On June 25, 2018, Empire Resorts, Inc. and Kien Huat Realty III Limited entered into a loan agreement (the “Kien Huat Subordinate Loan Agreement”), providing for loans of up to $30,000,000 (the “Kien Huat Subordinate Loan”). The Kien Huat Subordinate Loan shall be subordinate to the Bangkok Bank Loan. The proceeds of the Kien Huat Subordinate Loan may be used exclusively to make capital contributions to Montreign Operating Company LLC (“Montreign”), a subsidiary of the Company that owns Resorts World Catskills. Montreign may use such funds for marketing and general corporate purposes (including the payment of debt service). All amounts due under the Kien Huat Subordinate Loan shall mature on December 28, 2020, which date may be extended for additional one-year periods if the Bangkok Bank Loan is similarly extended or accelerated in the event the Bangkok Bank Loan is accelerated. The maturity of the Kien Huat Subordinate Loan may also be extended for up to one year at the sole discretion of Kien Huat. Advances under the Kien Huat Subordinate Loan shall be made in four installments as follows: (i) $5,000,000 shall be advanced no earlier than July 2, 2018; (ii) $5,000,000 shall be advanced no earlier than July 20, 2018; (iii) $10,000,000 shall be advanced no earlier than September 4, 2018; and (iv) $10,000,000 shall be advanced no earlier than September 17, 2018. The only condition to an advance shall be the delivery of a request for an advance not less than five business days prior to the date of an advance and that the representations contained in the Kien Huat Subordinate Loan Agreement shall be true and correct. The Company shall pay Kien Huat a commitment fee of $300,000 out of the proceeds of the first advance. The Kien Huat Subordinate Loan bears interest at a rate of 12% per annum, compounded monthly, and shall be payable monthly in arrears. Prior to the maturity of the Kien Huat Subordinate Loan, interest shall not be required to be paid in cash and will be added to the outstanding principal of the Kien Huat Subordinate Loan and shall thereafter be deemed to be part of the principal indebtedness due thereunder upon maturity. The Kien Huat Subordinate Loan may be repaid in full or in part at any time without premium or penalty. The Kien Huat Subordinate Loan Agreement contains customary representations and warranties and affirmative covenants, including a restriction on the use of the proceeds of the Kien Huat Subordinate Loan. Obligations under the Kien Huat Subordinate Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others: nonpayment of principal, interest or fees; breach of the affirmative covenants; and a default in payment of or acceleration of the Bangkok Bank Loan. Additionally, any future amendments to the Bangkok Bank Loan Agreement relating to default provisions thereunder, prepayment provisions or an increase of the maximum principal amount thereunder shall be subject to Kien Huat’s prior written consent. The Company agreed to indemnify and defend Kien Huat and its affiliates from negligent acts or omissions of the Company and its affiliates, any failure of the Company to comply with the terms of the Kien Huat Subordinate Loan Agreement and any failure of the Company to comply with any laws, except to the extent resulting from the gross negligence or willful misconduct of Kien Huat or its affiliates. Concurrently with the execution of the Kien Huat Subordinate Loan Agreement, Kien Huat and Bangkok Bank entered into a subordination and standstill agreement, pursuant to which Kien Huat agreed to subordinate all of its rights and remedies under the Kien Huat Subordinate Loan to Bangkok Bank with respect to the Bangkok Bank Loan. The Company and Bangkok Bank also entered into a First Amendment to Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Amendment”). The Bangkok Bank Loan Amendment permitted the Company to incur subordinate indebtedness under the Kien Huat Subordinate Loan. In addition, the Bangkok Bank Loan Amendment excludes the Kien Huat Subordinate Loan, for as long as such loan remains subordinate to the Bangkok Bank Loan, from calculations of the Company’s maximum total leverage ratio, which financial covenant is applicable beginning with the fiscal quarter ended December 31, 2018.