rate of
8.75%, will mature on November 1, 2005 and is subject to a prepayment penalty of
2.5% and (ii) the 7% subordinated  promissory notes, in the aggregate  principal
amount of  $5,072,856.84  issued to The Bryanston Group and Beatrice  Tollman on
January 9, 2004, which notes mature in six-month  increments  (varying in amount
from  13.33% to 26.67% of the note  amount)  beginning  on  January  9, 2005 and
ending on January 9, 2007.

            4.9 REIMBURSEMENT. If any Purchaser becomes involved in any capacity
in any  Proceeding by or against any Person who is a stockholder  of the Company
(except as a result of sales, pledges,  margin sales and similar transactions by
such Purchaser to or with any current  stockholder),  solely as a result of such
Purchaser's acquisition of the Securities under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses  (including
the cost of any  investigation  preparation and travel in connection  therewith)
incurred  in  connection   therewith,   as  such  expenses  are  incurred.   The
reimbursement  obligations  of the  Company  under  this  paragraph  shall be in
addition to any  liability  which the Company may otherwise  have,  shall extend
upon the same terms and  conditions to any  Affiliates of the Purchasers who are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the  Purchasers  and any such  Affiliate,  and shall be binding  upon and
inure  to  the  benefit  of  any   successors,   assigns,   heirs  and  personal

                                       18





representatives  of the Company,  the  Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the  Purchasers  nor any such
Affiliates,  partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company  solely as a result of acquiring  the  Securities  under
this Agreement.

            4.10  INDEMNIFICATION OF PURCHASERS.  The Company will indemnify and
hold the  Purchasers  and their  directors,  officers,  shareholders,  partners,
employees  and agents  (each,  a "PURCHASER  PARTY")  harmless  from any and all
losses,  liabilities,  obligations,  claims,  contingencies,  damages, costs and
expenses, including all judgments, amounts paid in settlements,  court costs and
reasonable  attorneys' fees and costs of  investigation  that any such Purchaser
Party  may   suffer  or  incur  as  a  result  of  or   relating   to:  (a)  any
misrepresentation,   breach  or  inaccuracy,  of  any  of  the  representations,
warranties,  covenants or agreements made by the Company in this Agreement or in
the  other  Transaction  Documents;  or (b) any cause of  action,  suit or claim
brought or made against such Purchaser Party and arising solely out of or solely
resulting  from the  execution,  delivery,  performance  or  enforcement of this
Agreement or any of the other Transaction Documents and without causation by any
other activity, obligation, condition or liability pertaining to such Purchaser.
The Company will reimburse  such  Purchaser for its  reasonable  legal and other
expenses  (including the cost of any  investigation,  preparation  and travel in
connection  therewith)  incurred in connection  therewith,  as such expenses are
incurred.

            4.11 RESERVATION OF COMMON STOCK. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive  rights, a sufficient number of shares of Common Stock
for the  purpose of  enabling  the  Company  to issue  Shares  pursuant  to this
Agreement.

            4.12  LISTING OF COMMON  STOCK.  The  Company  hereby  agrees to use
commercially  reasonably  efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably  practicable following the Closing
(but not later than the earlier of the Effective Date and the first  anniversary
of the  Closing  Date) to list all of the  Shares  on the  Trading  Market.  The
Company further  agrees,  if the Company applies to have the Common Stock traded
on any other  Trading  Market,  it will include in such  application  all of the
Shares,  and will take such other  action as is  necessary  or  desirable in the
opinion of the Purchasers to cause the Shares to be listed on such other Trading
Market as promptly as  possible.  The  Company  will take all action  reasonably
necessary  to continue  the listing and trading of its Common Stock on a Trading
Market and will comply in all respects with the Company's reporting,  filing and
other obligations under the bylaws or rules of the Trading Market.

                                   ARTICLE V.
                                  MISCELLANEOUS

            5.1  FEES  AND  EXPENSES.  Except  as  otherwise  set  forth in this
Agreement, each party shall pay the fees and expenses of its advisers,  counsel,
accountants and other experts,  if any, and all other expenses  incurred by such
party  incident  to  the  negotiation,   preparation,  execution,  delivery  and
performance of this  Agreement.  The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.

                                       19





            5.2 ENTIRE AGREEMENT.  The Transaction Documents,  together with the
exhibits and schedules thereto,  contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

            5.3  NOTICES.  Any  and  all  notices  or  other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (a) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number set forth on the signature pages attached hereto prior to 6:30
p.m.  (New York City time) on a Trading  Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile  number set forth on the signature  pages attached  hereto on a
day that is not a Trading  Day or later  than 6:30 p.m.  (New York City time) on
any Trading Day, (c) the second  Trading Day following  the date of mailing,  if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is  required  to be given.  The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

            5.4  AMENDMENTS;  WAIVERS.  No  provision of this  Agreement  may be
waived  or  amended  except in a written  instrument  signed,  in the case of an
amendment, by the Company and each Purchaser or, in the case of a waiver, by the
party against whom  enforcement  of any such waiver is sought.  No waiver of any
default  with  respect  to any  provision,  condition  or  requirement  of  this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any  subsequent  default  or a  waiver  of any  other  provision,  condition  or
requirement  hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.

            5.5  CONSTRUCTION.  The headings herein are for convenience only, do
not  constitute  a part of this  Agreement  and  shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict  construction  will be applied  against  any party.  This
Agreement  shall be  construed  as if  drafted  jointly by the  parties,  and no
presumption or burden of proof shall arise favoring or disfavoring  any party by
virtue of the  authorship  of any  provisions  of this  Agreement  or any of the
Transaction Documents.

            5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written  consent of each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  assigns or transfers any Securities,  provided such transferee agrees
in  writing to be bound,  with  respect to the  transferred  Securities,  by the
provisions hereof that apply to the "Purchasers".

            5.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.9.

                                       20





            5.8  GOVERNING  LAW.  All  questions  concerning  the  construction,
validity,  enforcement and interpretation of the Transaction  Documents shall be
governed by and construed  and enforced in accordance  with the internal laws of
the State of New York,  without  regard to the  principles  of  conflicts of law
thereof.   Each  party  agrees  that  all  legal   proceedings   concerning  the
interpretations,  enforcement  and defense of the  transactions  contemplated by
this Agreement and any other  Transaction  Documents  (whether brought against a
party hereto or its respective affiliates,  directors,  officers,  shareholders,
employees  or agents)  shall be commenced  exclusively  in the state and federal
courts  sitting in the City of New York.  Each party hereto  hereby  irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, New York for the adjudication of any dispute  hereunder or
in connection herewith or with any transaction  contemplated hereby or discussed
herein  (including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction  of any such  court,  that  such  suit,  action  or  proceeding  is
improper.  Each party  hereto  hereby  irrevocably  waives  personal  service of
process  and  consents  to  process  being  served in any such  suit,  action or
proceeding  by  mailing a copy  thereof  via  registered  or  certified  mail or
overnight  delivery  (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient  service of process and notice  thereof.  Nothing
contained  herein shall be deemed to limit in any way any right to serve process
in any manner  permitted by law. Each party hereto  (including  its  affiliates,
agents,  officers,  directors and employees) hereby  irrevocably  waives, to the
fullest extent  permitted by applicable  law, any and all right to trial by jury
in any legal  proceeding  arising out of or relating  to this  Agreement  or the
transactions  contemplated  hereby.  If either party shall commence an action or
proceeding  to  enforce  any  provisions  of a  Transaction  Document,  then the
prevailing  party in such action or proceeding  shall be reimbursed by the other
party for its  attorneys  fees and other costs and  expenses  incurred  with the
investigation, preparation and prosecution of such action or proceeding.

            5.9  SURVIVAL.  The  representations,   warranties,  agreements  and
covenants contained herein shall survive the Closing and delivery of the Shares.

            5.10  EXECUTION.  This  Agreement  may be  executed  in two or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become effective when  counterparts have been signed by
each party and  delivered  to the other  party,  it being  understood  that both
parties need not sign the same  counterpart.  In the event that any signature is
delivered by facsimile  transmission,  such  signature  shall create a valid and
binding  obligation of the party executing (or on whose behalf such signature is
executed)  with the same force and effect as if such  facsimile  signature  page
were an original thereof.

            5.11 SEVERABILITY.  If any provision of this Agreement is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

            5.12  REPLACEMENT  OF SECURITIES.  If any  certificate or instrument
evidencing any Securities is mutilated,  lost, stolen or destroyed,  the Company
shall  issue or cause to be issued in  exchange  and  substitution  for and upon

                                       21





cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument,  but only upon receipt of evidence reasonably satisfactory to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such replacement Securities.

            5.13 REMEDIES.  In addition to being entitled to exercise all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

            5.14  PAYMENT  SET ASIDE.  To the extent  that the  Company  makes a
payment or payments to any Purchaser  pursuant to any Transaction  Document or a
Purchaser  enforces or  exercises  its rights  thereunder,  and such  payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated,  declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company,  a trustee,  receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

            5.15 INDEPENDENT  NATURE OF PURCHASERS'  OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Document.  Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it shall not be necessary  for any other
Purchaser  to be  joined  as an  additional  party  in any  proceeding  for such
purpose.  Each  Purchaser was  introduced to the Company by Jefferies & Company,
Inc.,  which has acted solely as placement agent for the Company and not for any
Purchaser. Each Purchaser has been represented by its own separate legal counsel
in their review and  negotiation of the  Transaction  Documents.  For reasons of
administrative convenience only, certain Purchasers and their respective counsel
have chosen to communicate  with the Company through  Jefferies & Company,  Inc.
and its counsel.  Counsel to Jefferies & Company,  Inc.  does not  represent the
Purchasers  or the Company but only  Jefferies & Company,  Inc.  The Company has
elected to provide all Purchasers with the same terms and Transaction  Documents
for the  convenience of the Company and not because it was required or requested
to do so by the Purchasers.

                                       22





                                   ARTICLE VI
                                   CONDITIONS

            6.1  CONDITIONS  TO  CLOSING  OF THE  PURCHASERS.  Each  Purchaser's
obligation  to  purchase  the  Securities  at  the  Closing  is  subject  to the
satisfaction, or waiver by such Purchaser, of the following conditions:

                (a)  REPRESENTATIONS  AND WARRANTIES.  The  representations  and
      warranties  of the Company set forth in this  Agreement  shall be true and
      correct as of the date of this  Agreement and shall be true and correct in
      all material  respects  (except for those qualified as to materiality or a
      Material  Adverse  Effect,  which  shall  be true and  correct)  as of the
      Closing  Date (except to the extent that such  representation  or warranty
      speaks of an earlier date, in which case such  representation  or warranty
      shall be true and correct in all material  respects (or if qualified as to
      materiality  or a Material  Adverse  Effect,  true and correct) as of such
      date) as though made on and as of the Closing Date.

                (b)  PERFORMANCE OF  OBLIGATIONS  OF COMPANY.  The Company shall
      have  performed in all  material  respects all  agreements  and  covenants
      required to be  performed  by it under this  Agreement  on or prior to the
      Closing Date.

                (c) REGULATORY  APPROVALS.  The Company and each Purchaser shall
      have received all requisite approvals  (including all required findings of
      suitability).

                (d) NASD FILING.  The Company shall have filed with the National
      Association  of  Securities  Dealers,  a  Notification  Form:  Listing  of
      Additional Shares with respect to the Shares.

                (e) NO  SUSPENSION  OF  TRADING.  From  the date  hereof  to the
      Closing Date, trading in the Common Stock shall not have been suspended by
      the Commission  (except for any suspension of trading of limited  duration
      agreed to by the Company,  which  suspension  shall be terminated prior to
      the  Closing),  and,  at any time prior to the  Closing  Date,  trading in
      securities  generally as reported by Bloomberg Financial Markets shall not
      have been  suspended  or limited,  or minimum  prices  shall not have been
      established on securities whose trades are reported by such service, or on
      any Trading  Market,  nor shall a banking  moratorium  have been  declared
      either by the United States or New York State authorities.

                (f)  LOCK-UP   AGREEMENTS.   The  "lock-up"   agreements,   each
      substantially in the form of EXHIBIT C hereto,  between the Purchasers and
      each of the executive  officers,  directors and  Affiliates of the Company
      relating to sales and certain other dispositions of shares of Common Stock
      or certain  other  securities,  shall have been  executed and copies shall
      have been delivered to the Purchasers and such agreements shall be in full
      force and effect on the Closing Date.

            6.2 CONDITIONS TO CLOSING OF THE COMPANY.  The Company's  obligation
to issue and sell the Securities at the Closing is subject to the  satisfaction,
or waiver by the Company, of the following conditions:

                (a)  REPRESENTATIONS  AND WARRANTIES.  The  representations  and
      warranties of each Purchaser set forth in this Agreement shall be true and
      correct as of the date of this  Agreement and shall be true and correct in

                                       23



      all  material  respects as of the Closing  Date (except to the extent that
      such  representation  or warranty speaks of an earlier date, in which case
      such  representation or warranty shall be true and correct in all material
      respects as of such date) as though made on and as of the Closing Date.

                (b)  PERFORMANCE OF OBLIGATIONS OF THE  PURCHASERS.  Each of the
      Purchasers  shall have  performed in all material  respects all agreements
      and  covenants  required to be performed by it under this  Agreement on or
      prior to the Closing Date.

                (c) REGULATORY  APPROVALS.  The Company and each Purchaser shall
      have received all requisite approvals  (including all required findings of
      suitability).

                (d) NASD FILING.  The Company shall have filed with the National
      Association  of  Securities  Dealers,  a  Notification  Form:  Listing  of
      Additional Shares with respect to the Shares.



                            (Signature Page Follows)

                                       2





            IN WITNESS  WHEREOF,  the parties hereto have caused this Securities
Purchase   Agreement  to  be  duly  executed  by  their  respective   authorized
signatories as of the date first indicated above.

EMPIRE RESORTS, INC.                                 Address for Notice:
                                                     ------------------


By:_____________________________________
Name:                                                Attn:
Title:                                               Tel:
                                                     Fax:

With copy to (which shall not constitute notice):



Attn:
Tel:
Fax:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

                                       25





            IN WITNESS  WHEREOF,  the  undersigned  have caused this  Securities
Purchase   Agreement  to  be  duly  executed  by  their  respective   authorized
signatories as of the date first indicated above.


_____________________________                        Address for Notice:
[Print Name of Purchaser]                            ------------------




By:  __________________________
        Name:
        Title:

Subscription Amount:  $_________________
Shares:_____________________


                           [SIGNATURE PAGE CONTINUED]

                                       26






                                                                       Exhibit C

                            FORM OF LOCK-UP AGREEMENT



                                                                January 23, 2004



[PURCHASERS]
[          ]
[          ]

Re:   Empire Resorts, Inc.

Ladies and Gentlemen:

            The  undersigned  understands  that certain  purchasers have entered
into a Securities  Purchase  Agreement  (the "PURCHASE  AGREEMENT")  with Empire
Resorts, Inc., a Delaware corporation (the "COMPANY") providing for the offering
(the "OFFERING") by the several  Purchasers of certain shares of Common Stock of
the Company ("COMMON  STOCK").  Capitalized  terms used herein and not otherwise
defined shall have the meanings set forth in the Purchase Agreement.

            In  consideration  of the  Purchasers'  agreement  to  purchase  the
Shares, and for other good and valuable consideration receipt of which is hereby
acknowledged,  the  undersigned  hereby  agrees that,  without the prior written
consent  of  Purchasers   representing  at  least  66.67%  in  interest  of  all
Purchasers,  the  undersigned  will not, during the period from the date of this
Agreement  through (and  including)  the later to occur of (a) the date 120 days
after the Closing  under the  Purchase  Agreement  (the  "Closing")  and (b) the
Effective Date (as defined in the  Registration  Rights Agreement dated the date
of the Purchase  Agreement,  between the Purchaser and the Company),  (1) offer,
pledge,  announce the intention to sell, sell, contract to sell, sell any option
or  contract to  purchase,  purchase  any option or contract to sell,  grant any
option,  right or warrant to  purchase,  or  otherwise  transfer  or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into  or  exercisable  or  exchangeable  for  Common  Stock  (including  without
limitation,  Common  Stock which may be deemed to be  beneficially  owned by the
undersigned in accordance  with the rules and  regulations of the Securities and
Exchange  Commission and securities which may be issued upon exercise of a stock
option or warrant) or (2) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the Common
Stock,  whether any such transaction  described in clause (1) or (2) above is to
be settled by  delivery  of Common  Stock or such other  securities,  in cash or
otherwise.  In addition,  the undersigned agrees that, without the prior written
consent  of  Purchasers   representing  at  least  66.67%  in  interest  of  all
Purchasers,  it will not,  during  the  period  from the date of this  Agreement
through (and  including)  the date 180 days after the date of the Closing,  make

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any demand for or exercise  any right with respect to, the  registration  of any
shares  of Common  Stock or any  security  convertible  into or  exercisable  or
exchangeable for Common Stock.

            In furtherance of the foregoing, the Company, and any duly appointed
transfer  agent for the  registration  or transfer of the  securities  described
herein,  are hereby  authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.

            The undersigned  hereby represents and warrants that the undersigned
has full power and authority to enter into this Letter Agreement.  All authority
herein  conferred  or  agreed  to  be  conferred  and  any  obligations  of  the
undersigned  shall be binding upon the  successors,  assigns,  heirs or personal
representatives of the undersigned.

            Whether or not the Closing  actually  occurs  depends on a number of
factors,  including but not limited to certain conditions outside the control of
the Company and the Purchasers.

            The undersigned understands that, if the Purchase Agreement does not
become  effective,  or if the  Purchase  Agreement  (other  than the  provisions
thereof which survive  termination)  shall  terminate or be terminated  prior to
payment  for  and  delivery  of the  Common  Stock  to be sold  thereunder,  the
undersigned shall be released from all obligations under this Letter Agreement

            The  undersigned  understands  that the Purchasers are entering into
the Purchase Agreement in reliance upon this Letter Agreement.

            This  lock-up  agreement  shall  be  governed  by and  construed  in
accordance  with  the laws of the  State  of New  York,  without  regard  to the
conflict of laws principles thereof.

                                Very truly yours,

                                [NAME OF STOCKHOLDER]



                                By: _______________________
                                    Name:
                                    Title: