Exhibit 10.102

EQUITY INTEREST PURCHASE AGREEMENT

dated as of May 7, 2012

by and among

PENN NATIONAL GAMING, INC.,

as Buyer

HARRAH’S MARYLAND HEIGHTS, LLC,

as the Company

CAESARS ENTERTAINMENT OPERATING COMPANY, INC.,

HARRAH’S MARYLAND HEIGHTS OPERATING COMPANY, AND

PLAYERS MARYLAND HEIGHTS NEVADA, LLC

together, as Sellers

and

CAESARS ENTERTAINMENT CORPORATION,

as Parent

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TABLE OF CONTENTS

 

          Page   ARTICLE I. PURCHASE AND SALE OF EQUITY INTERESTS      1   

Section 1.1

   Purchase and Sale of Equity Interests      1   

Section 1.2

   Excluded Assets      3   

Section 1.3

   Retention of Assets      4   

Section 1.4

   Assignability and Consents      5   

Section 1.5

   Removal of Excluded Assets      6    ARTICLE II. TREATMENT OF LIABILITIES   
  6   

Section 2.1

   Assumed Liabilities      6   

Section 2.2

   Excluded Liabilities      7    ARTICLE III. PURCHASE PRICE AND DEPOSIT      8
  

Section 3.1

   Purchase Price      8   

Section 3.2

   Deposit      8   

Section 3.3

   Allocation of Purchase Price      9   

Section 3.4

   Risk of Loss      10   

Section 3.5

   Tax Withholding      10    ARTICLE IV. WORKING CAPITAL ADJUSTMENT AND OTHER
ADJUSTMENTS      10   

Section 4.1

   Estimated Closing Statement      10   

Section 4.2

   Estimated Operations Statement      10   

Section 4.3

   Final Adjustments      11   

Section 4.4

   Accounts Receivable; Accounts Payable; Deposits      12   

Section 4.5

   Corrective Actions      13   

Section 4.6

   Prorations      13    ARTICLE V. CLOSING      14   

Section 5.1

   Time and Place      14   

Section 5.2

   Deliveries at Closing      14    ARTICLE VI. REPRESENTATIONS AND WARRANTIES
OF PARENT AND SELLERS      16   

Section 6.1

   Organization of Parent and Sellers      16   

Section 6.2

   Authority; No Conflict; Required Filings and Consents      16   

Section 6.3

   Title to Equity Interests      17   

Section 6.4

   Litigation      17   

 

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ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY      18   

Section 7.1

   Organization of the Company; Capitalization      18   

Section 7.2

   Authority; No Conflict; Required Filings and Consents      18   

Section 7.3

   Financial Statements      20   

Section 7.4

   No Undisclosed Liabilities      20   

Section 7.5

   Taxes      20   

Section 7.6

   Real Property      22   

Section 7.7

   Intellectual Property      23   

Section 7.8

   Agreements, Contracts and Commitments      24   

Section 7.9

   Litigation      24   

Section 7.10

   Environmental Matters      24   

Section 7.11

   Permits; Compliance with Laws      25   

Section 7.12

   Labor Matters      26   

Section 7.13

   Employee Benefits      26   

Section 7.14

   Brokers      28   

Section 7.15

   Title to Purchased Assets      28   

Section 7.16

   Affiliate Transactions      28   

Section 7.17

   Minimum Cash      28   

Section 7.18

   Vendors      29   

Section 7.19

   Absence of Changes      29   

Section 7.20

   Insurance Coverage      29    ARTICLE VIII. REPRESENTATIONS AND WARRANTIES OF
BUYER      29   

Section 8.1

   Organization      29   

Section 8.2

   Authority; No Conflict; Required Filings and Consents      29   

Section 8.3

   Brokers      30   

Section 8.4

   Financing      31   

Section 8.5

   Licensability of Principals      31   

Section 8.6

   Permits; Compliance with Gaming Laws      31   

Section 8.7

   Waiver of Buyer’s Further Due Diligence Investigation      32   

Section 8.8

   Litigation      32    ARTICLE IX. COVENANTS      32   

Section 9.1

   Conduct of Business Prior to the Closing      32   

Section 9.2

   Cooperation; Notice; Cure      35   

Section 9.3

   No Solicitation      36   

Section 9.4

   Employee Matters      37   

Section 9.5

   Access to Information and the Real Property; Post-Closing Cooperation      39
  

Section 9.6

   Governmental Approvals      41   

Section 9.7

   Publicity      43   

Section 9.8

   Further Assurances and Actions      43   

 

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Section 9.9

   Transfer Taxes; HSR Filing Fee      44   

Section 9.10

   No Control      44   

Section 9.11

   Reservations; Guests; Valet Parking; Other Transition Matters      44   

Section 9.12

   Transfer of Utilities      46   

Section 9.13

   Certain Transactions      47   

Section 9.14

   FCC Approvals      47   

Section 9.15

   Insurance and Casualty      47   

Section 9.16

   Certain Notifications      48   

Section 9.17

   Non-Solicitation      48   

Section 9.18

   Transfer of Assets      48   

Section 9.19

   Customer List      49   

Section 9.20

   Lien Release      49   

Section 9.21

   Financing      49    ARTICLE X. CONDITIONS TO CLOSING      50   

Section 10.1

   Conditions to Each Party’s Obligation to Effect the Closing      50   

Section 10.2

   Additional Conditions to Obligations of Buyer      50   

Section 10.3

   Additional Conditions to Obligations of Sellers      51    ARTICLE XI.
TERMINATION AND AMENDMENT      51   

Section 11.1

   Termination      51   

Section 11.2

   Effect of Termination      53    ARTICLE XII. SURVIVAL; INDEMNIFICATION     
54   

Section 12.1

   Survival of Representations, Warranties, Covenants and Agreements      54   

Section 12.2

   Indemnification      55   

Section 12.3

   Procedure for Claims between Parties      56   

Section 12.4

   Defense of Third Party Claims      56   

Section 12.5

   Resolution of Conflicts and Claims      58   

Section 12.6

   Limitations on Indemnity      58   

Section 12.7

   Payment of Damages      59   

Section 12.8

   Exclusive Remedy      59   

Section 12.9

   Tax Matters      60    ARTICLE XIII. TITLE TO REAL PROPERTY      63   

Section 13.1

   Title Policy and UCC Search      63   

Section 13.2

   Defects Arising After the Effective Date      63   

Section 13.3

   Failure to Cure Title Defects      65   

Section 13.4

   Survey      65   

Section 13.5

   AS IS      65   

 

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Section 13.6

   No Conflict      68    ARTICLE XIV. MISCELLANEOUS      68   

Section 14.1

   Definitions      68   

Section 14.2

   Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury      82   

Section 14.3

   Notices      83   

Section 14.4

   Interpretation      83   

Section 14.5

   Entire Agreement      84   

Section 14.6

   Severability      84   

Section 14.7

   Assignment      84   

Section 14.8

   Parties of Interest      84   

Section 14.9

   Counterparts      85   

Section 14.10

   Mutual Drafting      85   

Section 14.11

   Amendment      85   

Section 14.12

   Extension; Waiver      85   

Section 14.13

   Time of Essence      85   

 

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EXHIBITS

 

Exhibit A    Form of Bill of Sale and Assignment Exhibit B    Form of Assignment
and Assumption Agreement Exhibit C    Form of Trademark Assignment Agreement
Exhibit D    Form of Deposit Escrow Agreement Exhibit E    Form of Customer List
Exhibit F    Form of Assignment of Equity Interests SCHEDULES    Schedule A   
Rebranding Plan Schedule B    Calculation of Net Working Capital Schedule C   
Calculation of Tray Ledger and Markers

 

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EQUITY INTEREST PURCHASE AGREEMENT

THIS EQUITY INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and entered
into as of May 7, 2012 (the “Effective Date”), by and among Penn National
Gaming, Inc., a Pennsylvania corporation (“Buyer”), Caesars Entertainment
Corporation, a Delaware corporation (“Parent”), Caesars Entertainment Operating
Company, Inc., a Delaware corporation (“CEOC”), Harrah’s Maryland Heights
Operating Company, a Nevada corporation (“HMHO”), Players Maryland Heights
Nevada, LLC, a Nevada limited liability company (“PMHN”, together with CEOC and
HMHO, “Sellers”), and Harrah’s Maryland Heights, LLC, a Delaware limited
liability company (the “Company”). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in Section 14.1.

WHEREAS, Sellers are the beneficial and record owners of all of the issued and
outstanding membership interests of the Company (the “Equity Interests”);

WHEREAS, the Board of Directors of Parent believes that it is in the best
interests of the Company, Sellers and Sellers’ members and stockholders to sell
all of the Equity Interests; and

WHEREAS, Buyer desires to acquire from Sellers and Sellers desire to sell to
Buyer, all of Sellers’ right, title and interest in and to the issued and
outstanding Equity Interests on the terms and subject to the conditions set
forth herein, after which the Company shall become a wholly-owned subsidiary of
Buyer.

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 EQUITY INTERESTS

Section 1.1 Purchase and Sale of Equity Interests. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, Sellers shall sell
and Buyer shall purchase from Sellers, the Equity Interests free and clear of
all Liens and Encumbrances other than Permitted Liens and Permitted
Encumbrances. As a result of Buyer’s acquisition of the Equity Interests, Buyer
shall indirectly acquire all of the Company’s right, title and interest in, and
under those certain rights and assets set forth below, free and clear of all
Liens and Encumbrances other than Permitted Liens and Permitted Encumbrances,
but excluding the Excluded Assets (the “Purchased Assets”):

(a) the Real Property;

(b) subject to Section 1.4, the Assumed Contracts;

(c) the Acquired Personal Property;

(d) Intentionally Omitted;

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(e) the Tray Ledger (pursuant to Section 4.2(a));

(f) the Markers (pursuant to Section 4.2(b));

(g) Intentionally omitted.

(h) the Transferred Marks and Domain Names, the Other Transferred Registered IP,
and the other Intellectual Property listed on Section 1.1(h) of the Company
Disclosure Letter (collectively, the “Transferred Intellectual Property”);

(i) the organizational documents, minute and stock books and records, and
corporate seals of the Company;

(j) (i) all corporate records of the Company, (ii) all other books and records
of the Company relating exclusively to the Business (except (A) to the extent
related to the Excluded Liabilities, the Excluded Assets or otherwise
proprietary to Sellers or their Affiliates (other than the Company) and (B) the
Customer Database), including all architectural, structural, service manuals,
engineering and mechanical plans, electrical, soil, wetlands, environmental, and
similar reports, studies and audits in the Company’s possession or control,
(iii) all plans and specifications for the Casino in the Company’s possession or
control and (iv) all human resources and other employee-related files and
records relating to the Transferred Employees, except to the extent prohibited
by Law; provided, however, Sellers may retain archival copies of all books,
files and records as set forth in Section 1.3;

(k) the Customer List;

(l) the Company Permits, Governmental Approvals and Gaming Approvals exclusively
related to the Casino, and pending applications therefor, to the extent
transferable by Law;

(m) all current assets reflected in the Final Closing Net Working Capital,
including Gift Certificates and Accounts Receivable;

(n) all bookings, contracts, or reservations for the use or occupancy of guest
rooms and/or meeting and banquet facilities of the Casino which use or occupancy
is scheduled to occur on or after the Closing Date;

(o) all advertising, marketing and promotional materials exclusively used or
held for use in the Business and to the extent such materials do not include any
System Marks and other than the Harrah’s Branded Paraphernalia;

(p) all landline telephone numbers used at the Casino on the Closing Date;

(q) all rights, claims, rebates, discounts and credits (including all
guarantees, indemnities, warranties and similar rights), performance or other
bonds, security or other deposits, advance payments and prepaid rents in favor
of the Company to the extent relating exclusively to (i) the Business as of the
Closing Date, (ii) the Purchased Assets, or (iii) the Assumed Liabilities;

 

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(r) all goodwill associated with the Business;

(s) all refunds or rebates of Taxes to which Buyer is entitled under
Section 12.9(g);

(t) the Rewards Information;

(u) any and all insurance proceeds, condemnation awards or other compensation
awards for loss or damage to any Purchased Assets, the Real Property and the
Business to the extent occurring after the date hereof but prior to the Closing
Date, and all right and claim of Sellers and the Company or any of their
respective Affiliates to any such insurance or other compensation not paid by
the Closing Date; and

(v) all other assets and properties of the Company exclusively used or held for
use in connection with the Business.

Section 1.2 Excluded Assets. Notwithstanding anything to the contrary contained
in this Agreement, immediately prior to the Closing, the Company shall assign to
Sellers (or their designee) and Sellers (or their designee) shall obtain the
right, title and interest in and to each and all of the following assets of the
Company (the “Excluded Assets”):

(a) the Excluded Contracts;

(b) any rights, claims and credits (including all guarantees, indemnities,
warranties and similar rights) in favor of the Company to the extent relating to
(i) any excluded assets set forth in this Section 1.2, (ii) any Excluded
Liability or (iii) the operation of the Business prior to the Closing Date, in
the case of clause (iii), other than those that are specifically Purchased
Assets under Section 1.1;

(c) the Markers listed on Section 1.2(c) of the Company Disclosure Letter;

(d) except for the Tray Ledger and the Markers (other than those Markers listed
on Section 1.2(c) of the Company Disclosure Letter) (all of which are part of
the Purchased Assets but shall be purchased in accordance with Section 4.2
hereof), and except for the Front Money which shall be treated as set forth in
Section 9.11(d) hereof, all chips or tokens of other casinos, cash, cash
equivalents, bank deposits or similar cash items of Sellers, the Company or
Sellers’ Affiliates held at the Casino as of the Closing to the extent not
reflected in the Final Closing Net Working Capital;

(e) all refunds or rebates of Taxes to which Sellers are entitled under
Section 12.9(g);

 

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(f) all of the human resources and other employee-related files and records,
other than such files and records relating exclusively to the Transferred
Employees (which files and records Sellers may retain an archival copy of, to
the extent permitted by Law);

(g) the Excluded Personal Property;

(h) the Excluded Software;

(i) all indebtedness, accounts payable, or other obligations owed to the Company
by any Seller or any of their Affiliates;

(j) without limitation to Buyer’s rights pursuant to Sections 1.1(k) and 1.1(t),
the Customer Database;

(k) all data, files and other materials located on any storage device (including
personal computers and servers) located at the Real Property (other than the
books and records described in Section 1.1(j) hereof);

(l) without limitation to Buyer’s rights pursuant to Sections 1.1(k) and 1.1(t),
the Total Rewards Program and any other player loyalty or rewards program of
Sellers or their Affiliates and all customer related data;

(m) any assets set forth on Section 1.2(m) of the Company Disclosure Letter;

(n) the Company Benefit Plans;

(o) the Company Insurance Policies (except as provided in Section 9.15);

(p) the System Marks;

(q) the Harrah’s Branded Paraphernalia; and

(r) all other assets and properties of the Company not exclusively used or held
for use in connection with the Business.

Section 1.3 Retention of Assets. Notwithstanding anything to the contrary
contained in this Agreement, Sellers and their Affiliates may retain and use, at
their own expense, archival copies of all of the Assumed Contracts, books,
records and other documents or materials conveyed hereunder, in each case, which
(a) are used in connection with Sellers’ or any of their Affiliates’ businesses
other than the Business or (b) if Sellers, in good faith, determine that Sellers
are reasonably likely to need access to, in connection with the preparation or
filing of any Tax Returns or compliance with any other Tax reporting obligations
or the defense (or any counterclaim, cross-claim or similar claim in connection
therewith) of any suit, claim, action, proceeding or investigation (including
any Tax audit or examination) against or by Sellers, the Company or any of its
Affiliates pending or threatened as of the Closing Date; provided, that Sellers
shall, and shall cause their Affiliates to, hold such documents or materials
relating to the Business, and all confidential or proprietary information
contained therein, confidential pursuant to Section 9.5(b).

 

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Section 1.4 Assignability and Consents.

(a) Notwithstanding anything to the contrary contained in this Agreement, if the
attempted or actual conveyance, assignment or transfer to Sellers (or their
designee) of any Excluded Assets is non-assignable or non-transferrable, by its
terms, without the consent of a third party (each, a “Non-Assignable Excluded
Asset”), then Sellers and Buyer shall each use their reasonable best efforts to
obtain the authorization, approval, consent or waiver of such other party to the
assignment of any such Non-Assignable Excluded Asset. Notwithstanding the
foregoing, in no event shall the failure to obtain a consent with respect to a
Non-Assignable Excluded Asset delay or otherwise impede the Closing, but the
Closing shall not constitute the sale, conveyance, assignment, transfer or
delivery of any such Non-Assignable Excluded Asset, and this Agreement shall not
constitute a conveyance, assignment, transfer or delivery of any such
Non-Assignable Excluded Asset unless and until such authorization, approval,
consent or waiver is obtained. The parties shall enter into a commercially
reasonable arrangement to provide that Sellers shall receive the interest of the
Company in the benefits and obligations under such Non-Assignable Excluded
Asset, and Sellers shall be liable to the Company in a fashion equivalent to
what Sellers’ Liabilities would be under the Non-Assignable Excluded Asset if it
were assigned, until such time as such third party authorization, approval,
consent or waiver shall have been obtained, and such arrangement shall include
performance by the Company as an agent of Sellers to the extent commercially
reasonable. Provided that Sellers are liable for all Liabilities related to a
Non-Assignable Excluded Asset that Sellers would otherwise be liable for under
this Agreement if such Non-Assignable Excluded Asset constituted an Excluded
Asset, Buyer shall, and shall cause the Company to, promptly pay over to Sellers
(or their designee) the net amount (after expenses and Taxes) of all payments
received by it in respect of such Non-Assignable Excluded Asset. In the event
that the Company acts as Sellers’ agent or is otherwise required to act to
fulfill obligations related to a Non-Assignable Excluded Asset pursuant to this
Section 1.4(a), Sellers shall assist and fully cooperate with Buyer and the
Company in fulfilling such obligations.

(b) Once authorization, approval or waiver of or consent for the conveyance,
assignment or transfer of any such Non-Assignable Excluded Asset is obtained,
such Non-Assignable Excluded Asset shall be conveyed, assigned, transferred and
delivered to Sellers (or their designee) without any further action by the
parties hereto. Notwithstanding anything to the contrary contained in this
Agreement, Sellers shall assume all Liabilities in respect of any Non-Assignable
Excluded Asset that Sellers would otherwise assume under this Agreement if such
Non-Assignable Excluded Asset constituted an Excluded Asset if it is receiving
the benefits thereof; provided, further, that Sellers shall also be liable to
the Company for performing its obligations under the arrangements described in
Section 1.4(c) hereof.

(c) Buyer understands and agrees that it is solely Buyer’s responsibility to
obtain any and all operating agreements (other than the Assumed Contracts)
necessary to conduct the Business from and after the Closing Date, including
replacement software license agreements for the software which will replace the
Excluded Software. Subject to the terms

 

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hereof, Buyer shall also be responsible for obtaining new licenses and permits
for the operation of the Business from and after the Closing. Except as set
forth in Section 1.1(l) hereof, no licenses or permits will be transferred by
Sellers in connection with the sale of the Equity Interests.

Section 1.5 Removal of Excluded Assets. All items located at the Real Property
that constitute Excluded Assets may be removed on or prior to the Closing Date
and within ninety (90) days after the Closing Date (the “Removal Period”) by
Sellers, their Affiliates or their respective Representatives, with the removing
party making any repairs necessary as a result of any damage caused during such
removal, but without any obligation on the part of Sellers, their Affiliates or
any removing party to replace any item so removed. Buyer will provide Sellers,
their Affiliates and their respective Representatives with reasonable access to
the Real Property to effect such removal, at reasonable times within the Removal
Period and after at least one (1) business day’s prior notice to Buyer, and
Sellers will use reasonable efforts to minimize disruption to Buyer’s
operations. Buyer, at its option, will have the right to have a Representative
present during any such removal activity. Sellers recognize that Buyer will be
replacing Excluded Software and that Buyer desires that its replacement software
will be operational as of the Closing. Sellers agree to, and to cause the
Company to, cooperate reasonably with Buyer in effecting the transition from
Excluded Software to replacement software, by allowing Buyer access to the Real
Property to install the replacement software; provided that: (a) there shall be
no material interference with the Business before the Closing; (b) Sellers shall
be reimbursed for any reasonable out-of-pocket costs incurred by the Company in
connection with such cooperation; and (c) if Sellers or the Company shall be
required to reveal proprietary information of Sellers or their Affiliates to
Buyer in connection with such cooperation, then Sellers or the Company will, at
Sellers’ option, either (i) not de-install third party Excluded Software that is
now installed on personal computers that are included in the Acquired Personal
Property (unless required to do so by Law or by agreement with the provider of
the Excluded Software) and Buyer agrees that Buyer will either obtain new
licenses for such Excluded Software or cease to use such Excluded Software
following the Closing, or (ii) de-install third party Excluded Software that is
now installed on personal computers included in the Acquired Personal Property.
Buyer’s agreement pursuant to this Section 1.5 shall survive the Closing and
shall be covered by Buyer’s indemnification obligations in ARTICLE XII hereof
and enforceable by Sellers by any means available at Law or equity, including
injunctive relief, which Buyer hereby agrees is an appropriate remedy. If
Sellers do not remove all of the Excluded Assets located at the Real Property
within the Removal Period, then Buyer may dispose of or retain any such
remaining Excluded Assets.

ARTICLE II.

TREATMENT OF LIABILITIES

Section 2.1 Assumed Liabilities. Upon the terms and subject to the conditions
set forth in this Agreement, the Company shall retain and be solely responsible
for, and as a result of Buyer’s acquisition of the Equity Interests Buyer shall
indirectly assume, only the Liabilities of the Company set forth in this
Section 2.1, other than the Excluded Liabilities (collectively the “Assumed
Liabilities”):

 

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(a) all Liabilities relating to the Purchased Assets or the Business, including
all Liabilities, burdens and obligations arising in respect to any Assumed
Contracts, accruing, arising out of, or relating to events, occurrences, pending
or threatened litigation, acts, omissions and claims happening from and after
the Closing;

(b) all Liabilities for replacement of, or refund for, damaged, defective or
returned goods relating to the Purchased Assets from and after the Closing,
including items purchased in a gift shop or similar facility at the Casino from
and after the Closing, but not including any pending product liability or
litigation claims relating to the sale of any goods happening prior to the
Closing;

(c) all Liabilities with respect to entertainment and hotel reservations
relating to the Casino (to the extent reflected in the Final Closing Net Working
Capital) from and after the Closing;

(d) all Liabilities for (i) Taxes arising out of or relating to the ownership of
the Company or the Purchased Assets after the Closing Date and (ii) Transfer
Taxes that are the responsibility of Buyer pursuant to Section 9.9(a), in each
case other than any Excluded Taxes (it being agreed and understood that this
clause (d) is the only clause of Section 2.1 that applies to Taxes);

(e) any Liabilities relating to the employment of the Transferred Employees by
Buyer and its Affiliates (including, following the Closing, the Company and its
Subsidiaries) solely to the extent accruing, arising out of, or relating to
events, occurrences, acts, omissions and claims happening after the Closing (for
the avoidance of doubt, including any Liabilities relating to the termination of
any Transferred Employee from and after the Closing);

(f) all current Liabilities reflected in the Final Closing Net Working Capital,
including the Progressive Liabilities and the Customer Deposits;

(g) any Liabilities assumed by Buyer pursuant to Section 9.4(f) hereof;

(h) without limiting the rights and obligations of the parties set forth in
ARTICLE XII hereof, all Liabilities under Environmental Laws, including
Environmental Liabilities relating to, resulting from, caused by or arising out
of ownership, operation or control of the Real Property or the other Purchased
Assets, arising before or after the Closing Date, and any Liability relating to
contamination or exposure to Hazardous Substances at or attributable to the Real
Property or the other Purchased Assets;

(i) all of the Company’s gaming chips and tokens with respect to the Business,
which are branded with the name, design, logo or other similar indicia of the
Casino, that are in circulation as of the Closing (collectively, the “Chips and
Tokens”); and

(j) any items set forth on Section 2.1 of the Company Disclosure Letter.

Section 2.2 Excluded Liabilities. Notwithstanding anything contained in this
Agreement to the contrary, immediately prior to the Closing, the Company shall
assign and

 

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Sellers shall assume, and from and after such time Sellers shall be responsible
for, only the following Liabilities of the Company (“Excluded Liabilities”):

(a) except as specifically listed in Section 2.1, all Liabilities relating to
any Purchased Assets or the Business accruing, arising out of, or relating to
events, occurrences, pending or threatened litigation, acts, omissions and
claims happening or existing prior to the Closing, including all Liabilities
arising from any breach of any Assumed Contract by Sellers or the Company on or
prior to the Closing;

(b) any Liabilities for any Excluded Taxes;

(c) any Liabilities relating to the Transferred Employees accruing, arising out
of, or relating to events, occurrences, pending or threatened litigation, acts,
omissions and claims happening or existing prior to the Closing and any
Liabilities arising out of or relating to the employment of any directors,
employees or other service providers of Sellers or any of their Affiliates
(other than the Transferred Employees), regardless of when arising;

(d) any Liabilities owed to any Seller or any of their Affiliates other than the
Company;

(e) any Liability that relates to any Excluded Asset, unless otherwise included
in the Final Closing Net Working Capital;

(f) any pending product liability or litigation claims relating to the sale of
any goods happening prior to the Closing; and

(g) any Liability of the Company for expenses or fees relating to the
preparation, negotiation or entering into of this Agreement, including fees of
financial advisors, attorneys, consultants and accountants.

ARTICLE III.

PURCHASE PRICE AND DEPOSIT

Section 3.1 Purchase Price. At the Closing, as consideration for the Equity
Interests, Buyer shall deliver or cause to be delivered by electronic transfer
of immediately available funds to an account designated by Sellers a cash
payment equal to the sum of (a) six hundred ten million dollars ($610,000,000)
(the “Purchase Price”) plus (b) the Estimated Closing Payment (which can be a
positive or negative number) plus (c) the Estimated Operations Payment. The
Purchase Price, together with the Estimated Closing Payment and the Estimated
Operations Payment is the “Closing Payment.”

Section 3.2 Deposit. On the date hereof, Buyer shall deposit nine million
one-hundred fifty thousand dollars ($9,150,000) (the “Deposit”) with Deutsche
Bank National Trust Company (the “Escrow Agent”) pursuant to an escrow agreement
in substantially the form attached hereto as Exhibit D (the “Deposit Escrow
Agreement”) executed and delivered by Parent, Buyer and the Escrow Agent on the
Effective Date; provided, further that for each two-month period by which the
Outside Date is extended by Parent or Buyer pursuant to Section 5.1(b)(ii),
Buyer shall,

 

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subject to Section 5.1(b)(iii), deposit an additional nine million one-hundred
fifty thousand dollars ($9,150,000) (each, an “Extension Deposit”) with the
Escrow Agent pursuant to the Deposit Escrow Agreement promptly and in any event
within three (3) business days of such extension. Upon the Closing, the Deposit
and any Extension Deposit, plus the interest accrued thereon shall be credited
against the Purchase Price and the parties shall instruct the Escrow Agent to
promptly release and pay the Deposit and any Extension Deposit, plus the
interest accrued thereon to Parent (or its designee) pursuant to the terms of
the Deposit Escrow Agreement. Upon the termination of this Agreement, the
parties shall instruct the Escrow Agent to promptly release and pay the Deposit
and any Extension Deposit, plus the interest accrued thereon to Buyer or Parent,
as applicable, pursuant to Section 11.2(c) hereof and the terms of the Deposit
Escrow Agreement. In the event of 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
written agreement acknowledges and expressly amends this Section 3.2.

Section 3.3 Allocation of Purchase Price. For federal income Tax and applicable
state and local Tax Purposes, Buyer and Sellers hereby agree to treat (and to
cause their respective Affiliates to treat) the purchase and sale of Equity
Interests pursuant to this Agreement in accordance with Revenue Ruling 99-6
(Situation 2). No more than thirty (30) days after the Determination Date, Buyer
shall prepare and deliver to Sellers a written statement setting forth the
allocation of the purchase price (as determined for federal income tax purposes,
taking into account any additional amounts payable pursuant to Section 4.3 and
any assumed liabilities that are required to be treated as part of the purchase
price for federal income tax purposes) among the Purchased Assets (and any other
assets that are considered to be acquired for federal income tax purposes) in
accordance with Section 1060 of the Code and the Treasury Regulations thereunder
(the “Purchase Price Allocation”). Buyer and Sellers shall endeavor in good
faith to agree on the Purchase Price Allocation. If Buyer and Sellers have not
agreed on the Purchase Price Allocation within sixty (60) days following the
Determination Date, then any disputed matter(s) will be finally and conclusively
resolved by an independent accounting firm of recognized national standing
reasonably acceptable to Buyer and Sellers with no existing relationship with
either party (the “Auditor”) in accordance with this Agreement, as promptly as
practicable, and such resolution(s) will be reflected on the Purchase Price
Allocation, provided that the resolution for each disputed item contained in the
Auditor’s determination shall be made subject to the definitions and principles
set forth in this Agreement, and shall be consistent with either the position of
Sellers or Buyer. Buyer and Sellers shall each use its reasonable best efforts
to furnish to the Auditor such work papers and other documents and information
pertaining to the disputed item as the Auditor may request. Sellers and Buyer
shall bear their own expenses in the preparation and review of the Purchase
Price Allocation, except that the fees and expenses of the Auditor shall be
borne equally by Buyer on the one hand and Sellers on the other hand. Buyer and
Sellers shall file all Tax Returns (including, but not limited to, IRS Form
8594) consistent with the Purchase Price Allocation, and shall not take any
position inconsistent with the Purchase Price Allocation or agree to any
proposed adjustment to the Purchase Price Allocation by any Governmental Entity,
without first giving the other parties prior written notice and an opportunity
to confer regarding such adjustment; provided, however, that the Purchase Price
Allocation shall be adjusted by any other amounts paid under this Agreement
following the

 

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Determination Date that affect the purchase price for federal income tax
purposes; and provided, further, that nothing contained herein shall prevent
Buyer or Sellers from settling any proposed deficiency or adjustment by any
Governmental Entity based upon or arising out of the Purchase Price Allocation,
or require Buyer or Sellers to litigate before any court any proposed deficiency
or adjustment by any Governmental Entity challenging the Purchase Price
Allocation.

Section 3.4 Risk of Loss. Subject to Section 9.15 hereof, until the Closing,
Sellers shall bear the risk of any loss or damage to the Company, including the
Purchased Assets, from condemnation, fire, casualty or any other occurrence.
Following the Closing, Buyer shall bear the risk of any loss or damage to the
Company, including the Purchased Assets, from condemnation, fire, casualty or
any other occurrence.

Section 3.5 Tax Withholding. Notwithstanding anything in this Agreement to the
contrary, Buyer shall be entitled to deduct and withhold from any amounts
otherwise payable under this Agreement to Sellers or any other Person such
amounts as are required to be deducted or withheld under the Code, or any
provision of applicable Law with respect to the making of such payment. To the
extent that amounts are so deducted and withheld and paid over to the applicable
Governmental Entity, such deducted and withheld amounts shall be treated for all
purposes of this Agreement as having been paid to Sellers or such other Person
in respect of which such deduction and withholding were made.

ARTICLE IV.

WORKING CAPITAL ADJUSTMENT AND OTHER ADJUSTMENTS

Section 4.1 Estimated Closing Statement. No less than five (5) business days
prior to the Closing Date, Sellers shall prepare and deliver to Buyer a written
closing statement (the “Estimated Closing Statement”) of the Estimated Closing
Net Working Capital, including the resulting Estimated Closing Net Working
Capital Overage (if any) or Estimated Closing Net Working Capital Shortage (if
any), and the proration amounts pursuant to Section 4.6 (to the extent not
already reflected in the Estimated Closing Net Working Capital), which Estimated
Closing Statement shall be prepared in good faith and on a basis consistent with
the preparation of the Financial Information and the calculation of Net Working
Capital set forth on Schedule B. Any amounts determined to be due and owing to
Sellers pursuant to the Estimated Closing Statement shall be paid by Buyer at
the Closing pursuant to Section 3.1 hereof (the “Estimated Closing Payment”).
Any amounts determined to be due and owing to Buyer by Sellers pursuant to the
Estimated Closing Statement shall reduce the Closing Payment payable to Sellers
at the Closing pursuant to Section 3.1.

Section 4.2 Estimated Operations Statement. Not less than five (5) business days
prior to the Closing Date, Sellers shall prepare and deliver to Buyer an
estimated accounting for the Casino as of the Closing Date of each of the items
set forth in this Section 4.2 (the “Estimated Operations Statement”), which
Estimated Operations Statement shall be prepared in good faith and on a basis
consistent with the calculation of the Tray Ledger and Markers set forth on
Schedule C. All amounts determined to be due and owing to Sellers by Buyer
pursuant to the Estimated Operations Statement shall be paid by Buyer to Sellers
at the Closing, pursuant to Section 3.1 hereof (the “Estimated Operations
Payment”).

 

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(a) Tray Ledger. Buyer shall purchase the Tray Ledger for the Casino at the face
amount of such Tray Ledger as set forth in the Estimated Operations Statement.

(b) Markers. Buyer shall purchase the Markers for the Casino from Sellers at the
face amount of such Markers as set forth in the Estimated Operations Statement.

(c) House Funds. Buyer and Sellers shall mutually agree upon a procedure
consistent with the counting of House Funds in the Ordinary Course of Business
and in accordance with applicable Laws for counting and determining all House
Funds as of the Closing, with such amount being included in the Calculation of
the Estimated Closing Net Working Capital. Buyer shall have no obligation to
purchase chips or tokens of other casinos, all of which shall be retained by
Sellers and are Excluded Assets.

Section 4.3 Final Adjustments.

(a) No more than ninety (90) days after the Closing Date, Sellers shall prepare
and deliver to Buyer a written statement (the “Final Closing Statement”) of the
Final Closing Net Working Capital, including the resulting Final Closing Net
Working Capital Overage (if any) or Final Closing Net Working Capital Shortage
(if any), and including a detailed breakdown of the various amounts of each
component of Net Working Capital, and the proration amounts pursuant to
Section 4.6 (to the extent not already reflected in the Estimated Closing Net
Working Capital), which Final Closing Statement shall be prepared in good faith
and on a basis consistent with the preparation of the Financial Information and
the calculation of Net Working Capital set forth on Schedule B. Any such amounts
determined pursuant to the Final Closing Statement shall be paid to either
Sellers or Buyer pursuant to Section 4.3(d) hereof (the “Final Closing
Payment”).

(b) No more than ten (10) business days after the Closing Date, Sellers shall
deliver to Buyer a final accounting as of the Closing of each of the items set
forth in Section 4.2 hereof (the “Final Operations Statement”), which Final
Operations Statement shall be prepared in good faith and on a basis consistent
with the calculation of the Tray Ledger and Markers set forth on Schedule C. Any
such amounts determined pursuant to the Final Operations Statement shall be paid
to either Sellers or Buyer, as applicable, pursuant to Section 4.3(d) hereof
(the “Final Operations Payment”).

(c) If Buyer disagrees with the calculation of any amounts on the Final Closing
Statement and/or the Final Operations Statement (collectively, the “Final
Statements”), Buyer shall, within twenty (20) business days after its receipt of
the applicable Final Statement, notify Sellers of such disagreement in writing,
setting forth in detail the particulars of such disagreement. Sellers will
provide Buyer reasonable access to any of Sellers’ records and relevant
employees not otherwise available to Buyer as a result of the transactions
contemplated hereby, to the extent reasonably related to Buyer’s review of the
Final Statements. If Buyer does not provide such notice of disagreement within
the twenty (20) business day period, Buyer shall be deemed to have accepted the
applicable Final Statement and the calculation of all amounts set forth thereon,
which shall be final, binding and conclusive for purposes of this Agreement and
not subject to any further recourse by Buyer or its Affiliates. If any such
notice of disagreement is timely provided, Buyer and Sellers shall use
reasonable best efforts for a period of five (5)

 

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business days (or such longer period as they may mutually agree) to resolve any
disagreements with respect to the calculation of any and all amounts set forth
on the applicable Final Statement. If, at the end of such period, the parties
are unable to fully resolve the disagreements, the Auditor shall resolve any
remaining disagreements. The Auditor shall be instructed to (i) consider only
such matters as to which there is a disagreement, (ii) determine, as promptly as
practicable, whether the disputed amounts set forth on the applicable Final
Statement were prepared in accordance with the standards set forth in this
Agreement, and (iii) deliver, as promptly as practicable, to Sellers and Buyer
its determination in writing. The resolution for each disputed item contained in
the Auditor’s determination shall be made subject to the definitions and
principles set forth in this Agreement, and shall be consistent with either the
position of Sellers or Buyer. Sellers and Buyer shall bear their own expenses in
the preparation and review of the Estimated Closing Statement, Final Closing
Statement, Estimated Operations Statement and Final Operations Statement, except
that the fees and expenses of the Auditor shall be paid one-half by Buyer and
one-half by Sellers. The determination of the Auditor shall be final, binding
and conclusive for purposes of this Agreement and not subject to any further
recourse by Buyer, Sellers or their respective Affiliates. Any dispute with
respect to the Final Statements will not affect any undisputed amounts in the
Final Statements or the related payments contemplated by Section 4.3(d) hereof.
The date on which an amount set forth on a Final Statement is finally determined
in accordance with this Section 4.3(c) is hereinafter referred to as the
“Determination Date.”

(d) Any amounts determined to be due and owing to Sellers from Buyer or to Buyer
from Sellers, as applicable, pursuant to this Section 4.3 shall be paid by
Sellers to Buyer or by Buyer to Sellers, as applicable, within two (2) business
days after the applicable Determination Date.

Section 4.4 Accounts Receivable; Accounts Payable; Deposits.

(a) Accounts Receivable. After the Closing, Parent and Sellers shall promptly
deliver to Buyer any cash, checks or other property that they or any of their
Affiliates receive to the extent relating to the Accounts Receivable of the
Business included in the Final Closing Net Working Capital. After the Closing,
Buyer shall promptly deliver to Sellers any cash, checks or other property that
Buyer or its Affiliates receive to the extent relating to any Accounts
Receivable existing as of the Closing Date and not included in the Final Closing
Net Working Capital. Neither party nor their Affiliates shall agree to any
settlement, discount or reduction of the Accounts Receivable belonging to the
other party. Neither party nor their Affiliates shall assign, pledge or grant
any security interest in the Accounts Receivable of the other party.

(b) Accounts Payable. Each party and their Affiliates will promptly deliver to
the other a true copy of any invoice, written notice of accounts payable or
written notice of a dispute as to the amount or terms of any accounts payable
received from the creditor of such accounts payable to the extent such accounts
payable is owed by the other party. Should either party discover it has paid an
accounts payable belonging to the other party, then Buyer or Sellers, as
applicable, shall provide written notice of such payment to the other party and
the other party shall promptly reimburse the party that paid such accounts
payable all amounts listed on such notice.

 

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(c) Customer Deposits. Customer Deposits received by the Company relating to
rooms, services and/or events relating to the period from and after the Closing
shall be retained by the Company at the Closing and included in the calculation
of the Final Closing Net Working Capital. Sellers shall not have further
liability or responsibility after Closing with respect to any Customer Deposits
relating to the period from and after the Closing and Sellers and their
Affiliates shall be entitled to retain Customer Deposits to the extent of rooms
and/or services furnished by Sellers prior to the Closing. “Customer Deposits”
include all security and other deposits, advance or pre-paid rents or other
amounts and key money or deposits (including any interest thereon) and Front
Money.

Section 4.5 Corrective Actions. If, after the Closing, Sellers and Buyer
determine that Sellers have transferred to Buyer, directly or indirectly, any
assets or Liabilities that, pursuant to the terms of this Agreement, constitute
Excluded Assets or Excluded Liabilities, or Sellers have retained any assets or
Liabilities that, pursuant to the terms of this Agreement, constitute Purchased
Assets or Assumed Liabilities, then such assets or Liabilities shall be returned
or transferred, as applicable, for no additional payment, and the other party
shall be obliged to accept such return or transfer.

Section 4.6 Prorations. The prorations relating to the Purchased Assets and the
ownership and operation of the Business set forth in this Section 4.6 will be
made as of the Closing. The prorations shall be estimated and prepared by
Sellers and included in the Estimated Closing Statement and the Final Closing
Statement delivered to Buyer pursuant to Section 4.1 and Section 4.3,
respectively (in each case to the extent not already reflected in the Estimated
Closing Net Working Capital).

(a) Utility 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 Sellers and charges thereafter
paid by Buyer. Prepaid utility charges shall be adjusted on the Estimated
Closing Statement and Final Closing Statement. 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 Sellers as of the Closing. Sellers or Buyer, as
appropriate, shall, upon receipt, submit a copy of the utility billings for any
such charges to the other party and such receiving party shall pay its pro-rata
share of such charges to the submitting party within seven (7) days from the
date of any such submission (to the extent not already reflected in the
Estimated Closing Net Working Capital).

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

 

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Except as otherwise specified in this Section 4.6 or agreed by the parties or
with respect to adjustments to the Purchase Price made pursuant to Section 4.3,
the net amount of all such prorations will be settled and paid on the Closing
Date.

ARTICLE V.

CLOSING

Section 5.1 Time and Place.

(a) Unless this Agreement is earlier terminated pursuant to ARTICLE XI hereof,
the closing of the transactions contemplated by this Agreement, including the
purchase and sale of the Equity Interests (the “Closing”), shall take place
promptly (but in no event more than five (5) business days) following the
satisfaction or waiver by the applicable party of the conditions set forth in
ARTICLE X hereof (other than those conditions to be satisfied or waived at or
upon the Closing), at such time and place as is agreed to by the parties (the
“Closing Date”), to be effective as of 12:01 a.m. Central Time on the Closing
Date.

(b) Notwithstanding the foregoing:

(i) Sellers may postpone the Closing Date as set forth in Section 13.2 hereof;

(ii) the Closing Date shall not be later than the date which is six (6) months
after the date of this Agreement (as may be extended pursuant to this
Section 5.1, the “Outside Date”), unless extended by Parent or Buyer, one or
more times, by a two (2) month period by providing the other with a written
notice of an intent to postpone the Closing Date no earlier than ten
(10) business days prior to the then-applicable Outside Date and no later than
five (5) business days prior to the then-applicable Outside Date (any which
extension shall give rise to Buyer’s obligation to pay an Extension Deposit
pursuant to Section 3.2); provided, however, that in no event shall the Closing
Date be later than the date which is twelve (12) months after the date of this
Agreement; and

(iii) notwithstanding anything to the contrary in this Section 5.1(b), if, at
the time of delivery of an extension notice pursuant to Section 5.1(b)(ii),
(x) Buyer has taken, or agreed to or committed to take (A) any action in breach
of Section 9.13, or (B) any action that has materially delayed, or is reasonably
likely to materially delay, the receipt of, or materially impact the ability of
a party to obtain, any Required Governmental Consent that has not been obtained,
or (C) any action that has caused, or is reasonably likely to cause, any
Governmental Entity to commence or re-open a Proceeding that would reasonably be
expected to challenge or prevent the transactions contemplated by this Agreement
or delay the Closing beyond the Outside Date, then the amount of the Extension
Deposit payable by Buyer pursuant to Section 3.2 in connection with such
extension shall be equal to twenty-three million three-hundred sixty-three
thousand dollars ($23,363,000).

Section 5.2 Deliveries at Closing. The following documents will be executed
and/or delivered by Buyer, Sellers and/or the Company, as appropriate, at or
prior to the Closing:

(a) Bill of Sale for Personal Property. A Bill of Sale and Assignment
substantially in the form attached as Exhibit A (the “Bill of Sale and
Assignment”), conveying to Sellers (or their designee) all of the Excluded
Assets.

 

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(b) Excluded Liabilities. An Assignment and Assumption Agreement substantially
in the form attached as Exhibit B (the “Assignment and Assumption Agreement”) to
transfer the Excluded Liabilities to Sellers (or their designee), and Sellers
agree to execute and deliver such other assumption agreements or other documents
required by any Person to effectuate the assumption of the Excluded Liabilities.

(c) FIRPTA Certificate. A duly executed non-foreign person affidavit of each
Seller (or, in the case of a Seller that is a disregarded entity, the Person
treated as the “transferor” with respect to such Seller within the meaning of
Treasury Regulations Section 1.1445-2(b)(2)(iii)) dated as of the Closing Date,
sworn under penalty of perjury and in form and substance required under the
Treasury Regulations issued pursuant to Section 1445 of the Code, stating that
such Seller is not a “foreign person” as defined in Section 1445 of the Code.

(d) Buyer Certificates. The certificates required by Sections 10.3(a) and
(b) hereof.

(e) Sellers Certificates. The certificates required by Sections 10.2(a) and
(b) hereof.

(f) Trademark Assignment. The short-form Trademark Assignment Agreement
substantially in the form attached hereto as Exhibit C (the “Trademark
Assignment Agreement”), conveying certain Transferred Intellectual Property from
CLC to the Company.

(g) Equity Interests. An Assignment of Equity Interests substantially in the
form attached as Exhibit F (the “Assignment of Equity Interests”), conveying to
Buyer (or its designee) all of the Equity Interests, and certificates evidencing
the Equity Interests, to the extent the Equity Interests are certificated.

(h) Resignations. Resignations, effective as of the Closing Date, of those
officers of the Company as Buyer may request in writing no less than ten
(10) days prior to the Closing Date.

(i) Other Documents. Any other documents, instruments or agreements which are
reasonably requested that are necessary to consummate the transactions
contemplated hereby and have not previously been delivered (including execution
and delivery by Sellers to the Title Insurer of customary affidavits and other
documentation as to matters of title in a form reasonably acceptable to Sellers
and Title Insurer to allow Title Insurer to issue the Endorsement).

 

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ARTICLE VI.

REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLERS

Parent and Sellers represent and warrant to Buyer that the statements contained
in this ARTICLE VI are true and correct as of the date of this Agreement (except
as to such representations and warranties that address matters as of a
particular date, which are given only as of such date).

Section 6.1 Organization of Parent and Sellers. Parent and Sellers are each duly
organized and validly existing under the laws of its state of organization and
has all requisite power and authority to own, lease and operate its assets and
to carry on its business as now being conducted. Parent and Sellers are each
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, be reasonably likely to (x) have a
material adverse effect on Parent or Sellers or a Company Material Adverse
Effect or (y) materially impair or materially delay the Closing. Each Seller is
a direct or indirect wholly-owned Subsidiary of Parent.

Section 6.2 Authority; No Conflict; Required Filings and Consents.

(a) Parent and each Seller have all requisite power and authority to enter into
this Agreement and each of the Ancillary Agreements to which it is a party and
to consummate the transactions contemplated hereby and thereby. Parent’s and
each Sellers’ execution and delivery of this Agreement and each Ancillary
Agreement to which it is a party and the consummation by Parent and Sellers of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of Parent and Sellers. This Agreement has been,
and each Ancillary Agreement will be at or prior to the Closing, duly executed
and delivered by Parent and Sellers and, assuming the due authorization,
execution and delivery by the other parties hereto and thereto, this Agreement
constitutes, and each Ancillary Agreement when so executed and delivered will
constitute, the valid and binding obligation of Parent and Sellers, enforceable
against Parent and Sellers in accordance with their respective 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 by Parent and each Seller of this Agreement and
each Ancillary Agreement to which it is a party does not, and the consummation
by Parent and Sellers of the transactions contemplated hereby and thereby and
the compliance by Parent and Sellers with any provisions hereof or thereof will
not, (i) conflict with, or result in any violation or breach of, any provision
of the organization documents of Parent or Sellers, (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 note, bond,
mortgage, indenture, lease, Contract or obligation to which Parent or Sellers
are a party or by which Parent or Sellers or the Purchased

 

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Assets may be bound, (iii) result in the creation of any Lien or Encumbrance
(other than Permitted Liens and Permitted Encumbrances) on any of the Purchased
Assets pursuant to, any note, bond, mortgage, indenture, agreement, lease,
license, permit, franchise, instrument, obligation or other Contract to which
Parent or Sellers are a party or by which Parent or Sellers or the Purchased
Assets may be bound or affected, or (iv) subject to the governmental filings and
other matters referred to in Section 7.2(c) hereof, conflict with or violate any
permit, concession, franchise, license, judgment, or Law applicable to Parent or
Sellers or the Purchased Assets, except, in the case of clauses (ii), (iii) and
(iv), for any such breaches, conflicts, violations, defaults, terminations,
cancellations, accelerations, losses or failures to obtain any such consent or
waiver which would not, individually or in the aggregate, be reasonably likely
to (x) have a material adverse effect on Parent or Sellers or a Company Material
Adverse Effect or (y) materially impair or materially delay the Closing.

(c) No consent, approval, finding of suitability, license, permit, waiver, order
or authorization of, or registration, declaration or filing with, any court,
administrative agency, commission, Gaming Authority or other governmental or
regulatory authority or instrumentality (“Governmental Entity”) is required by
or with respect to Parent or Sellers in connection with the execution and
delivery of this Agreement or the Ancillary Agreements by Parent and Sellers,
the compliance by Parent and Sellers with any of the provisions hereof or
thereof, or the consummation by Parent and Sellers of the transactions to which
they are a party that are contemplated hereby, except for (i) the filing of the
notification under, and compliance with any other applicable requirements of,
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder (the “HSR Act”), (ii) any approvals
and filing of notices required under the Gaming Laws, (iii) such consents,
approvals, orders, authorizations, permits, filings, declarations or
registrations related to, or arising out of, compliance with statutes, rules or
regulations regulating the consumption, sale or serving of alcoholic beverages
or tobacco or the renaming or rebranding of the operations at the Real Property,
(iv) such other filings, consents, approvals, findings of suitability, licenses,
waivers, orders, authorizations, permits, registrations and declarations as may
be required under the Laws of any jurisdiction in which Parent and Sellers
conduct any business or own any assets, the failure of which to make or obtain
would not, individually or in the aggregate, be reasonably likely to have a
material adverse effect on Parent or Sellers or a Company Material Adverse
Effect and (v) any consents, approvals, orders, authorizations, registrations,
permits, declaration or filings required by Buyer or any of its Subsidiaries,
Affiliates or key employees (including under the Gaming Laws).

Section 6.3 Title to Equity Interests. Sellers are the record and beneficial
owners of all Equity Interests, free and clear of all Liens, Encumbrances or any
other restrictions on transfer other than restrictions on transfer arising under
applicable securities Laws. Sellers are not party to any option, warrant,
purchase right or other Contract (other than this Agreement) obligating Sellers
to sell, transfer, pledge or otherwise dispose of Equity Interests. Sellers are
not a party to any voting trust, proxy or other agreement or understanding with
respect to the Equity Interests.

Section 6.4 Litigation. There is no action, suit or proceeding, claim,
arbitration or investigation against Parent or Sellers, pending, or as to which
Parent or Sellers have received

 

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any written notice of assertion or which, to Sellers’ knowledge, have been
threatened against, Sellers, the Purchased Assets, the Real Property or the
Business before any Governmental Entity that, individually or in the aggregate,
would be reasonably likely to have a Company Material Adverse Effect or
materially impair or materially delay the Closing.

ARTICLE VII.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Buyer that the statements contained in
this ARTICLE VII are true and correct as of the date of this Agreement and as of
the Closing (except as to such representations and warranties that address
matters as of a particular date, which are given only as of such date), except
as expressly set forth herein and in the corresponding section of the Disclosure
Letter delivered by the Company to Buyer herewith (the “Company Disclosure
Letter”). The Company Disclosure Letter shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this
Agreement and the disclosure in any paragraph shall, to the extent reasonably
apparent on the face of such disclosure that the matter disclosed is relevant to
another paragraph in this Agreement, qualify such other paragraph.

Section 7.1 Organization of the Company; Capitalization. The Company is duly
organized and validly existing under the laws of its state of organization and
has all requisite power and authority to own, lease and operate its assets and
to carry on the Business as now being conducted. The Company 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, be reasonably likely to (x) have a Company
Material Adverse Effect or (y) materially impair or materially delay the
Closing. All of the Equity Interests are duly authorized, validly issued, fully
paid and nonassessable and were issued in compliance with all applicable Laws.
No Person has any rights in, or rights to acquire from the Company, any other
equity related interests of the Company or any other securities convertible
into, or exercisable or exchangeable for, equity interests of the Company. There
are no outstanding options, warrants or other securities or subscription,
preemptive or other rights convertible into or exchangeable or exercisable for
any equity or voting interests of the Company and there are no “phantom stock”
rights, stock appreciation rights or other similar rights with respect to the
Company. The Company does not own any direct or indirect equity interest,
participation or voting right in any other Person or any options, warrants,
convertible securities, exchangeable securities, subscription rights, preemptive
rights, rights of first refusal, conversion rights, exchange rights, repurchase
rights, stock appreciation rights, phantom stock, profit participation or other
similar rights in or issued by any other Person.

Section 7.2 Authority; No Conflict; Required Filings and Consents.

(a) The Company has all requisite power and authority to enter into this
Agreement and each of the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The Company’s
execution and delivery of this Agreement and each Ancillary Agreement to which
it is a party and the consummation by the

 

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Company of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company. This Agreement
has been, and each Ancillary Agreement will be at or prior to Closing, duly
executed and delivered by the Company party thereto and, assuming the due
authorization, execution and delivery by the other parties hereto and thereto,
this Agreement constitutes, and each Ancillary Agreement when so executed and
delivered will constitute, the valid and binding obligation of the Company,
enforceable against the Company in accordance with their respective 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 by the Company of this Agreement and each
Ancillary Agreement to which it is a party, the consummation by the Company of
the transactions contemplated hereby and thereby, and the compliance of the
Company with any provisions hereof or thereof, does not or will not,
(i) conflict with, or result in any violation or breach of, any provision of the
organization documents of the Company, (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 note, bond,
mortgage, indenture, lease, Contract or obligation to which the Company is a
party or by which the Company or the Purchased Assets may be bound, (iii) result
in the creation of any Lien or Encumbrance (other than Permitted Liens and
Permitted Encumbrances) on any of the Purchased Assets pursuant to, any note,
bond, mortgage, indenture, agreement, lease, license, permit, franchise,
instrument, obligation or other Contract to which the Company is a party or by
which the Company or the Purchased Assets may be bound or affected, or
(iv) subject to the governmental filings and other matters referred to in
Section 7.2(c) hereof, conflict with or violate any permit, concession,
franchise, license, judgment, or Law applicable to the Company or the Purchased
Assets, except, in the case of clauses (ii), (iii) and (iv), for any such
breaches, conflicts, violations, defaults, terminations, cancellations,
accelerations, losses or failures to obtain any such consent or waiver which
would not, individually or in the aggregate, be reasonably likely to (x) have a
Company Material Adverse Effect or (y) materially impair or materially delay the
Closing.

(c) No consent, approval, finding of suitability, license, permit, waiver, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to the Company in connection
with the execution and delivery of this Agreement or the Ancillary Agreements by
the Company or the consummation by the Company of the transactions to which it
is a party that are contemplated hereby, except for (i) the filing of the
notification under, and compliance with any other applicable requirements of,
the HSR Act, (ii) any approvals and filing of notices required under the Gaming
Laws, (iii) such consents, approvals, orders, authorizations, permits, filings,
declarations or registrations related to, or arising out of, compliance with
statutes, rules or regulations regulating the consumption, sale or serving of
alcoholic beverages or tobacco or the renaming or rebranding of the operations
at the Real Property, (iv) such other filings, consents, approvals, findings of
suitability, licenses, waivers, orders, authorizations, permits, registrations
and declarations as may be required under the Laws of any jurisdiction in which
the Company conducts any business or owns any Purchased Assets, the failure of
which to make or obtain would not, individually or in the

 

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aggregate, be reasonably likely to (x) have a Company Material Adverse Effect or
(y) materially impair or materially delay the Closing, and (v) any consents,
approvals, orders, authorizations, registrations, permits, declaration or
filings required by Buyer or any of its Subsidiaries, Affiliates or key
employees (including under the Gaming Laws).

Section 7.3 Financial Statements.

(a) Section 7.3 of the Company Disclosure Letter contains a true and complete
copy of the audited financial statements of the Company for the twelve
(12) months ended December 31, 2011 and December 31, 2010 (the “Financial
Information”). Except as noted therein, 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 and fairly presents in all
material respects the financial position and results of operations of the
Business as of such date and the results of the Business for such period. No
representation or warranty is made that Buyer will be able to operate the
Business for the costs reflected in the Financial Information.

(b) The Company has devised and maintained systems of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit the preparation of the
Financial Information in conformity with GAAP, to the extent applicable, or the
Company’s internal accounting principles and to maintain proper accountability
for items, (iii) access to its property and assets is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate action is taken with respect to any
differences.

(c) The Financial Information was prepared from the books and records of the
Company, which (i) have been maintained in material compliance with applicable
legal and accounting requirements and reasonable business practices, (ii) are in
all material respects complete and correct and fairly reflect, in all material
respects, all dealings and transactions in respect of the Business and the
assets and liabilities thereof, and (iii) represent the financial information
which is included in the consolidated audited financial statements of Parent.

Section 7.4 No Undisclosed Liabilities. Except (i) as set forth in the Financial
Information, (ii) for Excluded Liabilities and (iii) for Liabilities incurred
since December 31, 2011 in the Ordinary Course of Business, the Company has no
Liabilities which would, individually or in the aggregate, reasonably be
expected to cause a Company Material Adverse Effect.

Section 7.5 Taxes.

(a) Except as would not, individually or in the aggregate, reasonably be
expected to cause a Company Material Adverse Effect, the Company has timely
filed with the appropriate Governmental Entities all Tax Returns required to be
filed by the Company and all such Tax Returns are true, complete and accurate.
The Company has timely paid all Taxes due from the Company whether or not shown
on such Tax Returns or the Company has established an adequate reserve therefor
in the Financial Information in accordance with GAAP, except as would not,
individually or in the aggregate, reasonably be expected to cause a Company
Material Adverse Effect.

 

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(b) Other than as set forth on Section 7.5(b)(i) of the Company Disclosure
Letter , there are no claims, actions, audits or other proceedings with any
Governmental Entities are presently ongoing or pending or threatened in writing
in respect of any material Taxes of the Company. There are no outstanding
waivers extending the statutory period of limitation relating to Taxes of the
Company. Schedule 7.5(b)(ii) of the Company Disclosure Letter lists each
agreement with any Governmental Entity with respect to any material Tax holiday
or other material Tax incentive currently in effect with respect to the Company
or the Purchased Assets, and Sellers have delivered or made available to Buyer a
copy of any such agreement with the relevant Governmental Entity.

(c) There are no Liens for Taxes (other than Permitted Liens) on the Company or
any Purchased Assets, except as which would not, individually or in the
aggregate, reasonably be expected to cause a Company Material Adverse Effect.
None of the Purchased Assets are required to be treated for Tax purposes as
owned by a Person other than the Company. Except as would not, individually or
in the aggregate, reasonably be expected to cause a Company Material Adverse
Effect, (i) the Company has complied in all respects with all Laws relating to
the payment and withholding of Taxes, including with respect to payments made to
employees, independent contractors, shareholders or other Persons, and (ii) all
Persons classified by the Company as independent contractors are correctly
classified for Tax purposes.

(d) The Company is not a party to or bound by any Tax sharing, Tax indemnity, or
Tax allocation agreement other than any such agreements that are customary
ordinary course commercial contracts not primarily related to Taxes. No “closing
agreements” described in Section 7121 of the Code (or any comparable provision
of state, local or foreign Law) have been entered into by or with respect to the
Company and no Tax ruling has been requested or received by or with respect to
the Company, in each case, that (x) would bind Buyer or any of its Affiliates
(including the Company) after the Closing and (y) would have, or reasonably be
expected to have, a material effect on the Purchased Assets, the Business,
Buyer, any Affiliate of Buyer or the Company after the Closing.

(e) The Company has not entered into any “listed transaction” within the meaning
of Treasury Regulations Section 1.6011-4(b)(2). Neither Buyer nor the Company
will be required to include any material item of income in, or exclude any
material item of deduction from, taxable income for any Post-Closing Period as a
result of any (i) adjustment required by reason of a change in method of
accounting for a Pre-Closing Period under Section 481(c) of the Code (or any
corresponding or similar provision of state, local or foreign Law), or
(ii) installment sale or intercompany transaction made prior to the Closing.

(f) The Company has not distributed the capital stock of any corporation in a
transaction intended to qualify under Section 355 of the Code within the past
two years prior to the date of this Agreement, nor has the Company been
distributed in a transaction intended to qualify under Section 355 of the Code
within the past two years prior to the date of this Agreement. The Company is
and since 2002 has been classified as a partnership for federal

 

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income tax purposes, and during this period neither the Company nor any of its
Affiliates has received any written notice from any Governmental Entity
challenging such classification and no Affiliate has taken a position
inconsistent with such classification. Since 2002 and, to the knowledge of the
Company, from the formation of the Company to 2002, the Company has never been a
member of any consolidated, combined, unitary or affiliated Tax Return group.
The Company does not own stock or other equity interests, for tax purposes or
otherwise, in any corporation, partnership or other entity.

Section 7.6 Real Property.

(a) All Real Property owned by the Company is described on Section 7.6(a) of the
Company Disclosure Letter (the “Owned Real Property”). The Company has valid and
insurable (at ordinary rates) fee simple title to the Owned Real Property
subject, in each case, to all Permitted Liens and Permitted Encumbrances.

(b) The Company does not lease any Real Property.

(c) There are no actions, proceedings, governmental investigations,
arbitrations, unsatisfied orders or judgments, actions, litigation, suits, or
other proceedings, pending (or, to the Company’s knowledge, overtly contemplated
or threatened) against the Company or otherwise relating to the Real Property or
the interests of the Company therein, which would be reasonably likely to
interfere with the use, ownership, improvement, development and/or operation of
the Real Property; in each case except for such actions, proceedings or
litigation, which, individually or in the aggregate, would not be reasonably
likely to (x) have a Company Material Adverse Effect or (y) materially impair or
materially delay the Closing.

(d) There are no pending condemnation, eminent domain, or similar proceedings or
actions pending or, to the Company’s knowledge, threatened with regard to the
Real Property.

(e) There are no violations or alleged violations of any Laws with respect to
the Real Property, including but not limited to zoning and the Americans with
Disabilities Act matters which would, individually or in the aggregate, be
reasonably likely to (x) have a Company Material Adverse Effect or
(y) materially impair or materially delay the Closing. To the Company’s
knowledge, there are no material inquiries, complaints, proceedings or
investigations (excluding routine, periodic inspections) pending regarding
compliance of the Real Property with any such Laws.

(f) To the Company’s knowledge, all material Improvements located on, under,
over or within the Real Property (including chillers and elevators), and all
other aspects of each parcel of Real Property, are in good operating condition
and repair and are structurally sound and free of any material defects.

(g) The Company has not filed notices of protest or appeal against, or commenced
proceedings to recover, real property tax assessments against any of the Real
Property.

 

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Section 7.7 Intellectual Property.

(a) Section 7.7(a)(1) of the Company Disclosure Letter lists all of the
trademark and service mark registrations and applications owned by the Company
and Caesars License Company, LLC, an indirect wholly-owned subsidiary of Parent
(“CLC”) as of the date hereof and used exclusively in connection with the
operation of the Business, and all of the Internet domain names registered by or
for the benefit of the Company or CLC and used exclusively in the Business
(collectively, the “Transferred Marks and Domain Names”), which Transferred
Marks and Domain Names will be owned by the Company at the Closing.
Section 7.7(a)(2) of the Company Disclosure Letter lists all issued patents or
patent applications or any registered copyrights that are owned by the Company
and used exclusively in the Business (“Other Transferred Registered IP”). To the
Company’s knowledge, no Transferred Marks and Domain Names or Other Transferred
Registered IP are now involved in any opposition or cancellation proceeding and,
to the Company’s knowledge, no such proceeding is or has been threatened in
writing with respect thereto. To the Company’s knowledge, all Transferred Marks
and Domain Names and Other Transferred Registered IP are subsisting, valid and
enforceable, and no abandonment, cancellation, or forfeiture of any of the
Transferred Marks and Domain Names or Other Transferred Registered IP is pending
or threatened in writing. To the Company’s knowledge, neither the Company nor
any of its Affiliates have received any written notice or claim challenging the
validity or enforceability of any Transferred Marks and Domain Names or Other
Transferred Registered IP that remains pending or unresolved as of the date
hereof.

(b) Except as set forth on Section 7.7(b) of the Company Disclosure Letter, the
Company and CLC own exclusively, free and clear of all Liens (except for any
Permitted Liens), all Transferred Intellectual Property. Neither the Company nor
any of its Affiliates has received any written notice or claim challenging the
Company’s or CLC’s ownership of any Transferred Intellectual Property, in each
case that remains pending or unresolved as of the date hereof. To the Company’s
knowledge, as of the date hereof the Company and CLC own or possess, and at the
Closing the Company will own or possess, adequate and enforceable rights to use
all Transferred Intellectual Property or Intellectual Property licensed to the
Company or CLC, as applicable, pursuant to an Assumed Contract that is used in
connection with the Business, as currently operated, without material
restrictions or material conditions on use (except as set forth in the Assumed
Contracts).

(c) To the Company’s knowledge, the Business, including the operation of the
Casino and the use of any of the Transferred Intellectual Property in connection
therewith, has not infringed upon, misappropriated or violated, and do not
infringe upon, misappropriate or violate, any Intellectual Property of any third
party, in each case, in any material respect. Neither the Company nor any of its
Affiliates has received any written notice or claim asserting that any such
infringement, misappropriation, or violation is or may be occurring or has or
may have occurred that remains pending or unresolved. To the Company’s
knowledge, no third party is misappropriating, infringing, or violating in a
material manner any Transferred Intellectual Property.

 

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Section 7.8 Agreements, Contracts and Commitments. (i) Each Assumed Contract is
valid and binding upon the Company (and, to the Company’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 the Company or, to
the Company’s knowledge, by any other party under any of the Assumed Contracts,
whether or not such breach, violation or default has been waived, and (iii) no
event has occurred with respect to the Company or, to the Company’s knowledge,
any other party, 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 Assumed Contracts, which breach, violation,
default, termination, modification, cancellation, foreclosure, imposition of a
Lien, prepayment or acceleration referred to in clause (ii) or (iii) would,
individually or in the aggregate, be reasonably likely to (x) have a Company
Material Adverse Effect or (y) materially impair or materially delay the
Closing. None of Sellers, the Company or any of their Affiliates has received
any written notice (or, to the knowledge of the Company, any oral or other
notice) of the intention of any Person to terminate, nor has there been any
termination of, any Assumed Contract. The Company has made available to Buyer a
true, correct and complete copy of all material Assumed Contracts, together with
all amendments, waivers or other changes thereto.

Section 7.9 Litigation. Other than as set forth on Section 7.9 of the Company
Disclosure Letter, there is no action, suit or proceeding, claim, arbitration or
investigation against the Company, pending, or as to which the Company has
received any written notice of assertion or, to the Company’s knowledge,
threatened against, the Company, the Purchased Assets, the Real Property or the
Business before any Governmental Entity, that, individually or in the aggregate,
would be reasonably likely to (x) have a Company Material Adverse Effect or
(y) materially impair or materially delay the Closing. The Company, the
Purchased Assets, the Real Property and the Business are not subject to any
judgment, decree, injunction, rule or order of any Governmental Entity or any
arbitrator that individually or in the aggregate materially interfere with, or
would reasonably be expected to materially interfere with, the ability of the
Business to be conducted as it is currently conducted or to utilize its
properties, assets and rights as currently utilized.

Section 7.10 Environmental Matters. Except as have not had and would not,
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect, (a) there are no Environmental Liabilities, (b) there
are no Environmental Conditions, (c) there is no pending or, to the Company’s
knowledge, threatened enforcement action regarding an Environmental Condition or
compliance with Environmental Laws with respect to the Real Property or the
Business, (d) no Hazardous Substance is located on the Real Property, except for
amounts permitted by Environmental Laws as used in the Ordinary Course of
Business of the Casino (e) in the past three (3) years the Company has not
received a written notice from any Governmental Entity or third party alleging a
violation of any Environmental Law and (f) the Company is in compliance with all
applicable Environmental Laws. The Company possesses all licenses, permits,
certificates, registrations, approvals, authorizations and consents from any
Governmental Entity required under Environmental Laws with respect to operation
of the Business. As promptly as reasonably practicable, and in any event within
thirty (30) days of the Effective Date, the Company will provide Buyer with true
and complete copies of (i) all licenses, permits, certificates, registrations,
approvals, authorizations and consents from

 

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any Governmental Entity issued to the Company under Environmental Laws
(“Environmental Authorizations”) and (ii) all written notices received by the
Company from any Governmental Entity or third party alleging a violation of any
Environmental Law that are, in each case, in the Company’s possession, custody
or control.

Section 7.11 Permits; Compliance with Laws.

(a) The Company and, to the Company’s knowledge, each of the Company’s
directors, officers, key employees and Persons performing management functions
similar to officers and partners hold all 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 (the “Company Permits”), each of
which is in full force and effect, except for such Company Permits the failure
of which to hold would not, individually or in the aggregate, be reasonably
likely to (x) have a Company Material Adverse Effect or (y) materially impair or
materially delay the Closing, and 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 of the
Company Permits that are currently in effect, the loss of which would,
individually or in the aggregate, be reasonably likely to (x) have a Company
Material Adverse Effect or (y) materially impair or materially delay the
Closing. All Company Permits that are material to the Business, and all permits
of the Company that are pending but not yet issued, are listed in
Section 7.11(a) of the Company Disclosure Letter. The Company and, to the
Company’s knowledge, the Company’s directors, officers, key employees and
Persons performing management functions similar to officers and partners, are,
and since January 1, 2009 have been, in compliance with the terms of the Company
Permits, except for such failures to comply as would not, individually or in the
aggregate, be reasonably likely to (x) have a Company Material Adverse Effect or
(y) materially impair or materially delay the Closing. The Business is, and
since January 1, 2009 has been, conducted in accordance with applicable Law
(including the Gaming Laws), except for such noncompliance which, individually
or in the aggregate, does not have and would not be reasonably likely to
(x) have a Company Material Adverse Effect or (y) materially impair or
materially delay the Closing. The Company has not received notice of any
investigation or review by any Governmental Entity with respect to the Real
Property, the Business, the other Purchased Assets or the Assumed Liabilities
that is pending, and, to the Company’s knowledge, no investigation or review is
threatened, nor has any Governmental Entity indicated any intention to conduct
the same, other than those the outcome of which would not, individually or in
the aggregate, be reasonably likely to (x) have a Company Material Adverse
Effect or (y) materially impair or materially delay the Closing.

(b) Neither the Company nor, to the Company’s knowledge, any of the Company’s
directors, officers, key employees or partners or Persons performing management
functions similar to officers or partners have 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 in connection with or related
to the Business which resulted in or would be reasonably likely to result in any
material fine or penalty. To the Company’s knowledge, there are no facts, which
if known to the regulators under the Gaming Laws would be reasonably likely to
result in the revocation,

 

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limitation or suspension of a license, finding of suitability, registration,
permit or approval of the Company or any of its officers, directors, key
employees or Persons performing management functions similar to an officer or
partner, or limited partner under any Gaming Laws, in each case in connection
with or related to the Business.

Section 7.12 Labor Matters.

(a) Each Property Employee who is not a Reserved Employee is employed by the
Company or a Subsidiary thereof, and no Reserved Employee is employed by the
Company or a Subsidiary thereof. As promptly as reasonably practicable, and in
any event within thirty (30) days of the Effective Date, Sellers will provide
Buyer with an accurate and complete list of each Property Employee as of the
date of such list stating each such individual’s (i) date of commencement of
employment, (ii) current position, (iii) business location,
(iv) annual/weekly/hourly rates of compensation, (v) actual and target incentive
and discretionary bonus amounts for the 2011 and 2012 calendar years,
(vi) status as full or part time, (vii) accrued vacation and (viii) credited
service under the Company Benefit Plans (such list to be updated periodically
between the date hereof and the Closing Date upon the reasonable request of
Buyer to reflect new hires, transfers and terminations not inconsistent with
Section 9.1(t)).

(b) The Company is not and has not been a party to or is, bound by, or otherwise
obligated with respect to, any collective bargaining agreement, labor union
contract, trade union agreement or foreign works council contract (any such
arrangement, a “Labor Agreement”). There are no unfair labor practice charges,
complaints or petitions for elections pending against the Company before the
National Labor Relations Board, or any similar Governmental Entity, or of which
the Company has received notice. There is no strike, slowdown, work stoppage or
lockout, or, to the Company’s knowledge, threat thereof, by or with respect to
any Property Employees, and no such strike, slowdown, work stoppage, lockout,
or, to the Company’s knowledge, threat thereof, by or with respect to any
Property Employees has occurred in the past five years. To the Company’s
knowledge, there have been no activities or proceedings of any labor union to
try to organize any non-unionized Property Employees during the last five years,
and there are no petitions for elections pending against the Company before the
National Labor Relations Board or any similar Governmental Entity or of which
the Company or its Affiliates have received notice.

Section 7.13 Employee Benefits.

(a) Section 7.13(a) of the Company Disclosure Letter sets forth an accurate and
complete list of all (i) “employee welfare benefit plans,” within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations thereunder (“ERISA”); (ii) “employee pension
benefit plans,” within the meaning of Section 3(2) of ERISA; and (iii) material
bonus, stock option, stock purchase, restricted stock, incentive, fringe
benefit, profit-sharing, pension or retirement, deferred compensation, medical,
life insurance, disability, accident, salary continuation, employment,
consulting, change-in-control, retention, severance, accrued leave, vacation,
sick pay, sick leave, supplemental retirement, unemployment and any other
compensation or benefit plans, programs, agreements,

 

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arrangements, commitments and/or practices (whether or not insured) for
employees of Sellers and their Subsidiaries who are located at the Real Property
or perform services exclusively related to the Business (the “Property
Employees”), other than the Reserved Employees (all of the foregoing plans,
programs, arrangements, commitments, practices and Contracts referred to in (i),
(ii) and (iii) above are referred to as the “Company Benefit Plans”). The
Company does not sponsor, maintain, or otherwise have any obligations with
respect to, nor has the Company ever sponsored, maintained, or otherwise had any
obligation with respect to, any employee benefit plan, program, agreement,
arrangement, commitment, practice or Contract (other than any such plan,
program, agreement, arrangement, commitment, practice or Contract maintained by
Sellers (or any Affiliate of Sellers other than the Company) with respect to
which (x) the Company is a sponsor or contributor as a participating employer
but (y) Buyer and its Affiliates (including, following the Closing, the Company)
shall have no responsibility or Liability).

(b) True and complete copies of each of the following documents (or accurate
summaries thereof) have been made available to Buyer: (i) Company Benefit Plans,
including with respect to any Company Benefit Plan that is not in writing, a
written description of the material terms thereof and (ii) with respect to any
Company Benefit Plan, (A) any related trust agreement, or insurance contract or
documents relating to other funding arrangements, (B) for the three (3) most
recently ended plan years, all IRS Form 5500s (and any financial statements and
other schedules attached thereto), (C) all current summary plan descriptions and
subsequent summaries of material modifications to the extent required under
ERISA, (D) a current IRS determination or opinion letter that is intended to be
qualified under Section 401(a) of the Code if applicable; and (E) the most
recent financial and actuarial valuation reports if applicable.

(c) Except as disclosed in Section 7.13(c) of the Company Disclosure Letter,
(i) each Company Benefit Plan that is intended to qualify under Section 401(a)
of the Code has either received a favorable determination or opinion letter from
the IRS as to its qualified status or, if the remedial amendment period for such
Company Benefit Plan has not yet expired, all amendments to such Company Benefit
Plan that are required by the IRS through the date hereof have been adopted on a
timely basis, and each trust established in connection with any Company Benefit
Plan that is intended to be exempt from federal income taxation under
Section 501(a) of the Code is so exempt, and no fact or event has occurred that
could affect adversely the qualified status of any such Company Benefit Plan or
the exempt status of any such trust; (ii) there has been no prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code, other than a transaction that is exempt under a statutory or
administrative exemption) with respect to any Company Benefit Plan with respect
to which the Company would be reasonably expected to have any liability;
(iii) no action or other administrative proceeding has been brought, or to the
Company’s knowledge, is threatened, against or with respect to any such Company
Benefit Plan, including but not limited by any Property Employee (other than
routine benefits claims), any audit or inquiry by the IRS or United States
Department of Labor (“DOL”), or any termination or similar proceeding by the DOL
or the Pension Benefit Guaranty Corporation with respect to which the Company is
reasonably expected to have any liability; and (iv) no Company Benefit Plan is a
multiemployer pension plan (as defined in Section 3(37) of ERISA)
(“Multiemployer Plan”), multiple employer plan (within the meaning of
Section 4063 or 4064 of ERISA or Section 413(c) of the Code) (“Multiple Employer
Plan”) or other pension plan subject to Title IV of ERISA or Section 412 of the
Code. There does not now exist, nor do any circumstances exist that could result
in, any Controlled Group Liability that would be a Liability of the Company
following the Closing.

 

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(d) No Company Benefit Plan that is a “welfare benefit plan” within the meaning
of Section 3(1) of ERISA provides retiree or post-employment benefits to any
Property Employees or to the employees of the Company’s ERISA Affiliates, other
than pursuant to Section 4980B of the Code or any similar state Law. The Company
and its ERISA Affiliates have complied in all material respects with the
provisions of Part 6 of Title I of ERISA and Sections 4980B, 9801, 9802, 9811
and 9812 of the Code with respect to the Property Employees.

(e) Each Company Benefit Plan and each employment agreement that is being
assumed by Buyer pursuant to this Agreement that is a “nonqualified deferred
compensation plan” (within the meaning of Section 409A(d)(1) of the Code) is,
and has in the past been maintained, in material compliance with Section 409A of
the Code.

(f) Neither the execution or delivery of this Agreement nor the consummation of
the transactions contemplated by this Agreement will, either alone or in
conjunction with any other event, (i) result in any payment or benefit becoming
due or payable, or required to be provided, to any director, employee or
independent contractor of the Company, (ii) increase the amount or value of any
benefit or compensation otherwise payable or required to be provided to any such
director, employee or independent contractor, (iii) result in the acceleration
of the time of payment, vesting or funding of any such benefit or compensation,
(iv) result in any “excess parachute payment” within the meaning of
Section 280G(b)(1) of the Code or (v) or result in any limitation on the right
of the Company to amend, merge, terminate or receive a reversion of assets from
any Company Benefit Plan or related trust.

Section 7.14 Brokers. Except for the fees and commissions of Deutsche Bank
Securities Inc. (which fees and commissions are the sole responsibility of
Sellers), the Company has not employed and no Person has acted directly or
indirectly as a broker, financial advisor or finder for the Company or incurred
any Liability for any brokerage fees, commissions or finder’s fees in connection
with the transactions contemplated by this Agreement.

Section 7.15 Title to Purchased Assets. The Company has good and marketable
title to, or a valid leasehold interest in, the tangible personal property
constituting Purchased Assets, free and clear of any Encumbrances or Liens other
than for Permitted Encumbrances and Permitted Liens.

Section 7.16 Affiliate Transactions. There are no transactions, Contracts or
other obligations between the Company, on the one hand, and any officer,
director or Affiliate of the Company, on the other, that will constitute an
Assumed Liability or that will otherwise continue after Closing.

Section 7.17 Minimum Cash. As of the Closing, the Business will have an amount
of House Funds at least equal to the minimum bankroll required by applicable
Gaming Laws, if any.

 

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Section 7.18 Vendors. As promptly as reasonably practicable, and in any event
within thirty (30) days of the Effective Date, Sellers will provide Buyer with a
list of the vendors of the Business as of the date of such list, including the
product or service provided by, and the principal contact information for, each
such vendor.

Section 7.19 Absence of Changes. Since December 31, 2011, the Business has been
conducted in the Ordinary Course of Business, and there has not been any event,
occurrence, state of circumstances or facts or change that has had or that would
be reasonably expected, individually or in the aggregate (x) to have a Company
Material Adverse Effect or (y) to materially impair or materially delay the
Closing.

Section 7.20 Insurance Coverage. Sellers and the Company maintain adequate
insurance coverage in accordance with reasonable commercial standards, including
material insurance policies and fidelity bonds and self-insurance programs, in
each case in respect of the Purchased Assets, the Real Property and the business
and operations of the Business and its employees (collectively, the “Insurance
Policies”).

ARTICLE VIII.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers that the statements contained in this
ARTICLE VIII are true and correct as of the this Agreement and as of the Closing
(except as to such representations and warranties that address matters as of a
particular date, which are given only as of such date), except as expressly set
forth herein and in the corresponding section of the Disclosure Letter delivered
by Buyer to Sellers herewith (the “Buyer Disclosure Letter”). The Buyer
Disclosure Letter shall be arranged in paragraphs corresponding to the numbered
and lettered paragraphs contained in this Agreement and the disclosure in any
paragraph shall, to the extent reasonably apparent on the face of such
disclosure that the matter disclosed is relevant to another paragraph in this
Agreement, qualify such other paragraph.

Section 8.1 Organization. Buyer is duly organized, validly existing and in good
standing under the laws of its state of organization and has all requisite
corporate power and authority to carry on its business as now being conducted.
Buyer 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, be reasonably likely to
have a Buyer Material Adverse Effect.

Section 8.2 Authority; No Conflict; Required Filings and Consents.

(a) Buyer has all requisite corporate power and authority to enter into this
Agreement and each of the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. Buyer’s execution
and delivery of this Agreement and each of the Ancillary Agreements to which it
is a party and the consummation by Buyer of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of
Buyer. This Agreement has been, and each Ancillary Agreement will be at or prior
to the Closing, duly executed and delivered by Buyer and, assuming the due

 

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authorization, execution and delivery of the other partiers hereto, this
Agreement constitutes, and each Ancillary Agreement when so executed and
delivered will constitute, the valid and binding obligation of Buyer,
enforceable against Buyer in accordance with their respective 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 by Buyer of this Agreement and each Ancillary
Agreement to which it is a party does not, and the consummation by Buyer of the
transactions contemplated hereby and thereby and the compliance by Buyer with
any provisions hereof or thereof will not, (i) conflict with, or result in any
violation or breach of, any provision of the organizational documents of Buyer,
(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 note, bond, mortgage, indenture, lease, Contract or obligation
to which Buyer is a party or by which Buyer or any of its properties or assets
may be bound, or (iii) subject to the governmental filings and other matters
referred to in Section 8.2(c) hereof, conflict with or violate any permit,
concession, franchise, license, judgment, or Law applicable to Buyer or any of
its properties or the assets, except, in the case of clauses (ii) and (iii), for
any such breaches, conflicts, violations, defaults, terminations, cancellations,
accelerations, losses or failures to obtain any consent or waiver which would
not, individually or in the aggregate, be reasonably likely to (x) have a Buyer
Material Adverse Effect or (y) materially impair or materially delay the
Closing.

(c) No consent, approval, finding of suitability, license, permit, waiver, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Buyer or its Affiliates in
connection with the execution and delivery of this Agreement or the Ancillary
Agreements by Buyer, the compliance by Sellers with any of the provisions hereof
or thereof, or the consummation by Buyer of the transactions that are
contemplated hereby, except for (i) the filing of the notification report under,
and compliance with any other applicable requirements of, the HSR Act, (ii) any
approvals and filing of notices required under the Gaming Laws, (iii) such
consents, approvals, orders, authorizations, permits, filings, declarations or
registrations related to, or arising out of, compliance with statutes, rules or
regulations regulating the consumption, sale or serving of alcoholic beverages
or tobacco or the renaming or rebranding of the operations at the Real Property,
(iv) such other filings, consents, approvals, findings of suitability, licenses,
waivers, orders, authorizations, permits, registrations and declarations as may
be required under the Laws of any jurisdiction in which Buyer conducts any
business or owns any assets, the failure of which to make or obtain would not,
individually or in the aggregate, be reasonably likely to (x) have a Buyer
Material Adverse Effect or (y) materially impair or materially delay the Closing
and (v) any consents, approvals, orders, authorizations, registrations, permits,
declaration or filings required by Parent, Sellers or the Company or any of
their Subsidiaries, Affiliates or key employees (including under the Gaming
Laws).

Section 8.3 Brokers. Neither Buyer nor any of its Representatives have employed,
and no Person has acted directly or indirectly as a broker, financial advisor or
finder for Buyer or incurred any Liability for any brokerage fees, commissions
or finder’s fees in connection with the transactions contemplated by this
Agreement.

 

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Section 8.4 Financing. Buyer will have available at the Closing sufficient funds
to enable Buyer to pay (x) the sum of the Purchase Price, the Estimated Closing
Payment and the Estimated Operations Payment and (y) the Final Closing Payment
and the Final Operations Payment, in each case pursuant to Section 4.2 hereof.

Section 8.5 Licensability of Principals. Except as set forth in Section 8.5 of
the Buyer Disclosure Letter, neither Buyer nor any of its current
Representatives or Affiliates (collectively the “Buyer Related Parties”) has
ever withdrawn, been denied, or had revoked, a gaming license or related finding
of suitability by a Governmental Entity or Gaming Authority within the last five
(5) years. Buyer and each of the Buyer Related Parties are in good standing in
each of the jurisdictions in which Buyer or any Buyer Related Party owns or
operates gaming facilities. To Buyer’s knowledge, as of the date hereof, there
are no facts, which if known to the Gaming Authorities would (a) be reasonably
likely to result in the denial, revocation, limitation or suspension of a gaming
license currently held or other Gaming Approval, or (b) result in a negative
outcome to any finding of suitability proceedings currently pending, or under
the suitability proceedings necessary for the consummation of this Agreement.
Buyer is not aware of any material investigations of it or any of its
subsidiaries operating in Missouri which investigations could result in
revocation of or material discipline related to its Class A License.

Section 8.6 Permits; Compliance with Gaming Laws.

(a) Buyer, and to its knowledge, each of its Affiliates, directors, officers,
key employees and Persons performing management functions similar to officers
and partners holds all 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 of Buyer (the “Buyer Permits”),
each of which is in full force and effect except for such Buyer Permits, the
failure of which to hold would not, individually or in the aggregate, be
reasonably likely to (x) have a Buyer Material Adverse Effect or (y) materially
impair or materially delay the Closing, and 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
the Buyer Permits that are currently in effect, the loss of which would,
individually or in the aggregate, be reasonably likely to (x) have a Buyer
Material Adverse Effect or (y) materially impair or materially delay the
Closing. Buyer, and to Buyer’s knowledge, Buyer’s directors, officers, key
employees and Persons performing management functions similar to officers and
partners are, and since January 1, 2009 have been, in compliance with the terms
of the Buyer Permits, except for such failures to comply, as would not,
individually or in the aggregate, be reasonably likely to (x) have a Buyer
Material Adverse Effect (y) materially impair or materially delay the Closing.
Buyer has not received notice of any investigation or review by any Governmental
Entity with respect to Buyer that is pending, and, no investigation or review is
threatened, nor has any Governmental Entity indicated any intention to conduct
the same, other than those the outcome of which would not, individually or in
the aggregate, be reasonably likely to (x) have a Buyer Material Adverse Effect
or (y) materially impair or materially delay the Closing.

 

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(b) Neither Buyer, nor any director, officer, key employee or partner of Buyer
or its Affiliates 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, other than as would not reasonably be expected, individually or
in the aggregate, to (i) have a Buyer Material Adverse Effect or (ii) materially
impair or materially delay the Closing. To the knowledge of Buyer, there are no
facts, which if known to the regulators under the Gaming Laws could reasonably
be expected to result in the revocation, limitation or suspension of a license,
finding of suitability, registration, permit or approval of Buyer or its
Affiliates, or any of their officers, directors, key employees or Persons
performing management functions similar to an officer or partner, or limited
partner under any Gaming Laws. Neither Buyer nor any officer, director, key
employee or Person performing management function similar to an officer or
partner of Buyer or their Affiliates, has suffered a suspension or revocation of
any Buyer Permit held under the Gaming Laws, other than as would not reasonably
be expected, individually or in the aggregate, to (i) have a Buyer Material
Adverse Effect or (ii) materially impair or materially delay the Closing.

Section 8.7 Waiver of Buyer’s Further Due Diligence Investigation. Subject to
ARTICLE XIII hereof, Buyer acknowledges that it is familiar with the Purchased
Assets and has had the opportunity, directly or through its representatives to
inspect the Purchased Assets and conduct due diligence activities. Without
limitation of the foregoing, Buyer acknowledges that the Purchase Price has been
negotiated based on Buyer’s express agreement that there would be no
contingencies to the Closing other than the conditions set forth in ARTICLE X
hereof. Further, without limiting any representation, warranty, covenant,
obligation or condition of Sellers or the Company expressly set forth herein,
Buyer acknowledges that it has waived and hereby waives as a condition to the
Closing any further due diligence reviews, inspections or examinations with
respect to the Real Property, including with respect to engineering,
environmental, survey, financial, operational, regulatory and legal compliance
matters.

Section 8.8 Litigation. There are no actions, claims, suits or proceedings
pending or, to Buyer’s knowledge, threatened against Buyer before any
Governmental Entity, which, if determined adversely, could prevent or materially
delay Buyer from completing the transactions contemplated by this Agreement.

ARTICLE IX.

COVENANTS

Section 9.1 Conduct of Business Prior to the Closing. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Closing, subject to any written instructions of any
Governmental Entity and to the limitations set forth below, Sellers shall cause
the Company to (except to the extent as expressly provided by this Agreement or
to the extent that Buyer shall otherwise grant its prior consent in writing,
which consent may not be unreasonably withheld, conditioned or delayed) carry on
the Business in the Ordinary Course of Business, including the payment of its
debts and Taxes when due (subject to good faith disputes over such debts or
Taxes, provided that, in the case of disputes

 

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over such Taxes, the Company’s failure to pay such Taxes when due would not,
individually or in the aggregate, have an adverse effect on Buyer or any of its
Affiliates (including, following the Closing, the Company) that is material),
and use commercially reasonable efforts consistent with past practices and
policies to maintain the effectiveness of the Company Permits, preserve the
Purchased Assets, preserve intact the present business organization, keep
available the services of its present officers and key employees and preserve
relationships with customers, suppliers, distributors and others having business
dealings with the Company with respect to the Business, perform in all material
respects all of its obligations under the Assumed Contracts, comply with all
applicable Laws in all material respects and maintain the books and records of
the Company in the Ordinary Course of Business. Without limiting the generality
of the foregoing, except as expressly provided by this Agreement or as disclosed
on Section 9.1 of the Company Disclosure Letter, during the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing, without the prior written consent of Buyer (which
consent shall not be unreasonably withheld, conditioned or delayed), the Company
shall not, and Sellers, with respect to subsections (e), (f), (l), (m) and
(u) below, shall not:

(a) sell, transfer, lease, dispose of, grant or otherwise authorize the sale,
transfer, lease, disposition, grant of, any of the Purchased Assets (other than
a Permitted Encumbrance), except for (i) sales of current assets in the Ordinary
Course of Business, (ii) sales of equipment and other non-current assets in the
Ordinary Course of Business which, individually, do not exceed $25,000 or which,
in the aggregate, do not exceed $500,000, or (iii) leases of the Real Property
that are terminable, without the payment of any consideration for early
termination, on no more than one hundred eighty (180) days’ notice;

(b) incur any Liabilities that are Assumed Liabilities, except for Liabilities
incurred (i) pursuant to Section 9.1(p), or (ii) in the Ordinary Course of
Business not exceeding $100,000 individually or $250,000 in the aggregate;

(c) enter into, modify, amend, terminate or renew any of the Assumed Contracts
or waive, release or assign any material rights or claims related to any Assumed
Contracts, except (i) for modifications or amendments in the Ordinary Course of
Business that would not reasonably be expected to have an adverse economic
impact on the Business in excess of $100,000 individually or $250,000 in the
aggregate and do not otherwise impair any material right or claim related to the
Assumed Contract or impose or renew any material restriction on the Company,
(ii) for renewals in the Ordinary Course of Business for a term of twelve
(12) months or less or (iii) as required by applicable Law;

(d) subject any of the Purchased Assets to or suffer or permit the creation on
the Purchase Assets of a Lien or Encumbrance, other than Permitted Liens or
Permitted Encumbrances created in the Ordinary Course of Business;

(e) fail to maintain its existing insurance coverage of all types relating to
Purchased Assets (however, in the event any such coverage shall be terminated or
lapse, or any claim is made against such coverage that causes the amount of
insurance coverage to cease to be adequate in accordance with reasonable
commercial standards, Sellers shall notify Buyer as

 

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promptly as practicable, so that Buyer may purchase “gap” insurance at its
option, and shall use their commercially reasonable efforts to procure
substantially similar substitute insurance policies, which in all material
respects are in at least such amounts, subject to the same deductibles, and
against such risks as are currently covered by such policies);

(f) amend the Company’s certificate of formation or operating agreement (or
similar organizational documents), or any terms of their outstanding equity
interests or other securities;

(g) enter into a plan of consolidation, merger, share exchange or reorganization
with any Person, effect any recapitalization, reclassification or other change
in their capitalization, or adopt a plan of complete or partial liquidation;

(h) waive, release or assign any material rights or material claims that would
otherwise constitute a Purchased Asset, except as contemplated by this
Agreement;

(i) enter into any material transaction or transaction outside of the Ordinary
Course of Business with any Affiliate relating to the Business to the extent
such transaction would be an Assumed Liability or an Assumed Contract;

(j) enter into any Contract the effect of which would be to grant to a third
party any license to use any Transferred Intellectual Property;

(k) enter into any settlement, consent decree or other agreement or arrangement
with a third party or Governmental Entity other than (i) as does not involve the
institution of mandated new procedures or other business conduct or the
imposition of equitable or similar relief on the Company and (ii) is not
reasonably likely to result in the revocation, limitation or suspension of any
Company Permit;

(l) expend any insurance, condemnation awards or other compensation awarded for
loss or damage to any Purchased Asset;

(m) issue or sell or encumber any Equity Interests or any securities convertible
into, or rights to acquire, any Equity Interests;

(n) purchase any equity interests in or securities of, or make any other
investment in or loans or advances to, any Person;

(o) except in the Ordinary Course of Business, acquire any material assets that
would constitute Purchased Assets;

(p) fail to make maintenance capital expenditures, in the Ordinary Course of
Business, in a total amount equal to the pro rata portion of the aggregate
maintenance capital expenditures for the twelve months beginning on the
effective date contemplated by the capital budget set forth in Section 9.1(p) of
the Company Disclosure Letter (“Required Capital Expenditures”);

 

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(q) engage in any new line of business;

(r) make any material change to its financial accounting methods, principles or
practices, except as may be required by Law or by GAAP;

(s) make, change or revoke any Tax election, change any of its methods of
reporting income or deductions for Tax purposes, compromise any Tax liability or
settle any Tax claim, audit or dispute, or file any amended Tax Return except,
in each case, for any action that would not, individually or in the aggregate,
have an adverse effect on Buyer or any of its Affiliates (including, following
the Closing, the Company) that is material; or

(t) except (1) as required by a Company Benefit Plan as in effect on the date
hereof, (2) as required by applicable Law, (3) in the Ordinary Course of
Business or (4) as a result of changes or actions by Parent that are not solely
directed at the Company or the Property Employees, (i) enter into, adopt, amend
or terminate any employee benefit plan, program, agreement, arrangement,
commitment or practice for the benefit or welfare of any Property Employee,
other than immaterial amendments that will not result in increased cost to Buyer
and its Affiliates (including, following the Closing, the Company and its
Subsidiaries), (ii) increase the compensation or benefits payable to any
Property Employee or pay any amounts to any Property Employee not otherwise due,
(iii) enter into any new, or amend any existing, Labor Agreement or similar
agreement with respect to the Company, (iv) provide any funding for any rabbi
trust or similar arrangement, or (v) (A) transfer any employee who is a Property
Employee as of the date of this Agreement to an employing entity other than the
Company or to a location other than the Real Property, or otherwise change such
employee’s duties or employer so that the employee would no longer constitute a
Property Employee, (B) take any action that results in the number of Property
Employees on the Closing Date exceeding the number of Property Employees on the
date of this Agreement or (C) transfer the employment of any Reserved Employee
to the Company; or

(u) enter into a Contract to do any of the foregoing, or to authorize or
announce an intention to do any of the foregoing.

It is agreed and understood that if Buyer does not grant or deny consent to a
proposed action within five (5) business days of receipt of the written request
by Sellers to take such action by the individuals set forth in Section 9.1 of
the Buyer Disclosure Letter at the email addresses set forth therein, Buyer
shall be deemed to have consented to such action notwithstanding any other
provision of this Section 9.1. Except as expressly contemplated by this
Agreement, nothing contained in this Agreement shall give Buyer, directly or
indirectly, the right to control or direct the Company’s operations prior to the
Closing. Prior to the Closing, the management of the Company shall exercise,
consistent with and in accordance with the terms and conditions of this
Agreement, complete control and supervision over the operations of the Company.

Section 9.2 Cooperation; Notice; Cure.

(a) Subject to compliance with applicable Law (including antitrust Laws and
Gaming Laws), from the date hereof until the Closing, Sellers and Buyer shall
confer on a

 

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regular basis with one or more Representatives of the other party to discuss the
general status of the Business. Sellers and the Company shall, to the fullest
extent permitted by Law (including antitrust Laws and Gaming Laws), provide up
to four (4) Representatives designated by Buyer (the “Designated Buyer
Representatives”) with reasonable access to the Reserved Employees during normal
business hours, and shall use their reasonable best efforts to assist the
Designated Buyer Representatives in familiarizing themselves with the operation
of the Business.

(b) Sellers and Buyer shall promptly notify the other in writing of, and will
use all commercially reasonable efforts to cure before the Closing Date, any
event, transaction or circumstance, as soon as practical after it becomes known
to such party, that causes or is reasonably expected to cause any
representation, covenant or agreement of Parent, Sellers, the Company or Buyer
under this Agreement to be breached in any material respect or that renders or
is reasonably expected to render untrue in any material respect any
representation or warranty of Parent, Sellers, the Company or Buyer contained in
this Agreement. Nothing contained in Section 9.1 above shall prevent Sellers or
the Company from giving such notice, using such efforts or taking any action to
cure any such event, transaction or circumstance. No notice given pursuant to
this Section 9.2 shall have any effect on the representations, warranties,
covenants or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein.

Section 9.3 No Solicitation. Prior to the earlier of the Closing and the
termination of this Agreement in accordance with Section 11.1 hereof, neither
Parent, Sellers, the Company, nor any of their respective shareholders, members,
directors, officers, employees, advisors, agents or other representatives
(collectively, “Representatives”), directly or indirectly, through Affiliates or
otherwise, shall (a) solicit, initiate, or encourage (including by way of
furnishing information) or take any other action to facilitate knowingly any
inquiries or proposals that constitute, or could reasonably be expected to lead
to, a proposal or offer of any kind that constitute, or could reasonably be
expected to lead to, an Acquisition Proposal, (b) engage in negotiations or
discussions with any person (or group of persons) other than Buyer or its
Affiliates (a “Third Party”) concerning, or provide any non-public information
to any person or entity relating to, any Acquisition Proposal, (c) continue any
prior discussions or negotiations with any Third Party concerning any
Acquisition Proposal or (d) accept, or enter into any agreement concerning, any
Acquisition Proposal with any Third Party or consummate any Acquisition
Proposal. From and after the date hereof until the earlier of the termination of
this Agreement or the Closing, Parent, Sellers and the Company will, and will
cause their respective Affiliates to (i) use their reasonable best efforts to
cause to be returned or destroyed promptly after the date hereof all
confidential information provided or made available to any Person other than
Buyer and its Affiliates and its and their Representatives in connection with a
potential transaction involving the Business or the Company, (ii) terminate all
access for such Persons to the electronic dataroom accessible through RR
Donnelley Venue with respect to the Business and (iii) not amend, modify, waive
or fail to enforce any of the terms or conditions included in any
confidentiality agreements with respect to the Business or the Company.

 

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Section 9.4 Employee Matters.

(a) Each Property Employee, other than the Reserved Employees, who is an
employee of the Company as of the Closing shall hereinafter be referred to as a
“Transferred Employee”. Each of the Property Employees is an at-will employee,
except that certain Property Employees may be eligible for severance
compensation upon certain termination events under an employment agreement that
covers any such Property Employee as set forth on Section 7.13(a) of the Company
Disclosure Letter.

(b) Effective as of the Closing, Buyer shall assume all employment agreements
set forth in Section 9.4(b) of the Company Disclosure Letter to the extent in
effect as of the Closing, provided that the applicable Property Employee
consents to such assignment to the extent required by the terms of the
applicable employment agreement.

(c) For a period of at least one (1) year immediately following the Closing
Date, (x) Buyer shall provide the Transferred Employees who remain employed by
the Company with base compensation, bonus opportunity and annual and long-term
incentive compensation opportunity that are in the aggregate, on an employee by
employee basis, no less favorable than those which the Transferred Employees
were provided by the Company or its Affiliates immediately prior to the Closing
and (y) Buyer shall honor the severance policies of the Company and its
Affiliates with respect to Transferred Employees.

(d) For a period of at least one (1) year immediately following the Closing
Date, Buyer shall, pursuant to plans and arrangements established or maintained
by Buyer (the “Buyer Benefit Plans”), provide the Transferred Employees who
remain employed by the Company employee benefits (including medical benefits)
which are no less favorable in the aggregate on an employee by employee basis
than those which the Transferred Employees were provided under the Company
Benefit Plans immediately prior to Closing. To the extent permitted under the
terms of the Buyer Benefit Plans, Buyer shall cause service with the Company and
its Affiliates prior to the Closing to be treated the same as service with any
of Buyer and its Affiliates from and after the Closing Date for purposes of
eligibility, vesting, and benefit accrual under the Buyer Benefit Plans (except
(i) to the extent giving such credit would result in duplication of benefits,
(ii) for benefit accrual purposes under any defined benefit pension plan,
(iii) for purposes of any retiree medical plan or (iv) for any newly established
plan of Buyer for which similarly situated employees of Buyer do not receive
past service credit).

(e) Effective immediately after the Closing, Buyer shall cause the Transferred
Employees to be covered by one or more medical benefit plans (“Buyer’s Medical
Plans”), which shall provide benefits to the Transferred Employees and their
dependents which in the aggregate are substantially comparable to the benefits
that were provided to the Transferred Employees and their dependents by the
Company Benefit Plans immediately prior to Closing. To the extent permitted
under the terms of Buyer’s Medical Plans, Buyer shall cause any Transferred
Employees or their dependents to not be subject to any “pre-existing conditions”
exclusions or limitations or “actively at work” requirements which would cause
any of the Transferred Employees or their dependents otherwise to be excluded
from Buyer’s Medical Plans immediately after the Closing. To the extent
permitted under the terms of Buyer’s Medical Plans, Buyer shall give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims
incurred and amounts paid by, and amounts reimbursed to, such employees for the
calendar year in which the Closing occurs under any welfare benefit plans
maintained or contributed to by the Company for its benefit immediately prior to
the Closing Date.

 

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(f) Effective as of the Closing Date, Buyer shall establish or designate a
defined contribution retirement plan which is qualified or eligible for
qualification under Section 401(a) of the Code (the “Buyer’s 401(k) Plan”). Each
Transferred Employee who participates in the Harrah’s Entertainment, Inc.
Savings and Retirement Plan (the “Company 401(k) Plan”) who satisfies the
eligibility requirements of Buyer’s 401(k) Plan shall become eligible to
participate in Buyer’s 401(k) Plan on the date he or she becomes an employee of
Buyer and, to the extent permitted under the terms of Buyer’s 401(k) Plan, Buyer
shall cause such Transferred Employee to be credited with eligibility service
and vesting service for all periods of service with the Company or any other
Person if so credited with such service under the Company 401(k) Plan. Buyer or
its applicable Subsidiary shall cause Buyer’s 401(k) Plan to accept “eligible
rollover distributions” (as defined in Section 402(c)(4) of the Code) from
Transferred Employees with respect to such Transferred Employees’ account
balances (including loans) under the Company 401(k) Plan in the form of cash
(and, as applicable, promissory notes with respect to loans), if elected by such
Transferred Employees.

(g) Parent maintains a plan qualified under Section 125 of the Code (the
“Company’s 125 Plan”) that includes flexible spending accounts for medical care
reimbursements and dependent care reimbursements (“Reimbursement Accounts”). As
soon as reasonably practicable following the Closing Date, cash equal to the
aggregate value as of the Closing Date of the Reimbursement Accounts of the
Transferred Employees shall be transferred from Parent to a plan established by
Buyer intended to qualify under Section 125 of the Code (“Buyer’s 125 Plan”).
Upon receipt of such amount, Buyer and Buyer’s 125 Plan shall assume all
obligations with respect to the Reimbursement Accounts for the Transferred
Employees as of the Closing Date. Buyer shall recognize the elections of the
Transferred Employees under the Company’s 125 Plan for purposes of Buyer’s 125
Plan for calendar year 2012. Parent shall provide Buyer with all information
reasonably requested in order for Buyer and Buyer’s 125 Plan to satisfy the
obligations set forth in this Section 9.4(g).

(h) No provision of this Agreement shall create any third party beneficiary
rights in any Transferred Employee, or any beneficiary or dependent thereof,
with respect to the compensation, terms and conditions of employment and/or
benefits that may be provided to any Transferred Employee by Buyer or under any
benefit plan which Buyer may maintain. In no event shall the terms of this
Agreement be deemed to (i) establish, amend, or modify any Company Benefit Plan
or any other benefit plan, program, agreement or arrangement maintained or
sponsored by Buyer, the Company or any Subsidiary of the Company or any of their
respective Affiliates; (ii) alter or limit the ability of Buyer or any of its
Subsidiaries (including, after the Closing Date, the Company or any Subsidiary
of the Company) to amend, modify or terminate any benefit or employment plan,
program, agreement or arrangement after the Closing Date; or (iii) confer upon
any Property Employee any right to employment or continued employment or
continued service with Buyer or any of its Subsidiaries (including, following
the Closing Date, the Company or any Subsidiary of the Company), or constitute
or create an employment or other agreement with any Property Employee.

 

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(i) On or following the Closing, Buyer shall comply with all provisions of the
WARN Act with respect to all Transferred Employees. As part of its obligations
under ARTICLE XII hereof, Buyer shall indemnify, defend and hold Sellers and the
Company harmless from and against any Liability to any Transferred Employees or
any Governmental Entity that may result to Sellers and/or the Company based on
Buyer’s failure to comply with any provision of the WARN Act as required by this
Section 9.4(i), including, but not limited to, fines, back pay and attorneys’
fees. Sellers shall notify Buyer of any terminations of the employment of any
employees of the Company that occur during the ninety (90)-day period prior to
the Closing.

(j) Sellers shall indemnify, defend and hold Buyer and its Affiliates harmless
from and against any Controlled Group Liability.

Section 9.5 Access to Information and the Real Property; Post-Closing
Cooperation.

(a) Upon reasonable notice, subject to applicable Law, including antitrust Laws
and Gaming Laws, the Company shall afford Buyer’s Representatives reasonable
access, during normal business hours, during the period from the date hereof to
the Closing, to the Real Property (including the Casino) and to all personnel,
properties, books, Contracts and records of the Casino and, during such period,
the Company shall furnish promptly to Buyer all material information concerning
the Business (including the Real Property) as Buyer may reasonably request
(collectively, the “Inspection”); provided, however, that (i) Buyer shall
provide the Company with at least twenty-four (24) hours’ prior written notice
of any Inspection; (ii) if the Company so requests, Buyer’s Representatives
shall be accompanied by a Representative of the Company; (iii) Buyer shall not
initiate contact with employees or other representatives of the Company other
than such Representative designated by the Company without the prior written
consent of Sellers or the Company, which consent shall not be unreasonably
withheld or delayed; (iv) Buyer’s Representatives shall not be entitled to
perform any physical testing of any nature with respect to any portion of the
Real Property without the Company’s prior written consent if in the reasonable
judgment of the Company such testing would reasonably be expected to materially
interfere with the Business and/or cause damage to the Purchased Assets;
(v) Buyer shall not materially interfere with the Business; (vi) Buyer shall, at
its sole cost and expense, promptly repair any damage to the Purchased Assets or
any other property owned by a Person other than Buyer arising from or caused by
Inspection, and shall reimburse the Company for any loss arising from or caused
by any Inspection, and restore the Purchased Assets or such other third-party
property to substantially the same condition as existed prior to such
Inspection, and shall indemnify, defend and hold harmless Sellers, the Company
and its Affiliates from and against any personal injury or property damage
claims, liabilities, judgments or expenses (including reasonable attorneys’
fees) incurred by any of them arising or resulting therefrom; and (vii) in no
event shall this Section 9.5(a) constitute a limitation of Buyer’s waiver of
further due diligence in Section 8.7 hereof, nor shall the results of any such
Inspection be a condition to Buyer’s obligations under this Agreement or limit
the provisions of Section 13.5 hereof. Prior to entering the Real Property to
perform any tests and assessments or for any other reason permitted hereunder
and, thereafter, Buyer shall maintain a policy of comprehensive public liability
insurance in an amount not less than $10,000,000 naming the Company as
additional primary insured, insuring against any and all Liabilities for damages
to property or injury or death to

 

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persons arising out of the entry onto the Real Property of all persons and
property on Buyer’s behalf. Such insurance policy shall be with a nationally
recognized insurance company reasonably acceptable to the Company and shall
provide that it may not be terminated without providing the Company at least
thirty (30) days written notice. Prior to Buyer’s entry onto the Real Property,
Buyer shall deliver to the Company a certificate of insurance evidencing the
insurance policy required by this Section 9.5(a).

(b) Following the Closing Date, each party hereto will hold, and will use its
best efforts to cause its Affiliates and its and their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative) all documents and information concerning the
other party or any of its Affiliates (and, for the avoidance of doubt, treating
information concerning the Business and the Purchased Assets as information
concerning Buyer) unless (i) compelled to disclose by judicial or administrative
process (including in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of any Governmental Entity)
or by other requirements of Law or (ii) disclosed in an action or proceeding
brought by another party hereto in pursuit of its rights or in the exercise of
its remedies hereunder, or unless such documents or information can be shown to
have been (1) previously known by the party receiving such documents or
information (other than pursuant to breach of an agreement to keep such
information confidential), (2) in the public domain (either prior to or after
the furnishing of such documents or information hereunder) through no fault of
such receiving party or (3) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential. Buyer and the Company agree that in the event any proprietary
information or knowledge relating to an Excluded Asset is obtained, revealed or
otherwise made known to Buyer in effecting (x) the transition from Excluded
Software to replacement software pursuant to Section 1.4(c) hereof,
specifically, or (y) the removal of the Excluded Assets, generally, Buyer shall
not reveal, disclose, employ or otherwise use any such proprietary information
and will hold such information in confidence in accordance with the terms of the
Confidentiality Agreement. No information or knowledge obtained in any
investigation pursuant to this Section 9.5 shall affect or be deemed to modify
the obligations of the parties to consummate the transactions contemplated
herein.

(c) Following the Closing, and for so long as Sellers on the one hand or Buyer
on the other hand, or their respective Affiliates are prosecuting, participating
in, contesting or defending any action, claim, investigation, suit or
proceeding, whenever filed or made, in connection with or involving in any way
(i) this Agreement or the transactions contemplated hereby or (ii) the conduct
or operation of the Business prior to or after the Closing, including any
action, claim, investigation, suit or proceeding related to the Excluded Assets
and/or the Excluded Liabilities, the other party shall (and shall cause its
Affiliates, and its and their respective Representatives, to) (A) cooperate with
such party and its Affiliates and their Representatives with the prosecution,
participation, contest or defense, (B) provide such party and its Affiliates and
their Representatives with reasonable access and duplicating rights to all
properties, books, contracts, commitments and records (whether in paper or
electronic form) related to the Real Property and (C) make available to such
party and its Affiliates and their Representatives its personnel (including, by
Buyer, the Transferred Employees), including for

 

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purposes of fact finding, consultation, testimony, interviews, depositions and
witnesses, in each case as shall be reasonably necessary in connection with the
prosecution, participation, contest or defense of the applicable action, claim,
investigation, suit or proceeding by such party and its Affiliates and
Representatives.

(d) Upon reasonable notice, subject to applicable Law, including antitrust Laws
and Gaming Laws, Parent shall afford Buyer’s Representatives reasonable access,
during normal business hours, for up to ninety (90) days following the Closing,
to each Reserved Employee for so long as he or she is an employee of Parent or
its Subsidiaries; provided, however, that Buyer shall not initiate contact with
the Reserved Employees without the prior written consent of Parent, which
consent shall not be unreasonably withheld or delayed.

Section 9.6 Governmental Approvals.

(a) The parties hereto shall cooperate with each other and use their reasonable
best efforts to (i) as promptly as practicable, take, or cause to be taken, all
appropriate action, and do or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable;
(ii) obtain from any Governmental Entities any consents, approvals, findings of
suitability, expiration or terminations of waiting periods, licenses, permits,
waivers, approvals, orders or authorizations required (A) to be obtained or made
by Sellers, the Company or Buyer or any of their respective Affiliates or any of
their respective Representatives and (B) to avoid any action or proceeding by
any Governmental Entity (including those in connection with the HSR Act), in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions governed herein; and (iii) make all
necessary registrations, declarations and filings, and thereafter make any other
submissions with respect to this Agreement, as required under (A) any applicable
federal or state securities Laws, (B) the HSR Act, (C) the Gaming Laws,
including, providing information with respect to, executing, filing and
participating in meetings with the Missouri Gaming Commission with respect to,
the Petition for Change in Control and (D) any other applicable Law
(collectively, the “Governmental Approvals”), and to comply with the terms and
conditions of all such Governmental Approvals. The parties hereto and their
respective Representatives and Affiliates shall file as promptly as practicable,
but in no event later than fifteen (15) days after the date hereof, all required
initial applications and documents in connection with obtaining the Governmental
Approvals (including under applicable Gaming Laws and the HSR Act) and shall act
diligently and promptly to pursue the Governmental Approvals and shall cooperate
with each other in connection with the making of all filings referenced in the
preceding sentence, provided that, Buyer shall bear the ultimate responsibility
of obtaining all Gaming Approvals on or before the Outside Date. Subject to
applicable Laws relating to the exchange of information, prior to making any
application or material written communication to or filing with any Governmental
Entity with respect to Governmental Approvals, each party shall provide the
other parties with drafts thereof and afford the other parties a reasonable
opportunity to comment on such drafts. Buyer, Sellers and the Company shall use
reasonable best efforts to schedule and attend any hearings or meetings with
Governmental Entities to obtain the Governmental Approvals as promptly as
possible, and, to the extent permitted by the Governmental Entity, each party
shall offer the other parties the opportunity to participate in all telephonic
conferences and all

 

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meetings with any Governmental Entity to the extent relating to Governmental
Approvals. Buyer, Sellers and the Company shall, to the extent practicable,
consult with the other parties on, in each case, subject to applicable Laws
relating to the exchange of information (including antitrust Laws and Gaming
Laws), all the information relating to Buyer, Sellers or the Company, as the
case may be, and any of their respective Affiliates or Representatives which
appear in any filing made with, or written materials submitted to, any third
party or any Governmental Entity to the extent made or submitted in connection
with the transactions contemplated by this Agreement, other than personal
information on individuals who are filing applications. Without limiting the
foregoing, Buyer, Sellers and the Company will notify the other parties promptly
of the receipt of comments or requests or other communications (whether oral or
written) from Governmental Entities to the extent relating to Governmental
Approvals and, promptly supply the other parties with copies of all written
correspondence between the notifying parties or any of their Representatives and
Governmental Entities with respect to Governmental Approvals. Buyer, Sellers and
the Company shall share responsibility for devising and implementing the
strategy for obtaining any clearances required under the HSR Act in connection
with the transactions contemplated by this Agreement, provided, however, that
(i) in the event of disagreement between Buyer on the one hand and Sellers and
the Company on the other hand, Buyer’s view shall prevail, and (ii) Buyer shall
take the lead in all meetings and communications with any Governmental Entity in
connection with obtaining such clearances.

(b) Without limiting Section 9.6(a) hereof, Buyer, Sellers and the Company
shall:

(i) each use its reasonable best efforts to avoid the entry of, or to have
vacated or terminated, any decree, order, or judgment that would restrain,
prevent or delay the Closing, on or before the Outside Date, including defending
through litigation on the merits any claim asserted in any court by any Person;
and

(ii) each use its reasonable best efforts to avoid or eliminate each and every
impediment under any antitrust, competition or trade regulation Law that may be
asserted by any Governmental Entity or any other Person with respect to the
Closing so as to enable the Closing to occur as soon as reasonably possible (and
in any event no later than the Outside Date), including implementing,
contesting, or resisting any litigation before any court or administrative
tribunal seeking to restrain or enjoin the Closing; provided, however, that
Buyer and its Affiliates shall be required to (and nothing in this Agreement
shall require Sellers, the Company or any of its Affiliates to) commit to any
divestitures, licenses or hold separate or similar arrangements with respect to
its or their respective assets or conduct of business arrangements, to the
extent necessary to obtain any approval from a Government Entity required to
consummate the transactions contemplated hereby.

(c) Buyer, Sellers and the Company shall promptly advise each other upon
receiving any communication from any Governmental Entity whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement to the extent that such communication is related to the Governmental
Approvals. Buyer, Sellers and the Company shall each use its reasonable best
efforts to take, or cause to be taken, all actions reasonably necessary to
defend any lawsuits or other legal proceedings challenging this Agreement or the

 

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consummation of the transactions contemplated hereby and shall seek to prevent
the entry by any Governmental Entity of any decree, injunction or other order
challenging this Agreement or the consummation of the transactions contemplated
hereby. The parties agree to appeal, as promptly as possible, any decree,
injunction or other order challenging this Agreement or the consummation of the
transaction contemplated hereby and use reasonable best efforts to have any such
decree, injunction or other order vacated or reversed.

(d) From the date of this Agreement until the Closing, each party shall promptly
notify all other parties hereto in writing of any pending or, to the knowledge
of Buyer, Sellers or the Company, as appropriate, threatened action, suit,
arbitration or other proceeding or investigation by any Governmental Entity or
any other Person (i) challenging or seeking damages in connection with the
Closing or any other transaction contemplated by this Agreement or (ii) seeking
to restrain or prohibit the consummation of the Closing.

Section 9.7 Publicity. Parent and Sellers on the one hand and Buyer on the other
hand shall agree on the form and content of the initial press release regarding
the transactions contemplated hereby and thereafter shall consult with each
other before issuing, provide each other the opportunity to review and comment
upon, and use commercially reasonable efforts to agree upon, any press release
or other public statement with respect to any of the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation and prior to considering in good faith any
such comments, except as may be required by applicable Law or any listing
agreement with any nationally recognized stock exchange. Notwithstanding
anything to the contrary herein, Buyer and Parent may make any public statement
in response to questions by the press, analysts, investors or those attending
industry conferences or financial analysts conference calls, so long as any such
statements are not inconsistent with previous press releases, public disclosures
or public statements made jointly by Buyer and Parent or made by one party and
reviewed by the other and do not reveal non-public information regarding the
transactions contemplated by this Agreement.

Section 9.8 Further Assurances and Actions.

(a) Subject to the terms and conditions herein, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable Laws to consummate and make
effective the transactions contemplated by this Agreement, including,
(i) obtaining all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and parties to Contracts as
are necessary or advisable for consummation of the transactions contemplated by
this Agreement and (ii) to fulfill all conditions precedent applicable to the
Closing.

(b) In case at any time after the Closing any further action is necessary to
carry out the purposes of this Agreement, to vest Buyer with full title to the
Equity Interests, the Purchased Assets and the assumption of the Assumed
Liabilities, or to vest Sellers with full title to the Excluded Assets and the
assumption of the Excluded Liabilities, Buyer, Sellers and the Company shall
take all commercially reasonable action necessary (including executing and

 

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delivering further notices, assumptions, releases and acquisitions); provided,
that if such action is necessary due to events or circumstances particular to
Buyer, Buyer shall bear the cost of such action, and otherwise Sellers shall
bear the cost of such action. All costs and expenses related to recording the
Trademark Assignment Agreement shall be borne by Buyer.

Section 9.9 Transfer Taxes; HSR Filing Fee.

(a) All transfer, recording, documentary, sales, use, stamp, registration and
other such Taxes (including real estate transfer or similar Tax that arise from
any indirect transfer of property as a result of the transfer of the Equity
Interests) and related fees (including any penalties, interest and additions to
Tax) incurred with respect to the purchase and sale of the Equity Interests
pursuant to this Agreement (“Transfer Taxes”) shall be paid by Buyer. Buyer
shall indemnify, defend and hold Sellers harmless from and against any and all
amounts for which Buyer is liable pursuant to this Section 9.9(a). The party
responsible under applicable Law for filing the Tax Returns pertaining to and
paying such Transfer Taxes shall (i) timely file such Tax Returns and remit to
the applicable Governmental Authority payment of the Transfer Taxes required to
be remitted therewith and (ii) promptly provide a copy of such Tax Return to the
other party. If Sellers have paid such Transfer Taxes they shall be reimbursed
for such Taxes promptly by Buyer. Buyer and Sellers shall cooperate as requested
in preparing, executing and filing all such Tax Returns and related
documentation on a timely basis as may be required to comply with the provisions
of any applicable Law.

(b) The filing fee required to be paid in connection with the pre-merger
notification filing under the HSR Act shall be paid by Buyer.

Section 9.10 No Control. Except as permitted by the terms of this Agreement,
prior to the Closing, Buyer shall not directly or indirectly control, supervise,
direct or interfere with, or attempt to control, supervise, direct or interfere
with, the Company, including the Casino, the Real Property and the other
Purchased Assets. Until the Closing, the operations and affairs of the Company,
including the Casino, the Real Property and the other Purchased Assets, are the
sole responsibility of and under the Company’s complete and exclusive control,
except as expressly provided for in this Agreement.

Section 9.11 Reservations; Guests; Valet Parking; Other Transition Matters.

(a) Reservations. Buyer will honor the terms and rates of all reservations (in
accordance with their terms) at the Casino made prior to the Closing by guests
or customers, including advance reservation cash deposits, for rooms or services
confirmed by the Company for dates after the Closing Date, provided that such
agreements were made in the Ordinary Course of Business. From and after the date
hereof, the Company may continue to accept reservations for periods after the
Closing in the Ordinary Course of Business. Buyer recognizes that such
reservations may include discounts or other benefits, including benefits under
frequent player or casino awards programs, group discounts, other discounts or
requirements that food, beverage or other benefits be delivered by Buyer to the
guest(s) holding such reservations following the Closing. Buyer will honor all
room allocation agreements and banquet facility and service agreements which
have been granted to groups, persons or other customers for periods

 

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after the Closing Date at the rates and terms provided in such agreements;
provided that such agreements were made in the Ordinary Course of Business.
Buyer agrees that Sellers can make, or have made, any representation or warranty
that any party holding a reservation or agreement for rooms, facilities or
services will utilize such reservation or honor such agreement and Buyer, by the
execution hereof, assumes the risk of non-utilization of reservations and
non-performance of such agreements from and after the Closing.

(b) Guests’ Safe Deposit Boxes. Not later than thirty (30) days prior to the
Closing, the Company shall use commercially reasonable efforts to send a notice
by certified mail to the last known address of each Person who has stored
personal property in safe deposit boxes located at the Casino, advising them
that they must make arrangements with Buyer to continue use of their safe
deposit box and that if they should fail to do so within fifteen (15) days after
the date of such notice is sent, the box will be opened in the presence of a
Representative of the Company, a Representative of Buyer, and a Notary Public;
and the contents of such box will be sealed in a package by the Notary Public,
who shall write on the outside the name of the Person who rented the safe
deposit box and the date of the opening of the box in the presence of the
Representatives of the Company and Buyer, respectively. The Notary Public and
the Representatives of the Company and Buyer shall then execute a certificate
reciting the name of the Person who rented the safe deposit box, the date of the
opening of the box and a list of its contents. The certificate shall be placed
in the package and a copy of it sent by certified mail to the last known address
of the person who rented the safe deposit box. The package will then be placed
in a vault arranged by Buyer. Pursuant to ARTICLE XII hereof, Parent and Sellers
shall be responsible for and indemnify Buyer against claims of alleged missing
items not contained on the certificate, and Buyer shall be responsible for and
indemnify Sellers against claims of alleged missing items listed on the
certificate.

(c) Guests’ Baggage. Prior to the Closing, the Company and Buyer shall take
inventory of: (i) all baggage, suitcases, luggage, valises and trunks of hotel
guests checked or left in the care of the Casino; (ii) all luggage or other
property of guests retained by the Casino as security for unpaid accounts
receivable; and (iii) the contents of the baggage storage room; provided,
however, that no such baggage, suitcases, luggage, valises or trunks shall be
opened. Except for the property referred to in (ii) above, which shall be
removed from the Casino by the Company within ten (10) days after the Closing,
all such baggage and other items shall be sealed in a manner to be agreed upon
by the parties and listed in an inventory prepared and signed jointly by
Representatives of the Company and Buyer as of the Closing. Said baggage and
other items shall continue to be stored by the Company and Buyer shall be
responsible for claims with respect thereto.

(d) Front Money.

(i) Pursuant to the Gaming Laws of the State of Missouri, the Company shall, at
least thirty (30) days prior to the Closing, to the extent legally required,
submit for approval to all applicable Gaming Authorities a plan containing
customary terms for the inventory of the Front Money at the Casino. Buyer and
the Company agree to cooperate fully with each other in effectuating the plan
that is approved by the applicable Gaming Authorities.

 

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(ii) Effective as of the Closing, Representatives of Buyer and the Company shall
take inventory of all Front Money and identify what Persons are entitled to what
portions of such Front Money. All such Front Money shall be retained in the
Casino cage and listed in an inventory prepared and signed jointly by
Representatives of Buyer and the Company no later than the Closing. Buyer shall
be responsible from and after the Closing for all Front Money and shall
distribute Front Money only to the Persons and only in the amounts as determined
pursuant to this Section 9.11(d).

(e) Vehicles with Valet Parking. On the Closing Date, the Company shall transfer
control of all motor vehicles that were checked and placed in the care of the
Business (the “Inventoried Vehicles”) to Buyer. Thereafter, Buyer shall be
responsible for the Inventoried Vehicles, provided that Sellers shall be liable
to the owners of such Inventoried Vehicles with respect to any damages occurring
prior to the Closing Date as a result of actions taken by the Business and its
employees or contractors (including damages (as a result of actions taken by the
Business and its employees or contractors) set forth in the damage report) or
items missing from or damaged in such Inventoried Vehicles and such liability
shall be an Excluded Liability for the purposes of this Agreement.

(f) Rebranding. Prior to and following the Closing Date, as the case may be, the
Company, Sellers and Buyer shall timely complete all steps required under the
Rebranding Plan attached hereto as Schedule A.

(g) Transition Planning. In order to facilitate an effective transition of all
of the services, systems and functions necessary to operate the Business (the
“Transitioned Functions”) from Sellers to Buyer and its Affiliates at Closing,
during the thirty (30) day period after the Effective Date (the “Transition
Planning Date”), the Parties shall work together in good faith in the
development of a reasonably detailed written plan (the “Transition Plan”)
setting out the steps that the parties will take to transition the Transitioned
Functions from Parent and Sellers to Buyer and its Affiliates, including among
other things the transition of any leased slot machines located at the Casino,
and to send communications to customers regarding the transactions contemplated
hereby. Each party shall use its reasonable best efforts to perform its
responsibilities under the Transition Plan in order to effect transition of all
Transitioned Functions to Buyer and its Affiliates at or prior to Closing. If
Sellers do not identify to Buyers a Transitioned Function, in connection with
the creation of the Transition Plan, on or prior to the Transition Planning
Date, and such omission would materially impair Buyer’s ability to operate the
Casino after the Closing Date, then, at Buyer’s request, Parent shall agree to
perform such Transitioned Function on behalf of the Company, at cost, for a
number of days from and after the Closing Date equal to the number of days that
passed after the Transition Planning Date before Sellers first identify such
Transitioned Function to Buyer; provided, that Parent shall not be required to
perform any Transitioned Functions on behalf of the Company pursuant to this
Section 9.11(g) after a date that is ninety (90) days after the Closing Date.

Section 9.12 Transfer of Utilities. Prior to the Closing, the Company shall
notify all utility companies servicing the Real Property of the anticipated
change in ownership of the Real Property and request that all billings after the
Closing be made to Buyer at the applicable Real Property. Buyer shall be
responsible for paying all deposits required by utility companies in

 

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order to continue service at the Real Property for periods after the Closing and
shall take any other action and make any other payments required to assure
uninterrupted availability of utilities at the Real Property for all periods
after the Closing. Following the Closing, all utility deposits made by the
Company relating to the pre-Closing period will be refunded directly to Sellers
by the utility company holding same; provided that if any such utility deposit
is returned to the Company following the Closing, Buyer shall promptly remit
such deposit to Sellers.

Section 9.13 Certain Transactions. From the date hereof until the Closing Date,
neither Buyer, Sellers nor the Company shall, and shall not permit any of their
respective Affiliates to, acquire or agree to acquire by merging or by
consolidating with, or by purchasing assets of or a substantial portion of
equity in, or any other manner, any business or any corporation, partnership,
association or other business organization or division thereof engaged in the
gaming business in the State of Missouri and/or the greater St. Louis area if
such acquisition or agreement to acquire could reasonably be expected to
adversely affect Buyer’s ability to obtain the Gaming Approvals or to consummate
the transactions contemplated by this Agreement, as applicable.

Section 9.14 FCC Approvals.

(a) The Company and Buyer will, as applicable, within ten (10) days of the
Effective Date, execute and file filing copies of FCC applications to either
(i) seek the consent of the FCC to the assignment of the FCC Licenses to Buyer,
or (ii) have the FCC Licenses reissued by the FCC in the name of Buyer, as
appropriate (collectively, the “FCC Approvals”). The Company and Buyer agree to
use their respective reasonable best efforts to cooperate with any requests for
information, filing of forms, communications with the FCC or other actions which
are reasonably necessary in order to obtain the FCC Approvals.

(b) If the FCC Approvals have not been obtained on or before the Closing Date
and no special temporary authority has been granted by the FCC that allows Buyer
to operate under the FCC Licenses, then (i) the Closing shall nevertheless occur
as scheduled, and (ii) the parties will comply with any applicable requirements
of the FCC or applicable Law (including the Company tendering for cancellation
the FCC Licenses). Buyer agrees that it will not use or operate the equipment
which is the subject of the FCC Licenses or the FCC Approvals after the Closing
in violation of any requirements of the FCC or any applicable Law.

Section 9.15 Insurance and Casualty. If, before the Closing, the Casino is
damaged by fire or other casualty, then, subject to the satisfaction or waiver
by the applicable party of the conditions set forth in ARTICLE X hereof, the
Closing shall proceed as scheduled, and Sellers shall, after the Closing Date,
(i) promptly pay to Buyer all insurance proceeds received by Sellers or their
Affiliates with respect to such damage, destruction or other loss, less any
proceeds applied to the physical restoration of the Casino, to the extent such
restoration expenditures were approved by Buyer in writing, (ii) take such
actions as may reasonably be requested by Buyer in connection with the tendering
of such claims to the applicable insurers with respect to such damage,
destruction or other loss and (iii) assign to Buyer all rights of Sellers and
their Affiliates against third parties (other than against its insurance
carriers) with respect to any causes of action, whether or not litigation has
commenced as of the Closing Date, in connection with such

 

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damage, destruction or other loss; provided, that the proceeds of such insurance
shall be subject to (and recovery thereon shall be reduced by the amount of) any
applicable deductibles and co-payment provisions or any payment or reimbursement
and shall constitute full compensation for the damage to the Casino, and Sellers
and their Affiliates shall have no responsibility for restoration or repair of
the Casino or any resultant loss, directly, by subrogation, or otherwise; and
provided, further, that if one or more prior claims has been made after the
Effective Date against the insurance with respect to the Purchased Assets that
causes the amount of insurance coverage to be insufficient to cover such damage,
destruction or other loss and the Company has failed to notify Buyer of such
claim(s) pursuant to Section 9.1(e), then Sellers shall pay or cause to be paid
the insurance proceeds with respect to such other claim(s) to Buyer so that it
receives the full amount of insurance proceeds that it would have received but
for such prior claim(s).

Section 9.16 Certain Notifications. From the date of this Agreement until the
Closing, Parent, Sellers, the Company and Buyer shall promptly notify the other
parties in writing, as soon as practical after it becomes known to such party,
of:

(a) any breach by such party of any of its representations, warranties,
covenants or obligations contained in this Agreement; and

(b) any fact, circumstance, event or action which will result in, or would
reasonably be expected to result in, the failure of Parent, Sellers, the Company
or Buyer to timely satisfy any of the closing conditions specified in ARTICLE X
hereof.

Nothing contained in Section 9.16 shall prevent Parent, Sellers, the Company or
Buyer from giving such notice, using such efforts or taking any action to cure
any of the foregoing. No notice given pursuant to this Section 9.16 shall have
any effect on the representations, warranties, covenants or agreements contained
in this Agreement for purposes of determining satisfaction of any condition
contained herein or the parties’ rights to indemnification hereunder.

Section 9.17 Non-Solicitation. Each party agrees that it shall not, and shall
cause their respective Affiliates not to, prior to the one (1)-year anniversary
of the Closing Date, solicit employment of employees of the other party or the
other party’s Affiliates that such soliciting party had substantial contact with
as a result of the transactions contemplated by this Agreement; provided,
however, that the restrictions contained in this Section 9.17 shall not apply to
(a) general solicitations not specifically directed to any employee of a party
or such party’s Affiliates, and (b) any solicitation or hiring of an individual
who is not employed by the other party or such party’s Affiliates at the time of
such solicitation or hiring of that individual and so long as such party did not
cause, induce or attempt to cause or induce such employee to no longer be
employed by such other party.

Section 9.18 Transfer of Assets. To the extent that Parent, Sellers or any of
their Affiliates (other than the Company) holds at or prior to the Closing any
asset, property or right that is exclusively used or held for use in connection
with the Business, Sellers shall cause such Person to promptly, and in any event
prior to the Closing, transfer such asset, property or right to the Company.

 

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Section 9.19 Customer List.

(a) Consent. Parent or Sellers shall solicit customers’ consents, on an
“opt-out” basis, for transfer of the information on the Customer List and the
Rewards Information not less than forty five (45) days prior to the anticipated
Closing Date.

(b) No Direct Marketing. From and after the Closing until the four (4) year
anniversary of the Closing Date, Parent and Sellers shall not, and shall cause
their Affiliates not to (i) make any direct marketing to the customers on the
Customer List for any casino property within a ninety (90)-mile radius of the
Casino or (ii) sell, license or otherwise permit any Person to use the Customer
Database or any portion thereof to make any direct marketing to the customers on
the Customer List for any property within a ninety (90)-mile radius of the
Casino; provided, that this Section 9.19(b) shall not restrict Parent and
Sellers from marketing to customers on the Customer List in connection with
online gaming, online play-for-fun games, or other online interactive games
conducted by Parent.

Section 9.20 Lien Release. Parent and Sellers shall use their reasonable best
efforts to facilitate and encourage the making of any filings, releases,
discharges, deeds and other documents necessary to evidence the release by all
financial institutions and other Persons to which any indebtedness (including
guarantee obligations in respect thereof) of the Company is outstanding (the
“Lenders”) of all Liens and Encumbrances in connection therewith relating to the
Purchased Assets, the Equity Interests, the Business or the Company (“Lender
Liens”), and all obligations (including guarantee obligations) of the Company in
respect of such indebtedness (“Loan Obligations”), substantially simultaneously
with the Closing Date. Promptly after the Effective Date, Parent and Sellers
shall request that the Lenders deliver letters or similar written confirmation
(each, a “Release Confirmation”), substantially simultaneously with the Closing
Date, confirming that (a) all Lender Liens shall be, upon the Closing Date,
released by all lenders thereunder and (b) all Loan Obligations shall be, upon
the Closing Date, released. Parent and Sellers shall keep Buyer reasonably
informed (orally and in writing) on a current basis regarding any material
developments relating to their request for Release Confirmations, including by
reporting any conversations with a Lender or its Representatives relating to the
Release Confirmations, any rejection of a Release Confirmation by a Lender or
any failure of a Lender to respond to a request for a Release Confirmation, and
by furnishing copies of any relevant written correspondence or draft
documentation.

Section 9.21 Financing.

Prior to the Closing, Buyer will use its reasonable best efforts to obtain any
financing necessary to pay the Purchase Price, the Estimated Closing Payment,
the Estimated Operations Payment and all fees and expenses necessary or related
to the consummation of the transactions contemplated by this Agreement. Parent,
Sellers and the Company shall provide all cooperation reasonably requested by
Buyer in connection with obtaining any such financing, including furnishing
financial and other pertinent information necessary to show the pro forma impact
of the transactions contemplated by this Agreement on Buyer and its
Subsidiaries; provided that Buyer shall be reimbursed for any reasonable
out-of-pocket costs incurred by the Company in connection with such cooperation.

 

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ARTICLE X.

CONDITIONS TO CLOSING

Section 10.1 Conditions to Each Party’s Obligation to Effect the Closing. The
respective obligations of each party to this Agreement to effect the Closing
shall be subject to the satisfaction of each of the following conditions on or
prior to the Closing, any of which may be waived in whole or in part in a
writing executed by all of the parties hereto:

(a) No Injunctions. No Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any order, executive order,
stay, decree, judgment or injunction or statute, rule or regulation which is in
effect (whether temporary, preliminary or permanent) and which prevents or
prohibits the consummation of, or that makes it illegal for either party hereto
to consummate, the transactions contemplated by this Agreement.

(b) HSR Act. Any applicable waiting periods, together with any extensions
thereof, under the HSR Act shall have expired or been terminated.

Section 10.2 Additional Conditions to Obligations of Buyer. The obligation of
Buyer to effect the Closing is subject to the satisfaction of each of the
following conditions prior to the Closing, any of which may be waived in whole
or in part in writing exclusively by Buyer; provided, however, that Buyer may
not waive the condition set forth in Section 10.2(d) below until the date this
is eleven (11) months from the Effective Date and in the event such condition is
waived, Buyer agrees not to operate the Casino until such time as all Required
Governmental Consents are obtained by Buyer:

(a) Representations and Warranties. (i) The representations and warranties of
Parent, Sellers and the Company contained in Sections 6.1 (Organization of
Parent and Sellers), 6.2 (Authority; No Conflict; Required Filings and
Consents), 6.3 (Title to Equity Interests), 7.1 (Organization of the Company;
Capitalization) and 7.2 (Authority; No Conflict; Required Filings and Consents)
shall be true and correct in all material respects at and as of the Closing as
if made at and as of such time and (ii) all of the other representations and
warranties of Parent, Sellers and the Company contained in this Agreement shall
be true and correct (without giving effect to any limitation as to “materiality”
or “Company Material Adverse Effect” set forth therein) at and as of the Closing
as if made at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such earlier date), except where the failure
of such representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect. Buyer shall have received a certificate signed on
behalf of the Company by an officer of Sellers to such effect.

(b) Performance of Obligations of Parent, Sellers and the Company. Parent,
Sellers and the Company shall have performed in all material respects all
covenants, agreements and obligations required to be performed by Parent,
Sellers and the Company under this Agreement at or prior to the Closing,
including delivery of items listed in Section 5.2 hereof and curing Monetary
Defects in accordance with Article XIII hereof. Buyer shall have received a
certificate signed on behalf of Sellers by an officer of Sellers and the Company
to such effect.

 

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(c) Deliverables. Sellers and the Company shall have delivered executed copies
of the Ancillary Agreements and other closing deliverables described in ARTICLE
V to be delivered by them.

(d) Governmental Consents. All consents, approvals, findings of suitability,
licenses, permits, waivers, orders or authorizations of and registrations,
declarations or filings with any Governmental Entity of competent jurisdiction
in respect of the Gaming Laws required or necessary in connection with the
transactions contemplated by this Agreement and necessary for ownership and
operation of the Real Property and the Business (including approval of the
Petition for Change in Control and the approval, licensing or registration of
Buyer and such of its (i) officers, executive directors, key employees or
Persons performing management functions similar to officers, (ii) shareholders
and (iii) key business affiliates as may be required by applicable Gaming
Authorities) (the “Required Governmental Consents”) have been obtained by Buyer
and shall be in full force and effect by Buyer.

Section 10.3 Additional Conditions to Obligations of Sellers. The obligations of
Sellers to effect the Closing are subject to the satisfaction of each of the
following conditions prior to the Closing, any of which may be waived in whole
or in part in writing exclusively by Sellers:

(a) Representations and Warranties. (i) The representations and warranties of
Buyer contained in Sections 8.1 (Organization) and 8.2 (Authority; No Conflict;
Required Filings and Consents) shall be true and correct in all material
respects at and as of the Closing as if made at and as of such time and
(iii) all of the other representations and warranties of Buyer contained in this
Agreement shall be true and correct (without giving effect to any limitation as
to “materiality” or “Buyer Material Adverse Effect” set forth therein) at and as
of the Closing as if made at and as of such time, except where the failure of
such representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to result in a Buyer
Material Adverse Effect. Sellers shall have received a certificate signed on
behalf of Buyer by an executive officer of Buyer to such effect.

(b) Performance of Obligations of Buyer. Buyer shall have performed in all
material respects all covenants, agreements and obligations required to be
performed by it under this Agreement at or prior to the Closing, including
delivery of items listed in Section 5.2. Sellers shall have received a
certificate signed on behalf of Buyer by an executive officer of Buyer to such
effect.

(c) Deliverables. Buyer shall have delivered executed copies of the Ancillary
Agreements and other closing deliverables described in ARTICLE V to be delivered
by it.

ARTICLE XI.

TERMINATION AND AMENDMENT

Section 11.1 Termination. This Agreement may be terminated at any time prior to
the Closing (with respect to Sections 11.1(b) through (g) hereof, by written
notice by the terminating party to the other parties):

(a) by mutual written agreement of Sellers and Buyer;

 

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(b) by Sellers or Buyer, if the transactions contemplated hereby shall not have
been consummated on or prior to the Outside Date; provided, however, that the
right to terminate this Agreement under this Section 11.1(b) shall not be
available to Sellers or Buyer, respectively, if Sellers’ (or Parent’s or the
Company’s) or Buyer’s failure, respectively, to fulfill any obligation of
Sellers (or Parent or the Company) or Buyer, respectively, under this Agreement
has been the primary cause of the failure of the Closing to occur on or before
the Outside Date;

(c) by Sellers or Buyer, if any Gaming Authority made a final, non-appealable
determination that such Gaming Authority will not issue to Buyer all Gaming
Approvals;

(d) by Sellers or Buyer, if a court of competent jurisdiction or other
Governmental Entity shall have issued a non-appealable final order, decree or
ruling or taken any other non-appealable final action, in each case, having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Closing and the transactions contemplated hereby; provided, however, that the
right to terminate this Agreement under this Section 11.1(d) shall not be
available to Sellers or Buyer, respectively, if Sellers’ (or Parent’s or the
Company’s) or Buyer’s failure, respectively, to fulfill any obligation of
Sellers (or Parent or the Company) or Buyer, respectively, under this Agreement
has been the primary cause of, or materially contributed to, such action;

(e) by Buyer, if the Company, Sellers or Parent have breached any
representation, warranty, covenant or agreement on the part of the Company,
Sellers or Parent set forth in this Agreement which (i) would result in a
failure of a condition set forth in Sections 10.1(a) or (b) or Sections 10.2(a),
(b), (c) or (d) hereof and (ii) is not cured within thirty (30) calendar days
after written notice thereof; provided, however, that if such breach cannot
reasonably be cured within such thirty (30) day period but can be reasonably
cured prior to the Outside Date, and the Company, Sellers and Parent are
diligently proceeding to cure such breach, this Agreement may not be terminated
pursuant to this Section 11.1(e); provided, further, that Buyer’s right to
terminate this Agreement under this Section 11.1(e) shall not be available if,
at the time of such intended termination, Sellers have the right to terminate
this Agreement under Section 11.1(b), (c), (d) or (f) hereof;

(f) by Sellers, if Buyer has breached any representation, warranty, covenant or
agreement on the part of Buyer set forth in this Agreement which (i) would
result in a failure of a condition set forth in Sections 10.1(a) or (b) or
Section 10.3(a), (b) or (c) hereof and (ii) is not cured within thirty
(30) calendar days after written notice thereof; provided, however, that if such
breach cannot reasonably be cured within such thirty (30) day period but can be
reasonably cured prior to the Outside Date, and Buyer is diligently proceeding
to cure such breach, this Agreement may not be terminated pursuant to this
Section 11.1(f); provided, further, that Buyer shall have no right to cure its
failure to timely make any Extension Deposit and such failure shall result in an
immediate right of Sellers to terminate hereunder; provided, further, that
Sellers’ right to terminate this Agreement under this Section 11.1(f) shall not
be available if, at the time of such intended termination, Buyer has the right
to terminate this Agreement under Section 11.1(b), (c), (d) or (e) hereof; or

(g) by Buyer, pursuant to Section 13.2(b) or 13.3.

 

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Section 11.2 Effect of Termination.

(a) Liability. In the event of termination of this Agreement as provided in
Section 11.1 hereof, this Agreement shall immediately become void and there
shall be no Liability on the part of Buyer or Sellers, or their respective
Affiliates or Representatives, other than Sections 1.5, 9.5(b) and 11.2 and
ARTICLE XIII hereof; provided, however, that nothing contained in this
Section 11.2 shall relieve or limit the Liability of either party to this
Agreement for any fraudulent or willful breach of this Agreement.

(b) Fees and Expenses. Except as otherwise expressly provided in this Agreement,
all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Closing is consummated. Any cancellation charges of
the Escrow Agent or Title Insurer shall be paid by the party who breached this
Agreement, and, if no party breached this Agreement, then each of Sellers and
Buyer shall pay one-half of such cancellation charges.

(c) Application of the Deposit and any Extension Deposit.

(i) Upon the termination of this Agreement pursuant to Section 11.1(e) and
(g) hereof, the Deposit and any Extension Deposit, together with interest earned
thereon, shall be paid to Buyer.

(ii) Upon the termination of this Agreement for any reason other than pursuant
to Section 11.1(e) and (g) hereof, the Deposit and any Extension Deposit,
together with any interest earned thereon, shall be paid to Sellers (or their
designee).

(d) Certain Terminations. In the event that (w) this Agreement is terminated
pursuant to Section 11.1(b) or (c), (x) one or more Required Governmental
Consents has not been obtained at or prior to the time of such termination,
(y) all of the condition to Buyer’s obligation to effect the Closing set forth
in Sections 10.1(a) or (b) and Sections 10.2(a), (b), (c) and (d) have been
satisfied, or waived by Buyer, other than those conditions that are not
satisfied because of the failure to obtain such Required Governmental Consent(s)
and (z) any action announced, entered into or commenced by Buyer after the
Effective Date (a “Buyer Corporate Transaction”) was a material cause of the
failure to obtain such Required Governmental Consent(s) prior to the termination
date, then, within three (3) business days of the consummation by Sellers of any
Company Sale pursuant to a binding arms length agreement with a non-affiliated
third party purchaser (the “Third Party Purchaser”) entered into within twelve
(12) months of such termination date (a “New Sale Agreement”), Buyer shall pay
to Sellers the amount, if any, by which (i) the Purchase Price less the amount
of the Deposit and any Extension Deposit previously released to Sellers pursuant
to Section 11.2(c) exceeds (ii) the New Sale Price (the “Make-Whole Amount”);
provided, that, if Sellers and/or the Company enter into a New Sale Agreement,
they shall use all reasonable best efforts to maximize the New Sale Price and
shall permit Buyer to participate on the same process as all other bidders in
the sales process seeking a Third Party Purchaser; provided, however, that prior
to entry into a New Sale Agreement, Sellers and the Company may use its good
faith judgment to determine the most favorable Company Sale proposal,
considering all legal, regulatory and financial aspects

 

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(including certainty of closing). In the event of a termination of this
Agreement of the type described in the first sentence of this Section 11.2(d),
there shall be no Liability on the part of Buyer or its Affiliates or
Representatives other than payment of the Make-Whole Amount (if any) pursuant to
this Section 11.2(d), and as set forth in Section 11.2(c); provided, however,
that nothing contained in this Section 11.2(d) shall relieve or limit the
Liability of Buyer for any fraudulent or willful breach of this Agreement. For
the avoidance of doubt, the parties acknowledge and agree that this
Section 11.2(d) does not limit Buyer’s obligations pursuant to Section 9.13
hereof and does not restrict Buyer’s ability to engage in a Buyer Corporate
Transaction.

ARTICLE XII.

SURVIVAL; INDEMNIFICATION

Section 12.1 Survival of Representations, Warranties, Covenants and Agreements.

(a) Except as set forth in ARTICLE XI and Section 12.1(b) hereof, the
representations, warranties, covenants and agreements of each party hereto shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any other party hereto, any Person controlling any such
party or any of their Representatives whether prior to or after the execution of
this Agreement.

(b) The representations and warranties made by Parent, Sellers, the Company and
Buyer in this Agreement shall survive the Closing until (and claims based upon
or arising out of such representations and warranties may be asserted at any
time before) six (6) months after the Closing Date, provided, however, that the
representations made in Sections 6.1 (Organization of Sellers), 6.2 (Authority;
No Conflict; Required Filings and Consents), 6.3 (Title to Equity Interests),
7.1 (Organization of the Company), 7.2 (Authority; No Conflict; Required Filings
and Consents), 7.14 (Brokers), 7.17 (Minimum Cash), 8.1 (Organization), 8.2
(Authority; No Conflict; Required Filings and Consents), 8.3 (Brokers)
(collectively, the “Fundamental Representations”) shall survive indefinitely,
and the representations and warranties in Section 7.5 (Tax) shall survive until
sixty (60) days following the expiration of the statute of limitations (taking
into account any extensions or waivers thereof) applicable to the collection of
the applicable Tax that is the subject of such representations. The period of
time a representation or warranty survives the Closing pursuant to the preceding
sentence shall be the “Survival Period” with respect to such representation or
warranty. The parties intend for the preceding two sentences to shorten the
otherwise applicable statute of limitations and agree that, subject to the last
sentence of this Section 12.1(b), no claim may be brought based upon, directly
or indirectly, any of the representations and warranties contained in this
Agreement after the Survival Period with respect to such representation or
warranty. The covenants and agreements of the parties hereto in this Agreement
shall survive the Closing without any contractual limitation on the period of
survival (other than those covenants and agreements that are expressly required
to remain in full force and effect for a specified period of time). The
termination of the representations and warranties provided herein shall not
affect a party (i) in respect of any claim made by such party in reasonable
detail in writing received by an Indemnifying Party prior to the expiration of
the applicable Survival Period provided herein, or (ii) in respect of any claim
grounded in fraud or willful misconduct of the Indemnifying Party.

 

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Section 12.2 Indemnification.

(a) Except with respect to Taxes that are governed by Section 12.2(d), from and
after the Closing, Parent and Sellers shall indemnify, save and hold harmless
Buyer and its Affiliates and its and their respective Representatives,
successors and assigns (each, a “Buyer Indemnified Party” and collectively, the
“Buyer Indemnified Parties”) from and against any and all costs, losses, Taxes,
Liabilities, obligations, damages, claims, demands and expenses (whether or not
arising out of third-party claims), including interest, penalties, reasonable
attorneys’ fees and all amounts paid in investigation, defense or settlement of
any of the foregoing (herein, “Damages”), incurred in connection with, arising
out of, or resulting from:

(i) any breach of any representation or warranty other than a Fundamental
Representation made by Parent, Sellers or the Company in this Agreement;

(ii) any breach of Fundamental Representation made by Parent, Sellers or the
Company in this Agreement;

(iii) any breach of any covenant (excluding any Damages incurred in connection
with, arising out of, or resulting from a breach of Section 9.1(p) that have
been reflected in Net Working Capital) or agreement made, or to be performed, by
Parent, Sellers or the Company in this Agreement;

(iv) the Excluded Liabilities;

(v) the Excluded Assets; or

(vi) the ownership, use, registration, maintenance, licensing or previous
transfer of the Purchased Assets prior to the Closing or the conduct of the
Business prior to the Closing.

(b) Except with respect to Taxes that are governed by Section 12.2(d), from and
after the Closing, Buyer shall indemnify, save and hold harmless Sellers, the
Company and their respective Affiliates and its and their Representatives,
successors and (each, a “Seller Indemnified Party” and collectively, the “Seller
Indemnified Parties”) from and against any and all Damages incurred in
connection with, arising out of, or resulting from:

(i) any breach of any representation or warranty other than a Fundamental
Representation made by Buyer in this Agreement;

(ii) any breach of Fundamental Representation made by Buyer in this Agreement;

(iii) any breach of any covenant or agreement made, or to be performed, by Buyer
in this Agreement;

(iv) the Assumed Liabilities;

 

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(v) the Purchased Assets; or

(vi) the ownership, use, registration, maintenance, licensing or further
transfer of the Purchased Assets after the Closing or the conduct of the
Business after the Closing.

(c) Interpretation. Notwithstanding anything in this Agreement to the contrary,
the term Damages shall not include any consequential, special or incidental
damages, claims for lost profits, or punitive or similar damages, except in
cases where such damages are recovered from an Indemnified Party by a third
party.

(d) Tax Indemnification.

(i) From and after the Closing, Sellers shall indemnify, save and hold harmless
the Buyer Indemnified Parties from and against any and all Damages incurred in
connection with, arising out of, or resulting from: (A) any breach of any
representation or warranty contained in Section 7.5 (Taxes); (B) any breach of
any covenant or agreement made, or to be performed by Parent, Sellers or the
Company on or prior to the Closing Date, pursuant to Section 3.3,
Section 9.1(s), Section 9.9(a) and Section 12.9; and (C) any Excluded Taxes.

(ii) From and after the Closing, Buyer shall indemnify, save and hold harmless
the Seller Indemnified Parties from and against any and all Damages incurred in
connection with, arising out of, or resulting from: (A) any breach of any
covenant or agreement made, or to be performed by Buyer, pursuant to
Section 3.3, Section 9.9(a) and Section 12.9; and (B) any Taxes of the Company
or relating to the Purchased Assets for any Post-Closing Period; in each case,
other than Taxes for which Sellers are responsible pursuant to
Section 12.2(d)(i).

Section 12.3 Procedure for Claims between Parties. Except with respect to Taxes
that are governed by Section 12.2(d), if a claim for Damages is to be made by a
Buyer Indemnified Party or Seller Indemnified Party (each, an “Indemnified
Party” and collectively, the “Indemnified Parties”) entitled to indemnification
hereunder, such party shall give written notice briefly describing the claim
and, to the extent then ascertainable, the monetary damages sought (each, a
“Notice”) to the indemnifying party hereunder (the “Indemnifying Party” and
collectively, the “Indemnifying Parties”) as soon as reasonably practicable
after such Indemnified Party becomes aware of any fact, condition or event which
may give rise to Damages for which indemnification may be sought under this
ARTICLE XII. Any failure to submit any such notice of claim to the Indemnifying
Party shall not relieve any Indemnifying Party of any Liability hereunder,
except to the extent that the Indemnifying Party was actually prejudiced by such
failure.

Section 12.4 Defense of Third Party Claims.

(a) Except with respect to Taxes that are governed by Section 12.2(d), if any
lawsuit, action, proceeding, investigation, claim or enforcement action is
initiated against an Indemnified Party by any third party (each, a “Third Party
Claim”) for which indemnification under this ARTICLE XII may be sought, Notice
thereof, together with copies of all notices and communication relating to such
Third Party Claim, shall be given to the Indemnifying Party as

 

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promptly as reasonably practicable. The failure of any Indemnified Party to give
timely Notice hereunder shall not affect rights to indemnification hereunder,
except to the extent that the Indemnifying Party was actually prejudiced by such
failure.

(b) If it so elects at its own cost, risk and expense, the Indemnifying Party
shall be entitled to:

(i) take control of the defense and investigation of such Third Party Claim at
its sole cost and expense if the Indemnifying Party notifies the Indemnified
Party in writing that the Indemnifying Party will indemnify the Indemnified
Party for any Damages related to the Third Party Claim;

(ii) employ and engage attorneys of its own choice (provided that such attorneys
are reasonably acceptable to the Indemnified Party) to handle and defend the
same, unless the named parties to such action or proceeding include both one or
more Indemnifying Parties and an Indemnified Party, and the Indemnified Party
has reasonably concluded that there may be one or more legal defenses or defense
strategies available to such Indemnified Party that are different from or
additional to those available to an applicable Indemnifying Party or that there
exists or is reasonably likely to exist a conflict of interest, in which event
such Indemnified Party shall be entitled, at the Indemnifying Parties’
reasonable cost, risk and expense, to separate counsel (provided that such
counsel is reasonably acceptable to the Indemnifying Party); and

(iii) compromise or settle such Third Party Claim, which compromise or
settlement shall be made (x) only with the written consent of the Indemnified
Party, such consent not to be unreasonably withheld, or (y) if such compromise
or settlement contains an unconditional release of the Indemnified Party in
respect of such claim, without any cost, liability or admission of wrongdoing of
any nature whatsoever to or by such Indemnified Party, and provides only for
monetary damages that will be paid in full by the Indemnifying Party.

(c) If the Indemnifying Party elects to assume the defense of a Third Party
Claim, the Indemnified Party shall cooperate in all reasonable respects with the
Indemnifying Party and its attorneys in the investigation, trial and defense of
such Third Party Claim and any appeal arising therefrom; provided, however, that
the Indemnified Party may, at its own cost, participate in the investigation,
trial and defense of such lawsuit or action and any appeal arising therefrom.
The parties shall cooperate with each other in any notifications to insurers.

(d) If the Indemnifying Party fails to assume the defense of such Third Party
Claim within fifteen (15) calendar days after receipt of the Notice, the
Indemnified Party against which such Third Party Claim has been asserted will
have the right to undertake, at the Indemnifying Parties’ reasonable cost, risk
and expense, the defense, compromise or settlement of such Third Party Claim on
behalf of and for the account and risk of the Indemnifying Parties; provided,
however, that such Third Party Claim shall not be compromised or settled without
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.

(e) If the Indemnified Party assumes the defense of the Third Party Claim, the
Indemnified Party will keep the Indemnifying Party reasonably informed of the
progress of any such defense, compromise or settlement.

 

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(f) If the Indemnifying Party notifies the Indemnified Party that it does not
dispute its liability to the Indemnified Party with respect to the Third Party
Claim or fails to notify the Indemnified Party whether the Indemnifying Party
disputes its liability to the Indemnified Party with respect to such Third Party
Claim within sixty (60) days of the Notice of such Third Party Claim having been
provided to the Indemnifying Party, the Damages arising from such Third Party
Claim will be conclusively deemed a liability of the Indemnifying Party and the
Indemnifying Party shall pay the amount of such Damages to the Indemnified Party
on demand following the final determination thereof. If the Indemnifying Party
disputes its liability with respect to such claim within such 60-day period,
then such dispute shall be resolved in accordance with the terms and conditions
of Section 12.5.

(g) This Section 12.4 shall not apply to any claim with respect to Taxes that
are governed by Section 12.2(d), which shall be governed exclusively by
Section 12.9(c).

Section 12.5 Resolution of Conflicts and Claims.

(a) If the Indemnifying Party objects in writing to any claim for
indemnification made by an Indemnified Party in any written Notice of a claim
(an “Objection Notice”), Sellers, on the one hand, and Buyer, on the other hand,
shall attempt in good faith to agree upon the rights of the respective parties
with respect to each of such claims, and such Sellers and Buyer shall provide
information to the other party (as reasonably requested) related to the issues
set forth in the Objection Notice. If Sellers and Buyer should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both
parties.

(b) If no such agreement is reached after good faith negotiation, either Buyer
or Sellers may demand mediation of the dispute, unless the amount of the damage
or loss is at issue in a pending action or proceeding involving a Third Party
Claim, in which event mediation shall not be commenced until such amount is
ascertained or both parties agree to mediation. In any such mediation, Buyer and
Sellers agree to employ a mediator from the American Arbitration Association
(the “AAA”) to assist them in reaching resolution of such dispute according to
the Commercial Mediation Rules of the AAA. The mediator shall be a corporate
attorney with at least fifteen (15) years experience in acquisitions. The fees
and expenses of the mediator shall be shared equally by Buyer and Sellers. If,
after mediation efforts, Buyer and Sellers should agree as to all or a portion
of a claim, a memorandum setting forth such agreement shall be prepared and
signed by both parties. If after reasonable efforts, and over a period of sixty
(60) calendar days, the parties are unable to reach agreement on such dispute
utilizing the mediator, the parties shall be permitted to proceed with any legal
remedy available to such party.

(c) The provisions of this Section 12.5 shall apply to disputes between the
parties as to Tax matters subject to Section 12.9, with the term “Third Party
Claim” replaced with “Tax Claim”.

Section 12.6 Limitations on Indemnity.

(a) No Buyer Indemnified Party shall seek, or be entitled to, indemnification
from any of the Indemnifying Parties pursuant to Section 12.2(a)(i) hereof to
the extent the aggregate claims for Damages of the Buyer Indemnified Parties for
which indemnification is

 

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sought pursuant to Section 12.2(a)(i) hereof are less than six million
one-hundred thousand dollars ($6,100,000) (the “Deductible”) or exceed an amount
equal to thirty million five-hundred thousand dollars ($30,500,000) (the “Cap”);
provided, that, if the aggregate of all claims for Damages for which
indemnification is sought pursuant to Section 12.2(a)(i) hereof equals or
exceeds the Deductible, then the Buyer Indemnified Parties shall be entitled to
recover for such Damages, subject to the limitations in this Section 12.6(a),
only to the extent such Damages exceed the Deductible, but in any event not to
exceed the Cap.

(b) In addition to the limitations set forth in Section 12.6(a), no Buyer
Indemnified Party shall seek, or be entitled to, indemnification from any of the
Indemnifying Parties pursuant to Section 12.2(a)(i) hereof to the extent any
individual claim or series of related individual claims for Damages of the Buyer
Indemnified Parties for which indemnification is sought pursuant to
Section 12.2(a)(i) hereof is less than $100,000, at which time, subject to the
limitation set forth herein, the Buyer Indemnified Party shall be entitled to
indemnification for the full amount of all such Damages from and including the
first dollar of such Damages and all such Damages shall count towards the
satisfaction of the Deductible.

(c) In calculating the amount of any Damages payable to a Buyer Indemnified
Party or a Seller Indemnified Party hereunder, the amount of the Damages
(i) shall not be duplicative of any other Damage for which an indemnification
claim has been made and (ii) shall be computed net of any amounts actually
recovered by such Indemnified Party under any insurance policy with respect to
such Damages (net of any costs and expenses incurred in obtaining such insurance
proceeds). If an Indemnifying Party pays an Indemnified Party for a claim and
subsequently insurance proceeds in respect of such claim is collected by the
Indemnified Parties, then the Indemnified Party promptly shall remit the
insurance proceeds (net of any costs and expenses incurred in obtaining such
insurance proceeds) up to the amount paid by Indemnifying Party to Indemnifying
Party. The Indemnified Parties shall use commercially reasonable efforts to
obtain from any applicable insurance company any insurance proceeds in respect
of any claim for which the Indemnified Parties seek indemnification under this
ARTICLE XII.

Section 12.7 Payment of Damages. Except as otherwise permitted in
Section 12.9(a), an Indemnified Party shall be paid in cash by an Indemnifying
Party the amount to which such Indemnified Party may become entitled by reason
of the provisions of this ARTICLE XII, within ten (10) business days after such
amount is determined either by mutual agreement of the parties or on the date on
which both such amount and an Indemnified Party’s obligation to pay such amount
have been determined by a final judgment of a court or administrative body
having jurisdiction over such proceeding.

Section 12.8 Exclusive Remedy.

(a) After the Closing, the indemnities provided in this ARTICLE XII shall
constitute the sole and exclusive remedy of any Indemnified Party for Damages
arising out of, resulting from or incurred in connection with any claims
regarding matters arising under or otherwise relating to this Agreement;
provided, however; that this exclusive remedy for Damages does not preclude a
party from bringing an action for specific performance or other equitable

 

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remedy to require a party to perform its obligations under this Agreement.
Without limiting the foregoing, Buyer, Parent and Sellers each hereby waive
(and, by their acceptance of the benefits under this Agreement, each Buyer
Indemnified Party and Seller Indemnified Party hereby waives), from and after
the Closing, any and all rights, claims and causes of action (other than claims
of, or causes of action arising from, fraud or willful misconduct) such party
may have against the other party arising under or based upon this Agreement or
any schedule, exhibit, disclosure letter, document or certificate delivered in
connection herewith, and no legal action sounding in tort, statute or strict
liability may be maintained by any party (other than a legal action brought
solely to enforce or pursuant to the provisions of this ARTICLE XII).
Notwithstanding anything to the contrary in this Section 12.8, in the event of
willful misconduct, or a fraudulent breach of the representations, warranties,
covenants or agreements contained herein, by Buyer, Parent or Sellers, any
Indemnified Party shall have all remedies available at law or in equity
(including for tort) with respect thereto.

(b) Without limiting the foregoing, the Buyer Indemnified Parties and the Seller
Indemnified Parties hereby waive and agree not to seek (whether under any
Environmental Law or otherwise) any statutory or common law remedy (whether for
contribution, equitable indemnity or otherwise) against any Indemnifying Party
with regard to any Environmental Condition or Environmental Liability, except
solely in accordance with the exclusive remedy provided in this ARTICLE XII.

Section 12.9 Tax Matters.

(a) Treatment of Indemnification Payments. All indemnification payments made
pursuant to this ARTICLE XII shall be treated by the parties for income Tax
purposes as adjustments to the purchase price, unless (i) otherwise required
pursuant to a “determination” (as defined in Section 1313(a) of the Code or any
similar provision of state, local or foreign Law) or (ii) Buyer provides Sellers
with its written consent, which consent shall not be unreasonably withheld,
conditioned or delayed.

(b) Tax Returns.

(i) Sellers shall prepare or cause to be prepared all Tax Returns required to be
filed by, with respect to or that include the Company with respect to taxable
periods of the Company ending on or before the Closing Date (the “Pre-Closing
Separate Tax Returns”), and such Pre-Closing Separate Tax Returns, to the extent
they relate to the Company, shall be prepared consistent with past practices and
this Agreement, except as otherwise required by applicable Law. Sellers shall
file or cause to be filed all Pre-Closing Separate Tax Returns that are required
to be filed on or before the Closing Date and Sellers shall pay, or cause to be
paid, all such Taxes shown as due on such Tax Returns. Buyer shall file or cause
to be filed all Pre-Closing Separate Tax Returns for the Company that are
prepared by Sellers pursuant to the first sentence of this Section 12.9(b)(i)
that are due after the Closing Date and, subject to the other provisions in this
Agreement, shall pay or cause to be paid all Taxes shown as due on such
Pre-Closing Separate Tax Returns, provided that neither Buyer nor the Company
shall be required to sign or file any Tax Return (i) not prepared in accordance
with this Agreement or (ii) if it reasonably determines that there is not
substantial authority supporting each material

 

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position reflected on such Tax Return (or such higher standard as may be
required under applicable state, local or foreign Law to avoid the imposition of
penalties) and, provided, further, that signing and filing a Tax Return in
accordance with the foregoing provision shall not be considered an
acknowledgement that such Tax Return complies with the requirements of this
Agreement. Sellers shall pay to Buyer no later than three (3) business days
prior to the due date for filing any Pre-Closing Separate Tax Return referenced
in the preceding sentence, the amount of Taxes shown as due on such Pre-Closing
Separate Tax Returns. Sellers shall provide Buyer a copy of each such
Pre-Closing Separate Tax Return for its review and comment a reasonable number
of days prior to the due date (including any applicable extension) of such Tax
Return, and Sellers shall reasonably consider any written comments of Buyer
received prior to filing such Pre-Closing Separate Tax Return. If the Company is
permitted under any applicable income Tax Law to treat the Closing Date as the
last day of the taxable period in which the Closing occurs, Buyer and Sellers
shall treat (and shall cause their respective Affiliates to treat) the Closing
Date as the last day of such taxable period.

(ii) Buyer shall prepare or cause to be prepared all Tax Returns of the Company
for taxable periods starting on or before the Closing Date and ending after the
Closing Date (each, a “Straddle Period”), and shall cause such Tax Returns to be
prepared consistent with past practices, except as otherwise required by
applicable Law. The Company shall file or cause to be filed all such Tax Returns
for any Straddle Period and, subject to the other provisions in this Agreement,
shall pay or cause to be paid all Taxes shown as due on such Tax Returns.
Sellers shall pay to Buyer no later than three (3) business days prior to the
due date for filing any Tax Return for any Straddle Period the amount of Taxes
owing with respect to the Straddle Period for which Sellers are responsible
pursuant to Section 12.2(d)(i). Buyer shall provide Sellers a copy of each such
Tax Return for their review and comment a reasonable number of days prior to the
due date (including any applicable extension) of such Tax Return, and Buyer
shall reasonably consider any written comments of Sellers received by Buyer
prior to filing such Tax Return.

(iii) For purposes of the indemnity provisions of this Agreement, in the case of
any Taxes that are imposed on a periodic basis and are payable for a Straddle
Period, the portion of such Tax related to the portion of such Straddle Period
ending on and including the Closing Date shall (A) in the case of any Taxes
other than gross receipts, employment, sales or use Taxes, Taxes based upon or
related to income and other similar Taxes, be deemed to be the amount of such
Tax for the entire Straddle Period multiplied by a fraction the numerator of
which is the number of days in the Straddle Period ending on and including the
Closing Date and the denominator of which is the number of days in the entire
Straddle Period, and (B) in the case of any Tax based upon or related to income
and any gross receipts, employment, sales or use Tax and other similar Taxes, be
deemed equal to the amount which would be payable if the relevant Tax period
ended on and included the Closing Date.

(c) Tax Contest. Buyer or Sellers, as applicable, shall promptly notify Sellers
or Buyer, as applicable, in writing upon receipt by Buyer (or, following the
Closing, the Company) or Sellers, as applicable, of a written notice of any
audit or administrative or judicial proceeding with respect to Taxes of the
Company which Sellers or Buyer, as applicable, may be responsible for pursuant
to Section 12.2(d) (a “Tax Claim”); provided, however, no failure or

 

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delay by Buyer or Sellers, as applicable, to provide notice of a Tax Claim shall
reduce or otherwise affect the obligation of Sellers or Buyer, as applicable,
hereunder except to the extent Sellers or Buyer, as applicable, is actually
prejudiced thereby. Buyer and Sellers shall cooperate with each other in the
conduct of any Tax Claim. Sellers shall have the right to control the conduct of
any Tax Claim for a period that ends on or prior to the Closing Date if Sellers
provide Buyer with notice of its election to control such claim within twenty
(20) days of Buyer notifying Sellers of such Tax Claim. If Sellers do not elect
to control any such Tax Claim within the time period set forth above, then Buyer
shall be entitled to control all aspects of such claim. Buyer shall control any
Tax Claim for a period that begins before and ends after the Closing Date. If
the resolution of any Tax Claim for any Pre-Closing Period or Straddle Period
could reasonably be expected to have an adverse effect on the party that is not
in control of such claim, (A) the party in control of such claim shall keep the
other party reasonably informed regarding the progress and substantive aspects
of such Tax Claim, (B) the other party shall be entitled to participate in any
proceedings with respect to such Tax Claim and (C) the party in control of such
claim shall not compromise or settle any such Tax Claim without obtaining the
other party’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding anything to the contrary in
this Agreement, Buyer shall have the right to exclusively control the conduct of
any audit or administrative or judicial proceeding with respect to the Company
for any taxable period other than a Straddle Period beginning after the Closing
Date.

(d) Cooperation. Buyer and Sellers shall reasonably cooperate, as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax Returns and any audit, litigation or other proceeding with respect to Taxes
of the Company. Such cooperation shall include the retention and (upon the other
party’s request, provided that the other party provides reimbursement for all
reasonable out of pocket expenses) the provision of records and information
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Each of Buyer
and Sellers shall (i) retain all books and records in its (or its Affiliate’s)
possession after the Closing with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
expiration of the statute of limitations (taking into account any extensions
thereof) of the respective taxable periods and (ii) give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, shall allow the
requesting party to take possession of such books and records.

(e) Certain Actions After Closing. Neither Buyer nor any of its Affiliates
(including, after the Closing, the Company) shall, without the prior written
consent of Sellers (such consent not to be unreasonably withheld, conditioned or
delayed), (i) make or change any (A) Tax election of the Company for a taxable
period (or portion thereof) ending on or before the Closing Date or (B) property
Tax election of the Company affecting the Tax Claim described in
Section 7.5(b)(i) of the Company Disclosure Letter in respect of certain
property Taxes of the Company for the 2011 taxable period, (ii) amend, refile or
otherwise modify (or grant an extension of any applicable statute of limitations
with respect to) any Tax Return of the Company for a taxable period (or portion
thereof) ending on or before the Closing Date, or (iii) cause the Company to
engage in any transaction on the Closing Date after the Closing that is

 

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outside of the ordinary course of business, except for the transactions
contemplated by this Agreement; in each case, except for any action that would
not, individually or in the aggregate, have an adverse effect on Sellers or any
of their Affiliates (including, with respect to a taxable period (or portion
thereof) ending on or before the Closing Date, the Company) that is material.

(f) Tax Sharing Agreements. Any and all existing Tax sharing or similar
agreements between Sellers or any of their Affiliates, on the one hand, and the
Company, on the other hand, shall be terminated and all payables and receivables
arising thereunder shall be settled, in each case prior to the Closing Date.
After the Closing, neither Buyer nor the Company shall have any further rights
or liabilities thereunder.

(g) Tax Refunds. Sellers shall be entitled to any refund (whether by way of
payment or reduction in Taxes otherwise payable in cash) received by Buyer or
the Company of Taxes constituting an Excluded Liability; provided, however, that
Sellers shall not be entitled to any refund of Taxes to the extent that such
refund is attributable to the carryback of a loss or other Tax attribute arising
in a Post-Closing Period. Except as provided in the foregoing sentence, Buyer
shall be entitled to any other refund of or with respect to the Company or with
respect to Transfer Taxes paid by Buyer pursuant to Section 9.9(a). If any party
receives a refund to which another party is entitled pursuant to this
Section 12.9(g), such party shall pay over such refund (net of costs or Taxes to
the party receiving such refund) to the party entitled to such refund no later
than ten (10) business days following receipt of such refund.

ARTICLE XIII.

TITLE TO REAL PROPERTY

Section 13.1 Title Policy and UCC Search. Buyer has obtained the Title
Commitment and agrees to accept the Title Policy delivered by the Company on or
immediately prior to the date hereof and the Uniform Commercial Code search of
Sellers dated as of April 25, 2012 (the “UCC Search”). Buyer hereby acknowledges
receipt of the Title Commitment, Title Policy and the UCC Search as evidence of
the status of the Company’s title to the Purchased Assets and acceptance of the
matters thereon as Permitted Liens. Buyer agrees to accept valid and insurable
(at ordinary rates) fee simple title to the Real Property subject to the
Permitted Liens and Permitted Encumbrances. Buyer shall have the option upon the
Closing Date to purchase a date-down endorsement to the Title Policy (or, at
Buyer’s option, a new title insurance policy) together with a non-imputation
endorsement (if available) (the “Endorsement”), insuring that the Company is the
owner of the Real Property described in the Title Policy, subject to the
exceptions set forth in the Endorsement. Buyer shall pay the premium for the
Endorsement.

Section 13.2 Defects Arising After the Effective Date.

(a) The UCC Search shall be updated by the Company not earlier than thirty
(30) days and not later than ten (10) days prior to the Closing Date. The
Endorsement, if Buyer elects to obtain such Endorsement, shall be updated by
Buyer not earlier than thirty (30) days and not later than ten (10) days prior
to the Closing Date. If the updated UCC Search and/or Endorsement, if
applicable, discloses defects in title not shown by (i) the applicable Title
Policy, (ii) UCC Search, (iii) the Company Disclosure Letter, (iv) the Title
Commitment or (v) this

 

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Agreement which, in any case, render fee simple title to the Real Property
uninsurable (at ordinary rates) (“Non-Monetary Defects”), or, if the Real
Property should become subject to a Monetary Defect (together with any
Non-Monetary Defects, “Additional Exceptions”), Buyer may object to such
Additional Exceptions by delivering to the Company an itemized written notice of
Buyer’s objection to such Additional Exceptions (“Defect Notice”) within fifteen
(15) days after the date of receipt by Buyer of the updated Endorsement, if
applicable, or UCC Search or, if earlier, the Closing Date (the “Notice
Period”). Additional Exceptions will not be deemed to include any Permitted
Liens or Permitted Encumbrances. Buyer’s failure to deliver a Defect Notice
during the Notice Period shall be deemed a waiver of Buyer’s right to object to
such Defect(s), and Buyer shall then accept such title as is described in the
Endorsement and UCC Search, as updated, without reserving any claim against the
Company for such Defect(s); provided that such a failure shall not limit any
claim that Buyer may have with respect to a breach of the Company’s obligations
pursuant to Section 9.1(d) hereof).

(b) If Buyer provides a Defect Notice to the Company during the Notice Period,
the Company shall have five (5) days after receipt of the Defect Notice within
which to give written notice to Buyer as to whether the Company will elect to
cure any Additional Exceptions. The Company shall be under no obligation to
remove any Additional Exceptions that are not Monetary Defects (and that are not
created as a consequence of a breach of the Company’s obligations pursuant to
Section 9.1(d) hereof), and any refusal of the Company to do so shall not be a
default of the Company under this Agreement. Failure to notify Buyer in writing
within such period of the Company’s election shall be deemed the Company’s
election not to cure any such Additional Exceptions. If the Company elects, in
its sole discretion, to cure any Additional Exceptions, the Company shall have
thirty (30) days after receipt of the Defect Notice to cure such Additional
Exceptions which Company has elected to cure, and the Closing shall, if
necessary, be extended accordingly. Buyer shall have five (5) business days
following either receipt of the Company’s notice electing not to cure any
Additional Exceptions or the date on which the Company is deemed to have elected
not to cure any Additional Exceptions in which to elect (in each case, without
limitation to any claim that Buyer may have with respect to a breach of the
Company’s obligations pursuant to Section 9.1(d) hereof) either to (i) waive its
objection to the Additional Exceptions that the Company does not or is deemed
not to elect to cure and to proceed with Closing; or (ii) terminate this
Agreement upon written notice to the Company and Escrow Agent. The Company shall
be obligated to cure Monetary Defects in accordance with Section 13.2(c).

(c) The Company shall be obligated to cure monetary Liens encumbering the Real
Property (other than any non-delinquent Taxes and assessments and any monetary
Liens created or suffered by Buyer or consented to by Buyer), including
financing liens or encumbrances created by, under or through or the Company or
that are held by the Company or any of its Affiliates (“Monetary Defects”) in
the manner provided below. In order to cure a Monetary Defect, or any Additional
Exception that the Company elects to cure in accordance with this Article XIII,
the Company shall have the option to extend the Closing Date for a period of
thirty (30) days, by giving written notice of such extension election to Buyer
and Escrow Agent on or prior to the Closing Date. The Company may cure Monetary
Defects, and any Additional Exceptions that the Company elects to cure, by any
of the following methods to the extent applicable: (i) removing the Monetary
Defect or applicable Additional Exceptions of

 

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record; (ii) posting a bond which causes a Monetary Defect to cease to be a Lien
on the Real Property; or (iii) providing indemnification to the Title Insurer
against adverse final adjudication of any Monetary Defect or such Additional
Exception and having the Title Insurer provide an endorsement, if applicable,
which deletes such Monetary Defect or such Additional Exception as an exception
to coverage.

Section 13.3 Failure to Cure Title Defects. If the Company fails to cure a
Monetary Defect that it is obligated to cure in accordance with Section 13.2
hereof, or an Additional Exception that the Company had elected to cure in
accordance with Section 13.2 hereof, such failure shall be a default by the
Company and this Agreement shall, at the option of Buyer (to be exercised by
written notice to the Company given no later than the earlier of: (a) the
Closing Date or (b) five (5) business days after such the Company’s notice to
Buyer of such the Company’s election not to cure or attempt to cure such title
defects), be terminated, the Escrow Agent shall return the Deposit to Buyer and
Buyer and the Company shall be released and discharged from any further
obligation to each other hereunder; provided, that if Buyer so elects, Buyer may
accept such title as is tendered by the Company without a reduction in the
Purchase Price or reservation of claim against the Company (but without
limitation to any claim that Buyer may have with respect to a breach of the
Company’s obligations pursuant to Section 9.1(d) hereof). Buyer’s right to
terminate this Agreement pursuant to this Section 13.3 shall apply to the entire
Agreement and notwithstanding anything contained to the contrary herein, if
Buyer elects to terminate this Agreement pursuant to this Section 13.3, Buyer
shall not, in any event, have a right to terminate less than all of this
Agreement.

Section 13.4 Survey. Buyer agrees to accept the Real Property subject to all
matters shown by the surveys described on Section 13.4 of the Company Disclosure
Letter (collectively, the “Survey”). The Company shall, at Buyer’s sole cost and
expense, cause the Survey to be updated and recertified to Buyer not earlier
than one hundred twenty (120) days and not later than fifteen (15) days prior to
the Closing. If a recertified updated and recertified Survey reveals: (a) any
material encroachments of the Real Property onto property of others; (b) any
material encroachments of property of others onto the Real Property; or (c) the
location of any title matter on the Real Property in a manner that would
materially and adversely affect the ability to use the Real Property as
presently constructed and located on the Real Property; or any other matter
which would render title to the Real Property uninsurable and unmarketable, and
if such matters were not revealed by the Survey, then such disclosure shall be
an Additional Exception as to which the provisions of Sections 13.2 and 13.3
hereof shall govern Buyer’s and the Company’s rights and obligations.

Section 13.5 AS IS. SUBJECT ONLY TO THE COMPANY’S REPRESENTATIONS AND WARRANTIES
AND COVENANTS EXPRESSLY SET FORTH HEREIN OR ANY CERTIFICATE OR AGREEMENT
DELIVERED PURSUANT HERETO AND SUBJECT TO THE CONDITIONS, RIGHTS AND OBLIGATIONS
SET FORTH HEREIN AND THEREIN, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES, AND
REPRESENTS AND WARRANTS TO SELLER AND THE COMPANY, THAT BUYER HAS OR WILL HAVE
THE OPPORTUNITY TO FULLY EXAMINE AND INSPECT THE PURCHASED ASSETS PRIOR TO THE
EXECUTION OF THIS AGREEMENT AND THAT BUYER IS FULLY CAPABLE OF EVALUATING AND
HAS EVALUATED THE PURCHASED ASSETS’

 

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SUITABILITY FOR BUYER’S INTENDED USE THEREOF, AND BUYER IS PURCHASING THE
PURCHASED ASSETS WITH ALL DEFECTS IN THEIR “AS IS”, “WHERE IS” CONDITION AND
WITH ALL FAULTS, WHETHER KNOWN, UNKNOWN, APPARENT, OR LATENT. BUYER’S DECISION
TO PURCHASE THE PURCHASED ASSETS IS NOT BASED ON ANY COVENANT, WARRANTY,
PROMISE, AGREEMENT, GUARANTY, OR REPRESENTATION BY THE COMPANY, SELLER OR ANY OF
THEIR AFFILIATES OR REPRESENTATIVES AS TO CONDITION, PHYSICAL OR OTHERWISE,
TITLE, LEASES, RENTS, REVENUES, INCOME, EXPENSES, OPERATION, ZONING OR OTHER
REGULATION, COMPLIANCE WITH LAW, SUITABILITY FOR PARTICULAR PURPOSES OR ANY
OTHER MATTER WHATSOEVER EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS
AGREEMENT. SUBJECT ONLY TO THE COMPANY’S REPRESENTATIONS, WARRANTIES AND
COVENANTS EXPRESSLY CONTAINED HEREIN, THE CONDITIONS SET FORTH IN ARTICLE X AND
THE REPRESENTATIONS, WARRANTIES, AND CONDITIONS SET FORTH IN ALL CERTIFICATES
AND AGREEMENTS DELIVERED BY THE COMPANY PURSUANT TO THIS AGREEMENT, BUYER
ACKNOWLEDGES AND AGREES THAT NEITHER THE COMPANY, SELLER, NOR ANY OF THEIR
AFFILIATES NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE, AND BUYER
SPECIFICALLY WAIVES AND RELINQUISHES ALL RIGHTS, PRIVILEGES AND CLAIMS ARISING
OUT OF, ANY ALLEGED REPRESENTATIONS, WARRANTIES (INCLUDING WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE, AND WARRANTIES ARISING FROM A
COURSE OF DEALING, USAGE OR TRADE), PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, WHICH MAY HAVE BEEN MADE OR GIVEN, OR WHICH
MAY BE DEEMED TO HAVE BEEN MADE OR GIVEN, BY THE COMPANY, ITS AFFILIATES OR ANY
OF THEIR RESPECTIVE REPRESENTATIVES, AS TO, CONCERNING OR WITH RESPECT TO:

(A) THE VALUE OF THE PURCHASED ASSETS (REGARDLESS OF, WITHOUT LIMITATION, ANY
STATEMENTS MADE BY THE COMPANY OR ANY ENTRY MADE IN THE COMPANY’S FINANCIAL
STATEMENTS);

(B) THE INCOME DERIVED OR TO BE DERIVED FROM THE PURCHASED ASSETS;

(C) THE SUITABILITY OF THE REAL PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH BUYER MAY CONDUCT THEREON, INCLUDING, THE POSSIBILITIES FOR FUTURE
DEVELOPMENT OF THE REAL PROPERTY;

(D) THE FITNESS OF THE PURCHASED ASSETS FOR ANY PARTICULAR PURPOSE;

(E) THE MANNER OR QUALITY OF REPAIR, STATE OF REPAIR OR LACK OF REPAIR OF THE
PURCHASED ASSETS;

 

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(F) THE NATURE, QUALITY OR CONDITION OF THE PURCHASED ASSETS, INCLUDING SOILS
CONDITION, ANY GRADING OR OTHER WORK PERFORMED ON OR WITH RESPECT TO THE REAL
PROPERTY, AND THE GEOLOGICAL CONDITION OF THE REAL PROPERTY;

(G) THE COMPLIANCE OF OR BY THE REAL PROPERTY OR ITS OPERATION WITH ANY
APPLICABLE LAWS;

(H) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED
INTO THE REAL PROPERTY;

(I) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS,
RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING TITLE III OF THE AMERICANS
WITH DISABILITIES ACT OF 1990 OR ANY ENVIRONMENTAL LAWS, AS ANY OF THE FOREGOING
MAY BE AMENDED FROM TIME TO TIME AND REGULATIONS PROMULGATED UNDER ANY OF THE
FOREGOING FROM TIME TO TIME;

(J) THE PRESENCE, SUSPECTED PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES AT, ON,
UNDER, OR ADJACENT TO THE REAL PROPERTY;

(K) THE CONTENT, COMPLETENESS OR ACCURACY OF THE STUDY MATERIALS OR ANY PLANS,
DRAWINGS, DESCRIPTIONS OR THE LIKE WITH RESPECT TO THE REAL PROPERTY;

(L) THE CONFORMITY OF THE REAL PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE
ZONING OR BUILDING REQUIREMENTS;

(M) DEFICIENCY OF ANY DRAINAGE;

(N) THE FACT THAT THE REAL PROPERTY MAY BE LOCATED ON OR NEAR EARTHQUAKE FAULTS
OR IN SEISMIC HAZARD ZONES;

(O) THE EXISTENCE OR NON-EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
ENTITLEMENTS AFFECTING THE REAL PROPERTY; OR

(P) ANY OTHER MATTER CONCERNING THE NATURE OR CONDITION OF THE REAL PROPERTY,
PHYSICAL OR OTHERWISE.

SUBJECT ONLY TO THE COMPANY’S REPRESENTATIONS, WARRANTIES AND COVENANTS
EXPRESSLY CONTAINED HEREIN, THE CONDITIONS SET FORTH IN ARTICLE X, THE RIGHTS
AND OBLIGATIONS SET FORTH IN ARTICLE X, AND ANY CERTIFICATES DELIVERED BY THE
COMPANY PURSUANT TO THIS AGREEMENT, BUYER FURTHER ACKNOWLEDGES AND AGREES THAT
THE PURCHASE PRICE REFLECTS THE PARTIES’ AGREEMENT TO CONVEY THE EQUITY
INTERESTS, INCLUDING THE REAL PROPERTY ON AN “AS IS, WHERE IS” BASIS

 

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AND BUYER HAS SPECIFICALLY AGREED TO DO SO IN ORDER TO INDUCE SELLER AND THE
COMPANY TO ENTER INTO THIS AGREEMENT. BUYER FURTHER ACKNOWLEDGES THAT NEITHER
SELLER NOR THE COMPANY IS LIABLE FOR AND SHALL NOT BE BOUND IN ANY MANNER BY ANY
ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
COMPANY, INCLUDING THE PURCHASED ASSETS, OR THE OPERATION THEREOF, FURNISHED BY
ANY REPRESENTATIVE OF THE COMPANY, EXCEPT TO THE EXTENT CONTAINED IN THE
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY EXPRESSLY SET FORTH
HEREIN AND IN ANY CERTIFICATES DELIVERED BY THE COMPANY PURSUANT TO THE TERMS OF
THIS AGREEMENT. SUBJECT ONLY TO THE COMPANY’S REPRESENTATIONS, WARRANTIES AND
COVENANTS EXPRESSLY CONTAINED HEREIN, THE CONDITIONS SET FORTH IN ARTICLE X AND
ANY CERTIFICATES AND AGREEMENTS DELIVERED BY THE COMPANY PURSUANT TO THIS
AGREEMENT, BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE SALE OF THE EQUITY INTERESTS, INCLUDING THE TRANSFER OF
THE REAL PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS IS”, “WHERE IS”
CONDITION AND BASIS WITH ALL FAULTS, AND SUBJECT TO ALL APPLICABLE LAWS
GOVERNING OR LIMITING THE DEVELOPMENT, USE OR OPERATION OF THE PURCHASED ASSETS
OR THE CASINO (SUBJECT ONLY TO THE COMPANY’S REPRESENTATIONS, WARRANTIES AND
COVENANTS EXPRESSLY SET FORTH HEREIN AND IN ANY CERTIFICATES DELIVERED BY THE
COMPANY PURSUANT TO TERMS OF THIS AGREEMENT), AND THAT THE COMPANY HAS NO
OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS OF ANY KIND TO THE
PURCHASED ASSETS.

Section 13.6 No Conflict. Nothing in this Article XIII shall limit or modify the
Company’s obligations pursuant to Section 9.1(d) hereof or any remedies that may
be available to Buyer in connection with any breach of such obligations pursuant
to this Agreement.

ARTICLE XIV.

MISCELLANEOUS

Section 14.1 Definitions.

(a) For purposes of this Agreement, the term:

“Accounts Receivable” means all accounts receivable (including receivables and
revenues for food, beverages, telephone and casino credit), notes receivable or
overdue accounts receivable, in each case, due and owing by any third party, but
not including the Tray Ledger and the Markers owed to the Company or its
Affiliates

“Acquired Personal Property” means the Personal Property, excluding the Excluded
Personal Property.

 

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“Acquisition Proposal” means any proposal or offer from any Person relating to
any direct or indirect acquisition or purchase of the Real Property or the other
Purchased Assets, other than the transactions with Buyer contemplated by this
Agreement.

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first-mentioned Person.

“Ancillary Agreements” means the Bill of Sale and Assignment, the Assignment and
Assumption Agreement, the Trademark Assignment Agreement, the Assignment of
Equity Interests, and the Deposit Escrow Agreement.

“Assumed Contracts” means all service contracts, equipment leases and other
leases with respect to Personal Property, Intellectual Property license
agreements, sign leases and other Contracts exclusively related to the Casino,
other than the Excluded Contracts and Contracts that relate to the Excluded
Assets.

“Business” means the business conducted by the Company at or with respect to the
Casino.

“Buyer Material Adverse Effect” means changes, events, circumstances or effects
that have had, will have or would reasonably be expected to have a material
adverse effect on Buyer’s ability to perform its obligations hereunder, obtain
any Gaming Approval or to consummate the transactions contemplated hereby.

“Casino” means that certain hotel and casino located on the Real Property and
commonly known as Harrah’s St. Louis.

“Class A License” means a license granted by the Missouri Gaming Commission
under the Gaming Laws to allow the parent organization(s) or controlling entity,
as determined by the executive director, to develop and operate Class B
licensee(s).

“Class B License” means a license granted by the Missouri Gaming Commission
under the Gaming Laws to maintain, conduct gambling games on, and operate an
excursion gambling boat and gaming facility at a specific location.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company Material Adverse Effect” means changes, events, circumstances or
effects that have had, will have or could reasonably be expected to be material
and adverse to the business, financial condition or results of operations of the
Purchased Assets or the Business, taken as a whole; provided, that none of the
following, individually and in the aggregate, shall constitute or be taken into
account in determining whether a Company Material Adverse Effect has occurred:
(i) general conditions (or changes therein) in the (A) travel, hospitality or
gaming industries, or in the jurisdiction where the Company operates or (B) the
financial, banking, currency or capital markets, (ii) any change in GAAP or
applicable Law (other than a change in Gaming Law prohibiting or substantially
restricting gaming activities which are currently permitted at

 

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Closing), (iii) any change, event or effect resulting from the entering into or
public announcement of the transactions contemplated by this Agreement, (iv) any
change, event or effect resulting from any act of terrorism, commencement or
escalation of armed hostilities in the U.S. or internationally, and (v) the
failure of the Casino to meet any financial or other projections (provided that
the underlying cause of any such failure to meet financial or other projections
may be considered in determining whether a Company Material Adverse Effect has
occurred); provided, however, that the matters described in clauses (i),
(ii) and (iv) above shall be considered in determining whether a Company
Material Adverse Effect has occurred to the extent of any disproportionate
impact on the Purchased Assets or the Business, taken as a whole, relative to
other participants operating in the same industries and geographic markets as
the Business.

“Company Sale” means a bona fide sale of the Business for cash, by means of a
sale of all of the Equity Interests or all or substantially all of the assets of
the Company to a non-affiliated third party.

“Confidentiality Agreement” means that certain agreement entered into as of
January 10, 2012 between CEOC and Buyer.

“Contract” means any agreement, contract, lease, power of attorney, note, loan,
evidence of indebtedness, purchase order, letter of credit, settlement
agreement, franchise agreement, undertaking, covenant not to compete, employment
agreement, license, instrument, obligation, commitment, understanding, policy,
purchase and sales order, quotation and other executory commitment to which any
Person is a party or to which any of the assets of such Person are subject,
whether oral or written, express or implied.

“Controlled Group Liability” means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the
Code, (iv) as a result of a failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, and
(v) under corresponding or similar provisions of foreign laws or regulations,

“Customer Database” means all customer databases, customer lists historical
records of customers and any other information collected with respect to
customers of the Casino, including any information used in connection with
marketing and promoting the Casino.

“Customer List” means a list of the names and key tendencies of customers listed
on the Customer Database who have visited the Casino during the twenty-four
(24) month period prior to the Closing, which Customer List shall be in format
and contain the information set forth on Exhibit E to the extent available in
the Customer Database, and subject to receipt of consent from each customer to
the transfer of such information to the extent required by the Total Rewards
Program or applicable Law.

“Encumbrances” means claims, pledges, agreements, limitations on voting rights,
charges or other encumbrances or restrictions on transfer of any nature.

 

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“Environment” means ambient air, vapors, surface water, groundwater, wetlands,
drinking water supply, land surface, or subsurface strata and biota.

“Environmental Condition” means, as relating exclusively to the Purchased
Assets, the release into the Environment and/or presence in the Environment of
any Hazardous Substance as a result of which the Company (i) has or may become
liable to any Person for an Environmental Liability, (ii) is or was in violation
of any Environmental Law, (iii) has or may be required to incur response costs
for compliance, investigation or remediation, or (iv) by reason of which the
Real Property or other assets of the Company, may be subject to any Lien under
Environmental Laws; provided, however, that none of the foregoing shall be an
Environmental Condition if such matter was fully remediated or otherwise fully
corrected prior to the date hereof in accordance with Environmental Law and to
the satisfaction of the applicable Governmental Entity.

“Environmental Laws” means all applicable and legally enforceable federal, state
and local statutes or laws, common law, judgments, orders, regulations,
licenses, permits, enforceable guidance and policies, rules and ordinances
relating to Hazardous Substances, pollution, restoration or protection of
health, safety or the environment, including, but not limited to the Federal
Water Pollution Control Act (33 U.S.C. §1251 et seq.), Resource Conservation and
Recovery Act (42 U.S.C. §6901 et seq.), Safe Drinking Water Act (42 U.S.C.
§3000(f) et seq.), Toxic Substances Control Act (15 U.S.C. §2601 et seq.), Clean
Air Act (42 U.S.C. §7401 et seq.), Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. §9601 et seq.) and other similar state
and local statutes, in effect as of the date hereof, including any judicial or
administrative interpretation thereof.

“Environmental Liabilities” means all Liabilities (including all reasonable
fees, disbursements and expenses of counsel, expert and consulting fees and
costs of investigations and feasibility studies and responding to government
requests for information or documents), fines, penalties, restitution and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future, resulting from any claim or demand, by any
Person or entity, under Environmental Law and relating exclusively to the
Company’s Purchased Assets or the generation and disposal of wastes or other
materials relating to the Business.

“ERISA Affiliate” means any trade or business, whether or not incorporated, that
together with the Company would be deemed a “single employer” within the meaning
of Section 4001(b) of ERISA or Section 414 of the Code.

“Estimated Closing Net Working Capital” means the Company’s good faith estimate
of the Net Working Capital of the Business as of the Closing.

“Estimated Closing Net Working Capital Overage” means the amount, if any, by
which the Estimated Closing Net Working Capital is greater than the Target Net
Working Capital.

“Estimated Closing Net Working Capital Shortage” means the amount, if any, by
which the Estimated Closing Net Working Capital is less than the Target Net
Working Capital.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Excluded Contracts” means all Contracts listed in Section 14.1(a) of the
Company Disclosure Letter.

“Excluded Personal Property” means the following:

(i) any Personal Property covered by the equipment leases from Affiliates of the
Company or other agreements by which property owned by Affiliates of the Company
is located at the Real Property and used in connection with the Business, all of
which equipment leases and other agreements are set forth on Section 14.1(b) of
the Company Disclosure Letter;

(ii) all point of sale credit card verification terminals or imprint plates
owned by third parties;

(iii) any and all signs, menus, stationery, gift shop inventory or other items
indicating that the Real Property is owned and/or operated by or on behalf of
the Company or its Affiliates or bearing the System Mark of the Company or its
Affiliates;

(iv) any gaming licenses, liquor licenses or other licenses or permits
pertaining to the Real Property not indirectly transferable to Buyer, in the
sale of the Equity Interests, by Law; and

(v) any personal property held as prizes.

“Excluded Software” means all computer software owned by or licensed for use by
the Company or its Affiliates, including all source codes, object codes and data
bases, whether on tape, disc or other computerized format, and all related user
manuals, computer records, service codes, programs and stored materials
(including all access codes and instructions needed to obtain access to and to
utilize the information contained on such computer records), together with any
and all updates and modifications of all of the foregoing and all copyrights
related to the foregoing, including the Customer Database and any customer
tracking system.

“Excluded Taxes” means, without duplication, all (i) Taxes (for the avoidance of
doubt, other than Transfer Taxes that are governed by Section 9.9(a)) imposed on
or payable by or with respect to the Company, or for which it is liable, for any
Pre-Closing Period; (ii) Taxes relating to the Excluded Assets or the Excluded
Liabilities (including, for the avoidance of doubt, any Taxes resulting from or
arising out of any actions or transactions pursuant to Section 1.4(a) (but not
to the extent such Taxes have reduced the amounts payable to Sellers pursuant to
Section 1.4(a)) or (b) or Section 1.5 relating to any Excluded Assets or
Excluded Liabilities); (iii) Liabilities of the Company pursuant to any Tax
sharing, allocation or indemnification agreement entered into before the Closing
to indemnify any other Person in respect of or relating to Taxes of such other
Person to the extent such Liabilities (A) relate to a Pre-Closing Period or
(B) otherwise accrue, arise out of, or relate to events, occurrences, pending or
threatened litigation, acts, omissions and claims happening or existing prior to
the Closing; (iv) Taxes relating to a Pre-Closing Period for which the Company
is liable (or that may be collected from the Company

 

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by way of offset against a refund of Tax otherwise due to the Company) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign Law) or as a successor or transferee; and (v) Taxes of Sellers and
their Affiliates (other than the Company) for any period (for the avoidance of
doubt, other than Transfer Taxes that are governed by Section 9.9(a)).

“FCC” means the Federal Communications Commission.

“FCC Licenses” means the licenses to operate a base station or two way security
radios at the Casino as described in Section 14.1(c) of the Company Disclosure
Letter.

“Final Closing Net Working Capital” means the Net Working Capital of the
Business as of the Closing as set forth in the Final Closing Statement.

“Final Closing Net Working Capital Overage” means the amount, if any, by which
the Final Closing Net Working Capital is greater than the Target Net Working
Capital.

“Final Closing Net Working Capital Shortage” means the amount, if any, by which
the Final Closing Net Working Capital is less than the Target Net Working
Capital.

“Fixtures” means all fixtures owned or leased by the Company and placed on,
attached to, or located at the Real Property.

“Front Money” means all money stored on deposit in the Casino cage belonging to,
and stored in an account for, any Person who is not the Company or an Affiliate
of the Company.

“GAAP” means generally accepted accounting principles in the United States.

“Gaming Approvals” means all licenses, permits, approvals, authorizations,
registrations, findings of suitability, franchises, entitlements, waivers and
exemptions issued by any Gaming Authority or required by any Gaming Law
necessary for or relating to the conduct of activities by any party hereto or
any of its Affiliates and the transactions contemplated hereby, including the
ownership, operation, management and development of the Business, the Purchased
Assets and Assumed Liabilities; specifically including a resolution by the
Missouri Gaming Commission granting the Petition for Change in Control of the
Company from Sellers to Buyer as contemplated by and upon the terms set forth in
this Agreement.

“Gaming Authorities” means any Governmental Entity with regulatory control or
jurisdiction over the conduct of lawful gaming or gambling in any jurisdiction
and within the State of Missouri, specifically the Missouri Gaming Commission.

“Gaming Laws” means any federal, state, local or foreign statute, ordinance
(including zoning), rule, regulation, permit (including land use), consent,
registration, finding of suitability, approval, license, judgment, order,
decree, injunction or other authorization, including any condition or limitation
placed thereon, governing or relating to the current or contemplated casino and
gaming activities and operations and manufacturing and distributing operations
of the Purchased Assets, the Business or the Company.

 

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“Gift Certificate” means any certificate, coupon, voucher or other writing which
entitles the holder or bearer to a credit (whether in a specified dollar amount
or for a specified item, such as a room night or meal) to be applied against the
usual charge for rooms, meals and/or other goods or services at the Casino; but
shall not include complimentary rooms (or room rates below average rack rates)
granted to convention and other meeting groups in the Ordinary Course of
Business.

“Harrah’s Branded Paraphernalia” means all personal property of the Company
including chips, tokens, cards, dice, promotional coupons and tickets, marketing
items, and office supplies, which include the trade names, trade dress, logos
and general marketing style associated with Parent, Sellers or their respective
Affiliates, and their controlled casino operations, including Harrah’s, Caesars
Entertainment, Harrah’s St. Louis and Harrah’s Maryland Heights.

“Hazardous Substance” means any pollutant, chemical, substance and any toxic,
infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical,
or chemical compound, or hazardous substance, material or waste, whether solid,
liquid or gas, that is subject to regulation, control or remediation under
applicable Environmental Laws, or that otherwise results in any Environmental
Liability, including any quantity of friable asbestos, urea formaldehyde foam
insulation, PCBs, crude oil or any fraction thereof, all forms of natural gas,
petroleum products or by-products or derivatives.

“House Funds” means all cash and cash equivalents located at the Casino,
including cash, negotiable instruments, and other cash equivalents located in
cages, drop boxes, slot machines and other gaming devices, cash on hand for the
Casino manager’s petty cash fund and cashiers’ banks, coins and slot hoppers,
carousels, slot vault and poker bank and cash in the registration, retail,
restaurant and other non-gaming areas of the Real Property (including in vending
machines, postage meters, pay phones, laundry machines and other cash-operated
equipment), and all checks, travelers’ checks, and bank drafts paid by guests of
the Casino, but shall not include Front Money, which shall be treated in
accordance with Section 9.11(d) hereof or the Tray Ledger, which shall be
treated in accordance with Section 4.2(a) hereof.

“Intellectual Property” means all intellectual property or other proprietary
rights of every kind, foreign or domestic, including all patents, patent
applications, inventions (whether or not patentable), processes, technologies,
discoveries, apparatus, know-how, trade secrets, trademarks, trademark
registrations and applications, domain names, trade dress, service marks,
service mark registrations and applications, trade names, and all goodwill
associated with the foregoing, copyright registrations, copyrightable and
copyrighted works, databases, software, rights of publicity, rights of privacy,
moral rights, customer lists and confidential marketing and customer
information.

“IRS” means the Internal Revenue Service, a division of the United States
Treasury Department, or any successor thereto.

“knowledge” means (i) when used in the phrase “Company’s knowledge” or “Sellers’
knowledge” and words of similar import, the actual knowledge of: Tim Lambert,
Ryan Hammer, Matt Heiskell and Matt Anfinson and (ii) when used in the phrase
“knowledge of Buyer” or “Buyer’s knowledge” and words of similar import, the
actual knowledge of: Carl Sottosanti, Frank Donaghue and Walter Bogumil.

 

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“Law” means any foreign or domestic law, statute, code, ordinance, rule,
regulation, order, judgment, writ, stipulation, award, injunction, decree or
arbitration award, policies, guidance, court decision, rule of common law or
finding.

“Liabilities” means any direct or indirect liability, indebtedness, obligation,
commitment, expense, claim, deficiency, guaranty or endorsement of or by any
Person of any type, whether accrued, absolute, contingent, matured, unmatured,
liquidated, unliquidated, known or unknown.

“Liens” means any mortgage, deed of trust, pledge, option, right of first
refusal or first offer, conditional sale, lien, security interest, conditional
or installment sale agreement, charge or other claims or rights of third parties
of any kind.

“Markers” means any amounts owed by any Person that is not an Affiliate of the
Company to the Company related to the Casino for gaming chips, tokens or similar
cash equivalents used at the Real Property delivered to such Person on credit or
otherwise.

“Net Working Capital” means the difference between (a) the current assets of the
Business, including cash and cash equivalents (including House Funds), the value
of inventory, Accounts Receivable, Gift Certificates, and current prepaid
expenses, to the extent benefiting the Business post-Closing and (b) the current
liabilities of the Business, including accounts payable, all accrued expenses,
all accrued Liabilities with respect to the Transferred Employees, all Customer
Deposits and all Progressive Liabilities, with each amount determined in
accordance with GAAP applied on a basis consistent with the past practices of
the Company and its Affiliates; provided, that (x) if the Company has not made
any Required Capital Expenditure required prior to the Closing Date pursuant to
Section 9.1(p), then the Net Working Capital as of the Closing Date shall be
deemed to be decreased by the amount of each such shortfall, and (y) if the
Company has made any Required Capital Expenditure prior to the Closing Date that
is not required to be made pursuant to Section 9.1(p) until after the Closing
Date, then the Net Working Capital as of the Closing Date shall be deemed to be
increased by the amount of each such early payment. For purposes of this
Agreement, Net Working Capital shall exclude (i) the items set forth in Sections
4.2 and 4.6 hereof and (ii) any Tax assets or Liabilities.

“New Sale Price” shall mean the aggregate consideration payable in connection
with the Company Sale that is the subject of the New Sale Agreement, taking into
account any applicable purchase price adjustments.

“Ordinary Course of Business” shall describe any action taken by a Person if
such action is consistent with such Person’s past practices and is taken in the
ordinary course of such Person’s normal day to day operations.

“Permitted Encumbrances” means any lien to secure payment of real estate Taxes,
including special assessments, which is a lien not yet due or payable, all
matters disclosed by the Survey, zoning and subdivision ordinances (provided
such ordinances are not currently violated or in anticipation of being
violated), terms and conditions of licenses, permits and approvals for the Real
Property (which are disclosed on Section 7.11(a) of the Company Disclosure
Letter) and Laws of any Governmental Entity having jurisdiction over the Real
Property.

 

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“Permitted Liens” means, with respect to the Company (i) Liens or Encumbrances
for assessments and other governmental charges not delinquent or which are
currently being contested in good faith by appropriate proceedings; (ii) Liens
or Encumbrances for Taxes not yet due and payable or Taxes being contested in
good faith by appropriate proceedings; (iii) mechanics’ and materialmen’s Liens
or Encumbrances not filed of record and similar charges not delinquent or which
are filed of record but are being contested in good faith by appropriate
proceedings; (iv) Liens or Encumbrances in respect of judgments or awards with
respect to which the Company shall in good faith currently be prosecuting an
appeal or other proceeding for review and with respect to which the Company
shall have secured a stay of execution pending such appeal or such proceeding
for review; (v) easements, leases, reservations or other rights of others in, or
minor defects and irregularities in title to, property or assets of the Company;
provided that, such easements, leases, reservations, rights, defects or
irregularities do not impair the use of the property or assets for the purposes
for which they are held in any material manner; (vi) rights of tenants under
operating leases and hotel guests whose occupancy may be terminated on short
notice; (vii) with respect to the Real Property, all exceptions described in the
Title Policy (other than items 39-40 on Schedule B thereto), the Title
Commitment (other than items 44-49 on Schedule B thereto) and the UCC Search
(other than those set forth on Section 14.1(d) of the Company Disclosure
Letter); (viii) any Assumed Liability; and (ix) any Lien or Encumbrance that
will be released and discharged at or prior to the Closing.

“Person” means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
“group” (as defined in Rule 13d-5(b)(1) under the Exchange Act).

“Personal Property” means all office, hotel, casino, barge, showroom,
restaurant, bar, convention, meeting and other furniture, furnishings, fittings,
appliances, equipment, equipment manuals, slot machines, gaming tables and
gaming paraphernalia (including parts or inventories thereof),
passenger/delivery vehicles, computer hardware and IT hardware systems,
reservations terminals, software, point of sale equipment, two-way security
radios and base station, machinery, spare parts, apparatus, appliances,
draperies, art work, carpeting, keys, building materials, telephones and other
communications equipment, televisions, maintenance equipment, tools, signs and
signage, office supplies, engineering, maintenance and cleaning supplies and
other supplies of all kinds, stationery and printing, linens (sheets, towels,
blankets, napkins), uniforms, silverware, glassware, chinaware, pots, pans and
utensils, and food, beverage, alcoholic beverage inventories, all articles of
personal property now located on the Real Property for resale, whether owned or
leased by the Company, and other tangible personal property that are used or
held for use in the Business and located at the Casino on the Closing Date.

“Petition for Change in Control” means a document filed with the Missouri Gaming
Commission in proper form to request approval of a “change in control” under 11
CSR 45-10.040(12) upon the terms and conditions set forth in this Agreement
without the automatic nullification of the existing Class B License held by the
Company under the Gaming Laws that would occur absent such approval.

 

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“Post-Closing Period” means any taxable period (including the portion of a
Straddle Period) beginning after the Closing Date.

“Pre-Closing Period” means any taxable period (including the portion of a
Straddle Period) ending on or before the Closing Date.

“Progressive Liabilities” means the sum of (a) the face amounts of the
progressive slot machine meters with an in house progressive jackpot feature (if
such slot machines are not removed by the vendor at or before the Closing) and
(b) the face amounts of the meters for the table games with an in house
progressive jackpot feature.

“Real Property” means the real property described on Section 7.6(a) of the
Company Disclosure Letter attached hereto, in each case together with the
buildings located thereon and the barge located thereon, and all associated
parking areas, Fixtures and all other improvements located thereon (the
buildings and such other improvements are referred to herein collectively as the
(“Improvements”)); all references hereinafter made to the Real Property shall be
deemed to include all rights, benefits, privileges, tenements, hereditaments,
covenants, conditions, restrictions, easements and other appurtenances on the
Real Property or otherwise appertaining to or benefitting the Real Property
and/or the Improvements situated thereon, including all mineral rights,
development rights, air and water rights, subsurface rights, vested rights
entitling, or prospective rights which may entitle the owner of the Real
Property to related easements, land use rights, air rights, viewshed rights,
density credits, water, sewer, electrical or other utility service, credits
and/or rebates, strips and gores and any land lying in the bed of any street,
road or alley, open or proposed, adjoining the Real Property, and all easements,
rights-of-way and other appurtenances used or connected with the beneficial use
or enjoyment of the Real Property.

“Rebranding Plan” means the plan for removing all Harrah’s Branded Paraphernalia
from the operations of the Company as agreed upon between the parties and set
forth on Schedule A attached hereto and incorporated herein.

“Reserved Employees” means the employees of the Casino that are listed in
Section 14.1(e) of the Company Disclosure Letter.

“Rewards Information” means the portion of the Customer Database that includes
the total points accrued at the Casino by customers listed on the Customer List
under the Total Rewards Program to the extent that Parent can obtain such
information using its commercially reasonable efforts, and subject to receipt of
consent from each customer to the transfer of such information to the extent
required by the Total Rewards Program or applicable Law.

“Room Revenues” means all revenues from the rental of guest rooms at the Casino,
together with any sales or other taxes thereon.

“Subsidiary” means, with respect to any party, any corporation or other
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such

 

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party is a general partner or managing member or (ii) at least 50% of the
securities or other equity interests having by their terms voting power to elect
a majority of the board of directors or others performing similar functions with
respect to such corporation or other organization that is, directly or
indirectly, owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.

“System Mark” means service marks, trademarks, trade names, fictitious business
names, slogans, color arrangements, designs, logos, Internet domain names and
other similar indicia of source or origin now or hereafter used or owned by the
Company or any of its Affiliates that is not used exclusively in the Business.

“Target Net Working Capital” means $1,500,000.

“Taxes” means any and all taxes, charges, fees, levies, tariffs, duties,
liabilities, impositions or other assessments in the nature of a tax (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Entity, including
income, gross receipts, profits, gaming, live entertainment, excise, real or
personal property, environmental, sales, use, value-added, ad valorem,
withholding, social security, retirement, employment, unemployment, workers’
compensation, occupation, service, license, net worth, capital stock, payroll,
franchise, gains, stamp, transfer and recording taxes.

“Tax Return” means any report, return (including any information return), claim
for refund, election, estimated Tax filing or payment, request for extension,
document, declaration or other information or filing supplied or required to be
supplied to any Governmental Entity with respect to Taxes, including attachments
thereto and amendments thereof.

“Title Commitment” means that certain title commitment number NCS-539000-3-MPLS
issued by First American Title Insurance Company, with an effective date of
March 14, 2012.

“Title Insurer” means the title company, if any, selected by Buyer to issue the
Endorsement, if applicable.

“Title Policy” means that certain policy of title insurance issued by the
Chicago Title Insurance Company, dated February 6, 2008, for the benefit of the
Company with respect to the Real Property.

“Total Rewards Program” means the Total Rewards® player loyalty program of
Parent and its Affiliates.

“Tray Ledger” means any accounts receivable of registered hotel guests who have
not checked out and who are occupying hotel rooms at the Casino on the evening
of the Closing Date, including the related Room Revenues.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988
and analogous state and local Law.

 

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(b) The following are defined elsewhere in this Agreement, as indicated below:

 

Terms

  

Cross Reference

in Agreement

     AAA    Section 12.5(b)    Additional Amount    Section 11.2(c)   
Additional Exceptions    Section 13.2(a)    Adjustment Date    Section 3.1   
Agreement    Preamble    Assignment and Assumption Agreement    Section 5.2(b)
   Assignment of Equity Interests    Section 5.2(g)    Assumed Liabilities   
Section 2.1    Auditor    Section 3.3    Bill of Sale and Assignment    Section
5.2(a)    Buyer    Preamble    Buyer Benefit Plans    Section 9.4(d)    Buyer
Disclosure Letter    Article VIII    Buyer Indemnified Parties    Section
12.2(a)    Buyer Indemnified Party    Section 12.2(a)    Buyer Permits   
Section 8.6    Buyer Related Parties    Section 8.5    Buyers’ 125 Plan   
Section 9.4(g)    Buyer’s 401(k) Plan    Section 9.4(f)    Buyer’s Medical Plans
   Section 9.4(e)    Cap    Section 12.6(a)    CEOC    Preamble    Chips and
Tokens    Section 2.1(i)    CLC    Section 7.7(a)    Closing    Section 5.1   
Closing Date    Section 5.1    Closing Payment    Section 3.1    Commitment
Letter    Section 8.4    Company    Preamble    Company’s 125 Plan    Section
9.4(g)    Company 401(k) Plan    Section 9.4(f)    Company Benefit Plans   
Section 7.13(a)    Company Disclosure Letter    Article VII    Company Permits
   Section 7.11(a)    Customer Deposits    Section 4.4(c)    Damages    Section
12.2(a)    Deductible    Section 12.6(a)    Defect Notice    Section 13.2(a)   
Deposit    Section 3.2    Deposit Escrow Agreement    Section 3.2   

 

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Terms

  

Cross Reference

in Agreement

     Designated Buyer Representative    Section 9.2(a)    Determination Date   
Section 4.3(c)    DOL    Section 7.13(c)    Effective Date    Preamble   
Endorsement    Section 13.1    Environmental Authorizations    Section 7.10   
Equity Interests    Recitals    ERISA    Section 7.13(a)    Escrow Agent   
Section 3.2    Estimated Closing Payment    Section 4.1    Estimated Closing
Statement    Section 4.1    Estimated Operations Payment    Section 4.2   
Estimated Operations Statement    Section 4.2    Excluded Assets    Section 1.2
   Excluded Liabilities    Section 2.2    Extension Deposit    Section 3.2   
FCC Approvals    Section 9.14(a)    Final Closing Payment    Section 4.3(a)   
Final Closing Statement    Section 4.3(a)    Final Operations Payment    Section
4.3(b)    Final Operations Statement    Section 4.3(b)    Final Statements   
Section 4.3(c)    Financial Information    Section 7.3    Fundamental
Representations    Section 12.1(b)    Governmental Approvals    Section 9.6(a)
   Governmental Entity    Section 6.2(c)    Group Tax Returns   
Section 12.9(b)(i)    HMHO    Preamble    HSR Act    Section 6.2(c)   
Improvements    Section 14.1(a)    Indemnified Parties    Section 12.3   
Indemnified Party    Section 12.3    Indemnifying Parties    Section 12.3   
Indemnifying Party    Section 12.3    Inspection    Section 9.5(a)    Insurance
Policies    Section 7.20    Inventoried Vehicles    Section 9.11(e)    Labor
Agreement    Section 7.12(b)    Make-Whole Amount    Section 11.2(d)    Monetary
Defects    Section 13.2(c)    Multiemployer Plan    Section 7.13(c)    Multiple
Employer Plan    Section 7.13(c)    New Sale Agreement    Section 11.2(d)   

 

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Terms

  

Cross Reference

in Agreement

     Non-Assignable Excluded Asset    Section 1.4(c)    Non-Monetary Defect   
Section 13.2(a)    Notice    Section 12.3    Notice Period    Section 13.2(a)   
Objection Notice    Section 12.5(a)    Ordinary Course of Business    Section
14.1    Other Transferred Registered IP    Section 7.7(a)    Outside Date   
Section 5.1    Owned Real Property    Section 7.6(a)    Payoff Letter    Section
9.20    PMHN    Preamble    Pre-Closing Separate Tax Returns    Section 12.9   
Property Employees    Section 7.13(a)    Purchase Price    Section 3.1   
Purchase Price Allocation    Section 3.3    Purchased Assets    Section 1.1   
Reimbursement Accounts    Section 9.4(g)    Removal Period    Section 1.5   
Representatives    Section 9.3    Required Capital Expenditures    Section
9.1(p)    Required Governmental Consents    Section 10.2(d)    Restricted Area
   Section 9.19    Seller Indemnified Parties    Section 12.2(b)    Seller
Indemnified Party    Section 12.2(b)    Sellers    Preamble    Sellers
Disclosure Letter    Article VI    Straddle Period    Section 12.9(b)(ii)   
Survey    Section 13.4    Survival Period    Section 12.1(b)    Tax Claim   
Section 12.9(c)(ii)    Third Party    Section 9.3    Third Party Claim   
Section 12.4(a)    Third Party Purchaser    Section 11.2(d)    Trademark
Assignment Agreement    Section 5.2(f)    Transfer Taxes    Section 9.9(a)   
Transferred Employees    Section 9.4(a)    Transferred Intellectual Property   
Section 1.1(h)    Transferred Marks and Domain Names    Section 7.7(a)   
Transition Plan    Section 9.11(g)    Transition Functions    Section 9.11(g)   
UCC Search    Section 13.1   

 

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Section 14.2 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.

(a) This Agreement and the transactions contemplated hereby, and all disputes
between the parties under or related to this Agreement or the facts and
circumstances leading to its execution, whether in contract, tort or otherwise,
shall be governed by and construed in accordance with the Laws of the State of
Missouri, applicable to contracts executed in and to be performed entirely
within the State of Missouri, without regard to the conflicts of laws principles
thereof.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the United States
Eastern District Court for the District of Missouri, and any appellate court
thereof, in any action or proceeding arising out of or relating to this
Agreement or the agreements delivered in connection herewith or the transactions
contemplated hereby or thereby or for recognition or enforcement of any judgment
relating thereto, and each of the parties hereby irrevocably and unconditionally
(i) agrees not to commence any such action or proceeding except in such court,
(ii) agrees that any claim in respect of any such action or proceeding may be
heard and determined in such court, (iii) waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any such action or proceeding in such court,
(iv) waives, to the fullest extent permitted by Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in such
court, and (v) to the extent such party is not otherwise subject to service of
process in the State of Missouri, appoints Corporation Service Company as such
party’s agent in the State of Missouri for acceptance of legal process and
agrees that service made on any such agent shall have the same legal force and
effect as if served upon such party personally within such state. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 14.3 hereof. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by Law.

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH
WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 14.2(C).

 

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Section 14.3 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be given or made by delivery in person, by courier service, by
facsimile (with a copy sent by another means specified herein), or by registered
or certified mail (postage prepaid, return receipt requested). Except as
provided otherwise herein, notices delivered by hand or by courier service shall
be deemed given upon receipt; notices delivered by facsimile shall be deemed
given twenty-four (24) hours after the sender’s receipt of confirmation of
successful transmission; and notices delivered by registered or certified mail
shall be deemed given seven (7) days after being deposited in the mail system.
All notices shall be addressed to the parties at the following addresses (or at
such other address for a party as will be specified by like notice):

 

  (a) if to Buyer, to

Penn National Gaming, Inc.

825 Berkshire Boulevard

Suite 200

Wyomissing, Pennsylvania 19610

with copies, which shall not constitute notice, to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attn: Daniel A. Neff

Facsimile: (212) 403-2000

 

  (b) if to Parent, Sellers, or the Company (prior to the Closing), to

Caesars Entertainment Corporation

One Caesars Palace Drive

Las Vegas, Nevada 89109

Attention: General Counsel

Facsimile: (702) 407-6418

with a copy to:

Latham & Watkins LLP

650 Town Center Drive

20th Floor

Costa Mesa, California 92626

Attention: Charles K. Ruck and Michael A. Treska

Facsimile: (714) 755-8290

Section 14.4 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section or Exhibit
or Schedule of this Agreement unless otherwise indicated. All Exhibits and
Schedules of this Agreement are incorporated herein by reference. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or

 

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interpretation of this Agreement. Whenever the words “include,” “includes” or
“including” are used in this Agreement they shall be deemed to be followed by
the words “without limitation.” The phrase “made available” in this Agreement
shall mean that the information referred to has been made available if requested
by the party to whom such information is to be made available. Buyer, Sellers
and the Company will be referred to herein individually as a “party” and
collectively as “parties” (except where the context otherwise requires).

Section 14.5 Entire Agreement. This Agreement and all documents and instruments
referred to herein constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; provided that the Confidentiality
Agreement shall remain in full force and effect after the Closing. Each party
hereto agrees that, except for the representations and warranties contained in
this Agreement and the Company Disclosure Letter, neither Sellers, the Company,
nor Buyer makes any other representations or warranties, and each hereby
disclaims any other representations and warranties made by itself or any of its
respective Representatives or other representatives, with respect to the
execution and delivery of this Agreement or the transactions contemplated
hereby, notwithstanding the delivery or disclosure to any of them or their
respective representatives of any documentation or other information with
respect to any one or more of the foregoing.

Section 14.6 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.

Section 14.7 Assignment. Without the prior written consent of the other party,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by operation of Law (including by merger, consolidation or a
change of control) or otherwise; provided, however, Buyer may assign any of its
rights in whole or in part to one or more of Buyer’s direct or indirect wholly
owned Subsidiaries; provided, further that no such assignment shall relieve
Buyer of any of its obligations hereunder. Any assignment in violation of the
preceding sentence shall be void and no assignment shall relieve the assigning
party of any of its obligations hereunder.

Section 14.8 Parties of Interest. Except as set forth in ARTICLE XII hereof,
this Agreement shall be binding upon and inure solely to the benefit of each
party hereto and their respective successors and assigns, and nothing in this
Agreement, express or implied is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

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Section 14.9 Counterparts. This Agreement may be executed by facsimile or
electronic mail transmission and/or in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.

Section 14.10 Mutual Drafting. Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties. In the event that any ambiguity or
question of intent arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.

Section 14.11 Amendment. This Agreement may be amended by Buyer and Sellers.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of Buyer and Sellers.

Section 14.12 Extension; Waiver. At any time prior to the Closing, Buyer,
Sellers and the Company by action taken or authorized by their respective boards
of directors may, to the extent legally allowed (i) extend the time for or waive
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained here. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.

Section 14.13 Time of Essence. Time is of the essence with respect to this
Agreement and all terms, provisions, covenants and conditions hereof.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed by
their respective duly authorized officers as of the date first written above.

 

BUYER

Penn National Gaming, Inc.,

a Pennsylvania corporation

By:  

/s/ Robert S. Ippolito

Name:  

Robert S. Ippolito

Its:  

VP/Secretary/Treasurer

THE COMPANY

Harrah’s Maryland Heights, LLC,

a Delaware limited liability company

By:  

/s/ Jonathan S. Halkyard

Name:  

Jonathan S. Halkyard

Its:  

Authorized Representative

PARENT

Caesars Entertainment Corporation,

a Delaware corporation

By:  

/s/ Jonathan S. Halkyard

Name:  

Jonathan S. Halkyard

Its:  

EVP and Chief Financial Officer

 

SELLERS

Caesars Entertainment Operating Company, Inc.,

a Delaware corporation

By:  

/s/ Jonathan S. Halkyard

Name:  

Jonathan S. Halkyard

Its:  

EVP and Chief Financial Officer

Harrah’s Maryland Heights Operating Co.,

a Nevada corporation

By:  

/s/ Jonathan S. Halkyard

Name:  

Jonathan S. Halkyard

Its:  

SVP and Treasurer

Players Maryland Heights Nevada, LLC,

a Nevada limited liability company

    By: Players Holding, LLC, Member           By: Players International, LLC,
Member  

By: Caesars Entertainment Operating

Company, Inc., Member

By:  

/s/ Jonathan S. Halkyard

Name:  

Jonathan S. Halkyard

Its:  

EVP and Chief Financial Officer

 

 

Signature Page to Equity Interest Purchase Agreement

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EXHIBIT A

FORM OF BILL OF SALE AND ASSIGNMENT

This Bill of Sale and Assignment (this “Bill of Sale”) is made as of [—], 2012,
by and among Caesars Entertainment Operating Company, Inc., a Delaware
corporation (“CEOC”), Harrah’s Maryland Heights Operating Company, a Nevada
corporation (“HMHO”), Players Maryland Heights Nevada, LLC, a Nevada limited
liability company (“PMHN”, together with CEOC and HMHO, “Sellers”), and Harrah’s
Maryland Heights, LLC, a Delaware limited liability company (the “Company”).

WHEREAS, pursuant to that certain Equity Interest Purchase Agreement, dated
May 7, 2012, by and among Penn National Gaming, Inc., a Pennsylvania corporation
(“Buyer”), Caesars Entertainment Corporation, a Delaware corporation, Sellers
and the Company (the “Purchase Agreement”), Sellers have agreed to sell to Buyer
all of Sellers’ right, title and interest in and to the issued and outstanding
Equity Interests on the terms and subject to the conditions set forth in the
Purchase Agreement;

WHEREAS, the Purchase Agreement provides that, immediately prior to the Closing,
the Company shall assign to Sellers (or their designee), and Sellers (or their
designee) shall obtain from the Company, all right, title and interest in and to
the Excluded Assets; and

WHEREAS, the execution and delivery of this Bill of Sale is required by
Section 5.2(a) of the Purchase Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Bill of Sale hereby agree
as follows:

 

1. Definitions. Each capitalized term used but not defined in this Bill of Sale
shall have the meaning ascribed to it in the Purchase Agreement.

 

2. Transfer of Assets. Effective as of immediately prior to the Closing, but
conditioned upon consummation of the Closing, on the terms and subject to the
conditions of the Purchase Agreement, the Company hereby transfers, conveys,
assigns and delivers to CEOC, and CEOC hereby accepts from the Company, all of
the Company’s right, title and interest in and to the Excluded Assets.

 

3. Governance. This Bill of Sale is intended to evidence the conveyance,
transfer, assignment and delivery to CEOC of the Excluded Assets effective as of
immediately prior to the Closing (but conditioned upon consummation of the
Closing).

 

4. Counterparts. This Bill of Sale may be executed and delivered in two or more
counterparts via facsimile transmission or via email with scan or email
attachment. Any such counterpart executed and delivered via facsimile
transmission or via email with scan or email attachment will be deemed an
original for all intents and purposes, and all such counterparts shall together
constitute one and the same instrument.

 

5. Successors and Assigns. This Bill of Sale shall bind and inure to the benefit
of the respective parties and their successors and assigns. This Bill of Sale is
for the sole benefit of the parties hereto and their successors and assigns, and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such successors or assigns, any legal
or equitable rights hereunder.

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6. Entire Understanding; Amendments. This Bill of Sale, the Purchase Agreement
and the Ancillary Agreements, together with the exhibits and schedules thereto,
constitute the entire agreement between the parties hereto and supersede any
prior understandings, agreements or representations by or between such parties,
written or oral, that may have related in any way to the subject matter hereof.
Nothing in this Bill of Sale shall be construed to be a modification of, or
limitation on, any provision of the Purchase Agreement, including the
representations, warranties and agreements set forth therein. In the event of a
conflict between this Bill of Sale and the Purchase Agreement, the parties
hereto agree that the Purchase Agreement shall control. Nothing in this Bill of
Sale shall be construed as creating any third party beneficiary rights in any
Person. This Bill of Sale shall not be amended or modified except in a written
document signed by all parties hereto.

 

7. Governing Law. This Bill of Sale (and any claim or controversy arising out of
or relating to this Bill of Sale) shall be governed by and construed in
accordance with the Laws of the State of Missouri without regard to conflicts of
laws principles thereof.

 

8. Section Headings; References. Section headings in this Bill of Sale are for
convenience of reference only, and shall neither constitute a part of this Bill
of Sale nor affect its interpretation. All words in this Bill of Sale shall be
construed to be of such number and gender as the context requires or permits.

 

9. Severability. If any term or other provision of this Bill of Sale is invalid,
illegal or incapable of being enforced as a result of any rule of Law or public
policy, all other terms and other provisions of this Bill of Sale shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Bill of Sale is not affected
in any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Bill of Sale so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this Bill of
Sale and the Purchase Agreement are fulfilled to the greatest extent possible.

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale and
Assignment on the date first written above.

 

THE COMPANY

Harrah’s Maryland Heights, LLC,

a Delaware limited liability company

By:  

 

Name:  

 

Its:  

 

SELLERS

Caesars Entertainment Operating Company, Inc.,

a Delaware corporation

By:  

 

Name:  

 

Its:  

 

Harrah’s Maryland Heights Operating Company,

a Nevada corporation

By:  

 

Name:  

 

Its:  

 

 

Players Maryland Heights Nevada, LLC, a Nevada limited liability company

    By:

  Players Holding, LLC, Member   By:   Players International, LLC, Member    
By:   Caesars Entertainment Operating Company, Inc., Member By:  

 

Name:  

 

Its:  

 

[Signature Page to Bill of Sale and Assignment]

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EXHIBIT B

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Assignment”) is made as of [—],
2012, by and among Caesars Entertainment Operating Company, Inc., a Delaware
corporation (“CEOC”), Harrah’s Maryland Heights Operating Company, a Nevada
corporation (“HMHO”), Players Maryland Heights Nevada, LLC, a Nevada limited
liability company (“PMHN”, together with CEOC and HMHO, “Sellers”), and Harrah’s
Maryland Heights, LLC, a Delaware limited liability company (the “Company”).

WHEREAS, pursuant to that certain Equity Interest Purchase Agreement, dated
May 7, 2012, by and among Penn National Gaming, Inc., a Pennsylvania corporation
(“Buyer”), Caesars Entertainment Corporation, a Delaware corporation, Sellers
and the Company (the “Purchase Agreement”), Sellers have agreed to sell to Buyer
all of Sellers’ right, title and interest in and to the issued and outstanding
Equity Interests on the terms and subject to the conditions set forth in the
Purchase Agreement;

WHEREAS, the Purchase Agreement provides that immediately prior to the Closing,
the Company shall assign to Sellers (or their designee), and Sellers (or their
designee) shall assume and be responsible for the Excluded Liabilities; and

WHEREAS, the execution and delivery of this Assignment is required by
Section 5.2(b) of the Purchase Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Assignment hereby agree as
follows:

 

1. Definitions. Each capitalized term used but not defined in this Assignment
shall have the meaning ascribed to it in the Purchase Agreement.

 

2. Assignment and Assumption. Effective as of immediately prior to the Closing,
but conditioned upon consummation of the Closing, on the terms and subject to
the conditions of the Purchase Agreement, the Company hereby transfers, conveys,
assigns and delivers to CEOC all of its rights, title and interest in and to the
Excluded Contracts and the Excluded Liabilities and CEOC hereby assumes and
accepts responsibility for the Excluded Contracts and Excluded Liabilities. CEOC
hereby agrees to discharge upon the terms and subject to the conditions set
forth in the Purchase Agreement the Excluded Liabilities.

 

3. Further Assurances. In furtherance of the foregoing, from time to time after
the Closing, the parties hereto agree to do such things and promptly execute,
acknowledge, and deliver any such further assurances, documents and instruments
of transfer or assignment, in each case that the other party may reasonably
request for the purpose of carrying out the intent of this Assignment.

--------------------------------------------------------------------------------

4. Governance. This Assignment is intended to evidence the assignment to and
assumption by CEOC of the Excluded Contracts and the Excluded Liabilities
effective as of immediately prior to the Closing (but conditioned upon
consummation of the Closing).

 

5. Counterparts. This Assignment may be executed and delivered in two or more
counterparts via facsimile transmission or via email with scan or email
attachment. Any such counterpart executed and delivered via facsimile
transmission or via email with scan or email attachment will be deemed an
original for all intents and purposes, and all such counterparts shall together
constitute one and the same instrument.

 

6. Successors and Assigns. This Assignment shall bind and inure to the benefit
of the respective parties and their successors and assigns. This Assignment is
for the sole benefit of the parties hereto and their successors and assigns, and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such successors or assigns, any legal
or equitable rights hereunder.

 

7. Entire Understanding; Amendments. This Assignment, the Purchase Agreement and
the Ancillary Agreements, together with the exhibits and schedules thereto,
state the entire understanding between the parties with respect to the subject
matter hereof and supersede all prior oral and written communications and
agreements with respect to the subject matter hereof. Nothing in this Assignment
shall be construed to be a modification of, or limitation on, any provision of
the Purchase Agreement, including the representations, warranties and agreements
set forth therein. In the event of a conflict between this Assignment and the
Purchase Agreement, the parties agree that the Purchase Agreement shall control.
This Assignment shall not be amended or modified except in a written document
signed by all parties hereto.

 

8. Governing Law; Jurisdiction. This Assignment (and any claim or controversy
arising out of or relating to this Assignment) shall be governed by and
construed in accordance with the domestic Laws of the State of Missouri without
regard to conflicts of laws principles thereof.

 

9. Section Headings; References. Section headings in this Assignment are for
convenience of reference only, and shall neither constitute a part of this
Assignment nor affect its interpretation. All words in this Assignment shall be
construed to be of such number and gender as the context requires or permits.

 

10. Severability. If any term or other provision of this Assignment is invalid,
illegal or incapable of being enforced as a result of any rule of Law or public
policy, all other terms and other provisions of this Assignment shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Assignment is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Assignment so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Assignment and the Purchase Agreement are fulfilled to the greatest extent
possible.

--------------------------------------------------------------------------------

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement on the date first written above.

 

THE COMPANY

Harrah’s Maryland Heights, LLC,

a Delaware limited liability company

By:  

 

Name:  

 

Its:  

 

SELLERS

Caesars Entertainment Operating Company, Inc.,

a Delaware corporation

By:  

 

Name:  

 

Its:  

 

Harrah’s Maryland Heights Operating Company,

a Nevada corporation

By:  

 

Name:  

 

Its:  

 

 

Players Maryland Heights Nevada, LLC, a Nevada limited liability company

    By:

  Players Holding, LLC, Member   By:   Players International, LLC, Member    
By:   Caesars Entertainment Operating Company, Inc., Member By:  

 

Name:  

 

Its:  

 

[Signature Page to Assignment and Assumption Agreement]

--------------------------------------------------------------------------------

EXHIBIT C

TRADEMARK ASSIGNMENT AGREEMENT

This Trademark Assignment Agreement (the “Assignment”) is made and entered into
as of [•], 2012, by and between Caesars License Company, LLC, a Nevada limited
liability company (“Assignor”), an indirect wholly-owned subsidiary of Caesars
Entertainment Corporation, and Harrah’s Maryland Heights, LLC, a Delaware
limited liability company (“Assignee”). Defined terms not specifically defined
herein shall have the meanings ascribed to them in the Equity Interest Purchase
Agreement, dated as of May 7, 2012 (the “Purchase Agreement”), by and among
Assignee, Penn National Gaming, Inc., a Pennsylvania corporation, and certain of
Assignor’s affiliates (“Sellers”), namely Caesars Entertainment Corporation, a
Delaware corporation, Caesars Entertainment Operating Company, Inc., a Delaware
corporation, Harrah’s Maryland Heights Operating Company, a Nevada corporation,
and Players Maryland Heights Nevada, LLC, a Nevada limited liability company.

WHEREAS, pursuant to the Purchase Agreement, Sellers have agreed to assign or
cause to be assigned to Assignee (or its designee) certain trademarks as listed
on Exhibit A to this Assignment (the “Trademarks”);

WHEREAS, to effect the transfer of the Trademarks as contemplated in the
Purchase Agreement, Assignor and Assignee desire to enter into this Assignment;
and

WHEREAS, the execution and delivery of this Assignment is required by
Section 5.2(j) of the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual promises of the parties, and for
good and valuable consideration, the receipt, adequacy and legal sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

1. Definitions. Each capitalized term used but not defined in this Assignment
shall have the meaning ascribed to it in the Purchase Agreement.

2. Assignment. Assignor does hereby sell, assign, transfer, convey and deliver
to Assignee (or its designee), and Assignee does hereby accept, all of
Assignor’s right, title, and interest in and to the Trademarks and any
registrations or applications for registration related thereto, and all common
law rights and goodwill associated therewith, together with all rights to sue
for past, present or future infringement or other violation and to collect all
past, present and future damages related thereto. Assignor further waives all
claims it has to the Trademarks and agrees to cease all use of the Trademarks,
as domain names, trade names, trademarks or service marks or otherwise, as of
the Closing. Assignor hereby authorizes and requests the Commissioner of Patents
and Trademarks in the United States Patent and Trademark Office and the
corresponding entities or agencies in any applicable state, to record Assignee
as the assignee and owner of the Trademarks and to deliver to Assignee, and to
Assignee’s attorneys, agents, successors or assigns, all official documents and
communications as may be warranted by this Assignment.

 

1

--------------------------------------------------------------------------------

3. Conflicts. Notwithstanding any other provisions of this Assignment to the
contrary, Assignee acknowledges and agrees that the representations, warranties,
covenants, agreements, conditions, indemnities, rights and remedies contained in
the Purchase Agreement shall not be superseded, modified, replaced, amended,
changed, rescinded, or in any way affected hereby. This Assignment is subject to
and controlled by the terms of the Purchase Agreement, and in the event of any
conflict or inconsistency between the terms of the Purchase Agreement and the
terms hereof, the terms of the Purchase Agreement shall govern.

4. Further Actions. Assignor covenants and agrees, at the expense of Assignee,
to execute and deliver, at the request of Assignee (or its designee), such
further instruments of transfer and assignment and to take such other actions as
reasonably requested by Assignee (or its designee) to more effectively
consummate the assignments contemplated by this Assignment.

5. Successors and Assigns. This Assignment shall bind and inure to the benefit
of the respective parties hereto and their successors and assigns. This
Assignment is for the sole benefit of the parties hereto and their successors
and assigns, and nothing herein expressed or implied shall give or be construed
to give to any Person, other than the parties hereto and such successors or
assigns, any legal or equitable rights hereunder.

6. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Missouri and the federal laws of the
United States of America, without giving effect to principles of conflicts of
laws that would require the application of the laws of any other jurisdiction.

7. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person, by
telecopy with answer back, by express or overnight mail delivered by a
nationally recognized air courier (delivery charges prepaid), by registered or
certified mail (postage prepaid, return receipt requested) or by e-mail with
receipt confirmed by return e-mail to the respective parties as set forth below,
or such other address as may be designated in writing hereafter, in the same
manner, by such party:

If to Assignor:

Caesars License Company

c/o Caesars Entertainment Corporation

One Caesars Palace Drive

Las Vegas, Nevada 89109

Attention: General Counsel

Facsimile: (702) 407-6418

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, California 92626

Facsimile No.: (714) 755-8290

Attn: Charles K. Ruck and Michael A. Treska

 

2

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If to Assignee:

Harrah’s Maryland Heights, LLC

c/o Caesars Entertainment Corporation

One Caesars Palace Drive

Las Vegas, Nevada 89109

Attention: General Counsel

Facsimile: (702) 407-6418

with a copy (which shall not constitute notice) to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attn: Daniel A. Neff

Facsimile: (212) 403-2000

Any notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by e-mail, telecopy or by air courier
shall be deemed effective on the first business day following the day on which
such notice or communication was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective on the third business day
following the day on which such notice or communication was mailed.

8. Amendment. Any term of this Assignment may be amended, modified, rescinded,
canceled or waived, in whole or in part, only by a written instrument signed by
each of the parties’ authorized representatives or their respective permitted
successors and assigns. Any amendment or waiver effected in accordance with this
Section shall be binding upon the parties and their respective successors and
assigns.

9. Counterparts. This Assignment may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement

10. Severability. If any term or other provision of this Assignment is invalid,
illegal or incapable of being enforced as a result of any rule of Law or public
policy, all other terms and other provisions of this Assignment shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Assignment is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Assignment so as to
effect the original intent of the parties

 

3

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as closely as possible in an acceptable manner to the end that the transactions
contemplated by this Assignment and the Purchase Agreement are fulfilled to the
greatest extent possible.

[SIGNATURE PAGE FOLLOWS]

 

4

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed on the date first written above.

 

ASSIGNOR

 

Caesars License Company, LLC,

a Nevada limited liability company

By: Caesars Entertainment Operating Company, Inc., its sole member

By:  

 

Name:  

 

Its:  

 

 

ASSIGNEE

 

Harrah’s Maryland Heights, LLC,

a Delaware limited liability company

By:  

 

Name:  

 

Its:  

 

 

[Signature Page to Trademark Assignment]

--------------------------------------------------------------------------------

Exhibit A

Assigned Trademarks

U.S. Federal Registrations

 

Mark

   Reg. No.      Reg. Date  

Eat Up Buffet

     3455130         06/24/2008   

Money in the Tank

     3604172         04/07/2009   

Tuesday Night Supper Club

     3351322         12/11/2007   

Missouri State Registrations

 

Mark

   Reg. No.      Reg. Date  

Grill 21

     S017614         01/13/2004   

iBonus

     S017208         01/24/2006   

Common Law

Club Aroma

Phat Tai

--------------------------------------------------------------------------------

EXHIBIT D

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”), dated as of May 7, 2012 (the
“Effective Date”), by and among Penn National Gaming, Inc., a Pennsylvania
corporation (“Buyer”), Caesars Entertainment Corporation, a Delaware corporation
(“Parent”, and together with Buyer, sometimes referred to individually as
“Party” or collectively as the “Parties”) and Deutsche Bank National Trust
Company (the “Escrow Agent”). Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Purchase Agreement
(defined below).

WHEREAS, pursuant to the Equity Interest Purchase Agreement (the “Purchase
Agreement”), dated as of May 7, 2012, by and among Buyer, Parent, Caesars
Entertainment Operating Company, Inc., a Delaware corporation, Harrah’s Maryland
Heights Operating Co., a Nevada corporation, Players Maryland Heights Nevada,
LLC, a Nevada limited liability company, and Harrah’s Maryland Heights, LLC, a
Delaware limited liability company (the “Company”), Buyer will purchase all of
the issued and outstanding membership interests of the Company, subject to the
terms and conditions set forth therein; and

WHEREAS, the Parties have agreed to deposit into escrow certain funds to be
subject to the terms and conditions set forth this Agreement and the Purchase
Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged by each of the parties hereto, the parties hereto,
intending to be legally bound, do hereby agree as follows:

Section 1. Appointment of Escrow Agent. Parent and Buyer hereby appoint Deutsche
Bank National Trust Company as escrow agent in accordance with the terms and
conditions set forth herein, and the Escrow Agent hereby accepts such
appointment.

Section 2. Deposit into the Escrow Property. Buyer, simultaneously with the
execution and delivery of this Agreement, has caused to be deposited with the
Escrow Agent the sum of nine million one-hundred fifty thousand dollars
($9,150,000) in immediately available funds (the “Escrow Deposit”); provided,
that, if the Outside Date is extended in two-month increments pursuant to
Section 5.1 of the Purchase Agreement, then pursuant to Section 3.2 of the
Purchase Agreement, Buyer shall deposit an additional nine million one-hundred
fifty thousand dollars ($9,150,000) (each, an “Extension Deposit”); provided,
however, in certain circumstances described in Section 5.1(b)(iii) of the
Purchase Agreement, Buyer shall deposit twenty-three million three-hundred
sixty-three thousand dollars ($23,363,000) (each, an “Increased Extention
Deposit”, the Increased Extension Deposit or Extenstion Deposit, as applicable,
together with the Escrow Deposit, the “Escrow Funds”), in each case within three
(3) business days of each such two-month extension of the Outside Date with the
Escrow Agent, which Escrow Funds shall be held by the Escrow Agent upon the
terms and conditions hereinafter set forth. The foregoing property and/or funds,
plus all interest, dividends and other distributions and payments thereon
(collectively, the “Distributions”) received by the Escrow Agent, less any
property and/or funds distributed or paid in accordance with this Escrow
Agreement, are collectively referred to herein as the “Escrow Property”. The
Escrow Agent shall have no duty to solicit the Escrow Property.

Section 3. Investment of the Escrow Property. The Escrow Agent shall follow the
joint written instructions signed by an Authorized Person of the Parties to this
Agreement (each a “Joint Instruction”) concerning any investment or reinvestment
from time to time of the Escrow Property; provided, that, in the absence of a
Joint Instruction, the Escrow Property shall remain uninvested. The Escrow Agent
shall invest and reinvest the Escrow Property, upon the joint written
instructions received

 

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from the Parties to this Agreement, in any combination of the following:
(a) Money Market Mutual Funds registered under the Investment Act of 1940; and
(b) time deposits. The Escrow Agent shall have the right to liquidate any
investments held in order to provide funds necessary to make required payments
under this Agreement.

The Escrow Agent shall have no obligation to invest or reinvest the Escrow
Property if deposited with the Escrow Agent after 11:00 a.m. (E.D.T.) on such
day of deposit. Instructions received after 11:00 a.m. (E.D.T.) will be treated
as if received on the following business day. The Escrow Agent shall have no
responsibility for any investment losses resulting from the investment,
reinvestment or liquidation of the Escrow Property. Any interest or other income
received on such investment and reinvestment of the Escrow Property shall become
part of the Escrow Property and any losses incurred on such investment and
reinvestment of the Escrow Property shall be debited against the Escrow
Property. Notwithstanding the foregoing, the Escrow Agent shall have the power
to sell or liquidate the foregoing investments whenever the Escrow Agent shall
be required to release all or any portion of the Escrow Property pursuant to
Section 4 hereof. In no event shall the Escrow Agent be deemed an investment
manager or adviser in respect of any selection of investments hereunder.

Section 4. Distribution of Escrow Property.

(a) The Escrow Agent shall hold the Escrow Property in its possession until
instructed hereunder to deliver the Escrow Property or any specified portion
thereof in accordance with a Joint Instruction. If the Escrow Property is
disbursed in accordance with a court order, the Parties shall jointly represent
to the Escrow Agent that such court order is final and non-appealable.

(b) At the Closing, the Escrow Property shall be credited against the Purchase
Price and the Parties shall instruct the Escrow Agent to promptly release and
distribute the Escrow Property to Parent (or its designee);

(c) Upon the termination of the Purchase Agreement, if the Purchase Agreement is
terminated pursuant to Section 11.1(e) and (g) thereof, the Escrow Property
shall be distributed to Buyer; provided, however, if the Purchase Agreement is
terminated for any reason other than pursuant to Section 11.1(e) and
(g) thereof, the Escrow Property shall be distributed to Parent (or its
designee).

Section 5. Termination. This Escrow Agreement shall terminate upon the
distribution of all Escrow Property from the account established hereunder. The
provisions of Sections 6, 8 and 9 shall survive the termination of this Escrow
Agreement and the earlier resignation or removal of the Escrow Agent.

Section 6. Compensation of Escrow Agent. The Escrow Agent shall be entitled to a
payment from Buyer of $2,500 for performance of its duties and responsibilities
under this Agreement, as more fully set forth in the fee agreement attached as
Exhibit “A” hereto, and said sum will be paid simultaneously with the execution
and delivery of this Agreement. Parent and Buyer shall reimburse the Escrow
Agent on demand for all customary fees and expenses and costs resulting from
loss, liability, damage, disbursements, advances or expenses paid or incurred by
it, which are paid or incurred after the Effective Date and directly in the
administration of its duties hereunder, including, but not limited to, counsel,
advisors’ and agents’ fees and disbursements and all taxes or other governmental
charges (collectively, “Costs”); provided, that, if Escrow Agent is aware that
the Costs in the aggregate will exceed the sum of $10,000, that Escrow Agent
will notify Parent and Buyer in writing of the nature and total of the
anticipated aggregate Costs, provided, however, that failure to give such notice
shall not absolve Parent or Buyer of any responsibility each has under this
paragraph. At all times, the Escrow

 

2

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Agent will have a right of set off and first lien on the funds in the Escrow
Property for payment of the Costs. The obligations contained in this Section 6
shall be joint and several obligations of Parent and Buyer, and shall survive
the termination of this Escrow Agreement and the resignation or removal of the
Escrow Agent. If any Costs incurred by, or any obligations owed to, the Escrow
Agent or any fees owed to its counsel hereunder are not promptly paid when due,
the Escrow Agent may reimburse itself therefor from the Escrow Property and may
sell, liquidate, convey or otherwise dispose of any investment in respect of the
Escrow Property for such purpose.

Section 7. Resignation of Escrow Agent. The Escrow Agent may resign and be
discharged from its duties hereunder at any time by giving thirty (30) calendar
days’ prior written notice of such resignation to Parent and Buyer. Parent and
Buyer may jointly remove the Escrow Agent or any successor escrow agent at any
time by giving thirty (30) calendar days’ prior written notice to the Escrow
Agent or successor escrow agent, as the case may be. Upon such notice, a
successor escrow agent shall be appointed by Parent and Buyer, who shall provide
written notice of such to the resigning Escrow Agent. Such successor escrow
agent shall become the escrow agent hereunder upon the resignation or removal
date specified in such notice. If Parent and Buyer are unable to agree upon a
successor escrow agent within thirty (30) days after a decision to remove the
Escrow Agent or a resignation by the Escrow Agent, the Escrow Agent may apply to
a court of competent jurisdiction for the appointment of a successor escrow
agent or for other appropriate relief. The customary costs and expenses
(including its attorneys’ fees and expenses) incurred by the Escrow Agent in
connection with such proceeding shall be paid equally by Parent and Buyer. Upon
receipt of the identity of the successor escrow agent, the Escrow Agent shall
either deliver the Escrow Property then held hereunder to the successor escrow
agent, less the Escrow Agent’s fees, costs and expenses or other obligations
owed to the Escrow Agent to be paid from any interest earned in respect of the
Escrow Property, or hold any interest earned in respect of the Escrow Property
(or any portion thereof), pending distribution, until all such fees, costs and
expenses or other obligations are paid. Upon its resignation and delivery of the
Escrow Property as set forth in this Section 7, the Escrow Agent shall be
discharged of and from any and all further obligations arising in connection
with the Escrow Property or this Agreement other than with respect to Sections 8
and 9 of this Agreement.

Section 8. Indemnification of Escrow Agent. Except as otherwise provided in
Section 9(o), Parent and Buyer shall jointly and severally indemnify, defend and
hold harmless the Escrow Agent and its officers, directors, employees,
representatives and agents, from and against and reimburse the Escrow Agent for
any and all claims, expenses, obligations, liabilities, losses, damages,
injuries (to person, property, or natural resources), penalties, stamp or other
similar taxes, actions, suits, judgments, reasonable costs and expenses
(including reasonable attorney’s fees and expenses) of whatever kind or nature
(“Losses”), demanded, asserted or claimed against the Escrow Agent directly or
indirectly relating to, or arising from, claims against the Escrow Agent by
reason of its participation in the transactions contemplated hereby, including
without limitation all reasonable costs required to be associated with claims
for damages to persons or property, and reasonable attorneys’ and consultants’
fees and expenses and court costs except to the extent caused by the Escrow
Agent’s fraud, gross negligence or willful misconduct. As soon as practicable
after the receipt by the Escrow Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall, if a
claim in respect thereof is to be made against any of the other parties hereto,
notify such other parties in writing. Nothing in this Section 8 shall constitute
a waiver of any claim which Parent, on the one hand, or Buyer, on the other
hand, may have against the other party for contributions arising from their
joint obligation to hold the Escrow Agent harmless hereunder. The provisions of
this Section 8 shall survive the termination of this Agreement or the earlier
resignation or removal of the Escrow Agent.

 

3

For internal use only

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Section 9. The Escrow Agent.

(a) The duties, responsibilities and obligations of Escrow Agent shall be
limited to those expressly set forth herein and no duties, responsibilities or
obligations shall be inferred or implied against the Escrow Agent. The Escrow
Agent shall not be subject to, nor required to comply with, any other agreement
to which the Parties are a party, even though reference thereto may be made
herein, or to comply with any direction or instruction (other than those
contained herein or delivered in accordance with this Escrow Agreement) from the
Parties or an entity acting on their behalf. The Escrow Agent shall not be
required to expend or risk any of its own funds or otherwise incur any
liability, financial or otherwise, in the performance of any of its duties
hereunder.

(b) If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects the Escrow Property (including
but not limited to orders of attachment or garnishment or other forms of levies
or injunctions or stays relating to the transfer of the Escrow Property), the
Escrow Agent is authorized to comply therewith in any manner it or legal counsel
of its own choosing deems appropriate, provided that the Escrow Agent acts in
good faith and gives reasonable notice thereof to the Parties; and if the Escrow
Agent complies with any such judicial or administrative order, judgment, decree,
writ or other form of judicial or administrative process, Escrow Agent shall not
be liable to any of the parties hereto or to any other person or entity even
though such order, judgment, decree, writ or process may be subsequently
modified or vacated or otherwise determined to have been without legal force or
effect.

(c) The Escrow Agent shall not be liable for any action taken or omitted or for
any loss or injury resulting from its actions or its performance or lack of
performance of its duties hereunder in the absence of fraud, gross negligence or
willful misconduct on its part provided that such actions or ommissions are in
good faith and consistent with the terms of this Agreement. In the absence of
fraud, gross negligence or willful misconduct, in no event shall the Escrow
Agent be liable under this Agreement (i) for acting in accordance with or
conclusively relying upon any instruction, notice, demand, certificate or
document from Parent and Buyer or any entity acting on behalf of the Parties,
(ii) for any indirect, consequential, punitive or special damages, regardless of
the form of action and whether or not any such damages were foreseeable or
contemplated, (iii) for the acts or omissions of its nominees, correspondents,
designees, agents, subagents or subcustodians in the administration of the
Escrow Agent’s duties hereunder, (iv) for the investment or reinvestment of any
cash held by it hereunder, in each case in good faith, in accordance with the
terms hereof, including without limitation any liability for any delays in the
investment or reinvestment of the Escrow Property, or any loss of interest or
income incident to any such delays, or (iv) for an amount in excess of the value
of the Escrow Property, valued as of the date of deposit, but only to the extent
of direct money damages.

(d) Upon five (5) business day’s written notice to Parent and Buyer, the Escrow
Agent may consult with legal counsel of its own choosing, at the expense of
Parent and Buyer, as to any matter relating to this Escrow Agreement and the
Escrow Agent shall not incur any liability for taking any action, that is
consistent with its duties, obligations or responsibities hereunder, in good
faith in accordance with any advice from such counsel.

(e) The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Escrow Agent (including but not limited to
any act or provision of any present or future law or regulation or governmental
authority, any act of God or war, civil unrest, local or national disturbance or
disaster, any act of terrorism, or the unavailability of the Federal Reserve
Bank wire or facsimile or other wire or communication facility).

 

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(f) The Escrow Agent shall be entitled to conclusively rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. The Escrow Agent may act in conclusive reliance upon any
instrument or signature believed by it to be genuine and may assume that any
person purporting to give receipt or advice to make any statement or execute any
document in connection with the provisions hereof has been duly authorized to do
so.

(g) The Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities deposited
hereunder, or for any description therein, or for the identity, authority or
rights of persons executing or delivering or purporting to execute or deliver
any such document, security or endorsement. The Escrow Agent shall not be called
upon to advise any party as to the wisdom in selling or retaining or taking or
refraining from any action with respect to any securities or other property
deposited hereunder.

(h) The Escrow Agent shall not be under any duty to give the Escrow Property
held by it hereunder any greater degree of care than it gives its own similar
property and shall not be required to invest any funds held hereunder except as
directed in this Escrow Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.

(i) At any time, the Escrow Agent may request an instruction in writing in
English from Parent and Buyer and may, at its own option, include in such
request the course of action it proposes to take and the date on which it
proposes to act, regarding any matter arising in connection with its duties and
obligations hereunder. The Escrow Agent shall not be liable for acting in
accordance with such a proposal on or after the date specified therein, provided
that the specified date shall be at least five (5) business days after Parent
and Buyer receive the Escrow Agent’s request for instructions and its proposed
course of action, and provided further that, prior to so acting, the Escrow
Agent has not received the written instructions requested.

(j) When the Escrow Agent acts on any information, instructions, communications,
(including, but not limited to, communications with respect to the delivery of
securities or the wire transfer of funds) sent by both Parent and Buyer by means
of telex, facsimile, email or other form of electronic or data transmission, the
Escrow Agent, absent fraud, willful misconduct or gross negligence, shall not be
responsible or liable in the event such communication is not an authorized or
authentic communication of the Parties or is not in the form Parent and Buyer
sent or intended to send (whether due to fraud, distortion or otherwise). Parent
and Buyer shall indemnify the Escrow Agent against any loss, liability, claim or
customary expense (including legal fees and expenses) it may incur with its
acting in accordance with any such communication.

(k) In the event of any ambiguity or uncertainty hereunder or in any notice,
instruction or other communication received by the Escrow Agent hereunder, the
Escrow Agent may, after providing notice to Parent and Buyer, in its reasonable
discretion, refrain from taking any action other than to retain possession of
the Escrow Property, unless the Escrow Agent receives written instructions,
signed by Parent and Buyer, which eliminates such ambiguity or uncertainty.

(l) In the event of any dispute between or conflicting claims among Parent and
Buyer and any other person or entity with respect to any Escrow Property, the
Escrow Agent shall be entitled, in its reasonable discretion, to refuse to
comply with any and all claims, demands or instructions with respect to such
Escrow Property so long as such dispute or conflict shall continue, and the
Escrow Agent shall not be or become liable in any way to Parent or Buyer for
failure or refusal to comply with

 

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such conflicting claims, demands or instructions. The Escrow Agent shall be
entitled to refuse to act until, in its reasonable discretion, either (i) such
conflicting or adverse claims or demands shall have been determined by a final
order, judgment or decree of a court of competent jurisdiction, which order,
judgment or decree is not subject to appeal, or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to the Escrow Agent
or (ii) the Escrow Agent shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and against any and all
losses which it may incur by reason of so acting. Any court order, judgment or
decree shall be accompanied by a legal opinion by counsel for the presenting
party, satisfactory to the Escrow Agent, to the effect that said order, judgment
or decree represents a final adjudication of the rights of the parties by a
court of competent jurisdiction, and that the time for appeal from such order,
judgment or decree has expired without an appeal having been filed with such
court. The Escrow Agent shall act on such court order and legal opinions without
further question. The Escrow Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial relief or
orders as it may deem, in its reasonable discretion, necessary. The customary
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
in connection with such proceeding shall be paid by, and shall be deemed a joint
and several obligation of, the Parent and Buyer.

(m) The Escrow Agent shall have no responsibility for the contents of any
writing of the arbitrators or any third party contemplated herein as a means to
resolve disputes and may conclusively rely without any liability upon the
contents thereof.

(n) The Escrow Agent does not have any interest in the Escrow Property deposited
hereunder but is serving as escrow holder only and having only possession
thereof. Buyer shall pay or reimburse the Escrow Agent upon request for any
transfer taxes or other taxes relating to the Escrow Property incurred in
connection herewith and shall indemnify and hold harmless the Escrow Agent from
any amounts that it is obligated to pay in the way of such taxes. Parent and
Buyer will each provide the Escrow Agent with a properly completed Internal
Revenue Service (“IRS”) form W-9 for tax identification number certification, or
IRS form W-8 for foreign person certification. If such tax reporting
documentation is not provided to the Escrow Agent, the Escrow Agent may be
required to withhold a portion of any interest or other income earned on the
investment of the Escrow Property. This paragraph shall survive notwithstanding
any termination of this Escrow Agreement or the resignation or removal of the
Escrow Agent.

(o) If requested by Parent or Buyer, the Escrow Agent shall provide to such
party monthly statements identifying the holdings of Escrow Property.

Section 10. Miscellaneous. (a) This Agreement embodies the entire agreement and
understanding among the parties relating to the subject matter hereof and it
shall stand as the final agreement unless all parties to this Agreement agree,
in writing, to revise or supplement the terms of this Agreement.

(b) This Agreement shall be governed by and construed in accordance with the
laws of the State of California without reference to the principles of conflict
of laws.

(c) Each of the parties hereto hereby irrevocably consents to the jurisdiction
of the courts of the State of California and of any Federal Court located in the
in such State in connection with any action, suit or other proceeding arising
out of or relating to this Agreement or any action taken or omitted hereunder,
and waives any claim of forum non conveniens and any objections as to laying of
venue. Each party further waives personal service of any summons, complaint or
other process and agrees that service thereof may be made by certified or
registered mail directed to such person at such person’s address for purposes of
notices hereunder.

 

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(d) All notices and other communications under this Agreement shall be in
writing in English and shall be deemed given when delivered personally, on the
next business day after delivery to a recognized overnight courier or mailed
first class (postage prepaid) or when sent by facsimile to the parties (which
facsimile copy shall be followed, in the case of notices or other communications
sent to the Escrow Agent, by delivery of the original) at the following
addresses (or to such other address as a party may have specified by notice
given to the other parties pursuant to this provision):

If to Buyer, to

Penn National Gaming, Inc.

825 Berkshire Boulevard

Suite 200

Wyomissing, Pennsylvania 19610

with copies, which shall not constitute notice, to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attn: Daniel A. Neff

Telephone: (212) 403-1000

Facsimile:   (212) 403-2000

If to Parent, to

Caesars Entertainment Corporation

One Caesars Palace Drive

Las Vegas, Nevada 89109

Attention: General Counsel

Fax: (702) 407-6418

with a copy to:

Latham & Watkins LLP

650 Town Center Drive

20th Floor

Costa Mesa, California 92626

Attention: Charles K. Ruck and Michael A. Treska

Fax: (714) 755-8290

If to the Escrow Agent, to:

Deutsche Bank National Trust Company

101 California Street, 47th Floor

San Francisco, CA 94111

Phone: (415) 617-2801

Facsimile: (415) 617-4280

Attention: Nicole DeSantis

E-Mail: nicole.desantis@db.com

 

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(e) The headings of the Sections of this Agreement have been inserted for
convenience and shall not modify, define, limit or expand the express provisions
of this Agreement.

(f) This Agreement and the rights and obligations hereunder of parties hereto
may not be assigned except with the prior written consent of the other parties
hereto. This Agreement shall be binding upon and inure to the benefit of each
party’s respective successors and permitted assigns. Except as expressly
provided herein, no other person shall acquire or have any rights under or by
virtue of this Agreement. This Agreement is intended to be for the sole benefit
of the parties hereto, and (subject to the provisions of this Section 10(f))
their respective successors and assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to be, for the benefit
of any third person.

(g) This Agreement may not be amended, supplemented or otherwise modified
without the prior written consent of the parties hereto.

(h) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any document or instrument held by or
delivered to it.

(i) The Escrow Agent shall not be called upon to advise any party as to the
wisdom in selling or retaining or taking or refraining from any action with
respect to any property deposited hereunder.

(j) The Parties agree that, for income tax reporting purposes, (i) all interest
and other income from investment of the Escrow Property for any tax period
(whether or not such amounts have been disbursed during such tax period) shall
be reported as having been earned by Buyer and (ii) until such time that all
remaining amounts of the Escrow Property have been distributed in accordance
with this Agreement, Buyer shall be deemed to be the owner of such Escrow
Property. The Escrow Agent shall file any required IRS Form 1099 (and any other
forms required by applicable law with respect to the Escrow Property) showing
the Escrow Agent as the “payor” and Buyer as the “payee,” and shall provide
Buyer with a copy of such IRS Form 1099 (or such other forms) on or before the
date on which such IRS Form 1099 (or such other form) must be provided to the
“payee” under applicable law. It is understood that the Escrow Agent shall be
responsible for income tax reporting only with respect to income earned on the
Escrow Property and will not be responsible for any other tax reporting.

(k) This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.

(l) The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.

(m) Parent and Buyer hereby represent and warrant (i) that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes its
legal, valid and binding obligation and (ii) that the execution, delivery and
performance of this Agreement by Parent and Buyer does not and will not violate
any applicable law or regulation.

 

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(n) The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of any
other provision; and if any provision is held to be unenforceable as a matter of
law, the other provisions shall not be affected thereby and shall remain in full
force and effect.

(o) No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions “Bankers Trust
Company”, “Deutsche Bank National Trust Company or “Deutsche Bank AG” or any of
their respective affiliates by name or the rights, powers, or duties of the
Escrow Agent under this Agreement shall be issued by any other parties hereto,
or on such party’s behalf, without the prior written consent of the Escrow
Agent.

(p) For purposes of this Agreement, “business day” shall mean any day that is
not a Saturday or Sunday or a day on which banks are required or permitted by
law or executive order to be closed in the City of San Francisco.

(q) For purposes of sending and receiving instructions or directions hereunder,
all such instructions or directions shall be, and the Escrow Agent may
conclusively rely upon such instructions or directions, delivered, and executed
by representatives of the Parties designated on Scheduled I attached hereto and
made a part hereof (each such representative, an “Authorized Person”) which such
designation shall include specimen signatures of such representatives, as such
Schedule I may be updated from time to time.

(r) USA PATRIOT Act Section 326 Customer Identification Program. The parties
hereto acknowledge that in order to help the United States government fight the
funding of terrorism and money laundering activities, pursuant to Federal
regulations that became effective on October 1, 2003 (Section 326 of the USA
PATRIOT Act) requires all financial institutions to obtain, verify, record and
update information that identifies each person establishing a relationship or
opening an account. The parties to this Agreement agree that they will provide
to the Escrow Agent such information as it may request, from time to time, in
order for the Escrow Agent to satisfy the requirements of the USA PATRIOT Act,
including but not limited to the name, address, tax identification number and
other information that will allow it to identify the individual or entity who is
establishing the relationship or opening the account and may also ask for
formation documents such as articles of incorporation or other identifying
documents to be provided.

 

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

 

PENN NATIONAL GAMING, INC.

        as Buyer

By  

 

Name:   Title:  

CAESARS ENTERTAINMENT CORPORATION

        as Parent

By  

 

Name:   Title:  

DEUTSCHE BANK NATIONAL TRUST COMPANY

        as Escrow Agent

By  

 

Name:   Title:   By  

 

Name:   Title:  

Signature Page to Escrow Agreement

 

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Schedule I

Authorized Representatives

 

Name                        Title   

Specimen Signature

Robert S. Ippolito    Vice President, Secretary & Treasurer    Jonathan S.
Halkyard    Executive Vice President and Chief Financial Officer    Eric Hession
   Senior Vice President of Finance and Treasurer   

 

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EXHIBIT E

FORM OF CUSTOMER LIST

 

Name    Last, first, middle initial, prefix and suffix Customer Number   
Caesars will mask the number Social Security Number    Home Address    Street
address, city, state, zip+4, country Business Address    Street address, city,
state, zip+4, country Home Phone #    Business Phone #    Date of Birth:   

Email Address

Date Customer Established:

   Preferences (e.g.: football, rodeo, country music):    Interest Codes – many
for one guest.

Number of Cards Issued

Card Issue 100YR Date

Type of player (e.g.: cash, credit, suspended):

   Nickname:    Sex:    Last Play Date:    Drivers License Number    Drivers
License State    Drivers License Month of Expiration    Drivers License Year of
Expiration    Secondary Form of ID    Employer Name    Employment Position   
Mail Code (Home or Business)    Bad Address Flag    Do Not Call/Do Not Mail Code
  

 

Group Codes:

 

Customer Number and Group Code

   Group Name    Arrive 100YR Date    Depart 100YR Date   

 

Credit:

 

Customer Number

   Current Limit    Current Limit Approved 100YR date    Current Limit Approver
   Temporary Limit   

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Temporary Limit Approved 100YR date

 

Temporary Limit Approver

   Previous Limit    Previous Limit Approved 100YR date    Last transaction
100YR date/last credit activity   

Current Checks Balance

Current Returns Balance

Current Safekeeping Balance

   Current redeposit balance    Customer Write Off Balance    Detailed
Transaction data to support outstanding markers    Casino Hosts:    Casino Host
Contact For Customer    Casino Host Name    Game Code:    Game Code    Game Code
Description    Game Type (P=Pit, S=Slot, O=Other)    Slot Denomination    Slot
Ratings Detail    Only available for 45 days of history Cust #    Date    Card
in time    Card out time    Coin In:    Coin Out:    Theo Win:    Type of
Machine:    Denom    Jackpot Amount Paid    Slot Machine #   

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Table Ratings Detail    Only available for 45 days of history Cust #    Date   
Length Of play    Game Played:    E.g. 21, CR, RO, etc. Table Number:    Average
Bet:    Chips In:    Cash In    Marker buy in    Total Buyin    Theo Win:   
Actual Win:    Win/Loss:    Rater ID/Rated by   

 

Slot History

   This data is available in a Daily Summary record for agreed to date range
beyond the 45 days of available detail ratings. To be provided in the daily
summary format for the most recent 45 days in addition to the detail level
Customer    Will be one record per day per Slot Denom played Date    Coin In   
Time – LOP (minutes)    Denom    Game Code (S=Slots)    Theo    Win/Loss   

 

Table History

   This data is available in a Daily Summary record for agreed to date range
beyond the 45 days of available detail ratings. To be provided in the daily
summary format for the most recent 45 days in addition to the detail level.
Customer    Will be one record per day per game code played Date    Buy In Cash
   Buy In Marker    Average Bet    Game Code    Theo    Actual Win/Loss    Time
– LOP (minutes)   

Summary record for the last six months prior to close of the redeemed
points/comps/value by category (Cash/Hotel/F&B, other) at a customer level in
the format attached.

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EXHIBIT F

FORM OF ASSIGNMENT OF EQUITY INTERESTS AGREEMENT

This Assignment of Equity Interests Agreement (this “Assignment Agreement”) is
made as of [—], 2012, by and among Caesars Entertainment Operating Company,
Inc., a Delaware corporation (“CEOC”), Harrah’s Maryland Heights Operating
Company, a Nevada corporation (“HMHO”), Players Maryland Heights Nevada, LLC, a
Nevada limited liability company (“PMHN”, together with CEOC and HMHO,
“Sellers”), and Penn National Gaming, Inc., a Pennsylvania corporation
(“Buyer”).

WHEREAS, Sellers are the record and beneficial owners of all Equity Interests as
set forth in the Purchase Agreement;

WHEREAS, pursuant to that certain Equity Interest Purchase Agreement, dated
May 7, 2012, by and among Buyer, Caesars Entertainment Corporation, a Delaware
corporation, Sellers and the Company (the “Purchase Agreement”), Sellers have
agreed to sell to Buyer all of Sellers’ right, title and interest in and to the
issued and outstanding Equity Interests on the terms and subject to the
conditions set forth in the Purchase Agreement;

WHEREAS, pursuant to the Purchase Agreement, Sellers desire to assign and Buyer
desires to acquire, all rights, title and interest in and to the Equity
Interests; and

WHEREAS, the execution and delivery of this Assignment Agreement is required by
Section 5.2(k) of the Purchase Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Assignment hereby agree as
follows:

 

1. Definitions. Each capitalized term used but not defined in this Assignment
shall have the meaning ascribed to it in the Purchase Agreement.

 

2. Assignment. Each of the Sellers hereby, on the terms and subject to the
conditions of the Purchase Agreement, sells, assigns, transfers, conveys and
delivers to the Buyer, and the Buyer does hereby, on the terms and subject to
the conditions of the Purchase Agreement, purchase, acquire and accept from
Sellers, all of Sellers’ right, title and interest in and to the Equity
Interests.

 

3. Governance. This Assignment Agreement is intended to evidence the conveyance,
transfer, assignment and delivery to Buyer of the Equity Interests effective as
of the Closing.

 

4. Counterparts. This Assignment Agreement may be executed and delivered in two
or more counterparts via facsimile transmission or via email with scan or email
attachment. Any such counterpart executed and delivered via facsimile
transmission or via email with scan or email attachment will be deemed an
original for all intents and purposes, and all such counterparts shall together
constitute one and the same instrument.

--------------------------------------------------------------------------------

5. Successors and Assigns. This Assignment Agreement shall bind and inure to the
benefit of the respective parties and their successors and assigns. This
Assignment Agreement is for the sole benefit of the parties hereto and their
successors and assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such
successors or assigns, any legal or equitable rights hereunder.

 

6. Entire Understanding; Amendments. This Assignment Agreement, the Purchase
Agreement and the Ancillary Agreements, together with the exhibits and schedules
thereto, constitute the entire agreement between the parties hereto and
supersede any prior understandings, agreements or representations by or between
such parties, written or oral, that may have related in any way to the subject
matter hereof. Nothing in this Assignment Agreement shall be construed to be a
modification of, or limitation on, any provision of the Purchase Agreement,
including the representations, warranties and agreements set forth therein. In
the event of a conflict between this Assignment Agreement and the Purchase
Agreement, the parties hereto agree that the Purchase Agreement shall control.
Nothing in this Assignment Agreement shall be construed as creating any third
party beneficiary rights in any Person. This Assignment Agreement shall not be
amended or modified except in a written document signed by all parties hereto.

 

7. Governing Law; Jurisdiction. This Assignment Agreement (and any claim or
controversy arising out of or relating to this Assignment) shall be governed by
and construed in accordance with the domestic Laws of the State of Missouri
without giving effect to conflicts of laws principles thereof.

 

8. Section Headings; References. Section headings in this Assignment Agreement
are for convenience of reference only, and shall neither constitute a part of
this Assignment Agreement nor affect its interpretation. All words in this
Assignment Agreement shall be construed to be of such number and gender as the
context requires or permits.

 

9. Severability. If any term or other provision of this Assignment Agreement is
invalid, illegal or incapable of being enforced as a result of any rule of law
or public policy, all other terms and other provisions of this Assignment
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by this Assignment
is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Assignment Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Assignment Agreement and the Purchase Agreement are
fulfilled to the greatest extent possible.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Equity
Interests Agreement on the date first written above.

 

SELLERS  

Caesars Entertainment Operating Company, Inc.,

a Delaware corporation

By:

 

 

Name:

 

 

Its:

 

 

 

Harrah’s Maryland Heights Operating Company,

a Nevada corporation

By:

 

 

Name:

 

 

Its:

 

 

 

Players Maryland Heights Nevada, LLC, a Nevada limited liability company

    By:

  Players Holding, LLC, Member   By:   Players International, LLC, Member    
By:   Caesars Entertainment Operating Company, Inc., Member

 

By:  

 

Name:

 

 

Its:

 

 

BUYER

 

Penn National Gaming, Inc.,

a Pennsylvania corporation

By:

 

 

Name:

 

 

Its:

 

 

[Signature Page to the Assignment of Equity Interests Agreement]