ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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ZIA PARTNERS, LLC | ZIA PARK LLC | PENN NATIONAL GAMING, INC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Delaware Date: 11/9/2006
Industry: Casinos and Gaming Law Firm: Skadden, Arps, Slate, Meagher & Flom LLP

Exhibit 10.1

ASSET PURCHASE AGREEMENT

dated as of November 7, 2006

by and among

ZIA PARTNERS, LLC, as Seller,

ZIA PARK LLC, as Buyer

and

PENN NATIONAL GAMING, INC., as Parent Guarantor
(solely with respect to Section 2.6 and ARTICLES VI and XII)

TABLE OF CONTENTS

		Page
ARTICLE I

PURCHASE AND SALE OF ASSETS

Section 1.1	Purchase and Sale of Assets	1
Section 1.2	Excluded Assets	3
Section 1.3	Excluded Liabilities	4
Section 1.4	Assumed Liabilities	5
Section 1.5	Retention and Removal of Excluded Assets	5
Section 1.6	Assignability and Consents	6

ARTICLE II

PURCHASE AND SALE OF ASSETS; PURCHASE PRICE

Section 2.1	Purchase and Sale of Assets and Assumption of Liabilities	7
Section 2.2	Purchase Price	7
Section 2.3	Deposit	9
Section 2.4	Post-Closing Adjustment to Purchase Price	11
Section 2.5	Allocation of Total Consideration	12
Section 2.6	Parent Guarantee	13

ARTICLE III

PRORATIONS AND ADJUSTMENTS

Section 3.1	Adjustments	13
Section 3.2	Accounts Receivable	14
Section 3.3	Accounts Payable	14

ARTICLE IV

CLOSING

Section 4.1	Closing	14
Section 4.2	Deliveries at Closing	15

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Section 5.1	Organization of Seller	16
Section 5.2	Authority; No Conflict; Required Filings and Consents	17

Section 5.3	Financial Statements	18
Section 5.4	No Undisclosed Liabilities	18
Section 5.5	Real Property	18
Section 5.6	Intellectual Property	20
Section 5.7	Agreements, Contracts and Commitments	20
Section 5.8	Litigation; Orders	21
Section 5.9	Environmental Matters	21
Section 5.10	Permits; Compliance with Laws	22
Section 5.11	Labor Matters	23
Section 5.12	Employee Benefits	25
Section 5.13	Brokers	26
Section 5.14	Insurance	26
Section 5.15	Personal Property	26
Section 5.16	Sufficiency of Assets	26
Section 5.17	Computer Software	27
Section 5.18	Taxes	27
Section 5.19	Customer Information	27

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT GUARANTOR

Section 6.1	Organization	27
Section 6.2	Authority; No Conflict; Required Filings and Consents	27
Section 6.3	Brokers	29
Section 6.4	Financing	29
Section 6.5	Licensability	29
Section 6.6	Litigation	29

ARTICLE VII

COVENANTS

Section 7.1	Conduct of Business of Seller	29
Section 7.2	Cooperation; Notice; Cure	32
Section 7.3	No Solicitation	32
Section 7.4	Employee Matters	33
Section 7.5	Access to Information and the Property	34
Section 7.6	Governmental Approvals.	36
Section 7.7	Publicity	38
Section 7.8	Further Assurances and Actions	38
Section 7.9	Transfer Taxes; HSR Filing Fee	39
Section 7.10	Accounts Receivable; Assumed Current Liabilities; Accounts Payable and Other Excluded Current Liabilities	39
Section 7.11	Inventoried Automobiles	39
Section 7.12	Insurance Policies	40
Section 7.13	Transfer of Utilities	40

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Section 7.14	Certain Transactions	40
Section 7.15	Insurance; Casualty and Condemnation	40
Section 7.16	No Control	41
Section 7.17	Customer Database; Audit Right	42
Section 7.18	Motorsports Entertainment Complex	42
Section 7.19	Non-Solicitation	42
Section 7.20	Non-Competition	43
Section 7.21	Amended Ground Lease	43
Section 7.22	Domain Names	44
Section 7.23	Pre-Closing Financial Statements	44

ARTICLE VIII

CONDITIONS TO CLOSING

Section 8.1	Conditions to Each Party’s Obligation to Effect the Closing	44
Section 8.2	Additional Conditions to Obligations of Buyer	45
Section 8.3	Additional Conditions to Obligations of Seller	46

ARTICLE IX

TERMINATION AND AMENDMENT

Section 9.1	Termination	47
Section 9.2	Effect of Termination	48

ARTICLE X

SURVIVAL; INDEMNIFICATION

Section 10.1	Survival of Representations, Warranties, Covenants and Agreements	50
Section 10.2	Indemnification	51
Section 10.3	Interpretation	51
Section 10.4	Procedure for Claims between Parties	52
Section 10.5	Defense of Third Party Claims	52
Section 10.6	Limitations on Indemnity	53
Section 10.7	Payment of Damages	53
Section 10.8	Exclusive Remedy	53
Section 10.9	Treatment of Indemnification Payments	54

ARTICLE XI

PROPERTY

Section 11.1	As Is	54
Section 11.2	Title to Real Property	55

ARTICLE XII

MISCELLANEOUS

Section 12.1	Definitions	57
Section 12.2	Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury	67
Section 12.3	Notices	68
Section 12.4	Interpretation	68
Section 12.5	Entire Agreement	69
Section 12.6	Severability	69
Section 12.7	Assignment	70
Section 12.8	Parties of Interest	70
Section 12.9	Counterparts	70
Section 12.10	Mutual Drafting	70
Section 12.11	Amendment	70
Section 12.12	Extension; Waiver	70
Section 12.13	Time of Essence	71
Section 12.14	Seller Disclosure Letter	71

EXHIBITS

Exhibit A		Deposit Escrow Agreement

Exhibit B		Form of Warranty Deed

Exhibit C		Form of Bill of Sale and Assignment

Exhibit D		Form of Assignment and Assumption of Assumed Contracts and Assumed Liabilities

Exhibit E		Form of Non-Foreign Affidavit

Exhibit F		Form of Confirmation of Transfer of Inventoried Vehicles

Exhibit G		Form of Bill of Sale – Passenger /Delivery Vehicles

Exhibit H		Liquor License Purchase and Sale Agreement

Exhibit I		Form of Assignment of Leases

Exhibit J		Title Commitment and the UCC-11 Search

Exhibit K		Transition Services Agreement

Exhibit L		Form of Allocation Agreement

TABLE OF DEFINITIONS

Terms		Cross Reference in Agreement

401(k) Plan		Section 7.4(d)
Accounts Receivable		‎Section 12.1(a)
Acquired Personal Property		‎Section 12.1(a)
Acquisition Proposal		‎Section 12.1(a)
Adjustment Notes		Section 2.2(b)
Adjustments		‎Section 2.2(b)
Affiliate		‎Section 12.1(a)
Agreement		Preamble
Alcoholic Beverage Approvals		‎Section 12.1(a)
Allocation		Section 2.5
Amended Ground Lease		‎Section 12.1(a)
Assumed Contracts		‎Section 12.1(a)
Assumed Current Liabilities		‎Section 1.4(a)
Assumed Liabilities		‎Section 1.4
Assumed Software		Section 5.17
Base Purchase Price		‎Section 2.2(a)
Base Rate		‎Section 8.2(h)
Books and Records		‎Section 12.1(a)
Business Day		‎Section 12.1(a)
Business		‎Section 2.2(b)
Buyer 401(k) Plan		Section 7.4(d)
Buyer Indemnified Parties		‎Section 10.2(a)
Buyer Indemnified Party		‎Section 10.2(a)
Buyer		Preamble
Cap		‎Section 10.6(a)
Cash On Hand		‎Section 2.4(d)
Casualty Termination Event		‎Section 12.1(a)
Closing Balance Sheet		‎Section 2.4(a)
Closing Date Cash On Hand		‎Section 2.4(a)
Closing Date Working Capital		‎Section 2.4(a)
Closing Date		‎Section 4.1
Closing		‎Section 4.1
COBRA		‎Section 12.1(a)
Code		‎Section 12.1(a)
Compass Loan Documents		‎Section 12.1(a)
Confidentiality Agreement		‎Section 7.5(a)
Contract		‎Section 12.1(a)
Customer Database		‎Section 12.1(a)
Customer Information		Section 7.17(a)
Damages		‎Section 10.2(a)
Deposit Escrow Agreement		Section 2.3(a)

vii

Deposit Escrow Net Earnings		Section 2.3(a)
Deposit		‎Section 2.3(a)
Employee Records		Section 12.1(a)
Employees		Section 12.1(a)
Encumbrances		‎Section 12.1(a)
Environmental Condition		‎Section 12.1(a)
Environmental Laws		‎Section 12.1(a)
Environmental Liabilities		‎Section 12.1(a)
Environmental Report		‎Section 8.2(g)
ERISA Affiliate		Section 5.12(c)
Escrow Agent		‎Section 2.3(a)
Escrow Costs		Section 2.3(a)
Escrow Funds Replacement Amount		‎Section 2.3(a)
Escrow Funds		Section 2.3(a)
Escrow Termination Date		Section 2.3(a)
Estimated Cash On Hand		‎Section 2.2(c)
Estimated Working Capital		‎Section 2.2(c)
Exchange Act		‎Section 12.1(a)
Excluded Assets		‎Section 1.2
Excluded Contracts		‎Section 12.1(a)
Excluded Current Assets		Section 1.2(a)
Excluded Current Liabilities		Section 1.3(b)
Excluded Liabilities		‎Section 1.3
Excluded Personal Property		‎Section 12.1(a)
Existing Allocation Agreement		‎Section 5.10(d)
Existing Ground Lease		‎Section 12.1(a)
Final Determination Date		Section 2.4(c)
Final Purchase Price Adjustment		‎Section 2.4(c)
Financial Information		‎Section 5.3
GAAP		‎Section 12.1(a)
Gaming Approvals		‎Section 12.1(a)
Gaming Authorities		‎Section 12.1(a)
Gaming Laws		‎Section 12.1(a)
Governmental Approvals		‎Section 7.6(a)
Governmental Entity		‎Section 5.2(c)
Ground Lease Estoppel and Consent Certificate		‎Section 12.1(a)‎
Hazardous Activity		‎Section 12.1(a)
Hazardous Substance		‎Section 12.1(a)
HSR Act		‎Section 5.2(c)
Hubbard		Section 12.1(a)
Improvements		Section 12.1(a)
Inactive Employee		Section 12.1(a)
Indemnified Party		Section 10.4
Indemnifying Parties		‎Section 10.4
Indemnifying Party		‎Section 10.4
Individual Machine Adjustment		‎Section 2.2(d)

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Initial Scheduled Closing Date		Section 12.1(a)
Inspection		‎Section 7.5(a)
Intellectual Property		‎Section 12.1(a)
Inventoried Vehicles		‎Section 7.11(c)
IRS		‎Section 12.1(a)
Knowledge of Seller		Section 12.1(a)
L/C Amount		‎Section 2.3(a)
L/C Delivery Date		‎Section 2.3(a)
Land		‎Section 5.5(b)
Law		‎Section 12.1(a)
Lease Documents		‎Section 5.5(e)
Leased Property		‎Section 5.5(a)
Leases		‎Section 12.1(a)
Legal Proceeding		‎Section 12.1(a)
Letters of Credit		Section 2.3(a)
Liabilities		‎Section 12.1(a)
Licensed Parties		Section 5.10(a)
Liens		‎Section 12.1(a)
Liquor License Purchase and Sale Agreement		Recitals
Liquor License		‎Recitals
Material Assumed Contracts		‎Section 12.1(a)
Material Portion of the Property		Section 12.1(a)
Minimum Cash On Hand		‎Section 2.4(d)
Monetary Encumbrances		‎Section 11.2(b)
Non-Assignable Asset		‎Section 1.6(a)
Notice		‎Section 10.4
Operating Agreements		‎Section 12.1(a)
Option Agreement		‎Section 12.1(a)
Order		‎Section 12.1(a)
Ordinary Course of Business		‎Section 12.1(a)
Outside Date		‎Section 12.1(a)
Owner’s Title Policy		‎Section 8.2(c)
Parent Guarantor		Preamble
Passenger/Delivery Vehicles		‎Section 12.1(a)
Payroll Taxes		Section 7.4(g)
Permitted Additional Gaming Machines		‎Section 12.1(a)
Permitted Encumbrances		‎Section 12.1(a)
Person		‎Section 12.1(a)
Personal Property		‎Section 12.1(a)
Pre-Closing Employee Liabilities		‎Section 12.1(a)
Pre-Closing Financial Information		‎Section 7.23
Pre-Closing Tax Liability		‎Section 12.1(a)
Pre-Closing Tax Period		Section 12.1(a)
Preliminary Closing Balance Sheet		‎Section 2.2(c)
Preliminary Purchase Price Adjustment		‎Section 2.2(c)
Privacy Obligations		‎Section 5.6(d)

Property Employee		Section 12.1(a)
Property Material Adverse Effect		‎Section 12.1(a)
Property Specific Data		‎Section 12.1(a)
Property		‎Section 12.1(a)
Purchase Price		‎Section 2.2(a)
Purchased Assets		‎Section 1.1
Purchased Current Assets		‎Section 1.1(c)
Purchased Machines Adjustment		Section 2.2(d)
Reference Balance Sheet		‎Section 2.2(b)
Reference Date Working Capital		‎Section 2.2(b)
Reference Date		‎Section 2.2(b)
Release		‎Section 12.1(a)
Representatives		‎Section 7.3(a)
Required Consents		Section 4.2(m)
Retained Employees		‎Section 12.1(a)
Ruidoso Downs		‎Recitals
Securities Act		‎Section 12.1(a)
Seller Benefit Plans		‎Section 5.12(a)
Seller Disclosure Letter		‎ARTICLE V
Seller Indemnified Parties		‎Section 10.2(b)
Seller Indemnified Party		‎Section 10.2(b)
Seller Permits		‎Section 5.10(a)
Seller		Preamble
Seller’s Knowledge		Section 12.1(a)
Shortfall Amount		‎Section 7.15(a)
Straddle Period		Section 12.1(a)
Subsidiary		‎Section 12.1(a)
Survey		‎Section 11.2(a)
Survival Period		‎Section 10.1(b)
Tax Return		‎Section 12.1(a)
Tax		‎Section 12.1(a)
Taxes		Section 12.1(a)
Third Party Claim		‎Section 10.5
Threshold		‎Section 10.6(a)
Title Commitment		‎Section 12.1(a)
Title Insurer		‎Section 12.1(a)
Total Consideration		Section 2.2(a)
Total Escrow Funds Amount		Section 2.3(a)
Transfer Time		‎Section 12.1(a)
Transferred Employees		‎Section 7.4(a)
Transferred Intellectual Property		‎Section 12.1(a)
WARN Act		‎Section 12.1(a)
Water Rights		Section 5.5(b)
Working Capital		‎Section 2.4(d)

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of November 7, 2006, by and among Zia Partners, LLC, a New Mexico limited liability company (“ Seller ”), Zia Park LLC, a Delaware limited liability company (“ Buyer ”), and (solely with respect to Section 2.6 and ARTICLE VI and XII hereof) Penn National Gaming, Inc., a Pennsylvania corporation (“ Parent Guarantor ”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 12.1(a) hereof.

WHEREAS, Seller owns and operates the Property (commonly known as Black Gold Casino and Zia Park Racetrack);

WHEREAS, Buyer, a wholly owned subsidiary of Parent Guarantor, desires to purchase and acquire, and Seller desires to sell and transfer to Buyer, Seller’s interest in the Property and the Business, in each case on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, Parent Guarantor desires to guarantee the performance by Buyer of Buyer’s obligations under this Agreement as set forth in Section 2.6 hereof;

WHEREAS, Buyer, Ruidoso Downs Racing, Inc., a New Mexico corporation and an Affiliate of Seller (“ Ruidoso Downs ”), and (solely with respect to specified sections thereof) Seller have entered into a Liquor License Purchase and Sale Agreement, dated as of the date hereof, and in the form attached hereto as Exhibit H (the “ Liquor License Purchase and Sale Agreement ”), for the sale by Ruidoso Downs to Buyer, and the purchase by Buyer from Ruidoso Downs, on the Closing Date, of the liquor license (No. 2969) (the “ Liquor License ”) currently owned by Ruidoso Downs and leased by Seller from Ruidoso Downs in connection with the sale and service of alcoholic beverages at the Property; and

WHEREAS, Seller, Ruidoso Downs and Buyer also have entered into a Transition Services Agreement, dated as of the date hereof, and in the form attached hereto as Exhibit K , for the transitional use of certain personnel and certain services provided to the Property by Seller, Ruidoso Downs and their Affiliates, and certain other matters set forth therein.

NOW, THEREFORE, the parties hereto, in consideration of the premises and of the mutual representations, warranties and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:

ARTICLE I

PURCHASE AND SALE OF ASSETS

Section 1.1 Purchase and Sale of Assets . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing (subject to Section 1.6 hereof), Seller shall sell, convey, assign and transfer to Buyer, and Buyer shall purchase and acquire from Seller, all of Seller’s right, title and interest in and to those rights and assets set forth below, but excluding the Excluded Assets (the “ Purchased Assets ”):

(a) the Property;

(b) Cash On Hand as of the Closing Date, which, in accordance with Section 2.2(c), shall be no less than Minimum Cash On Hand;

(c) other than the Excluded Current Assets, all current assets (other than Cash On Hand) reflected on the Reference Balance Sheet (the “ Purchased Current Assets ”);

(d) the Assumed Contracts;

(e) the Acquired Personal Property;

(f) the Transferred Intellectual Property;

(g) the Books and Records;

(h) the Assumed Software;

(i) with respect to the Property, the Seller Permits, and pending applications therefor, to the extent transferable by Law;

(j) the Customer Database;

(k) Employee Records;

(l) to the extent relating to (x) the Purchased Assets or (y) any of the Assumed Liabilities, all rights, claims, rebates, discounts and credits (including all indemnities, warranties and similar rights), performance and other bonds, security and other deposits, advance payments, and prepaid rents in favor of Seller;

(m) subject to Section 1.5(b) and Section 7.15 hereof, if, prior to the Closing Date, the Property is destroyed, damaged or taken in condemnation, the insurance proceeds or condemnation award payable to Seller, or any of its Affiliates or any of their respective Representatives or any transferable or assignable claim for insurance proceeds or condemnation award payable to Seller or any of its Affiliates or any of their respective Representatives with respect thereto;

(n) all assets to which Buyer is entitled under the prorations contemplated hereby, including, without limitation, the proration provisions set forth in ARTICLE III hereof;

(o) all Seller’s rights under the Amended Ground Lease;

(p) all manufacturers’ and other warranties applicable to the Property or the Purchased Assets;

(q) other than related to the Excluded Current Assets or as provided for in Section 7.12, claims, deposits, prepayments, prepaid assets, refunds, causes of action, rights of recovery, rights of setoff and rights of recoupment of Seller relating to the Business or the Property as of the Closing Date, including any such rights of Seller under any property, casualty, workers’

compensation or, subject to the second proviso in Section 7.15(a)(i), other insurance policy (provided that Seller shall not be required to sell, convey, assign or transfer to Buyer any insurance policies but shall instead cancel such policies as provided in Section 7.12);

(r) all assets to which Buyer is entitled under the provisions of ARTICLE III hereof; and

(s) any other tangible or intangible assets owned, leased or licensed by Seller (other than the Excluded Assets) which are located at the Property or used in the Business.

The Purchased Assets shall be conveyed to Buyer free and clear of all Liabilities and Liens other than (i) the Assumed Liabilities and (ii) the Permitted Encumbrances.

Notwithstanding anything to the contrary herein, any Purchased Asset which consists of source code, or any other property which can be transmitted via remote telecommunications, will be delivered to Buyer on the Closing Date via remote telecommunications.

Section 1.2 Excluded Assets . Notwithstanding anything to the contrary contained in this Agreement, from and after the Closing Date, Seller shall retain all of its right, title and interest in and to each and all of the following assets (the “ Excluded Assets ”):

(a) all current assets of the type designated on the Reference Balance Sheet as to be retained by Seller (the “ Excluded Current Assets ”);

(b) the Excluded Contracts;

(c) any rights, claims, causes of action and credits (including all indemnities, warranties and similar rights) in favor of Seller or any of its Affiliates or Representatives to the extent relating to (i) any other Excluded Asset or (ii) any Excluded Liability;

(d) the corporate charter or other organizational documents, minute and stock books and records, corporate seals, Tax Returns (including supporting schedules) of Seller or any of its Affiliates;

(e) except as otherwise set forth in Section 7.4, all pension plans and the assets thereof and all other employee benefit plans and arrangements and the assets thereof;

(f) all indebtedness or accounts payable owing from any Affiliate of Seller to Seller;

(g) any refund, credit, claim or entitlement with respect to Taxes of Seller or its Affiliates, or with respect to the Purchased Assets, attributable to Tax periods (or portions thereof) ending on or before the Closing Date;

(h) the Excluded Personal Property; and

(i) any assets set forth on Section 1.2 of the Seller Disclosure Letter.

Section 1.3 Excluded Liabilities . Other than the Assumed Liabilities, Buyer is not, and shall not be deemed to be, assuming or taking the Purchased Assets subject to any obligations or liabilities of Seller or any of its Affiliates, of any kind or nature whatsoever, whether known or unknown, fixed or contingent, including without limitation (collectively, the “ Excluded Liabilities ”):

(a) any Liability in respect of any Excluded Asset;

(b) except for the Assumed Current Liabilities, all current liabilities reflected on the Reference Balance Sheet (the “ Excluded Current Liabilities ”);

(d) all Liabilities of Seller pursuant to the prorations contemplated hereby, including, without limitation, the proration provisions set forth in ARTICLE III hereof;

(e) all Liabilities under indebtedness of Seller (including without limitation under the Compass Loan Documents and including any indebtedness or accounts payable owing from Seller to any Affiliate of Seller);

(f) all Pre-Closing Tax Liabilities;

(g) all Pre-Closing Employee Liabilities;

(h) all Liabilities of Seller pursuant to ARTICLE III hereof;

(i) all Liabilities of Seller that (i) by their terms should have been performed on or prior to the Closing Date, and/or (ii) arise from events or circumstances, including for claims, pending or threatened litigation, acts, omissions, events or occurrences relating to the Purchased Assets or the Business, to the extent occurring on or prior to the Closing Date, or the operation of the Property, the Business or the Purchased Assets on or prior to the Closing Date (including without limitation any Liabilities with respect to escheatable property, any Liabilities in connection with any products or services offered by Seller on or prior to the Closing Date and any Liabilities for acts or omissions of Seller or any of its Affiliates or any of their respective Representatives on or prior to the Closing Date), in each case, other than the Assumed Liabilities;

(j) all Liabilities, including, without limitation, Environmental Liabilities, under, pursuant or relating to any Environmental Laws relating to, resulting from, caused by or arising out of ownership, operation, use or control of the Property or the Business to the extent arising out of activities or circumstances occurring prior to the Closing Date, including, without limitation, any Liability relating to contamination or exposure to Hazardous Substances at or attributable to the Property or the Business to the extent arising out of activities or circumstances occurring prior to the Closing Date; and

(k) any Liabilities of Seller not specifically assumed by Buyer hereunder.

Section 1.4 Assumed Liabilities . Upon the terms and subject to the conditions set forth in this Agreement, as of the Closing Date, Buyer agrees to assume, satisfy, perform, pay, discharge and be solely responsible for each of the following Liabilities (the “ Assumed Liabilities ”):

(a) all current Liabilities of the type designated on the Reference Balance Sheet as to be assumed by Buyer (the “ Assumed Current Liabilities ”);

(b) all Liabilities relating to, or arising in respect of, (i) the Purchased Assets accruing, arising out of, or relating to events, occurrences, acts or omissions happening from and after the Closing Date or the operation of the Property, the Business or the Purchased Assets from and after the Closing Date, and (ii) all Assumed Contracts which were not fully performed and were not required to have been so performed, prior to the Closing Date, excluding any Liability resulting from any breach thereof on or prior to the Closing Date by Seller or any of its Affiliates or any of their respective Representatives, to the extent of such breach;

(c) all Liabilities of Seller with respect to entertainment, dining and other reservations made by patrons relating to the Property or the Business from and after the Closing Date;

(d) all Liabilities for Taxes arising from and attributable to the ownership of any portion of the Purchased Assets or the other Assumed Liabilities after the Closing Date;

(e) all Liabilities relating to Transferred Employees accruing from and after the Closing Date to the extent arising out of or relating to their employment by Buyer;

(f) all Liabilities under, pursuant or relating to any Environmental Laws, including, without limitation, Environmental Liabilities, relating to, resulting from, caused by or arising out of ownership, operation, use or control of the Property or the Business, accruing, arising out of, or relating to events, occurrences, acts or omissions happening from and after the Closing Date, including, without limitation, any Liability relating to contamination or exposure to Hazardous Substances at or attributable to the Property or the Business; provided, however , that Seller shall retain liability for the Liabilities set forth in Section 1.3(j) hereof; and

(g) to the extent lawfully transferable, all obligations, commitments and Liabilities under any Seller Permits assigned to Buyer pursuant to Section 1.1(i) hereof.

Section 1.5 Retention and Removal of Excluded Assets

(a) Notwithstanding anything to the contrary contained in this Agreement, Seller and its Affiliates may retain and use, at their own expense, archival copies of all of the Assumed Contracts and other documents or materials transferred hereunder, in each case, which (i) are used in connection with Seller’s or its Affiliates’ businesses, other than the Business; (ii) Seller in good faith determines it is reasonably likely to need access to in connection with the defense (or any counterclaim, cross-claim or similar claim in connection therewith) of any suit, claim, action, proceeding or investigation against or by Seller or any of its Affiliates; or (iii) Seller in good faith determines it is reasonably likely to need access to in connection with any filing, report, or investigation to or by any Governmental Authority; provided , that notwithstanding anything to the contrary herein, neither Seller nor its Affiliates shall be entitled to retain any

copies of or use the Customer Database or any documents or materials relating thereto or containing any of the data or information therein, including without limitation any summaries or analyses thereof, and Seller shall, and shall cause its Affiliates to, comply with their obligations under Section 7.17 hereof.

(b) All items located at the Property that constitute Excluded Assets may be removed on or prior to the Closing Date (or within a reasonable period of time mutually agreed to by Buyer and Seller following the Closing Date) by Seller, its Affiliates, the owners of the Excluded Assets, or their respective Representatives, with the removing party making all repairs necessitated by such removal, but without any obligation on the part of Seller, its Affiliates, or any removing party to replace any item so removed. Seller hereby reserves unto itself and its Affiliates and the owners of the Excluded Assets, and their respective Representatives, a right of entry into the Property at reasonable times for a reasonable period of time following the Closing Date, as mutually agreed to by Buyer and Seller, to effect such removal; provided , however , that any such removal of Excluded Assets shall not materially interfere with Buyer’s business operations at the Property. In the event that any Excluded Assets are removed following the Closing Date, Seller shall provide Buyer prior notice and Buyer shall be permitted, at its discretion, to be present during such removal of the Excluded Assets. All risk of loss relative to any Excluded Assets that are located on the Property after the Closing Date shall remain with Seller. If Seller does not remove any of the Excluded Assets within a reasonable period of time as mutually agreed to by Buyer and Seller following the Closing Date, all such remaining Excluded Assets shall be deemed to be abandoned and Buyer may dispose of any such remaining Excluded Assets.

Section 1.6 Assignability and Consents .

(a) Notwithstanding anything to the contrary contained in this ARTICLE I, if the sale, conveyance, assignment, attempted sale, conveyance, assignment or transfer to Buyer of any Contract (other than the Amended Ground Lease and any other Contract listed in Section 4.2(m) of the Seller Disclosure Letter) that is part of the Purchased Assets is, by its terms, nonassignable without the consent of a third party (other than an Affiliate of Seller, in which case Seller covenants and agrees to cause such Affiliate to render such consent) and such authorizations, approvals, consents or waivers shall not have been obtained prior to the Closing Date (each, a “ Non-Assignable Asset ”), in either case (provided that such authorization, approval, consent or waiver is not a Required Consent), the Closing shall proceed, but the Closing shall not constitute the sale, conveyance, assignment, transfer or delivery of any such Non-Assignable Asset, and this Agreement shall not constitute a sale, conveyance, assignment, transfer or delivery of any such Non-Assignable Asset unless and until such authorization, approval, consent or waiver is obtained; provided , however , that nothing in this Section 1.6 shall relieve the parties of their obligations under Section 7.8 hereof and notwithstanding anything in this Agreement, receipt of the Required Consents shall be a condition to Buyer’s obligation to effect the Closing. After the Closing, Seller and Buyer shall use commercially reasonable efforts to obtain any such authorizations, approvals, consents or waivers related to the Non-Assignable Assets, and Buyer and Seller shall cooperate with each other in any arrangement commercially reasonable to provide that Buyer shall receive the interest of Seller in the benefits under any such Non-Assignable Asset until such time as such third party consent, approval or waiver shall have been obtained, and each of Buyer and Seller shall cooperate with the other party in any such

commercially reasonable arrangement, including performance by Seller as agent if commercially reasonable to Seller. Seller shall promptly pay over to Buyer the amount of all payments received by it in respect of all of its Non-Assignable Assets.

(b) Once authorization, approval or waiver of or consent for the sale, conveyance, assignment or transfer of any such Non-Assignable Asset is obtained, Seller shall convey, assign, transfer and deliver any such Non-Assignable Asset at no additional cost to Buyer, and such Non-Assignable Asset shall thereafter constitute a Purchased Asset.

ARTICLE II

PURCHASE AND SALE OF ASSETS; PURCHASE PRICE

Section 2.1 Purchase and Sale of Assets and Assumption of Liabilities .

On the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer agrees to purchase, acquire, assume and accept from Seller, and Seller agrees to sell, transfer, assign, convey and deliver to Buyer, all of the Purchased Assets and the Assumed Liabilities.

Section 2.2 Purchase Price .

(a) In consideration for the sale, transfer, assignment, conveyance and delivery to Buyer of the Purchased Assets, at the Closing, Buyer shall (i) deliver or cause to be delivered to Seller an aggregate amount in cash equal to the sum (such sum, the “ Purchase Price ”) of: (1) Two Hundred Million United States Dollars ($200,000,000) (the “ Base Purchase Price ”) against which the amount of the Deposit shall be credited, (2) the Preliminary Purchase Price Adjustment, if any, in accordance with Section 2.2(c) hereof, (3) the dollar amount of Estimated Cash On Hand in accordance with Section 2.2(c) hereof, and (4) the Purchased Machines Adjustment, if any, in accordance with Section 2.2(d) hereof, which sum shall be delivered by wire transfer or otherwise in immediately available funds in accordance with instructions delivered by Seller to Buyer at least two (2) Business Days prior to the Closing Date, and (ii) assume the Assumed Liabilities (the Purchase Price, together with the Assumed Liabilities, the “ Total Consideration ”). The Total Consideration shall be subject to a Final Purchase Price Adjustment after the Closing pursuant to Section 2.4 hereof. Buyer shall be entitled to (x) deduct and withhold, from any payment otherwise payable pursuant to this Agreement to Seller, the amounts required to be deducted and withheld under the Code, or any provision of state, local, or foreign tax law, with respect to the making of such payment, as long as Buyer pays such amount to such proper taxing authority, and (y) deduct from the Purchase Price any shortfall in capital expenditures made by Seller in accordance with Section 7.1(a)(xv) hereof.

(b) Seller has delivered to Buyer an unaudited consolidated balance sheet of the business operated at the Property (the “ Business ”) and related data of Seller as of June 30, 2006 (the “ Reference Date ”), a copy of which is set forth in Section 2.2(b) of the Seller Disclosure Letter (the “ Reference Balance Sheet ”). The Reference Balance Sheet reflects the adjustments agreed to by Buyer and Seller and so noted as “ Adjustment Notes ” set forth therein (the

“ Adjustments ”), and except for the Adjustments, has been prepared in accordance with GAAP and on a basis consistent with the unaudited Financial Information.

(c) At least three (3) Business Days before the Closing, Seller shall deliver to Buyer a preliminary Closing Balance Sheet (prepared as of the end of the most recent calendar month for which balance sheet data is available in the Ordinary Course of Business) (the “ Preliminary Closing Balance Sheet ”). The Preliminary Closing Balance Sheet will reflect the Adjustments and, except for the Adjustments, will be prepared in accordance with GAAP and on a basis consistent with the unaudited Financial Information. The Preliminary Closing Balance Sheet will set forth a good faith estimate of the amount of (i) Working Capital of the Business as of the Closing Date (such estimate, the “ Estimated Working Capital ”) and (ii) Cash On Hand of the Business as of the Closing Date (such estimate, the “ Estimated Cash On Hand ”), which shall be no less than Minimum Cash On Hand, and Seller shall make such transfers and deposits of funds prior to the Closing necessary to cause Estimated Cash on Hand to not be less than the Minimum Cash on Hand. The “ Preliminary Purchase Price Adjustment ” (which may be positive or negative) shall equal the difference between (x) Estimated Working Capital and (y) zero, and shall be made as follows: (i) if the Estimated Working Capital is greater than zero, then the Preliminary Purchase Price Adjustment shall be positive, and (ii) if the Estimated Working Capital is less than zero, then the Preliminary Purchase Price Adjustment shall be negative.

(d) If Seller has purchased for cash any Permitted Additional Gaming Machines prior to the Closing, then an adjustment to the Purchase Price (such adjustment, the “ Purchased Machines Adjustment ”) shall be made as set forth in Section 2.2(a)(i)(4). The amount of the Purchased Machines Adjustment shall equal the sum of the Individual Machine Adjustment (as defined below) for each Permitted Additional Gaming Machine so purchased. The “ Individual Machine Adjustment ” for any Permitted Additional Gaming Machine so purchased shall equal the product of (i) the aggregate dollar amount paid in cash by Seller for its purchase of such Permitted Additional Gaming Machine, multiplied by (ii) the quotient determined by dividing (A) (x) 60 minus (y) the number of months between the date such Permitted Additional Gaming Machine is purchased and the Closing Date (with any partial month being rounded to the nearest whole month period), by (B) 60.

(e) At or prior to Closing, (i) Seller shall make such transfers of funds, settle such intercompany accounts and take such other actions as are necessary to make effective, as of the Closing, the Adjustments, and (ii) Seller shall have paid off, had released or otherwise satisfied, in each case unconditionally, (x) all Liens on the Purchased Assets that secure Liabilities under the Compass Loan Documents and (y) any other Liens on the Purchased Assets (other than Permitted Encumbrances), and shall deliver to Buyer evidence of the unconditional payment, release or satisfaction of the matters set forth in (x) and (y) hereof satisfactory to Buyer.

(f) Except as otherwise set forth herein, each party shall pay its own costs and expenses arising in connection with this Agreement and the Closing (including, without limitation, its own attorneys’ and advisors’ fees, charges and disbursements). The following costs shall be allocated between the parties as follows: (i) any Escrow Costs and any title fees and costs shall be paid one-half ( 1 ¤ 2 ) by Seller and one-half ( 1 ¤ 2 ) by Buyer or, if the Escrow Costs are paid out of the Deposit as contemplated in Section 2.3(a)(i), Buyer and Seller shall make mutually agreeable arrangements so that such Escrow Costs are in effect paid one-half ( 1 ¤ 2 ) by

Seller and one-half ( 1 ¤ 2 ) by Buyer; (ii) the cost of the updated and recertified Survey shall be paid by Buyer; (iii) the cost of the Owner’s Title Policy shall be paid by Seller with respect to the portion of the cost attributable to obtaining a NM 1 ALTA 10-17-92 policy or any endorsements required pursuant to Section 11.2(b) hereof (including all endorsements listed on the attachment to the Title Commitment), and the portion of the cost attributable to obtaining extended coverage or any endorsements requested by Buyer (other than any endorsements that are required pursuant to Section 11.2(b) hereof) shall be paid by Buyer; (iv) all recording fees shall be paid by Seller; and (v) any and all amounts or penalties due and payable in connection with the discharge and satisfaction of any Liens (other than the Permitted Encumbrances) in accordance with the terms hereof, shall be paid by Seller.

Section 2.3 Deposit .

(a) On the date hereof, Buyer shall deposit an amount equal to Ten Million United States Dollars ($10,000,000) (such amount, including any and all income and interest earned or accrued thereon, the “ Deposit ”) with First American Title Insurance Co. (the “ Escrow Agent ”), pursuant to the terms of an escrow agreement dated as of the date hereof and attached hereto as Exhibit A (the “ Deposit Escrow Agreement ”) executed and delivered by Buyer, Seller and the Escrow Agent. At the Closing, the Deposit shall be credited against the Purchase Price and shall continue to be held by the Escrow Agent pursuant to this Section 2.3(a) and in accordance with the terms of the Deposit Escrow Agreement until released pursuant to this Section 2.3(a) and the terms of the Deposit Escrow Agreement. Upon termination of this Agreement, the Deposit shall be payable pursuant to Section 9.2(c) hereof, and thereafter shall be promptly released by the Escrow Agent to Buyer or Seller, as applicable, pursuant to Section 9.2(c) hereof and the terms of the Deposit Escrow Agreement. Following the Closing, the Deposit shall be held and disbursed as provided in the Deposit Escrow Agreement, which shall provide, among other things, that (i) any fees or expenses payable to the Escrow Agent under the Deposit Escrow Agreement on account of, in connection with or related to the Deposit (the “ Escrow Costs ”) shall first be paid out of any income and interest accrued on the Deposit; (ii) the Deposit shall be disbursed to Buyer to satisfy any obligations of Seller under Section 2.4(c)(i); (iii) the Deposit shall be disbursed to the Buyer Indemnified Parties to satisfy any indemnification obligations of Seller under Section 10.2(a); (iv) any income or interest on the Deposit (net of any Escrow Costs) shall be distributed to Seller as provided in the Deposit Escrow Agreement (such net amount, the “ Deposit Escrow Net Earnings ”); (v) on the six month anniversary of the Closing Date, if on such date the amount of funds held by the Escrow Agent pursuant to the Deposit Escrow Agreement (the funds held by the Escrow Agent at any date of determination, the “ Escrow Funds ” as of such date) exceeds Five Million United States Dollars ($5,000,000), then such excess shall be distributed by the Escrow Agent to Seller in accordance with the Deposit Escrow Agreement, such that immediately following such distribution, the Escrow Funds shall equal in the aggregate Five Million United States Dollars ($5,000,000); and (vi) as of the date twelve (12) months following the Closing Date (the “ Escrow Termination Date ”), any Escrow Funds (following any payments made against the Deposit pursuant to Section 10.7) (other than any amount of cash required to satisfy the maximum amount of the aggregate of any claims for indemnification for which written notice has been given to Seller in accordance with Section 10.4 and which as of such Escrow Termination Date have not been finally determined), including any income or interest accrued thereon but less any Escrow Costs and less any amounts then due and payable from the Escrow Funds to any Buyer Indemnified Party pursuant to Section 10.2(a),

shall be distributed by the Escrow Agent to Seller in accordance with the Deposit Escrow Agreement. Pending distribution pursuant to this Section 2.3(a), the Deposit shall be held in trust pursuant to the Deposit Escrow Agreement and shall not be used except as permitted by the Deposit Escrow Agreement; provided , that Seller and Buyer may direct the Escrow Agent to invest the Deposit as set forth in the Deposit Escrow Agreement.

On the Closing Date or any time after the Closing Date but before the Escrow Termination Date, for purposes of securing any obligations of Seller under Section 2.4(c) and any indemnification obligations of Seller under this Agreement, Seller shall have the right and option, to be exercised at the election of Seller in its sole and absolute discretion, to deliver, or cause to be delivered, to the Escrow Agent one or more irrevocable standby letters of credit issued by a commercial bank or banks rated “AA” or higher (as modified from time to time, the “ Letters of Credit ”) in favor of the Escrow Agent with respect to all or a portion of the Escrow Funds then held by the Escrow Agent on the L/C Delivery Date (as defined below) (the amount of Escrow Funds with respect to which Seller elects to deliver or cause to be delivered Letters of Credit, the “ Escrow Funds Replacement Amount, ” and the total amount of Escrow Funds held by the Escrow Agent prior to any such replacement with Letters of Credit, the “ Total Escrow Funds Amount ”), in an aggregate initial principal amount (the “ L/C Amount ”) equal to the Escrow Funds Replacement Amount. In the event that Seller elects to exercise the right set forth in this paragraph, Seller shall deliver written notice to such effect to Buyer and the Escrow Agent within two (2) Business Days prior to the estimated date of delivery of the Letters of Credit (the “ L/C Delivery Date ”) in accordance with the terms hereof, which notice shall include the Escrow Funds Replacement Amount. Upon receiving such notice and the Letters of Credit: (i) if the Escrow Funds Replacement Amount is equal to the Total Escrow Funds Amount, the Escrow Agent shall promptly liquidate all investments in the Escrow Fund and distribute all of the cash remaining in the Escrow Fund to Seller, as instructed by Seller; and (ii) if the Escrow Funds Replacement Amount is less than the Total Escrow Funds Amount, the Escrow Agent shall (x) promptly liquidate that portion of the investments and/or cash in the Escrow Fund in an amount equal to the Escrow Funds Replacement Amount and distribute the same, as instructed by Seller, and (y) continue to hold all of the investments and cash remaining in the Escrow Fund after such distribution pursuant to the first paragraph of this Section 2.3(a) and the terms of the Deposit Escrow Agreement such that, immediately following the distribution referred to in the immediately preceding clause (x), the L/C Amount plus the investments and cash remaining in the Escrow Fund total the Total Escrow Funds Amount. Any Letters of Credit shall have an expiry no earlier than the Escrow Termination Date and shall have drawing conditions and other terms, and be in a form, reasonably satisfactory to Buyer and consistent with the terms hereof. If, pursuant to this paragraph and the Deposit Escrow Agreement, Seller elects to (and does) deliver one or more Letters of Credit, for all purposes under this Agreement, the term “ Escrow Fund ” shall include the amounts available under the Letters of Credit, and in such case the Escrow Agent shall make each distribution to be paid to Buyer in accordance with this Agreement (i) first, by distributing any cash or liquidating any investments held in the Escrow Funds to permit the making of such distribution, and (ii) then, if the aggregate amount of such cash and investments is not sufficient to make such distribution, by drawing against the Letters of Credit, on a pro rata basis in accordance with the respective principal amount of each Letter of Credit.

(b) Seller and Buyer agree to execute and be bound by such other reasonable and customary escrow instructions as may be necessary or reasonably required by the Escrow Agent or the parties hereto in order to consummate the purchase and sale contemplated herein, or otherwise to distribute and pay the funds held in escrow as provided in this Agreement and the Deposit Escrow Agreement; provided , that such escrow instructions are consistent with the terms of this Agreement and the Deposit Escrow Agreement. In the event of any inconsistency between the terms and provisions of such supplemental escrow instructions and the terms and provisions of this Agreement, or any inconsistency between the terms and provisions of the Deposit Escrow Agreement and the terms and provisions of this Agreement, the terms and provisions of this Agreement shall control, absent an express written agreement between the parties hereto to the contrary which acknowledges this Section 2.3(b).

Section 2.4 Post-Closing Adjustment to Purchase Price

(a) As soon as reasonably practical following (but not more than thirty (30) days after) the Closing Date, Buyer shall prepare (and shall consult with Seller in preparing) an unaudited consolidated balance sheet of the Business as of the Closing Date (the “ Closing Balance Sheet ”). The Closing Balance Sheet will reflect the Adjustments and, except for the Adjustments, will be prepared in accordance with GAAP and on a basis consistent with the unaudited Financial Information. The Closing Balance Sheet will set forth (i) the actual amount of Working Capital of the Business as of the Closing Date (the “ Closing Date Working Capital ”) and (ii) the actual amount of Cash On Hand of the Business as of the Closing Date (the “ Closing Date Cash On Hand ”).

(b) The Closing Balance Sheet, including the Closing Date Working Capital, shall become final and binding upon the parties unless within sixty (60) days following the Closing Date, Seller and Buyer have been unable to agree on a final Closing Balance Sheet, including the Closing Date Working Capital, in which case Seller and Buyer shall negotiate in good faith to resolve any differences for an additional thirty (30) days. If by the end of the additional thirty (30) day period such differences have not been resolved, they shall be resolved by the Chicago, Illinois office of an accounting firm mutually acceptable to Seller and Buyer, and such firm’s opinion thereon and the resulting Closing Balance Sheet, including the Closing Date Working Capital, shall be final, binding and not subject to any appeal. The fees and expenses of such accounting firm in connection with any such resolution shall be paid one-half (½) by Seller and one-half (½) by Buyer.

(c) Within ten (10) days following the final determination (such date of final determination, the “ Final Determination Date ”) of the Closing Balance Sheet and the Closing Date Working Capital, a final adjustment to the Total Consideration (the “ Final Purchase Price Adjustment ”) shall be made and paid as follows (it being agreed that any amounts payable pursuant to Section 2.4(c)(i) and (ii) may, if applicable, be offset against each other):

(i) (x) if the Closing Date Working Capital is less than the Estimated Working Capital, then Seller shall promptly pay, or cause to be paid to Buyer, in cash, an amount equal to the amount of such difference; provided, however, that Buyer shall, to the extent that any Escrow Funds remain available, have the right, at its option, first be paid by the Escrow Agent from the Escrow Funds pursuant to Section 2.3(a) hereof and

in accordance with the Deposit Escrow Agreement; and (y) if the Closing Date Working Capital is greater than the Estimated Working Capital, then Buyer shall promptly pay, or cause to be paid to Seller, in cash, an amount equal to the amount of such difference; and

(ii) (x) if the Closing Date Cash On Hand is less than the Estimated Cash On Hand, then Seller shall promptly pay, or cause to be paid to Buyer, in cash, an amount equal to the amount of such difference; provided, however, that Buyer shall, to the extent that any Escrow Funds remain available, have the right, at its option, first be paid by the Escrow Agent from the Escrow Funds pursuant to Section 2.3(a) hereof and in accordance with the Deposit Escrow Agreement; and (y) if the Closing Date Cash On Hand is greater than the Estimated Cash On Hand, then Buyer shall promptly pay, or cause to be paid to Seller, in cash, an amount equal to the amount of such difference.

(d) As used herein, (i) the term “ Working Capital ” means the calculation, using the same methodology set forth on the Reference Balance Sheet, of the Purchased Current Assets minus the Assumed Current Liabilities, (ii) the term “ Cash On Hand ” means all cash, cash equivalents or similar cash items of Seller held at the Property as of the Closing, including without limitation, cash contained in the cage, TITO (Ticket-In, Ticket-Out) exchange devices, slot booths, count rooms and drop boxes at the Property, and (iii) the term “ Minimum Cash On Hand ” means Two Million United States Dollars ($2,000,000).

(e) Any and all payments required to be made pursuant to this Section 2.4 shall be made by wire transfer or otherwise in immediately available funds in accordance with instructions delivered by the applicable payee to the applicable payor prior to the time such payment is required to be made.

(f) Nothing in this Section 2.4 shall preclude any party from exercising, or shall adversely affect or otherwise limit in any respect the exercise of, any right or remedy available to it hereunder for any misrepresentation or breach of warranty hereunder, but neither Buyer nor Seller shall have any right to dispute the Closing Balance Sheet, the Closing Date Working Capital or the Closing Date Cash on Hand, or any portion thereof once it has been finally determined in accordance with Section 2.4(b).

Section 2.5 Allocation of Total Consideration . The Total Consideration shall be allocated among the Purchased Assets as shall be mutually agreed upon between the Buyer and Seller prior to the Closing (the “ Allocation ”) (and each party agrees not to unreasonably withhold or delay its agreement thereto); provided , that no more than One Million United States Dollars ($1,000,000) of the Total Consideration shall be allocated to the covenant not to compete set forth in Section 7.20 hereof. If (i) the Internal Revenue Service determines to contest the amount allocated pursuant to the Allocation to the covenant not to complete, then, the defense shall be jointly controlled by Buyer and Seller (with each party bearing its own expenses) and such contest shall not be pursued beyond an administrative appeal proceeding within the Internal Revenue Service; and (ii) upon final settlement of such contest, Seller is required to allocate more than One Million United States Dollars ($1,000,000) of the Total Consideration to the covenant not to compete set forth in Section 7.20 hereof, then Buyer shall pay Seller an amount equal to twenty percent (20%) of the excess of the amount of such allocation over One Million United States Dollars ($1,000,000). The Allocation shall be subject to modification as agreed to

by Buyer and Seller to reflect the Final Purchase Price Adjustment or any other adjustment to the Total Consideration pursuant to this Agreement, and to the extent traceable to a particular Purchased Asset, as agreed to by Buyer and Seller, shall be allocated to, and thereby increase or decrease as the case may be, the purchase price of such Purchased Asset. To the extent that a component of the Final Purchase Price Adjustment or any other adjustment to the Total Consideration pursuant to this Agreement cannot be traced to a particular Purchased Asset, such component shall be apportioned among the Purchased Assets as agreed to by Buyer and Seller. Each party to this Agreement agrees that it will report the transaction completed pursuant to this Agreement (including, without limitation, the filing of Internal Revenue Service Form 8594) in accordance with the Allocation, and that no party will take a position inconsistent with the Allocation unless otherwise required by applicable Law.

Section 2.6 Parent Guarantee . Parent Guarantor hereby guarantees, absolutely and unconditionally, the timely and complete performance by Buyer of the obligations of Buyer, and the payment by Buyer of the amounts required to be paid by Buyer, in each case as provided for in this Agreement and hereby agrees to pay any and all reasonable expenses (including reasonable attorneys’ fees and disbursements) which may be paid or incurred by Seller in enforcing any rights with respect to, or collecting against, Parent Guarantor or Buyer. Parent Guarantor agrees that the guarantee in this Section 2.6 constitutes a guarantee of payment and not of collection, and Seller shall not be obligated to initiate, pursue or exhaust any form of recourse or obtain any judgment against Buyer or others or to realize upon or exhaust any collateral security held by or available to Seller before being entitled to payment from Parent Guarantor. The liability of Parent Guarantor shall not be limited, diminished or affected by (i) any failure by Seller to file or enforce any claim against Buyer or others (in administration, bankruptcy or otherwise), or (ii) any other circumstance which might otherwise constitute a legal or equitable discharge of a guarantor. Parent Guarantor waives diligence, presentment, protest, notice of dishonor or protest or default, demand for payment upon Buyer or the undersigned, notice of acceptance, and all other notices and demands whatsoever. The guarantee set forth in this Section 2.6 is a continuing guarantee, and it will not be discharged until, and will remain in full force and effect until, performance or payment in full of all actions and other obligations of Buyer provided in this Agreement or, if earlier, termination of this Agreement in accordance with ARTICLE IX. To the extent this Agreement requires the Buyer to act (or refrain from acting) in connection with any Federal income tax matter as to which the Buyer is a disregarded entity, Parent Guarantor guarantees that it shall instead act (or refrain from acting) in accordance with the Buyer’s obligations hereunder.

ARTICLE III

PRORATIONS AND ADJUSTMENTS

Section 3.1 Adjustments . Notwithstanding any provision in ARTICLE II, in preparing the Preliminary Closing Balance Sheet and the Closing Balance Sheet and in making the calculations of Estimated Working Capital and Closing Date Working Capital, the following provisions shall be observed.

(a) Seller shall be liable for the portion of the Taxes allocable to the portion of the Straddle Period ending on and including the Closing Date, which shall be in the case of Taxes

imposed on a periodic basis, the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis (such as real property taxes), the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in the Straddle Period ending on and including the Closing Date and the denominator of which is the number of calendar days in the entire relevant Straddle Period.

(b) Utility (which shall include water, gas, electric, sewer, fuel and the like) meters will be read, to the extent that the utility company will do so, during the daylight hours on the Closing Date (or as near as practicable prior thereto), with charges to that time paid by Seller and charges thereafter paid by Buyer. Charges for utilities which are un-metered, or the meters for which have not been read on the Closing Date, will be prorated between Buyer and Seller as of the Transfer Time.

(c) All income and expenses pursuant to the Assumed Contracts will be prorated between Buyer and Seller as of the Closing Date on the Preliminary Closing Balance Sheet and the Closing Date Balance Sheet. Seller shall receive a credit on the Preliminary Closing Balance Sheet for (a) the amount of any prepaid rents or other amounts related to periods from and after the Closing Date and (b) security deposits, or other deposits previously paid by Seller under the Assumed Contracts, less any such amounts paid to and collected by Seller under its Assumed Contracts. Any amounts received by Buyer under its Assumed Contracts related to any period prior to the Closing Date shall be promptly paid to Seller. Any amounts received by Seller under the Assumed Contracts related to any period after the Closing Date shall be promptly paid to Buyer.

Section 3.2 Accounts Receivable . The collection of all Accounts Receivable of Seller accruing prior to the Transfer Time shall be the responsibility of Seller, except that following the Closing, the collection of Accounts Receivable that are Purchased Current Assets shall be the responsibility of Buyer, in each case subject to the obligations of the parties set forth in Section 7.10 hereof.

Section 3.3 Accounts Payable . The payment of all accounts payable of Seller and all other Excluded Current Liabilities shall be the responsibility of Seller, as further set forth in Section 7.10 hereof.

ARTICLE IV

CLOSING

Section 4.1 Closing . Unless this Agreement is earlier terminated pursuant to ARTICLE IX hereof, the closing of the transactions contemplated by this Agreement, including the purchase and sale of the Purchased Assets (the “ Closing ”), shall take place on the third (3 rd ) Business Day following satisfaction or waiver of the conditions set forth in ARTICLE VIII hereof (other than those conditions to be satisfied or waived at the Closing), at 9:00 a.m., New York time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, unless another time and place are agreed to by the parties (the “ Closing Date ”).

Section 4.2 Deliveries at Closing . The following documents will be executed and delivered, as applicable, by Buyer or Seller at or prior to the Closing:

(a) Warranty Deed . Seller shall execute and deliver to Buyer a duly executed and acknowledged Warranty Deed in the form attached as Exhibit B , which form may be modified to the extent required by local Law, conveying to Buyer the Land.

(b) Bill of Sale and Assignment . Seller shall execute and deliver to Buyer, and Buyer shall execute an acceptance of, a Bill of Sale and Assignment in the form attached as Exhibit C , which form may be modified to the extent required by local Law, conveying to Buyer the Purchased Assets.

(c) Assumed Contracts; Assumed Liabilities . Buyer and Seller shall execute and deliver an Assignment and Assumption of Assumed Contracts and Assumed Liabilities in the form attached as Exhibit D , which form may be modified to the extent required by local Law, to transfer the Assumed Liabilities, Assumed Contracts and Assumed Software to Buyer, and Buyer and Seller each agrees to execute and deliver such other assumption agreements or other documents reasonably required by any Person (and reasonably acceptable to Buyer) to effectuate the assumption of the Assumed Liabilities and the Purchased Assets.

(d) Purchase Price . Buyer shall deliver or cause to be delivered to Seller cash in the amount of the Purchase Price (against which the amount of the Deposit shall be credited) pursuant to Section 2.2 hereof.

(e) Closing Escrow Agreement . If either Buyer or Seller so requests, Buyer, Seller and the Escrow Agent shall execute and deliver, not later than two (2) Business Days prior to the Closing, a closing escrow agreement (in form and substance reasonably acceptable to Buyer, Seller and the Escrow Agent), providing for the appointment and responsibilities of such escrow agent with respect to implementation of the Closing.

(f) Buyer Certificates . Buyer shall deliver to Seller the certificates required by Section 8.3(a) and (b) hereof.

(g) Seller Certificates . Seller shall deliver to Buyer the certificates required by Section 8.2(a) and (b) hereof.

(h) Customer Database . Seller shall deliver to Buyer the Customer Database, which shall be in the format and contain the information set forth on Section 4.2(h) of the Seller Disclosure Letter, together with all of the other information required to be surrendered and delivered to Buyer pursuant to Section 7.17.

(i) Non-Foreign Affidavit . Seller (or the appropriate Affiliate of Seller if Seller is a disregarded entity for tax purposes) shall execute and deliver a Non-Foreign Affidavit in the form attached as Exhibit E .

(j) Transfer of Inventoried Vehicles . Buyer and Seller shall confirm the transfer of Inventoried Vehicles by executing and delivering a Confirmation of Transfer of Inventoried

Vehicles in the form attached as Exhibit F , which form may be modified to the extent required by local Law.

(k) Vehicle Titles . Seller shall execute and deliver to Buyer certificates of title, endorsed for transfer to Buyer, for its Passenger/Delivery Vehicles along with a Bill of Sale — Passenger/Delivery Vehicles therefor in the form attached as Exhibit G , which form may be modified to the extent required by local Law.

(l) Assignment of Lease . Seller and Buyer shall each execute and deliver an Assignment of Leases with respect to the Leases in the form attached hereto as Exhibit I , which form may be modified to the extent required by local Law.

(m) Consents . Seller shall deliver to Buyer all executed consents and approvals (in form and substance reasonably acceptable to Buyer) listed on Section 4.2(m) of the Seller Disclosure Letter (the “ Required Consents” ), including, without limitation, the Ground Lease Estoppel and Consent Certificate.

(n) Gift Certificates . Seller shall deliver to Buyer a schedule (which may be in electronic form) of all outstanding gift certificates, the Liability therefor which is to be transferred to Buyer.

(o) Owner’s Affidavit . Seller shall execute and deliver to the Title Insurer such proof of authority, organizational documents and owner’s affidavits as reasonably required by the Title Insurer, and in a form reasonably acceptable to Seller, as necessary to issue the Owner’s Title Policy (including causing the deletion of the standard pre-printed exceptions).

(p) Survey and Title Policy . Seller shall deliver (or cause to be delivered) to Buyer the updated and recertified Survey and the Owner’s Title Policy.

(q) Access . Seller shall deliver to Buyer all keys, security cards, security codes, remote devices, and all other items required for access to all parts of the Property.

(r) Other Documents . Each party shall deliver any other documents, instruments or agreements which are reasonably requested by the other party, the Title Insurer or the Escrow Agent that are reasonably necessary to consummate the transactions contemplated hereby and have not previously been delivered.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer with respect to the Purchased Assets and the Assumed Liabilities, except as set forth herein and in the referenced section of the Disclosure Letter delivered by Seller to Buyer on the date of this Agreement (the “ Seller Disclosure Letter ”), as follows:

Section 5.1 Organization of Seller . Seller is duly organized and validly existing under the laws of its state of organization and has all requisite power and authority to carry on its

business as now being conducted. Seller is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, have a Property Material Adverse Effect. Seller does not have any Subsidiaries.

Section 5.2 Authority; No Conflict; Required Filings and Consents .

(a) Seller has all requisite power and authority to enter into this Agreement and the other agreements contemplated hereby and to consummate the transactions to which it is a party that are contemplated by this Agreement and the other agreements contemplated hereby. The execution and delivery of this Agreement and the other agreements contemplated hereby by Seller and the consummation by it of the transactions to which it is a party that are contemplated by this Agreement and the other agreements contemplated hereby have been duly authorized by all necessary action on the part of Seller and its members. Each of this Agreement and the other agreements contemplated hereby have been, or will be prior to Closing, as applicable, duly executed and delivered by Seller, and assuming this Agreement and the other agreements contemplated hereby constitute, or will constitute prior to Closing, as applicable, the valid and binding obligation of the other parties hereto, constitute, or will constitute prior to Closing, as applicable, the valid and binding obligation of Seller, enforceable against Seller in accordance with their terms, subject, as to enforcement, to (i) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect affecting creditors’ rights generally and (ii) general principles of equity.

(b) The execution and delivery of this Agreement and the other agreements contemplated hereby by Seller do not, and the consummation by Seller of the transactions contemplated by this Agreement and the other agreements contemplated hereby will not, (i) conflict with, or result in any violation or breach of, any provision of the organizational documents of Seller, (ii) result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any material benefit) under, or require a consent or waiver under, any of the terms, conditions or provisions of any bond, mortgage, indenture, Assumed Contract, Lease, or other Contract or obligation to which Seller is a party or by which Seller may be bound, (iii) subject to the governmental filings and other matters referred to in Section 5.2(c) hereof, contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Entity or any other Person the right to revoke, withdraw, suspend, cancel, terminate, or modify, in each case in any respect, any permit, concession, franchise, license, judgment, or Law applicable to Seller or (iv) result in the imposition or creation of any Lien upon or with respect to the Property other than a Permitted Encumbrance, except in the case of clauses (ii) and (iii) for any such conflicts, violations, breaches, contraventions, defaults, terminations, cancellations, accelerations or losses, failures to obtain any such consent or waiver, or any such revocation, withdrawal, suspension, cancellation, termination or modification which (x) would not, individually or in the aggregate, have a Property Material Adverse Effect or (y) would not prevent or materially delay the Closing or prevent, materially delay or adversely affect the performance by Seller of the transactions contemplated by this Agreement or the other agreements contemplated hereby.

(c) No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency, commission, Gaming Authority or other governmental authority or instrumentality (“ Governmental Entity ”) or any other person is required by or with respect to Seller in connection with the execution and delivery of this Agreement or the other agreements contemplated hereby by Seller or the consummation by Seller of the transactions to which it is a party that are contemplated hereby or thereby, except for (i) the filing of the notification report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“ HSR Act ”), (ii) any approvals or filing of notices required under the Gaming Laws, (iii) any consents, approvals, orders, authorizations, registrations, permits, declarations or filings required by, of or with respect to Buyer or any of its Subsidiaries, Affiliates or key employees (including, without limitation, under the Gaming Laws), and (iv) such consents, approvals, orders, authorizations, permits, filings, declarations or registrations of which the failure to make or obtain would not, individually or in the aggregate, have a Property Material Adverse Effect or prevent or materially delay the Closing or prevent, materially delay or adversely affect the performance by Seller of the transactions contemplated by this Agreement or the other agreements contemplated hereby.

Section 5.3 Financial Statements . Section 5.3 of the Seller Disclosure Letter contains a true and complete copy of (i) the audited balance sheets, statements of income, cash flow statements and all other financial information relating to the Property and the Business for the twelve (12) month periods ending December 31, 2004 and December 31, 2005, and (ii) the unaudited balance sheet, statement of income, cash flow statement and all other financial information relating to the Property and the Business for each of the monthly periods ended in January 2006 through September 2006 ((i) and (ii), collectively, the “ Financial Information ”). Except as noted therein and except, with respect to the unaudited Financial Information, for normal period-end adjustments and the lack of footnotes, the Financial Information was prepared in accordance with GAAP in effect at the time of such preparation applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements) and fairly presented in all material respects the consolidated financial position of the Business as of such date and for such period. Notwithstanding the foregoing, Buyer acknowledges that such Financial Information was prepared by Seller or its Affiliates for internal purposes, reflects allocation of some but not necessarily all costs incurred by Affiliates of Seller for its benefit, and that no representation or warranty is made that Buyer will be able to operate the Property or the Business for the costs reflected in the Financial Information.

Section 5.4 No Undisclosed Liabilities . Except for (i) Liabilities reflected or reserved against in the Financial Information, and (ii) Excluded Liabilities, Seller has no material Liabilities with respect to the Property or the Business.

Section 5.5 Real Property .

(a) Section 5.5(a) of the Seller Disclosure Letter contains a complete and accurate list of all real property leased by Seller (the “ Leased Property ”).

(b) Section 5.5(b) of the Seller Disclosure Letter contains a complete and accurate list of all real property and associated water rights (the “ Water Rights ”) owned by Seller

(collectively, the “ Land ”). Seller does not license, or otherwise use or occupy, any real property other than the Leased Property and the Land.

(d) Seller has a valid fee simple interest in the Land, subject to the Permitted Encumbrances.

(e) The Water Rights are valid and in good standing in their entirety and no part of the Water Rights has been forfeited or abandoned.

(f) True and correct copies of the Leases (together with all guarantees, amendments and modification thereof, the “ Lease Documents ”) have been delivered to Buyer. The Lease Documents are unmodified and in full force and effect, and there are no other agreements, written or oral, for the use and occupancy of the Leased Property. Neither Seller, nor to the Knowledge of Seller, any landlord or other party, is in default under the Lease Documents.

(g) To the Knowledge of Seller, (i) neither the Land nor the Leased Property is in violation of any applicable Laws, except for such violations which, individually or in the aggregate, would not adversely affect in any material respect Seller’s current use of the Land and the Leased Property; (ii) there are no material defects in the physical condition of the Land or the Leased Property and the Improvements are free from structural defects, with all building systems being in good working order and condition, ordinary wear and tear excepted, with no capital improvements or material repairs currently necessary or contemplated; (iii) the Improvements have not suffered any damage by fire or other casualty loss or destruction that has not been repaired and restored to its condition prior to such casualty; (iv) the Improvements are in good condition and repair and are adequate for the use, occupancy and operation of the Property and the Business; and (v) no brokerage commissions or finder’s fees are owed with respect to the Land, the Leased Property or the Business.

(h) Seller has not received written notice of, nor does Seller have any Knowledge of, any Legal Proceeding pending (or, to the Knowledge of Seller, threatened) relating to the Land or the Leased Property or the interests of Seller therein, which would be reasonably likely to interfere in any material respects with the use, occupancy, ownership, improvement, development and/or operation of the Land or the Leased Property or the interests of Seller therein.

(i) With the exception of the Lease Documents themselves and all matters of record that are disclosed by the Title Commitment, there are no Contracts or other Liabilities outstanding relative to the material encumbrance, lease, sublease or transfer of the Land or the Leased Property and there are no Persons in possession or claiming possession or the right to use the Land or the Leased Property. Seller has received no written notice that either the whole or any part of the Land or the Leased Property is subject to any pending suit for condemnation or other taking by any Governmental Entity, and Seller does not have any Knowledge that such condemnation or other taking is threatened or contemplated. Seller has not entered into any agreement in lieu of condemnation therefor.

(j) To the Knowledge of Seller, the Property is free of Encumbrances that would materially impair the use of the Property for the purposes for which it is held by Seller or the financeability of the Property.

Section 5.6 Intellectual Property .

(a) Section 5.6(a) of the Seller Disclosure Letter lists all (i) trademark and service mark registrations and applications and web domain URLs that are included in the Transferred Intellectual Property and (ii) trademark, service mark and trade name license agreements which are included in the Transferred Intellectual Property. To Seller’s Knowledge, Seller owns or possesses adequate and enforceable rights to use the Transferred Intellectual Property as set forth on Section 5.6(a) of the Seller Disclosure Letter.

(b) The conduct of the Business as currently conducted does not, and, to the Knowledge of Seller, immediately following the Closing, will not, infringe, misappropriate, or otherwise violate any Person’s Intellectual Property rights, and there has been no such claim asserted or threatened in the past six (6) years against Seller or, to the Knowledge of Seller, any other Person.

(c) To the Knowledge of Seller, no Person is infringing, misappropriating, or otherwise violating any Intellectual Property owned, used, or held for use by Seller in the conduct of the Business, and no such claims have been asserted or threatened against any Person by Seller or, to the Knowledge of Seller, by any other Person, in the past three (3) years.

(d) Seller has at all times complied in all material respects with all applicable Laws, contractual obligations, and its own rules, policies, and procedures relating to privacy, data protection, and the collection and use of personal information collected, used, or held for use by Seller in the conduct of the Business (the foregoing, collectively “ Privacy Obligations ”). No claims have been asserted to Seller in writing or to Seller’s Knowledge threatened against Seller alleging a violation of any Privacy Obligations. Seller takes reasonable measures to ensure that such information is protected against unauthorized access, use, modification, or other misuse.

Section 5.7 Agreements, Contracts and Commitments . True and correct copies of the Assumed Contracts (other than purchase orders entered into in the Ordinary Course of Business) have been made available to Buyer and a list of such Assumed Contracts is included in Section 1.1(d) of the Seller Disclosure Letter and (i) each Material Assumed Contract is valid and binding upon Seller (and, to Seller’s Knowledge, on all other parties thereto), in accordance with its terms and is in full force and effect, (ii) there is no material breach or material violation of or default by Seller under any of the Assumed Contracts, whether or not such breach, violation or default has been waived, (iii) to Seller’s Knowledge there is no material breach or material violation of or default by any other Person under any of the Assumed Contracts, and (iv) no event has occurred with respect to Seller, which, with notice or lapse of time or both, would constitute a breach, violation or default of, or give rise to a right of termination, modification, cancellation, foreclosure, imposition of a Lien, prepayment or acceleration under, any of the Material Assumed Contracts. Section 5.7 of the Seller Disclosure Letter sets forth, to Seller’s Knowledge, as of the date hereof, any breach or violation of or default by Seller or any other Person under any of the Assumed Contracts, whether or not such breach, violation or default has

been waived. Prior to the Closing, Seller shall update Section 5.7 of the Seller Disclosure Letter so that it sets forth, to Seller’s Knowledge, as of the Closing Date, any breach or violation of or default by Seller or any other Person under any of the Assumed Contracts, whether or not such breach, violation or default has been waived.

Section 5.8 Litigation; Orders .

(a) Except as set forth in Section 5.8 of the Seller Disclosure Letter, there are no pending Legal Proceedings that are material, individually or in the aggregate, that have been commenced by or against Seller or that otherwise relate to or may adversely affect the Business or any of the Purchased Assets. To the Knowledge of Seller, (i) no such Legal Proceeding has been threatened, and (ii) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Legal Proceeding.

(b) There are no Orders that are material, individually or in the aggregate, to which Seller, the Business or any of the Purchased Assets is subject, and Seller is not subject to any such Order that relates to the Business or any of the Purchased Assets. To the Knowledge of Seller, no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any such Order to which Seller, the Business or any of the Purchased Assets is subject.

Section 5.9 Environmental Matters . Except as specifically set forth in Section 5.9 of the Seller Disclosure Letter:

(a) With respect to the Property and the Business, Seller, the Property and the Business have complied with and are currently in material compliance with all applicable Environmental Laws, which compliance includes, without limitation, the possession by Seller of all permits and other governmental authorizations required under all Environmental Laws, and compliance with the material terms and conditions thereof, and assurance that all existing site conditions (including any on-site wells) are in material compliance with applicable requirements for operation or closure, as appropriate, and that any such wells requiring closure have been closed in material compliance with all applicable requirements.

(b) Seller has not received any Order, citation, directive, inquiry, notice, summons, warning or other communication from (i) any Governmental Entity, Person, employee or private citizen, or (ii) the current or prior owner or operator of any portion of the Property, of any alleged, actual or potential violation of or failure to comply with any Environmental Law, of any alleged, actual or potential Environmental Condition, or of any actual or threatened obligation to undertake or bear the cost of any Environmental Liability with respect to any portion of the Property or the Business.

(c) There are no pending or, to the Knowledge of Seller, threatened, claims, Legal Proceedings, Encumbrances, or other restrictions of any nature, resulting from any Environmental Condition or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Property or the Business.

(d) To Seller’s Knowledge, none of the following exists at, on, in or under any portion of the Property or related to the Business: (i) underground storage tanks, (ii) asbestos-containing

material in any form or condition, (iii) polychlorinated biphenyls, or (iv) landfills, surface impoundments, dumps, or disposal areas. Other than in material compliance with Environmental Laws, Seller has not permitted or conducted, nor is Seller aware of, any Hazardous Activity conducted with respect to the Property or relating to the Business.

(e) To the Knowledge of Seller, in connection with the Business, there has been no Release, or threat of Release, of any Hazardous Substances at or from the Property or at any other locations where any Hazardous Substances were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the Property or the Business. To the Knowledge of Seller, Seller has not in connection with the Business treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including, without limitation, any Hazardous Substance in a manner that has given or would give rise to an Environmental Liability.

(f) Seller has delivered to Buyer (to the extent in the possession of or reasonably available to Seller) true and complete copies of all environmental assessments and results of any reports, studies, analyses, tests, or monitoring possessed, received or initiated by Seller (or otherwise in the possession of or reasonably available to Seller) pertaining to Hazardous Substances, Releases, Environmental Conditions or Hazardous Activities in, on, or under the Property or relating to the Business, or concerning compliance by Seller or the Business, with any Environmental Laws.

(g) Seller is not required by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the effectiveness of any transactions contemplated hereby, (i) to perform a site assessment for Hazardous Substances, (ii) to remove or remediate Hazardous Substances, (iii) to give notice to or receive approval from any Governmental Entity, or (iv) to record or deliver to any person or entity any disclosure document or statement pertaining to environmental matters.

Section 5.10 Permits; Compliance with Laws .

(a) Seller and, to Seller’s Knowledge, each of its managers, members, officers and Persons required to be licensed under applicable Laws to perform such Person’s function with Seller (collectively, “ Licensed Parties ”), hold all material permits, registrations, findings of suitability, licenses, variances, exemptions, certificates of occupancy, orders and approvals of all Governmental Entities (including all authorizations under Gaming Laws), necessary to conduct the business and operations conducted at the Property and in connection with the Business, each of which is in full force and effect in all material respects (the “ Seller Permits ”) and, to Seller’s Knowledge, no event has occurred which permits, or upon the giving of notice or passage of time or both, would permit, revocation, non-renewal, modification, suspension, limitation or termination of any Seller Permit that currently is in effect. Seller, and to Seller’s Knowledge, each of its Licensed Parties, in each case whose position is related to the Property, are in compliance in all material respects with the terms of the Seller Permits. The operations conducted by Seller at the Property and in connection with the Business are not being conducted and have not been conducted in material violation of any applicable Law of any Governmental Entity (including, without limitation, any Gaming Laws). Seller has not received a written notice of any material investigation or review by any Governmental Entity with respect to Seller or the

Property that is pending, and, to Seller’s Knowledge, no material investigation or review is threatened, nor has any Governmental Entity indicated in writing any intention to conduct the same.

(b) Neither Seller nor, to Seller’s Knowledge, any of its Licensed Parties, in each case whose position is related to the Property or the Business, has received any written claim, demand, notice, complaint, court order or administrative order from any Governmental Entity in the past three (3) years under or relating to any violation or possible violation of any Gaming Laws related to actions or inactions at the Property which did or would be reasonably likely to result in fines or penalties equal to or greater than Twenty Five Thousand United States Dollars ($25,000). To Seller’s Knowledge, there are no facts, which if known to the Gaming Authorities will or would be reasonably likely to result in the revocation, limitation or suspension of any Gaming Approval.

(c) Neither Seller nor, to Seller’s Knowledge, any of its Licensed Parties, has, directly or indirectly, paid or delivered any fee, commission or other sum of money or item of property, however characterized, to any finder, agent, government official or other Person, in the United States or any other country, in any manner related to the Business, which would be illegal under any applicable Law.

(d) All gaming machines used on the Property or in connection with the Business have been approved by the appropriate Gaming Authorities with jurisdiction thereon and are owned by Seller or are subject to the Allocation Agreement and Memorandum of Understanding between Seller and Ruidoso Downs dated as of January 27, 2005, as amended (the “ Existing Allocation Agreement ”), which Existing Allocation Agreement has been approved by the New Mexico Gaming Control Board. The Existing Allocation Agreement is valid and binding upon Seller (and, to Seller’s Knowledge, on all other parties thereto), in accordance with its terms and is in full force and effect, (ii) there is no breach or violation of or default by Seller under the Existing Allocation Agreement, whether or not such breach, violation or default has been waived, (iii) to Seller’s Knowledge, there is no breach or violation of or default by any other Person under the Existing Allocation Agreement, and (iv) no event has occurred with respect to Seller, which, with notice or lapse of time or both, would constitute a breach, violation or default of, or give rise to a right of termination, modification, cancellation, foreclosure, imposition of a Lien, prepayment or acceleration under, the Existing Allocation Agreement.

Section 5.11 Labor Matters .

(a) Seller has provided to Buyer a list (which list is set forth in Section 5.11(a) of the Seller Disclosure Letter) setting forth, as of October 27, 2006, the following information for each of the Employees: name, job title (or positions held), date of hire, the current annual base salary (or hourly rate) and most recent bonus paid.

(b) To its Knowledge, Seller has good labor relations with employees employed by it. Seller and its employees, agents or representatives have not committed any material unfair labor practice as defined in the National Labor Relations Act. Seller is neither party to, nor bound by (and none of its respective properties or assets is bound by or subject to), any labor agreement, collective bargaining agreement, work rules or practices, or any other labor-related agreements

or arrangements with any labor union, labor organization, trade union or works council. There are no labor agreements, collective bargaining agreements, work rules or practices, or any other labor-related agreements or arrangements that pertain to any of the Employees and are enforceable against Seller. No Employees are represented by any labor union, labor organization, trade union or works council with respect to their employment with Seller.

(c) No labor union, labor organization, trade union, works council, or group of employees of Seller has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or to Seller’s Knowledge threatened in writing to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority. To the Knowledge of Seller, there are no labor union organizing activities with respect to any of the Employees. There are no actual or, to the Knowledge of Seller, threatened material arbitrations, material grievances, labor disputes, strikes, lockouts, slowdowns or work stoppages against or affecting Seller, nor has there been any of the foregoing during the 5-year period before the date of this Agreement.

(d) All personnel policies, rules and procedures applicable to the Employees are in writing. There are no written personnel manuals, handbooks, policies, rules or procedures applicable to any of the Employees, other than those set forth in Section 5.11(d) of the Seller Disclosure Letter, true and complete copies of which have heretofore been provided to Buyer.

(e) Seller is and has been in material compliance with all applicable Laws respecting employment and employment practices, including, without limitation, all Laws respecting terms and conditions of employment, health and safety, wages and hours, child labor, immigration, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, employee leave issues and unemployment insurance. Seller is not delinquent in accordance with Seller’s payment policies in payments to any Employees or former employees for any services or amounts required to be reimbursed or otherwise paid. Seller is not a party to, or otherwise bound by, any Order solely binding against Seller and/or its Affiliates relating to Employees or employment practices.

(f) Section 5.11(f) of the Seller Disclosure Letter contains a true and complete list of the names and the sites of employment or facilities of those individuals who suffered an “ employment loss ” (as defined in the WARN Act) at any site of employment or facility of Seller during the 90-day period prior to the date of this Agreement. Section 5.11(f) of the Seller Disclosure Letter shall be updated immediately prior to the Closing Date with respect to the 90-day period prior to the Closing Date.

(g) The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any breach or other violation of any collective bargaining agreement, employment agreement, consulting agreement or any other labor-related agreement to which Seller is a party and/or is bound by and/or that pertains to any of the Employees.

Section 5.12 Employee Benefits .

(a) Section 5.12 of the Seller Disclosure Letter sets forth an accurate and complete list of all bonus, stock option, stock purchase, restricted stock, incentive, fringe benefit, profit-sharing, pension or retirement, deferred compensation, medical, life insurance, disability, accident, salary continuation, severance, accrued leave, vacation, sick pay, sick leave, supplemental retirement and unemployment benefit plans, programs, arrangements, commitments and/or practices (whether or not insured, whether qualified or nonqualified, subject to ERISA or not, defined under Section 3(3) of ERISA or not, written or unwritten) for the benefit of any current or former employees, directors or consultants of Seller at the Property, as of the date of this Agreement (all of the foregoing plans, programs, arrangements, commitments, practices and Contracts referred to above are referred to, the “ Seller Benefit Plans ”).

(b) True and complete copies of the Seller Benefit Plans (which shall include all summary plan descriptions, summaries of material modifications and memoranda, employee handbooks and other written communications regarding the Seller Benefit Plans), have been made available by Seller to Buyer.

(c) At no time has Seller or any trade or business, whether or not incorporated (an “ ERISA Affiliate ”), that together with Seller would be deemed a “single employer” within the meaning of Section 4001(b)(1) of ERISA ever maintained, established, sponsored, participated in or contributed to any plan that is subject to Title IV of ERISA.

(d) At no time has Seller or any ERISA Affiliate ever contributed to or been requested to contribute to any “multiemployer pension plan,” as such term is defined in Section 3(37) of ERISA or a plan that is funded, in whole or in part, through a voluntary employees’ beneficiary association exempt from Tax under Section 501(c)(9) of the Code.

(e) Except for the continuation coverage requirements of COBRA or death benefits or retirement benefits under any “employee pension plan” as that term is defined in Section 3(2) of ERISA, Seller has no obligations or potential liability for benefits to employees, former employees or their respective dependents following termination of employment or retirement under any of the Seller Benefit Plans.

(f) Each of the Seller Benefit Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified. Each such Seller Benefit Plan is either a prototype plan entitled to rely on the opinion letter issued by the IRS as to the qualified status of such plan under Section 401(a) of the Code, to the extent provided in Revenue Procedure 2005-16, or has received a favorable determination letter from the IRS. No event has occurred which would affect such qualified status.

(g) The consummation of the transactions contemplated by this Agreement will not, either alone or in combination with any other event, (i) entitle any current or former employee, officer or director of Seller to severance pay, unemployment compensation or any other similar termination payment, or (ii) accelerate the time of payment or vesting, or increase the amount of or otherwise enhance any benefit due any such employee, officer or director. No amounts payable under any of the Seller Benefit Plans or any other contract, agreement or arrangement

with respect to which Seller may have any liability could fail to be deductible for federal income tax purposes by virtue of Section 280G of the Code.

(h) There are no pending or, to Seller’s knowledge, threatened or anticipated claims by or on behalf of any Seller Benefit Plan, by any employee or beneficiary under any such Seller Benefit Plan or otherwise involving any such Seller Benefit Plan (other than routine claims for benefits).

(i) Each of the Seller Benefit Plans has been operated and administered in all material respects in accordance with applicable Laws, including but not limited to ERISA and the Code.

(j) Neither Seller nor any ERISA Affiliate has, prior to the Closing Date and in any material respect, violated any of the health care continuation requirements of COBRA or the Health Insurance Portability Accountability Act of 1996, as amended, or any similar provision of state law applicable to its employees.

Section 5.13 Brokers . Neither Seller nor any of its Representatives has employed any broker, financial advisor or finder or incurred any Liability for any brokerage fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement. Seller agrees to indemnify, defend and hold Buyer free and harmless from and against any and all loss, liability, cost, damage and expense, including without limitation, reasonable attorneys’ fees, in connection with any and all fees, commissions and finder fees claimed in connection with this transaction. The provisions of this Section 5.13 shall survive the Closing or earlier termination of this Agreement.

Section 5.14 Insurance . The insurance policies maintained by Seller or its Affiliates in respect of the Property insure against risks and liabilities customary in Seller’s industry. Neither Seller nor its Affiliates is in material breach of any such policies and all such policies are in full force and effect.

Section 5.15 Personal Property . Except for Permitted Encumbrances, Seller has good and valid title to, or an adequate leasehold interest in, or other legal right to, all material tangible personal property necessary to conduct its business as presently conducted, excluding the Excluded Personal Property. Notwithstanding anything contained in this Section 5.15, the representations contained herein do not concern Land, Leased Property or Intellectual Property, which are the subject of the representations in Section 5.5 and Section 5.6 hereof, respectively.

Section 5.16 Sufficiency of Assets . The Purchased Assets constitute all of the tangible and intangible assets related to the Property and the Business that are reasonably necessary to operate the Property and the Business immediately following Closing in substantially the same manner the Property and the Businesses are currently being operated. None of Seller’s Affiliates or Representatives own, lease or license any assets used in the operation of the Business, or employ any Persons that work at the Property or in the Business, except as set forth in Section 5.16 of the Seller Disclosure Letter.

Section 5.17 Computer Software . Section 5.17 of the Seller Disclosure Letter sets forth a true and correct list of all material computer software used at the Property or relating to the Business (“ Assumed Software ”).

Section 5.18 Taxes .

(a) Seller

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