Exhibit 10.1

EQUITY INTEREST PURCHASE AGREEMENT

dated as of August 16, 2013

by and among

TROPICANA ST. LOUIS LLC,

as Buyer

CASINO ONE CORPORATION,

as Target,

PNK (ES), LLC,

as ES,

PNK (ST. LOUIS RE), LLC,

as RE,

PNK (STLH), LLC,

as STLH,

and

CASINO MAGIC, LLC,

PINNACLE ENTERTAINMENT, INC.,

together, as Sellers

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TABLE OF CONTENTS

 

     Page  

ARTICLE 1 PURCHASE AND SALE OF EQUITY INTERESTS

     2   

Section 1.1 Purchase and Sale of Equity Interests

     2   

Section 1.2 Excluded Assets

     2   

Section 1.3 Retention of Assets

     3   

ARTICLE 2 PURCHASE PRICE AND DEPOSIT

     3   

Section 2.1 Purchase Price

     3   

Section 2.2 Deposit

     3   

Section 2.3 Allocation of Purchase Price and Section 338(h)(10) Election

     4   

Section 2.4 Risk of Loss

     5   

Section 2.5 Tax Withholding

     5   

ARTICLE 3 WORKING CAPITAL ADJUSTMENT AND OTHER ADJUSTMENTS

     5   

Section 3.1 Estimated Closing Statement

     5   

Section 3.2 Final Adjustments

     6   

Section 3.3 Accounts Receivable; Accounts Payable; Deposits

     7   

Section 3.4 Corrective Actions

     8   

ARTICLE 4 CLOSING

     8   

Section 4.1 Time and Place

     8   

Section 4.2 Deliveries at Closing

     8   

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLERS

     11   

Section 5.1 Organization of Sellers

     11   

Section 5.2 Authority; No Conflict; Required Filings and Consents

     12   

Section 5.3 Title to Equity Interests

     13   

Section 5.4 Litigation

     13   

ARTICLE 6 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANIES

     13   

Section 6.1 Organization of the Companies; Capitalization

     13   

Section 6.2 Authority; No Conflict; Required Filings and Consents

     14   

Section 6.3 Financial Statements

     15   

Section 6.4 No Undisclosed Liabilities

     15   

Section 6.5 Taxes

     15   

Section 6.6 Real Property

     17   

Section 6.7 Intellectual Property

     19   

Section 6.8 Agreements, Contracts and Commitments

     20   

Section 6.9 Litigation

     21   

Section 6.10 Environmental Matters

     21   

Section 6.11 Permits; Compliance with Laws

     22   

Section 6.12 Labor Matters

     22   

Section 6.13 Employee Benefits

     23   

Section 6.14 Brokers

     25   

Section 6.15 Title to Purchased Assets; Sufficiency of Purchased Assets

     25   

Section 6.16 Minimum Cash

     26   

 

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     Page  

Section 6.17 Absence of Changes

     26   

Section 6.18 Insurance

     26   

Section 6.19 Hotel Agreements and Redevelopment Agreement

     26   

ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF BUYER

     27   

Section 7.1 Organization

     27   

Section 7.2 Authority; No Conflict; Required Filings and Consents

     28   

Section 7.3 Brokers

     29   

Section 7.4 Financing

     29   

Section 7.5 Licensability of Principals

     29   

Section 7.6 Permits; Compliance with Gaming Laws

     29   

Section 7.7 Qualified Person

     30   

Section 7.8 Opportunity to Conduct Due Diligence

     30   

Section 7.9 Litigation

     30   

Section 7.10 Status of Buyer

     30   

ARTICLE 8 COVENANTS

     30   

Section 8.1 Conduct of Business Prior to the Closing

     30   

Section 8.2 Cooperation; Notice; Cure

     34   

Section 8.3 No Solicitation

     34   

Section 8.4 Employee Matters

     35   

Section 8.5 Access to Information and the Real Property; Post-Closing
Cooperation; Furnishing of Financial Statements

     37   

Section 8.6 Governmental Approvals

     39   

Section 8.7 Publicity

     41   

Section 8.8 Further Assurances and Actions

     41   

Section 8.9 Transfer Taxes

     42   

Section 8.10 No Control

     43   

Section 8.11 Reservations; Guests’ Safe Deposit Boxes; Valet Parking; Other
Transition Matters

     43   

Section 8.12 Certain Transactions

     45   

Section 8.13 Insurance and Casualty

     45   

Section 8.14 Non-Solicitation

     45   

Section 8.15 Customer Database

     47   

Section 8.16 Lien and Guaranty Release

     49   

Section 8.17 Rebranding

     49   

Section 8.18 FTC Approval

     49   

Section 8.19 FTC Documents

     49   

Section 8.20 Agreement between Buyer and Four Seasons Hotels Limited

     50   

Section 8.21 Financing Cooperation

     51   

Section 8.22 Certain Property

     51   

Section 8.23 Contribution of STLH Equity Interests

     52   

Section 8.24 Alley Vacation

     52   

ARTICLE 9 CONDITIONS TO CLOSING

     52   

Section 9.1 Conditions to Each Party’s Obligation to Effect the Closing

     52   

Section 9.2 Additional Conditions to Obligations of Buyer

     53   

Section 9.3 Additional Conditions to Obligations of Sellers

     54   

 

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     Page  

ARTICLE 10 TERMINATION AND AMENDMENT

     55   

Section 10.1 Termination

     55   

Section 10.2 Effect of Termination

     56   

ARTICLE 11 SURVIVAL; INDEMNIFICATION

     58   

Section 11.1 Survival of Representations, Warranties, Covenants and Agreements

     58   

Section 11.2 Indemnification

     58   

Section 11.3 Procedure for Claims between Parties

     60   

Section 11.4 Defense of Third Party Claims

     60   

Section 11.5 Limitations on Indemnity

     62   

Section 11.6 Payment of Damages

     63   

Section 11.7 Exclusive Remedy

     63   

Section 11.8 Tax Matters

     64   

ARTICLE 12 TITLE TO REAL PROPERTY

     67   

Section 12.1 Title Policies

     67   

Section 12.2 Survey

     68   

Section 12.3 AS IS

     68   

Section 12.4 No Conflict

     70   

Section 12.5 Section 1031 Transactions

     70   

ARTICLE 13 MISCELLANEOUS

     71   

Section 13.1 Definitions

     71   

Section 13.2 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury;
Limitation on Damages

     86   

Section 13.3 Notices

     87   

Section 13.4 Interpretation

     88   

Section 13.5 Entire Agreement

     88   

Section 13.6 Severability

     88   

Section 13.7 Assignment

     89   

Section 13.8 Parties of Interest

     89   

Section 13.9 Counterparts

     89   

Section 13.10 Mutual Drafting

     89   

Section 13.11 Amendment

     89   

Section 13.12 Non-Recourse

     89   

Section 13.13 Extension; Waiver

     89   

Section 13.14 Time of Essence

     90   

 

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EXHIBITS

 

Exhibit A    Form of Deposit Escrow Agreement Exhibit B    Form of Trademark
Assignment Agreement Exhibit C    Form of Assignment and Assumption of
Redevelopment Agreement

SCHEDULES

 

Schedule A    Excluded Assets Schedule B    Calculation of Net Working Capital

 

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EQUITY INTEREST PURCHASE AGREEMENT

THIS EQUITY INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and entered
into as of August 16, 2013 (the “Effective Date”), by and among Tropicana St.
Louis LLC, a Delaware limited liability company (“Buyer”), Pinnacle
Entertainment, Inc., a Delaware corporation (“Parent”), Casino Magic, LLC, a
Minnesota limited liability company (“Holdco”, together with Parent, “Sellers”),
and Casino One Corporation, a Mississippi corporation (“Target”), PNK (ES), LLC,
a Delaware limited liability company (“ES”), and PNK (ST. LOUIS RE), LLC, a
Delaware limited liability company (“RE”), and PNK (STLH), LLC, a Delaware
limited liability company (“STLH”, and together with ES, RE and Target,
hereafter collectively referred to as the “Companies,” and any one of them
individually as a “Company”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in Section 13.1 hereof.

WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated as of
December 20, 2012, entered into by and among Parent, PNK Holdings, Inc., PNK
Development 32, Inc., and Ameristar Casinos, Inc. (“Ameristar”), as amended by
that certain First Amendment to Agreement and Plan of Merger, dated as of
February 1, 2013, as further amended by that certain Second Amendment to
Agreement and Plan of Merger, dated as of March 14, 2013 (as such agreement may
be further amended, supplemented and/or modified, from time to time, the “Merger
Agreement”), on August 13, 2013 Ameristar became a wholly-owned Subsidiary of
Parent through a merger of PNK Holdings, Inc. with and into Ameristar (the
“Merger”) and then Ameristar was merged with and into Parent with Parent being
the surviving entity;

WHEREAS, the United States Federal Trade Commission (the “FTC”) has issued an
administrative complaint (the “Administrative Complaint”) seeking to prohibit
the consummation of the Merger if it would combine Parent and Ameristar’s
current businesses in certain markets, including the St. Louis, Missouri market;

WHEREAS, in connection with the Merger, Parent has entered into an agreement
containing consent orders (the “Consent Agreement”) and is required to comply
with the Decision and Order accepted by the FTC (Docket No.9355) (the “Order”)
and the related Order to Hold Separate and Maintain Assets issued by the FTC
(the “Hold Separate Order,” and together with the Order, the “FTC Orders”),
pursuant to which Parent will be required to cause Target to be divested
following the consummation of the Merger;

WHEREAS, upon consummation of the Merger, a hold separate monitor and a hold
separate manager were appointed by the FTC pursuant to the FTC Orders and are in
charge of the management of the Companies until the closing of the sale of the
Equity Interests (as defined below) to Buyer;

WHEREAS, Holdco is the beneficial and record owner of all of the issued and
outstanding stock of Target (“Target Stock”) and Parent is the beneficial and
record owner of all of the issued and outstanding membership interests of ES, RE
and, subject to Section 8.23, STLH (the “Membership Interests” and, together
with the Target Stock, the “Equity Interests”);

 

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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 Companies shall become wholly-owned subsidiaries
of Buyer; and

WHEREAS, concurrently with the execution of this Agreement, and as a condition
and inducement to Sellers’ willingness to enter into this Agreement, Tropicana
Entertainment Inc. (“Tropicana”) is entering into a limited guarantee in favor
of Sellers with respect to certain obligations of Buyer hereunder (the “Limited
Guarantee”) and Tropicana Entertainment Inc. and Sellers are entering into a
letter agreement providing for certain obligations of Tropicana in contemplation
of the Section 338(h)(10) Election (the “338(h)(10) Letter”);

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 1

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, Holdco shall sell to
Buyer, and Buyer shall purchase from Holdco the Target Stock, and Parent shall
sell to Buyer, and Buyer shall purchase from Parent, the Membership Interests,
in each case free and clear of all Liens (other than restrictions to which Buyer
may be subject under applicable securities Laws and Gaming Laws).

Section 1.2 Excluded Assets. Notwithstanding anything to the contrary contained
in this Agreement, from and after the Closing, Sellers shall retain all of their
right, title and interest in and to each and all of the assets set forth on
Schedule A (collectively, the “Excluded Assets”), which Excluded Assets are not
a part of the transactions contemplated hereby, whether or not any such Excluded
Asset is presently owned by the Companies. Sellers and Buyer may amend Schedule
A as necessary to include any specific items owned by Sellers which are not
owned by the Companies but which were inadvertently omitted from said Schedule.
Prior to the Closing Date, Sellers shall cause the Companies to assign to
Sellers or an Affiliate designated by Parent, all right, title and interest of
the Companies (if any) in such Excluded Assets. All items, whether located at
the Companies’ Real Property, or otherwise owned by the Companies, that
constitute Excluded Assets, may be removed on or prior to the Closing Date or
within one hundred twenty (120) days after the Closing Date by Sellers; provided
that such removal shall be done upon reasonable notice at prearranged times
during normal business hours so as not to unreasonably disrupt the Companies’
operations or customers; provided further that if Buyer or any Company so
requests, Sellers’ Representatives shall be accompanied by a Representative of
Buyer during the course of such removal. Sellers acknowledge and agree that all
liability and loss associated with the Excluded Assets and their removal shall
be borne exclusively by Sellers.

 

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Section 1.3 Retention of Assets. Notwithstanding anything to the contrary
contained in this Agreement, Sellers and their respective Affiliates may retain
and use, at their own expense, archival copies of all of the Contracts, books,
records and other documents or materials of the Companies (except to the extent
prohibited by Section 8.15), in each case, which (a) are in existence on or
prior to the Closing, (b) are used in connection with Sellers or any of their
respective Affiliates’ businesses other than the Companies (except to the extent
prohibited by the FTC Documents), or (c) if Parent, in good faith, determines
that it or any of its Affiliates is 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 other obligation under applicable Law, or
the defense (or any counterclaim, cross-claim or similar claim in connection
therewith) or prosecution of any suit, claim, action, proceeding or
investigation (including any Tax audit or examination) against or by Parent or
any of Parent’s Affiliates that relates to any periods on or prior to the
Closing Date. Buyer understands and agrees that it is solely Buyer’s
responsibility to obtain any and all operating agreements necessary to conduct
the Business from and after the Closing Date, including replacement software
license agreements for the software that will replace the Excluded Software.
Subject to the terms hereof, Buyer shall also be responsible for obtaining new
licenses and permits for the operation of the Business from and after the
Closing to the extent such licenses and permits of the Companies are not
transferable with the transfer of the Equity Interests.

ARTICLE 2

PURCHASE PRICE AND DEPOSIT

Section 2.1 Purchase Price.

(a) At the Closing, as consideration for the Equity Interests, Buyer shall
deliver or cause to be delivered to Parent (or its designee) by electronic
transfer of immediately available funds to an account designated by Sellers a
cash payment equal to the sum of (i) Two Hundred Sixty Million Dollars
($260,000,000.00) subject to adjustment as described in Section 2.1(b) below
(the “Purchase Price”) plus (ii) the Estimated Closing Payment (which can be a
positive or negative number). The Purchase Price, together with the Estimated
Closing Payment, is the “Closing Payment.”

(b) The Purchase Price shall be reduced by (i) the amount of any remaining
payment obligations of Sellers under Section 1 of that certain Seventh Amendment
to Redevelopment Agreement dated as of December 11, 2012 by and between the LCRA
and Parent as calculated at the Closing Date, and (ii) the Capex Shortfall, if
any.

Section 2.2 Deposit. No later than five (5) Business Days after the Effective
Date, Buyer shall deposit Fifteen Million Dollars ($15,000,000.00) (the
“Deposit”) with Citibank N.A. (the “Escrow Agent”) pursuant to an escrow
agreement in substantially the form attached hereto as Exhibit A (the “Deposit
Escrow Agreement”) to be executed and delivered by Parent, Buyer

 

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and the Escrow Agent in connection with the making of the Deposit. Upon the
Closing, the 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, plus the interest accrued thereon, to
Sellers (or their 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, plus the interest
accrued thereon, to Buyer or Parent, as applicable, pursuant to Section 10.2(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 2.1(b). All fees of the Escrow Agent shall be borne one-half
by Sellers and one-half by Buyer.

Section 2.3 Allocation of Purchase Price and Section 338(h)(10) Election.

(a) Election. Buyer (or, if Buyer is a disregarded entity for U.S. federal
income tax purposes, Buyer’s immediate corporate parent) shall join with the
Companies and Sellers in making a timely election under Section 338(h)(10) of
the Code (and any corresponding election under state, local, and foreign Law)
with respect to the purchase and sale of the Target Stock hereunder
(collectively, a “Section 338(h)(10) Election”). Buyer (or, if Buyer is a
disregarded entity for U.S. federal income tax purposes, Buyer’s immediate
corporate parent) and Sellers, as appropriate, shall execute a properly prepared
IRS Form 8023 at the Closing to make the Section 338(h)(10) Election. In
addition, Sellers and the Companies hereby agree to make a protective election
under Section 336(e) of the Code in compliance with Section 1.336-2(h) of the
Treasury Regulations.

(b) Allocation of Purchase Price. For federal income Tax and applicable state
and local Tax purposes, Buyer and Parent hereby agree to treat (and to cause
their respective Affiliates to treat) the purchase and sale of the Membership
Interests pursuant to this Agreement as a sale of the Purchased Assets held by
ES, RE and, if the transaction structure is modified pursuant to Section 8.23 to
involve the direct sale of the STLH Equity Interests to Buyer, STLH. No more
than ninety (90) days after the Determination Date, Buyer shall prepare and
deliver to Sellers a written statement setting forth (i) the allocation of the
purchase price (as determined for federal income Tax purposes, taking into
account any additional amounts payable pursuant to Section 3.2) among the Target
Stock and the Membership Interests, (ii) the allocation of the purchase price
from clause (i) allocated to the Membership Interests, plus any assumed
liabilities of ES, RE and, if the transaction structure is modified pursuant to
Section 8.23 to involve the direct sale of the STLH Equity Interests to Buyer,
STLH that are required to be treated as part of the purchase price for federal
income Tax purposes to the Purchased Assets (and any other assets that are
considered to be acquired for federal income Tax purposes) held by ES, RE and,
if the transaction structure is modified pursuant to Section 8.23 to involve the
direct sale of the STLH Equity Interests to Buyer, STLH in accordance with
Section 1060 of the Code and the Treasury Regulations thereunder and (iii) the
allocation of the purchase price from clause (i) allocated to the Target Stock,
plus any assumed liabilities of Target that are required to be treated as part
of the purchase price for federal income Tax purposes to the Purchased Assets
(and any other assets that are considered to be acquired for federal income Tax
purposes) held by Target in accordance with Section 338(h)(10) (and, on a
protective basis, Section 336(e)) of the Code and the Treasury

 

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Regulations thereunder (the “Purchase Price Allocation”). Buyer and Sellers
shall negotiate 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 a mutually agreed upon national accounting
firm (the “Tax Arbiter”) in accordance with this Agreement, as promptly as
practicable, and such resolution(s) will be reflected in the Purchase Price
Allocation, provided that the resolution for each disputed item contained in the
Tax Arbiter’s determination shall be made subject to the definitions and
principles set forth in this Agreement. Buyer and Sellers shall each use its
commercially reasonable efforts to furnish to the Tax Arbiter such work papers
and other documents and information pertaining to the disputed item as the Tax
Arbiter 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 Tax Arbiter shall be borne equally by Buyer, on the one
hand, and Sellers, on the other hand. Buyer, the Companies and Sellers shall
file all Tax Returns (including, but not limited to, IRS Forms 8594 and 8883)
consistent with the Purchase Price Allocation, and shall not agree to any
proposed adjustment to, or settlement with respect 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 Determination Date that
affect the purchase price for federal income Tax purposes.

Section 2.4 Risk of Loss. Subject to Section 8.13 hereof, until the Closing,
Sellers shall bear the risk of any loss or damage to the Companies, including
the Purchased Assets and Excluded Assets, from condemnation, fire, casualty,
taking by eminent domain, or any other occurrence. Following the Closing, Buyer
shall bear the risk of any loss or damage to the Companies, including the
Purchased Assets, and excluding the Excluded Assets, from condemnation, fire,
casualty, taking by eminent domain, or any other occurrence.

Section 2.5 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 3

WORKING CAPITAL ADJUSTMENT AND OTHER ADJUSTMENTS

Section 3.1 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 certified by the Chief Financial Officer of Parent (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 including a
detailed classification of the various amounts of each

 

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component of 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 2.1 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 2.1 hereof. Notwithstanding any provision of this Agreement
to the contrary, Buyer shall, subject to applicable Gaming Laws, if any, be
permitted to have a representative of Buyer present to observe any cash counts,
counts of gaming chips and tokens and physical inventories that will be taken by
Sellers and the Companies on the Closing Date, and such counts and inventories
shall be memorialized in a listing prepared and signed jointly by
Representatives of Buyer, Parent and the Companies no later than the Closing.

Section 3.2 Final Adjustments.

(a) No more than ninety (90) days after the Closing Date, Buyer shall prepare
and deliver to Sellers 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 classification of the various amounts of each
component of 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 to be payable pursuant to the Final
Closing Statement shall be paid to either Sellers, on the one hand, or Buyer, on
the other hand, pursuant to Section 3.2(c) hereof (the “Final Closing Payment”).

(b) If Sellers disagree with the calculation of any amounts on the Final Closing
Statement, Sellers shall, within twenty (20) Business Days after their receipt
of the Final Closing Statement, notify Buyer of such disagreement in writing,
setting forth in detail the particulars of such disagreement. Any amounts on the
Final Closing Statement not disputed in writing by Sellers within twenty (20)
Business Days after receipt of the Final Closing Statement shall be final,
binding and conclusive for purposes of this Agreement. Buyer will provide
Sellers reasonable access to any of Buyer’s and the Companies’ records
(including work papers and source documents) and relevant employees not
otherwise available to Sellers as a result of the transactions contemplated
hereby, to the extent reasonably related to Sellers’ review of the Final Closing
Statement. If Sellers do not provide such notice of disagreement within the
twenty (20) Business Day period, Sellers shall be deemed to have accepted the
Final Closing 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, Sellers or their respective
Affiliates absent manifest error or fraud. If any such notice of disagreement is
timely provided, Buyer and Sellers shall use commercially reasonable efforts for
a period of twenty (20) Business Days (or such longer period as they may
mutually agree) to resolve any disagreements with respect to the calculation of
any amounts set forth on the Final Closing Statement (and which were previously
identified in writing by Sellers pursuant to the first sentence of this
Section 3.2(b)). If, at the end of such period, the parties are unable to fully
resolve the disagreements, the parties shall refer the matter to BDO USA LLP
(the “Auditor ”)

 

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to 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 Final Closing Statement were prepared in accordance with the
standards set forth in this Agreement, and (iii) deliver, as promptly as
practicable but in any event within forty-five (45) days of the end of such
20-Business Day period (or such longer period as the parties may have mutually
agreed), 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 and Final Closing 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, absent manifest error or fraud by Buyer, Sellers or
the Auditor. Any dispute with respect to the Final Closing Statement will not
affect any undisputed amounts in the Final Closing Statement or the related
payments contemplated by Section 3.2(c) hereof. The date on which an amount set
forth on the Final Closing Statement is finally determined in accordance with
this Section 3.2(b) is hereinafter referred to as the “Determination Date.”

(c) Any amounts determined to be due and owing to Sellers from Buyer or to Buyer
from Sellers, as applicable, pursuant to this Section 3.2 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 3.3 Accounts Receivable; Accounts Payable; Deposits.

(a) Accounts Receivable. After the Closing, 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. No party nor its Affiliates shall agree to any settlement,
discount or reduction of the Accounts Receivable belonging to the other party
pursuant to this Section 3.3(a). No party nor its Affiliates shall assign,
pledge or grant any security interest in the Accounts Receivable of the other
party.

(b) Accounts Payable. Each party and its Affiliates will promptly deliver to the
other a true copy of any invoice, written notice of accounts payable relating to
the Business or written notice of a dispute as to the amount or terms of any
accounts payable relating to the Business received from the creditor of such
accounts payable to the extent such account payable relating to the Business is
owed by the other party. Should either party discover it has paid an accounts
payable belonging to the other party that is not included in the Final Closing
Net Working Capital, 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 Companies relating to
rooms, services and/or events relating to the period from and after the Closing
shall be retained by the Companies at the Closing and included in the
calculation of the Final Closing Net Working Capital. Sellers shall not have
further liability or responsibility after the 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 3.4 Corrective Actions. If, after the Closing, Sellers and Buyer
determine that Sellers have transferred to Buyer, directly or indirectly, any
assets that, pursuant to the terms of this Agreement, constitute Excluded
Assets, or Sellers have retained any assets that, pursuant to the terms of this
Agreement, constitute Purchased Assets, then such assets shall be returned or
transferred, as applicable, for no additional payment, and the other party shall
be obliged to accept such return or transfer.

ARTICLE 4

CLOSING

Section 4.1 Time and Place.

(a) Unless this Agreement is earlier terminated pursuant to Article 10 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 9 hereof (other than those conditions to be satisfied or waived at or
upon the Closing and subject to the Required Governmental Consents (as defined
in Section 9.2(d) below)), 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 (or such later time required to complete pre-opening activities
such as compliance audits by the Missouri Gaming Commission of Buyer’s gaming
procedures and the assets of the Companies and Buyer).

(b) Notwithstanding the foregoing, except as provided in Section 10.1(b), the
Closing Date shall not be later than the date that is six (6) months after the
earlier of (x) the consummation of the Merger and (y) the Effective Date (the
“Outside Date”), subject to extension as provided in Section 10.1(b).

Section 4.2 Deliveries at Closing. The following documents will be executed
and/or delivered by Buyer, Sellers and/or the Companies, as appropriate, at or
prior to the Closing:

(a) 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.

 

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(b) Buyer Certificates. The certificates required by Section 9.3(a) and
Section 9.3(b) hereof.

(c) Sellers Certificates. The certificates required by Section 9.2(a) and
Section 9.2(b) hereof.

(d) Trademark Assignment. The short-form Trademark Assignment Agreement
substantially in the form attached hereto as Exhibit B (the “Trademark
Assignment Agreement”), conveying the Parent Transferred Intellectual Property
from Parent to Target.

(e) Equity Interests. Stock certificates representing the Target Stock, duly
endorsed in blank or accompanied by stock powers or other instruments of
transfer duly executed in blank, and, with respect to the Membership Interests,
an Assignment of Membership Interests in form and substance reasonably
satisfactory to Buyer (the “Assignment of Membership Interests”), conveying to
Buyer (or its designee) all of the Membership Interests.

(f) Transition Services Agreement. At Buyer’s election, a Transition Services
Agreement in form and substance reasonably satisfactory to the parties (the
“Transition Services Agreement”), wherein Parent would provide Buyer with
certain reasonably requested transition services.

(g) Resignations. Resignations, effective as of the Closing Date, of those
directors and officers of the Companies as Buyer may request in writing no less
than five (5) days prior to the Closing Date.

(h) Obligation of Special Assessment for Community Improvement District. Buyer
shall acknowledge the continuing obligation of Target and ES of the payment for
the year 2014, and thereafter, of the annual special assessment (“CID Special
Assessment”) of the Riverside Community Improvement District (“CID”), to which
CID Special Assessment Buyer shall consent for the remainder of the term of the
CID. Buyer, as owner of the Equity Interests of Target and ES after the Closing,
shall also acknowledge participation in the CID for the remainder of the term
(expiring in 2023).

(i) Assignment and Assumption of Redevelopment Agreement. The Assignment and
Assumption of Redevelopment Agreement substantially in the form attached hereto
as Exhibit C.

(j) Agreement between Buyer and Four Seasons Hotels Limited. An agreement (the
“Four Seasons Agreement”), in form and substance reasonably satisfactory to
Sellers and Buyer, with Four Seasons Hotels Limited whereby Buyer (i) agrees
that the Hotel Agreements continue in full force and effect, and (ii) assumes
all of the contractual obligations of “Owner” as contained in the Hotel
Agreements.

 

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(k) Estoppel Certificate. An estoppel certificate provided by Four Seasons
Hotels Limited pursuant to Section 24.14 of the Hotel Management Agreement.

(l) Good Standing Certificates. A certificate of good standing of each Seller
and each Company in each case, issued as of a date not earlier than five (5)
days prior to the Closing Date by the Secretary of State of the State in which
each such Seller or Company, as applicable, is incorporated, organized or
qualified to do business.

(m) Secretary’s Certificates. A certificate of the secretary of each Seller and
each Company, dated the Closing Date, in form and substance reasonably
satisfactory to Buyer, certifying as to: (i) the Governing Documents of such
Seller or Company, (ii) that there have been no amendments to such Governing
Documents and that such Governing Documents are in full force and effect as of
the Closing Date, (iii) the resolutions of the board of directors, or the
equivalent governing body if such Seller or Company is not a corporation, of
each such Seller or Company authorizing the transactions contemplated by this
Agreement and the execution, delivery and performance of this Agreement and each
Ancillary Agreement to which such Seller or Company is a party, (iv) specimen
signatures and incumbency of all officers of such Seller or Company authorized
to execute this Agreement and each Ancillary Agreement, and (v) the minute books
of such Company (if any).

(n) Payoff Letters; Release of Guarantees. Sellers shall deliver to Buyer
letters or releases of guarantees, in form and substance reasonably satisfactory
to Buyer, evidencing that all Indebtedness of the Companies will be paid in full
at the Closing (other than Indebtedness of Parent which is guaranteed by the
Companies, as to which Sellers shall deliver to Buyer evidence, in form and
substance reasonably satisfactory to Buyer, of the release of the Companies from
the obligations under their respective guarantees) and authorizing the
Companies, Buyer or its agents to file at the Closing UCC-3 Termination
Statements with respect to any Lien associated with such Indebtedness (including
Liens securing such Indebtedness of Parent).

(o) Consents, Etc. Sellers shall have delivered to Buyer copies of all filings,
notices and consents set forth on Section 4.2(o) of the Sellers Disclosure
Letter, which filings, notices and consents shall be in full force and effect as
of the Closing Date.

(p) Assignments. Sellers shall have delivered to Buyer copies of (i) all
assignments with respect to the Contracts set forth on Section 4.2(p) of the
Sellers Disclosure Letter, (ii) a Permit in form and substance comparable to
Encroachment Permit No. 111495, issued to Target (the Contracts and Permit in
clauses (i) and (ii) together, the “Assigned Contracts”), which assignments
shall be in full force and effect as of the Closing Date, and (iii) to the
extent required consents are obtained, the Contracts listed in Section 8.8(a) of
the Sellers Disclosure Letter.

(q) Real Property. Sellers shall have delivered to Buyer a full-sized copy of
the updated and recertified Surveys in accordance with Section 12.2 hereof and
the original or copies of the Closing Title Policies and any other reports and
documents related to the ownership and condition of the Real Property in
Sellers’ possession or control.

 

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(r) Assignment and Assumption or Termination of Certain Excluded Contracts. With
respect to each Excluded Contract to which any Company is a party that has been
assigned and assumed or terminated with respect to such Company prior to the
Closing, Sellers shall have delivered to Buyer an agreement, in form and
substance reasonably satisfactory to Buyer, between one or more Sellers and the
applicable Companies, providing for the assignment to and assumption by a Seller
or the termination with respect to the applicable Companies of each such
Excluded Contract. Any such Excluded Contract that has not been so assigned and
assumed or terminated prior to the Closing, shall be governed by Section 8.8(c)
or 8.8(d) hereto, as applicable.

(s) 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 or a new Title
Insurance Policy).

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLERS

Sellers hereby jointly and severally represent and warrant to Buyer that the
statements contained in this Article 5 are true and correct as of the Effective
Date and will be true and correct as of the Closing Date (in each case, 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 with
respect to the representations and warranties of Sellers contained in this
Article 5 delivered by Sellers to Buyer herewith (the “Sellers Disclosure
Letter”). The Sellers’ 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 5.1 Organization of Sellers. Each Seller is duly organized or
incorporated, as applicable, and validly existing under the laws of its state of
organization or incorporation, as applicable, and has all requisite power and
authority to own, lease and operate its assets and to carry on its business as
now being conducted. Each Seller is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified, licensed or in good standing would not, individually or in the
aggregate, be reasonably likely to (x) have a material adverse effect on Parent
and its subsidiaries taken as a whole or a Company Material Adverse Effect or
(y) materially impair or materially delay the Closing. Holdco is a direct
wholly-owned Subsidiary of Parent.

 

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

(a) Each Seller 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 and perform its
obligations hereunder and thereunder. Each Seller’s execution and delivery of
this Agreement and each Ancillary Agreement to which it is a party and the
consummation by each Seller of the transactions contemplated hereby and thereby
and performance of its obligations hereunder and thereunder have been duly
authorized by all necessary action on the part of Sellers. This Agreement has
been, and each Ancillary Agreement will be at or prior to the Closing, duly
executed and delivered by each Seller 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 each Seller, enforceable against
such Seller 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 each Seller of this Agreement and each
Ancillary Agreement to which it is a party does not, and the consummation by
each Seller of the transactions contemplated hereby and thereby and the
compliance by such Seller with any provisions hereof or thereof will not,
(i) result in any violation or breach of, any provision of the organization
documents of such Seller, (ii) (assuming that prior to the Closing consents from
the requisite lenders and administrative agent under the Credit Agreement are
obtained, or an amendment to the Credit Agreement is entered into, to permit the
disposition of the Equity Interests and the transactions contemplated by this
Agreement) 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 any Seller is a party or by which any Seller 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 any Seller are a party or by which any Seller or the Purchased
Assets may be bound or affected, or (iv) subject to the governmental filings and
other matters referred to in Section 6.2(c) hereof, violate any permit,
concession, franchise, license, judgment, or Law applicable to any Seller or the
Purchased Assets, except, in the case of clauses (ii), (iii) and (iv), for any
such breaches, 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 and its subsidiaries taken as a whole 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,
arbitral body administrative agency, commission, Gaming Authority or other
governmental or regulatory authority or instrumentality (“Governmental Entity”)
is required by or with respect to either Seller in connection with the execution
and delivery of this Agreement or the Ancillary Agreements by either Seller, the
compliance by either Seller with

 

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any of the provisions hereof or thereof, or the consummation by either Seller of
the transactions to which it is a party that are contemplated hereby, except for
(i) any approvals and filing of notices required under the Gaming Laws, (ii) the
approval of, or notice to, the FTC, (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 any 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
and its subsidiaries taken as a whole or a Company Material Adverse Effect or
would not 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 5.3 Title to Equity Interests. Sellers are the record and beneficial
owners of all Equity Interests, free and clear of all Liens (other than
Permitted Liens), or any other restrictions on transfer other than restrictions
on transfer arising under applicable securities Laws and Gaming Laws.

Section 5.4 Litigation. Except with respect to the Administrative Complaint,
there is no Action against any Seller, pending, or as to which any Seller has
received any written notice of assertion or which, to any Seller’s knowledge,
have been threatened against, any Seller, the Purchased Assets, the Real
Property or the Business before any Governmental Entity or with respect to this
Agreement 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 6

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANIES

Sellers hereby jointly and severally represent and warrant to Buyer that the
statements contained in this Article 6 are true and correct as of the Effective
Date and will be true and correct as of the Closing Date (in each case, 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 with
respect to the representations and warranties of Sellers contained in this
Article 6, delivered by Sellers 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 6.1 Organization of the Companies; Capitalization. Each of the Companies
is duly organized and validly existing under the laws of its state of
organization, and the Companies collectively have all requisite power and
authority to own, lease and operate its assets and to carry on the Business as
now being conducted. Each of the Companies is duly qualified

 

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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 any Company, any other
equity related interests of such Company or any other securities convertible
into, or exercisable or exchangeable for, equity interests of such 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 any of the Companies and there are no “phantom
stock” rights, stock appreciation rights or other similar rights with respect to
any of the Companies.

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

(a) Each of the Companies 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. Each of the
Companies’ execution and delivery of this Agreement and each Ancillary Agreement
to which it is a party and the consummation by such Company of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of such Company. This Agreement has been, and each Ancillary
Agreement will be at or prior to Closing, duly executed and delivered by each
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 each Company, enforceable against such
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) Except as set forth in Section 6.2(b) of the Company Disclosure Letter, the
execution and delivery by each Company of this Agreement and each Ancillary
Agreement to which it is a party, the consummation by each Company of the
transactions contemplated hereby and thereby, and the compliance of each Company
with any provisions hereof or thereof, does not and will not, (i) result in any
violation or breach of, any provision of the organization documents of such
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 such Company is a party or by which such 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 any Company is a party or by which such Company or the
Purchased Assets may be bound or affected, or (iv) subject to the governmental
filings and other matters referred to in (c) hereof, violate any permit,
concession,

 

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franchise, license, judgment, or Law applicable to any Company or the Purchased
Assets, except, in the case of clauses (ii), (iii) and (iv), for any such
breaches, 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) Except as set forth in Section 6.2(c) of the Company Disclosure Letter, 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 Companies in connection with the
execution and delivery of this Agreement or the Ancillary Agreements by the
Companies or the consummation by the Companies of the transactions to which it
is a party that are contemplated hereby, except for (i) the approval of, or
notice to, the FTC, (ii) 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, (iii) 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 any Company conducts any business or owns any Purchased
Assets, the failure of which to make or obtain 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 (iv) 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 Financial Statements. Section 6.3 of the Company Disclosure Letter
contains a true and complete copy of the unaudited balance sheet and income
statements of the Companies as of and for the year ended December 31, 2012 and
December 31, 2011 and the unaudited interim balance sheet and income statement
for the Companies as of and for the six month period ended June 30, 2013 (the
“Financial Information”). Except as noted therein, the Financial Information was
prepared from the books and records of the Companies and in accordance with GAAP
in effect at the time of such preparation applied on a consistent basis
throughout the periods involved and fairly presents the financial position and
results of operations of the Companies as of such dates and the results of the
Companies for such periods, except, in the case of unaudited financial
statements, of normal year-end and audit adjustments and the absence of
footnotes.

Section 6.4 No Undisclosed Liabilities. Except (i) as set forth in the Financial
Information and (ii) for Liabilities incurred since December 31, 2012 in the
Ordinary Course of Business, the Companies have no Liabilities of a type
required to be reflected on the face of a balance sheet prepared in accordance
with GAAP, which would, individually or in the aggregate, be reasonably likely
to cause a Company Material Adverse Effect.

Section 6.5 Taxes.

(a) The Companies have timely filed with the appropriate Governmental Entities
all federal income Tax Returns and all other Tax Returns required to be filed by
the Companies and all such Tax Returns are true, complete and accurate in all
material respects. The Companies have timely paid all Taxes due from the
Companies whether or not shown on such Tax Returns or the Companies have
established an adequate reserve therefor in the Financial Information in
accordance with GAAP.

 

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(b) Other than as set forth on Section 6.5(b)(i) of the Company Disclosure
Letter, there are no material claims, actions, examinations, audits or other
proceedings with any Governmental Entities presently ongoing or pending or
threatened in writing in respect of any Taxes of the Companies. There are no
outstanding waivers extending the statutory period of limitation relating to
Taxes of the Companies. Section 6.5(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 Companies 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) The Companies have withheld and, to the extent required to be paid, have
timely paid to the appropriate authorities or set aside in an account for such
purpose, to the extent material, all proper and accurate amounts that are
required to be withheld, so paid or so set aside, in each case in compliance
with all Tax withholding provisions on amounts paid or owed to any employee,
creditor, stockholder or member, or other third party.

(d) The Companies will not be required to include any amount in, or exclude any
item of deduction from, income for any Taxable period (or portion thereof)
ending after the Closing Date as a result of (i) a change in accounting method
for any Taxable period (or portion thereof) ending on or before the Closing
Date, (ii) pursuant to any agreement with any Governmental Entity executed on or
prior to the Closing Date or (iii) the installment method of accounting, open
transaction, the completed contract method of accounting, the long-term contract
method of accounting, the cash method of accounting, (iv) prepaid amounts
received on or prior to the Closing Date, (v) an election under Code
Section 108(i), or otherwise.

(e) No written claim has ever been made by any Governmental Entity against any
Company in any jurisdiction in which such Company does not file Tax Returns that
any such Person is or may be subject to taxation by that jurisdiction.

(f) Each of RE, ES and STLH is, and has always been, classified for federal
income Tax purposes as an entity disregarded as separate from Parent for federal
income Tax purposes. None of RE, ES nor STLH has made an election on IRS Form
8832 to be treated as an association taxable as a corporation. As of the Closing
Date, STLH will hold only nominal assets.

(g) No Company has consummated, participated in, or is currently participating
in any transaction that was or is a “tax shelter,” “listed transaction” or
“reportable transaction” as defined in Sections 6662, 6662A, 6011, 6012, 6111 or
6707A of the Code or the Treasury Regulations promulgated thereunder, including,
but not limited to, transactions identified by the IRS by notice, regulation or
other form of published guidance as set forth in Treasury Regulation
Section 1.6011-4(b)(2).

 

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(h) Except for the STLH Equity Interests, none of the Purchased Assets consists
of an equity interest in any Person.

(i) There are no Liens for Taxes on any Company (including, for the avoidance of
doubt, upon the stock of Target or the membership interests of RE, ES or STLH)
or any Purchased Assets, except for Permitted Liens as to which adequate
reserves have been established on the financial statements of the Companies.

(j) No Company is 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 any
Company and no Tax ruling has been requested or received by or with respect to
any Company, in each case, that (x) would bind Buyer or any of its Affiliates
(including any Company) after the Closing and (y) would have, or be reasonably
likely to have, a material adverse effect on the Purchased Assets, the Business,
Buyer, any Affiliate of Buyer or any Company after the Closing.

(k) Within the past ten (10) years, no Company has been a member of an
affiliated group of corporations within the meaning of Section 1504 of the Code,
or a member of a combined, consolidated or unitary group for state, local or
foreign Tax purposes, and none of the Companies is a successor to any such
entity, except for any group the common parent of which was Parent. No Company
has liability for the Taxes of any Person under Section 1.1502-6 of the Treasury
Regulations (or similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.

Section 6.6 Real Property.

(a) The Companies have fee title to the Real Property described in
Section 6.6(a) of the Company Disclosure Letter, and the Real Property so
described constitutes all of the Real Property owned by the Companies or used in
connection with the Business other than as set forth in Section 6.6(b).
Section 6.6(a) of the Company Disclosure Letter sets forth a complete list of
all addresses and tax parcel numbers associated with the Real Property owned by
each Company, together with a list of the most recently issued existing Title
Policies. The property numbers used in Section 6.6(a) of the Company Disclosure
Letter to identify parcels of Real Property shall be used for purposes of
identifying Real Property in this Agreement and in the Company Disclosure
Letter.

(b) All Real Property leased by any Company and all Real Property leased by any
Seller and used in the Business is described on Section 6.6(b) of the Company
Disclosure Letter. No Company uses or occupies or requires the right to use or
occupy any Real Property other than the Real Property identified in Sections
6.6(a) and 6.6(b) of the Company Disclosure Letter.

 

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(c) There are no actions, proceedings, governmental investigations,
arbitrations, unsatisfied orders or judgments, actions, litigation, suits, or
other proceedings, pending (or, to the knowledge of Sellers, overtly
contemplated or threatened) against any Company or otherwise relating to the
Real Property or the interests of any 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) No Company has received written notice that there are condemnation, eminent
domain, or similar proceedings or actions pending or, to the knowledge of
Sellers, threatened with regard to the Real Property that would materially
impair the use of the Real Property in the Business as it is currently
conducted.

(e) There are no violations or alleged violations of any Laws applicable 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 Sellers’ 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 knowledge of Sellers, all 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, except where
the failure to be so, in the aggregate, would not be reasonably likely to have a
Company Material Adverse Effect. The Companies have provided, or upon Buyer’s
request shall provide, accurate and complete copies of any engineering or
structural reports concerning any Real Property.

(g) Except as may otherwise be set forth in the Company Disclosure Letter or in
the Title Commitments set forth in Section 6.6(a) of the Company Disclosure
Letter, no owned Real Property is subject to any Lien that is not a Permitted
Lien or a Permitted Encumbrance.

(h) Except for work or services being performed in the Ordinary Course of
Business consistent with past practices, all accounts for work and services
performed or materials placed or furnished upon or in respect of the
construction and completion on any of the Real Property will be fully paid as of
the Closing Date.

(i) Set forth in Section 6.6(i) of the Company Disclosure Letter is an accurate
and complete list of the Private Restrictions applicable to the Real Property,
which are not Permitted Encumbrances. Except as otherwise set forth in
Section 6.6(i) of the Company Disclosure Letter, no Seller has received no
notice of any violation of any Private Restriction and no Company is in
violation of any of such Private Restrictions.

 

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(j) Except for private street right-of-way owned by Target or ES and used for
ingress and egress of the general public and except as set forth in the Existing
Surveys or Section 6.6(j) of the Company Disclosure Letter, no part of any
Improvement encroaches on any real property adjacent to the Real Property, and
there are no buildings, structures, Fixtures or other improvements primarily
situated on adjacent real property which encroach on any part of the Real
Property. The Real Property (i) has actual open vehicular and pedestrian access
to a public road or right of way directly or through Real Property owned by
Companies, (ii) is supplied with public or quasi-public utilities and other
services appropriate for the operation of the Business, and (iii) is not located
within any Special Flood Hazard Area and no wetlands, as defined by 40 C.F.R. §
230.3(t), are located within the Real Property.

(k) There are no options, rights of first refusal or similar rights in favor of
any Person to purchase, acquire or lease any portion of the Real Property or any
interest therein.

Section 6.7 Intellectual Property.

(a) Section 6.7(a)(1) of the Company Disclosure Letter lists all of the material
trademark and service mark registrations and applications, and all material
common law trademarks and service marks, owned by the Companies as of the
Effective Date and used in connection with the operation of the Business, and
all of the Internet domain names registered by or for the benefit of the
Companies and used in connection with the operation of the Business (such of
those marks and domain names that are identified on Section 6.7(a)(1) of the
Company Disclosure Letter as used exclusively in the operation of the Business,
collectively, the “Transferred Marks and Domain Names”). The Transferred Marks
and Domain Names will be owned by the Companies at the Closing.
Section 6.7(a)(2) of the Company Disclosure Letter lists all material issued
patents or patent applications or any copyright registrations and applications
therefor that are owned by the Companies and used in the Business (such of those
items that are identified on Section 6.7(a)(2) of the Company Disclosure Letter
as used exclusively in the operation of the Business, collectively, the “Other
Transferred Registered IP”). A Company is the sole and exclusive owner of all
right title and interest in and to the Transferred Marks and Domain Names and
the Other Transferred Registered IP. No Transferred Marks and Domain Names or
Other Transferred Registered IP are now involved in any opposition or
cancellation proceeding, and no such proceeding is or, since January 1, 2010,
has been threatened in writing with respect thereto. To Sellers’ knowledge, all
Transferred Marks and Domain Names and Other Transferred Registered IP are
subsisting, valid and enforceable. 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. Neither the Companies nor any of their
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 Effective Date. To
the knowledge of Sellers, no Person is infringing, misappropriating, or
otherwise violating any Intellectual Property owned or licensed by any of the
Companies, and no such claims are pending or, since January 1, 2010, have been
threatened against any Person by any of the Companies.

(b) Except as set forth on Section 6.7(b) of the Company Disclosure Letter, the
Companies own exclusively or have license rights to, free and clear of all Liens
(except for any Permitted Liens or Permitted Encumbrances), all Transferred
Marks and Domain Names and the other Transferred Registered IP. Neither the
Companies nor any of their Affiliates has received any written notice or claim
challenging any Company’s ownership of any Transferred

 

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Marks and Domain Names and the Other Transferred Registered IP, in each case
that remains pending or unresolved as of the Effective Date. To Sellers’
knowledge, as of the Effective Date, the Companies own or possess, and at the
Closing, the Companies will own or possess, adequate and enforceable rights to
use all Transferred Marks and Domain Names and Other Transferred Registered IP
or Intellectual Property licensed to any of the Companies pursuant to a Company
Contract that is used in connection with the Business, as currently operated,
without restrictions or conditions on use (except as set forth in the Company
Contracts), except as would not, individually or in the aggregate, be reasonably
likely to have a Company Material Adverse Effect.

(c) The Companies are in compliance in all respects with all applicable Laws,
rules and regulations governing the collection and use of personal information
and such collection and use are in accordance in all respects with the privacy
policies under which the information was collected. Sellers and the Companies
have the right to transfer all customer data contained in the Customer Database
Records, and any other personally identifiable information transferred to Buyer
under this Agreement, and such transfer does not violate any privacy or data
security law or regulation, or any other applicable law or regulation, or
violate any agreements with any individuals or third parties, including, without
limitation, any privacy policies under which the information was collected.
Since January 1, 2010, neither the Companies nor any of their Affiliates have
received any written notice or claim asserting violation of any applicable laws,
rules and regulations governing the collection and use of personal information
or violation of any Company’s privacy policies.

Section 6.8 Agreements, Contracts and Commitments. Except for those Company
Contracts that are terminable by a Company upon sixty (60) days’ notice or less
without penalty and except for the Excluded Contracts, Section 6.8 of the
Company Disclosure Letter sets forth a complete, accurate and current list of
(a) all Hotel Agreements, (b) all Hotel Letter Agreements, (c) any Company
Contract providing for aggregate annual payments to or by the Companies in
excess of Two Hundred Thousand Dollars ($200,000.00), (d) any Company Contract
that grants to any Person the right to occupy (except pursuant to reservations
made in the Ordinary Course of Business) any portion of the Real Property,
(e) any Company Contract that grants to any Seller or any Company the right to
use, occupy, or access any real property other than the Real Property owned by
the Companies, and (f) any Company Contract (excluding, for the avoidance of
doubt, any Permit) with the CID, LCRA or any other governmental or
quasi-governmental entity (collectively the “Material Contracts”), and, to
Sellers’ knowledge, Section 6.8 of the Company Disclosure Letter sets forth a
materially complete, accurate and current list as of the Effective Date of all
other Company Contracts. Section 6.8 of the Company Disclosure Letter may be
amended after the Effective Date (i) upon mutual agreement of the parties, to
add as Material Contracts additional Company Contracts entered into after the
Effective Date by any Company in compliance with Section 8.1(d), or (ii) by
Sellers or any Company to reflect changes resulting from actions permitted by
Section 8.1(d). Each Material Contract is a valid and binding obligation of the
Company party thereto and, to the knowledge of Sellers, is a valid and binding
obligation of each other party thereto, and is in full force and effect and
enforceable by such Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect
affecting creditors’ rights generally and (ii) general principles of equity;
except for the failure to be valid, binding or in full force and

 

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effect, 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. There is no breach or violation of or default by
any Company or, to Sellers’ knowledge, by any other party under any of the
Material Contracts, that 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 or any Company has received any
written notice of the intention of any Person to terminate, nor has there been
any termination of, any Material Contract since January 1, 2010. Sellers have
made available to Buyer a true, correct and complete copy of all Material
Contracts, together with all amendments, waivers or other changes thereto.

Section 6.9 Litigation.

(a) Other than with respect to the Administrative Complaint or as set forth on
Section 6.9(a) of the Company Disclosure Letter, there is no action, suit or
proceeding, claim, arbitration or investigation (an “Action”) against any
Company (including without limitation, with respect to workers’ compensation),
pending, or as to which any Company has, or Sellers have, received any written
notice of assertion or, to Sellers’ knowledge, threatened against, any 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
subject the Companies, taken as a whole, to (i) with respect to any such Actions
pending, or as to which any Company has, or Sellers have, received any written
notice of assertion or, to Sellers’ knowledge, are threatened as of the
Effective Date, Liability that is in excess of Two Hundred Thousand
Dollars ($200,000) or (ii) with respect to any such Actions as to which any
Company, or Sellers, receive any written notice of assertion or, to Sellers’
knowledge, threat between the Effective Date and the Closing Date, Liability not
otherwise taken into account in the determination of Final Working Capital that
is final, binding and conclusive for purposes of this Agreement pursuant to
Section 3.2(b) that, in the aggregate with any Liabilities described in
Section 6.12(b)(ii)(y), is in excess of Seven Hundred Fifty Thousand Dollars
($750,000).

(b) Other than the FTC Documents, the Companies, 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 be reasonably likely to
materially interfere with, the ability of the Business to be conducted as it is
currently conducted or to utilize its properties, Purchased Assets and rights as
currently utilized.

Section 6.10 Environmental Matters. Except for matters set forth in the
environmental studies and documents set forth in Section 6.10 of the Company
Disclosure Letter, true and complete copies of which have been made available to
Buyer, (a) to Sellers’ knowledge, there are no Environmental Liabilities, (b) to
Sellers’ knowledge, there are no Environmental Conditions, (c) there is no
pending or, to Sellers’ knowledge, threatened, enforcement action regarding an
Environmental Condition or compliance with Environmental Laws with respect to
the Real Property or the Business, (d) to Sellers’ knowledge, 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 Companies,
(e) since January 1, 2010, no Company has

 

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received a written notice from any Governmental Entity or third party alleging a
violation of any Environmental Law, and (f) to Sellers’ knowledge, each Company
is in compliance with all applicable Environmental Laws. The Companies possess
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 practicable, and in any
event within thirty (30) days after the Effective Date, the Companies will
provide Buyer with true and complete copies of all material licenses, permits,
certificates, registrations, approvals, authorizations and consents from any
Governmental Entity issued to any Company under Environmental Laws. The
representations and warranties included in this Section 6.10 shall be the sole
and exclusive representations and warranties of Sellers with respect to
environmental matters.

Section 6.11 Permits; Compliance with Laws. Each Company and, to Sellers’
knowledge, each Company’s directors, officers and key employees hold all
permits, registrations, findings of suitability, licenses, and required
approvals of all Gaming Authorities necessary for the conduct of the Business as
currently conducted, each of which is in full force and effect, and, to Sellers’
knowledge, no event has occurred which permits, or upon the giving of notice or
passage of time or both, would permit, revocation, non-renewal, modification,
suspension, limitation or termination of any of such permits, registrations,
findings of suitability, licenses, and approvals that are currently in effect
necessary for the conduct of the Business as currently conducted. The Companies
hold all permits, registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals of all Governmental
Entities (other than 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 or the loss of
which would not, individually or in the aggregate, be reasonably likely to have
a Company Material Adverse Effect. The Business is, and since January 1, 2010
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. No
Company has received written notice of any investigation or review by any
Governmental Entity with respect to the Company Permits, the Real Property, the
Business, the other Purchased Assets that is pending, and, to Sellers’
knowledge, no investigation or review is threatened, except as would not
reasonably be expected to subject the Company to material Liability.

Section 6.12 Labor Matters.

(a) Sellers have made available to Buyer a schedule setting forth the following
information for each Property Employee as of June 13, 2013: title,
department, full-time/part-time status, pay type, date of hire, salary/wage
rate, job grade and target bonus percentage.

(b) Except as set forth in Section 6.12(b) of the Company Disclosure Letter,
(i) each 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”), (ii) (x) as of the Effective Date, there
are no unfair labor practice charges,

 

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complaints or petitions for elections pending against any Company before the
National Labor Relations Board, or any similar Governmental Entity, or of which
any Company has received written notice, and (y) there are no such charges,
complaints or petitions that commence, or of which any Company receives written
notice, between the Effective Date and the Closing Date, that subject the
Companies to Liability not otherwise taken into account in the determination of
Final Working Capital that is final, binding and conclusive for purposes of this
Agreement pursuant to Section 3.2(b) that, in the aggregate with any Liabilities
described in Section 6.9(a)(ii), is in excess of Seven Hundred Fifty Thousand
Dollars ($750,000); (iii) there is no strike, slowdown, work stoppage or
lockout, or, to Sellers’ knowledge, threat thereof, by or with respect to any
Property Employees, that, individually or in the aggregate, would be reasonably
likely to have a Company Material Adverse Effect, and no such strike, slowdown,
work stoppage, lockout by or with respect to any Property Employees has occurred
in the past five years. Buyer acknowledges that UNITE HERE, Local 74 represents
approximately 500 employees at the Casino, and good faith negotiations are
continuing on an ongoing basis with respect to a collective bargaining
agreement. The representations and warranties included in this Section 6.12(b)
shall be the sole and exclusive representations and warranties of Sellers with
respect to unfair labor practice charges, complaints or petitions for elections
pending against any Company before the National Labor Relations Board or any
similar Governmental Entity.

Section 6.13 Employee Benefits.

(a) Section 6.13(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) written
(and material unwritten) 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, paid time off, sick pay, sick leave, supplemental
retirement, unemployment and any other compensation or benefit plans, policies,
programs, agreements, arrangements, commitments and/or practices (whether or not
insured) that are maintained or sponsored by Sellers or any of their Affiliates
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”), (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 Companies do not sponsor, maintain, or
otherwise have any obligations with respect to, nor have the Companies 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 Companies) with respect to which any of the Companies is a sponsor or
contributor as a participating employer).

(b) True and complete copies (or accurate summaries) of each Company Benefit
Plan have been made available to Buyer, including all applicable amendments,
contracts and agreements relating thereto that could reasonably be expected to
affect the Companies’ obligations with respect to the Company Benefit Plans or
Buyer’s obligations under Section 8.4(b), Section 8.4(c) and Section 8.4(d)
hereof.

 

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(c) Except as disclosed in Section 6.13(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
Effective Date 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, to
Sellers’ knowledge, no fact or event has occurred that would be reasonably
likely to affect adversely the qualified status of any such Company Benefit Plan
or the exempt status of any such trust; and (ii) 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, and no Company is or has been a participating employer in any
Multiemployer Plan or Multiple Employer Plan. To Sellers’ knowledge, there does
not now exist, nor do any circumstances exist that would be reasonably likely to
result in, any Controlled Group Liability, including, without limitation, any
withdrawal or similar liability, with respect to any Company Benefit Plan that
would be a liability of any of the Companies following the Closing.

(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 any of the Companies’ ERISA
Affiliates, other than pursuant to Section 4980B of the Code or any similar
state Law. Each 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,
except where the failure to so comply, individually or in the aggregate, would
not be reasonably likely to have a Company Material Adverse Effect.

(e) 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, constitute an event under any Company Benefit
Plan that will (i) result in any payment or benefit becoming due or payable, or
required to be provided, to any Property Employee, (ii) increase the amount or
value of any benefit or compensation otherwise payable or required to be
provided to any such Property Employee, (iii) result in the acceleration of the
time of payment, vesting or funding of any such benefit or compensation payable
to a Property Employee, or (iv) result in any “excess parachute payment” within
the meaning of Section 280G(b)(1) of the Code with respect to a Property
Employee that is a “disqualified individual” within the meaning of Section 280G
of the Code.

(f) To Sellers’ knowledge, all Company Benefit Plans have been administered in
form and in operation in accordance with their terms and applicable law
(including any guidance issued thereunder), except as would not reasonably be
expected to result in any Liability to the Companies or Buyer (or Buyer’s
Affiliates) and no Company Benefit Plan is

 

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currently or has within the three (3) years prior to the Effective Date been the
subject of any actual, or, to Sellers’ knowledge, threatened, legal action by
any party, or inquiry, examination or audit by a Governmental Entity or is the
subject of an application or filing under, or is a participant in, an amnesty,
voluntary compliance, self-correction or similar program sponsored by any
Governmental Entity. There are no actions, suits, or claims (other than routine
claims for benefits) pending or, to Sellers’ knowledge, threatened, involving
any Company Benefit Plan or the assets thereof.

(g) Each Company Benefit Plan that is subject to the requirements of
Section 409A of the Code has been maintained in form and in operation in
compliance with such section and all applicable regulatory guidance (including,
without limitation, proposed regulations, notices, rulings, and final
regulations), except as would not reasonably be expected to result in any
material Liability to any of the Companies, and no Company has any obligation to
gross-up, indemnify, or otherwise reimburse any current for former service
provider to such Company for any consequences (including but not limited to
taxes and interest) incurred by such service provider under Section 409A of the
Code.

(h) With respect to each Company Benefit Plan, all contributions or premium
payments due and payable on or before the Closing Date have been timely made
and, to the extent not presently payable, appropriate reserves and proper
accruals have been established for the payment thereof, except as would not
reasonably be expected to result in any material Liability to any of the
Companies.

(i) Each of the Companies is in compliance in all material respects with all
applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health,
including Laws concerning unfair labor practices within the meaning of Section 8
of the National Labor Relations Act, and the employment of non-residents under
the Immigration Reform and Control Act of 1986. All of the Companies’ employees
are lawfully authorized to work in the United States in accordance with
applicable federal and state law, and none of the Companies’ employees are
illegal aliens. There are no charges, governmental audits, investigations,
administrative proceedings or complaints concerning employment practices pending
or, to the knowledge of Sellers, threatened before any federal, state, or local
agency or court, except to the extent disclosed in Section 6.13(i) of the
Company Disclosure Letter, and, to the knowledge of Sellers, no basis for any
such matter exists. Each employee, independent contractor, and consultant of any
Company has been, and is, properly classified as such under applicable law.

Section 6.14 Brokers. Except for the fees and commissions of Goldman Sachs
(which fees and commissions are the sole responsibility of Sellers), Sellers
have not employed and no Person has acted directly or indirectly as a broker,
financial advisor or finder for Sellers and Sellers have not incurred any
liability for any brokerage fees, commissions or finder’s fees in connection
with the transactions contemplated by this Agreement.

Section 6.15 Title to Purchased Assets; Sufficiency of Purchased Assets. The
Companies have good and marketable title to, or a valid leasehold interest in,
the material tangible Personal Property constituting Purchased Assets, free and
clear of any Encumbrances or Liens other than for Permitted Encumbrances and
Permitted Liens. To Sellers’ knowledge, all of

 

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the tangible Personal Property constituting Purchased Assets, taken as a whole,
are structurally sound, are in good operating condition and, taken as a whole,
such tangible Personal Property constituting Purchased Assets is not in need of
maintenance or repairs except for ordinary, routine maintenance and repairs or
except where the failure to be so, in the aggregate, would not be reasonably
likely to have a Company Material Adverse Effect. The tangible Personal Property
constituting Purchased Assets currently owned or leased by any Company, together
with all other assets of the Companies constituting Purchased Assets, the
Excluded Assets, and any assets and services the benefit of which is to be
provided under the Transition Services Agreement, taken as a whole, are
sufficient in all material respects for the continued conduct of the Business in
substantially the same manner as currently conducted. The Purchased Assets
include all of the “Lumiere Assets,” as defined in the Order.

Section 6.16 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.

Section 6.17 Absence of Changes. From December 31, 2012 through the Effective
Date, 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 likely, individually or in the
aggregate (x) to have a Company Material Adverse Effect or (y) to materially
impair or materially delay the Closing.

Section 6.18 Insurance. Section 6.18 of the Company Disclosure Letter sets forth
a true and complete list of all current insurance policies (specifying each
insured, the insurer, the amount of coverage, the type of insurance, the policy
number, the expiration date, the annual premium, and any pending claim
thereunder) maintained by any Seller or any of their respective Affiliates
(including the Companies) which insure the assets, business, operations,
employees, officers and directors of any Company. Sellers have made true and
complete copies of all such insurance policies available to Buyer. Such
insurance policies are in full force and effect and shall remain in full force
and effect following the consummation of the transactions contemplated by this
Agreement. To Sellers’ knowledge, all premiums due on such insurance policies
have either been paid or, if due and payable prior to Closing, will be paid
prior to Closing in accordance with the payment terms of each insurance policy.
The insurance policies do not provide for any retrospective premium adjustment
or other experience-based liability on the part of any Company. The insurance
policies are of the type and in the amounts customarily carried by Persons
conducting a business similar to the Companies and are sufficient for compliance
in all material respects with all applicable Laws and Material Contracts to
which any Company is a party or by which any Company is bound.

Section 6.19 Hotel Agreements and Redevelopment Agreement. Each of the Hotel
Agreements and the Redevelopment Agreement is a valid and binding obligation of
the Company party thereto and, to the knowledge of Sellers, is a valid and
binding obligation of each other party thereto, and is in full force and effect
and enforceable by such Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect
affecting creditors’ rights generally and (ii) general principles of equity.
There is no breach or violation of or default by any Company or, to Sellers’
knowledge, by any other party under any

 

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Hotel Agreement or the Redevelopment Agreement nor have Sellers or the Companies
received any written notice of any default under any Hotel Agreement or the
Redevelopment Agreement. Assuming that Buyer is a “Qualified Person” as defined
in the Hotel Management Agreement and Buyer has executed and delivered the Four
Seasons Agreement, the execution and delivery by Sellers of this Agreement and
the consummation of the transactions contemplated hereby does not and will not
result in any violation or breach of any Hotel Agreement. Subject to any consent
which may be required from the LCRA, the execution and delivery by Sellers of
this Agreement and the consummation of the transactions contemplated hereby does
not and will not result in any violation or breach of the Redevelopment
Agreement. None of Sellers or any Company has received any written notice of the
intention of any Person to terminate, nor has there been any termination of, any
Hotel Agreement or the Redevelopment Agreement. Sellers have made available to
Buyer all material written notices and submissions, submitted or delivered by or
to any Company since January 1, 2010 pursuant to or in connection with the Hotel
Agreements and the Redevelopment Agreement. To Sellers’ knowledge, as of the
Effective Date, the Four Seasons Hotel satisfies the World Class Luxury Hotel
standard (as defined in the Hotel Management Agreement and the Hotel License
Agreement), and the Casino satisfies the design and maintenance standards of the
Hotel Management Agreement. With respect to the Redevelopment Agreement,
(a) Parent has written acknowledgement from the LCRA that its obligations under
Section 3.12.1 of the Redevelopment and with respect to the Essential Elements
of the Project on Exhibit B to the Redevelopment Agreement are satisfied,
(b) with respect to Section 3.8, Parent has satisfied the Required Expenditure
requirements and has constructed a luxury class, fully integrated mixed-use
gaming facility and hotel development, including a “Four Seasons” branded hotel,
(c) Parent has satisfied its obligations to the LCRA with respect to the Hammond
Apartments, L.P. required under the Redevelopment Agreement, (d) Parent has
completed the improvements to the Ancillary Development Site under
Section 3.12.3, and (e) Parent has timely made all payments due under the
Redevelopment Agreement during the previous five (5) years.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers that the statements contained in this
Article 7 are true and correct as of the Effective Date and will be true and
correct as of the Closing Date (in each case, 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 7.1 Organization. Buyer is duly organized and validly existing under the
laws of its state of organization and has all requisite power and authority to
carry on its business as now being conducted. 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 or materially impair or materially delay the Closing.

 

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

(a) Buyer 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. 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
authorization, execution and delivery of the other parties 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 7.2(c) hereof, conflict with or violate any permit,
concession, franchise, license, judgment, or Law applicable to Buyer, 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) any approvals and filing of notices required
under the Gaming Laws, (ii) approval by, or filing a notice with, the FTC,
(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

 

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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 Sellers or the
Companies or any of their Subsidiaries, Affiliates or key employees (including
under the Gaming Laws).

Section 7.3 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 and Buyer has not incurred any liability for any brokerage
fees, commissions or finder’s fees in connection with the transactions
contemplated by this Agreement.

Section 7.4 Financing. Buyer has sufficient cash on hand or financing
availability to enable it to make payment of (x) the sum of the Purchase Price
and the Estimated Closing Payment and (y) the Final Closing Payment. BUYER
HEREBY ACKNOWLEDGES AND AGREES THAT THE RECEIPT BY BUYER OF ANY FINANCING FROM
ANY PERSON IS NOT A CONDITION, UNDER ARTICLE 9, TO BUYER’S OBLIGATION TO
PURCHASE THE EQUITY INTERESTS AT THE CLOSING.

Section 7.5 Licensability of Principals. Except as set forth in Section 7.5 of
the Buyer Disclosure Letter, none of Tropicana, its Subsidiaries (including
Buyer), its direct or indirect parent entities, or any of their respective
current executive officers and directors (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.
Buyer and each of the Buyer Related Parties are in good standing, and in
material compliance with all Gaming Laws, 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 Effective Date, 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, licensing,
permits, orders, authorizations or proceedings necessary for the consummation of
this Agreement.

Section 7.6 Permits; Compliance with Gaming Laws. Buyer, and to Buyer’s
knowledge, each of the Buyer Related Parties, and its and their respective
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 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

 

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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, 2010 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 written notice of any investigation or review by any
Governmental Entity with respect to Buyer that is pending, and, to Buyer’s
knowledge, no investigation or review is threatened, nor has any Governmental
Entity indicated in writing 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.

Section 7.7 Qualified Person. In Buyer’s reasonable opinion, Buyer is a
“Qualified Person” as defined in the Hotel Management Agreement.

Section 7.8 Opportunity to Conduct Due Diligence. 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 9 hereof.

Section 7.9 Litigation. There are no actions, claims, suits or proceedings
pending or, to Buyer’s knowledge, threatened against Buyer before any
Governmental Entity, that, individually or in the aggregate, would be reasonably
be likely to (x) have a Buyer Material Adverse Effect or (y) materially impair
or materially delay the Closing.

Section 7.10 Status of Buyer. Buyer is a direct wholly-owned subsidiary of
(a) Tropicana, or (b) a direct or indirect wholly-owned corporate subsidiary of
Tropicana. Since its formation, Buyer has been a Delaware limited liability
company and either (x) prior to or as of the beginning of the Closing Date will
be wholly owned by a domestic U.S. corporation and also treated as a disregarded
entity for U.S. federal income tax purposes, or (y) on or before the Closing
Date, will have made an election, for U.S. federal income tax purposes, on IRS
Form 8832, to be treated as an association taxable as a corporation, with such
election having effect on or before the Closing Date.

ARTICLE 8

COVENANTS

Section 8.1 Conduct of Business Prior to the Closing. During the period from the
Effective Date 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, Companies shall, and
Sellers shall cause the Companies 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)

 

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carry on the Business in the Ordinary Course of Business. Without limiting the
generality of the foregoing, except (i) as expressly provided by this Agreement
or as disclosed on Section 8.1 of the Company Disclosure Letter, (ii) as
required by the Trustee, or (iii) as is required by, or necessary pursuant to,
the FTC Documents to maintain the viability and marketability of the Casino and
to prevent the destruction, removal, wasting, deterioration, or impairment of
the Casino, except for ordinary wear and tear (including, but not limited to,
regular repair and maintenance efforts, continuation of any planned capital
expenditures, and marketing and promotional programs), during the period from
the Effective Date 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
Companies shall not, and Sellers, with respect to subsections (b) and (f) 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 Lien or Permitted Encumbrance), except for (i) sales or dispositions
of current assets in the Ordinary Course of Business, (ii) sales or dispositions
of equipment and other non-current assets (including inventory) in the Ordinary
Course of Business or that are no longer useful in the Ordinary Course of
Business, or (iii) leases of immaterial portions of the Real Property that are
terminable, without the payment of any consideration for early termination, on
no more than ninety (90) days’ notice;

(b) cause or permit any distribution or dividend in respect of the Equity
Interests other than distributions or dividends solely in cash that do not cause
the Companies’ aggregate cash balance at any time prior to the Closing to be
less than Five Million Dollars ($5,000,000.00);

(c) incur any Indebtedness except for unsecured short term Indebtedness incurred
in the Ordinary Course of Business or pursuant to guarantees of Indebtedness of
Parent and its subsidiaries, including, without limitation, Indebtedness
incurred pursuant or in relation to the Merger; provided, that all such
Indebtedness of the Companies, and any Liens arising from or related to such
Indebtedness, shall be fully paid and released at Closing (other than
Indebtedness of Parent which is guaranteed by the Companies, which guarantees
shall be released at Closing);

(d) enter into, modify, amend, terminate, consent to any modification, amendment
or termination or renew any Material Contracts or any Contract that would
constitute a Material Contract when entered into by any Company, except (i) for
modifications or amendments in the Ordinary Course of Business, (ii) for
renewals in the Ordinary Course of Business, (iii) terminations upon expiration
of Material Contracts, or (iv) as required by applicable Law; provided, that no
new Material Contract shall include a term in excess of twelve (12) months;
provided further, in each case, that no modification or amendment, or renewal
shall (x) extend the term of any Material Contract beyond twelve (12) months,
(y) incorporate terms that are materially different from the terms of such
Material Contract as of the Effective Date, or (z) subject Buyer to any material
Liability of a type to which Buyer was not subject pursuant to such Material
Contract as of the Effective Date; provided further, that no Seller or Company
shall modify, amend, terminate, consent to any modification, amendment or
termination or renew any of the Hotel Agreements or the Redevelopment
Agreements;

 

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

(f) amend any 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 split, combination, redemption, purchase,
repurchase, recapitalization, reclassification or other change in
capitalization, otherwise acquire, directly or indirectly, any equity or voting
interest in, any of the Companies, or adopt a plan of complete or partial
liquidation of any of the Companies;

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

(i) defer or fail to make Monthly Capital Expenditures that, on average from the
Effective Date until the Closing Date, are less than the Monthly Target Capital
Expenditures, or deviate in any material way from any capital expenditure or
maintenance obligation set forth in any of the Hotel Agreements or other
Material Contract;

(j) engage in any new line of business;

(k) make any material change to the Companies’ financial accounting methods,
principles or practices, except as may be required by Law or by GAAP, except
that Parent may change (i) the method for allocating corporate overhead to its
Subsidiaries (including the Companies) and (ii) the method of charging health
care and medical costs to its Subsidiaries (including the Companies) (whether by
pooling and allocating such costs to its Subsidiaries, by charging specific
health care and medical claims to its Subsidiaries or otherwise), provided, that
such change does not have an adverse effect on any of the Companies after the
Closing;

(l) settle, cancel, or compromise any Action asserted by or against any Company
or waive or release any rights of any of the Companies in any Action, except for
settlements, cancellations, compromises, waivers or releases in an amount per
Action not to exceed One Hundred Fifty Thousand Dollars ($150,000.00);

(m) make any material change to the Companies’ Gift Certificate, marketing and
sales programs or efforts, Customer Loyalty Program, or other programs or
initiatives associated with customer relationships with the intent or purpose of
favoring other properties owned, directly or indirectly, by Sellers or their
Affiliates over the Casino, or that has the intent or purpose of diverting
existing customers of the Casino to any other property owned, directly or
indirectly, by Sellers or their Affiliates;

(n) modify or rescind any material licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities, including
Gaming Approvals, of any of the Companies, or fail to use good faith efforts to
obtain any renewal or extension, as may be required by Law, of any such material
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Entities;

 

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(o) enter into, modify or otherwise change any employment agreement, severance
agreement or severance plan, compensation structure, employee benefit plan or
eligibility for such employee benefit plan, or, to the extent not permitted by
the FTC Documents, any retention agreement or retention plan, in each case, with
respect to any employee of any of the Companies, except (i) as required by Law
or by the terms of an existing plan or agreement, (ii) in connection with the
replacement of an existing employee or hiring of an employee to fill a currently
open position or (iii) pursuant to a company-wide change in one or more
“employee welfare benefit plans” within the meaning of Section 3(l) of ERISA
implemented by Parent and its Subsidiaries;

(p) increase the compensation of any employee of any of the Companies, except
(i) increases in the Ordinary Course of Business within a range consistent with
such Company’s past practice, but in no event causing an increase in the
Companies’ aggregate compensation expense by more than three percent (3%) per
annum, (ii) as required by Law or by the terms of an existing plan or agreement
or (iii) in connection with the promotion or replacement of an existing employee
or hiring of an employee to fill a currently open position;

(q) 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 (except for compromises or settlements in
an amount not to exceed One Hundred Thousand Dollars ($100,000) individually or
in the aggregate), or file any amended Tax Return; or

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

Except as expressly contemplated by this Agreement, nothing contained in this
Agreement shall give Buyer, directly or indirectly, the right to control or
direct any Company’s operations prior to the Closing. Prior to the Closing, the
management of the Companies and the Trustee (once appointed) shall exercise,
consistent with and in accordance with the terms and conditions of this
Agreement, complete control and supervision over the operations of the
Companies.

In addition, notwithstanding anything in this Agreement (including the
restrictions set forth in the first paragraph of this Section 8.1), nothing
herein shall preclude Sellers or the Companies or any of their respective
Affiliates from taking any action that is required by, or necessary pursuant to,
the FTC Documents or by the Trustee to maintain the viability and marketability
of the Casino and to prevent the destruction, removal, wasting, deterioration,
or impairment of the Casino, except for ordinary wear and tear (including, but
not limited to, regular repair and maintenance efforts, continuation of any
planned capital expenditures, and marketing and promotional programs).

 

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Section 8.2 Cooperation; Notice; Cure.

(a) From the Effective Date until the Closing, Sellers and the Companies shall,
to the fullest extent permitted by Law (including antitrust Laws and Gaming
Laws), assist Buyer and Buyer’s Representatives in becoming familiar with any of
the Companies’ existing and prospective businesses and assets and liabilities to
such extent and at such times as Buyer and Buyer’s Representatives may
reasonably request, including, without limitation, the Internal Control System
established by the Target under 11 CSF 45-9.010, et. seq. (the “Internal
Controls”); provided, however, that (x) such access does not unreasonably
disrupt the normal operations of the Companies and (y) the Companies are under
no obligation to disclose to Buyer any information the disclosure of which is
restricted by Contract, Law or is subject to attorney-client privilege;
provided, further, that, for the avoidance of doubt, such access to the
Companies shall include reasonable access (it being understood, however, that
such access does not include log-in access or access that would violate
applicable Gaming Laws) to, and cooperation from, any Company’s information
technology systems and employees to permit Buyer to test the information
technology systems and to prepare any Company’s information technology systems
for integration with those of Buyer, and prepare for the implementation of
Buyer’s own systems, including the training of any of the Companies’ employees
(which training shall be conducted by Buyer at its cost and expense) and
integration of the Internal Controls.

(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 any representation, covenant or agreement of Sellers
or Buyer under this Agreement to be breached in any material respect or that
renders untrue in any material respect any representation or warranty of Sellers
or Buyer contained in this Agreement. No notice given pursuant to this
Section 8.2(b) 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. For the avoidance of doubt, no failure to give notice
required by this Section 8.2(b) with respect to a breach of any representation
or warranty by the party required to give such notice shall, in and of itself,
result in the subject matter of such representation or warranty breach
constituting a breach of a covenant of such party.

Section 8.3 No Solicitation. Prior to the earlier of the Closing and the
termination of this Agreement in accordance with Section 10.1 hereof, neither
Sellers, the Companies, 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 or initiate, or take any other action to facilitate
knowingly, including, without limitation, by entering into a non-disclosure
agreement with any person (or group of persons) other than Buyer or its
Affiliates (a “Third Party”), 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 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,
including, without limitation, any non-disclosure, confidentiality or other
agreement of similar effect, or consummate any Acquisition Proposal.

 

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Section 8.4 Employee Matters.

(a) Each Property Employee who is an employee of any 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 6.13(a) of the Company Disclosure Letter.

(b) For a period of at least six (6) months immediately following the Closing
Date, (x) Buyer shall cause the Companies to provide the Transferred Employees
who remain employed by any of the Companies, Buyer or any Affiliate of Buyer
with base compensation, bonus opportunities and annual and long-term incentive
compensation opportunities that are substantially similar to those provided by
the Companies or their respective Affiliates immediately prior to the Closing
Date and (y) Buyer shall honor the severance policies of the Companies and their
respective Affiliates with respect to Transferred Employees.

(c) For a period of at least six (6) months 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 Companies, Buyer or any Affiliate of Buyer with employee
benefits (including medical benefits) which are substantially similar to those
provided under the Company Benefit Plans immediately prior to the Effective
Date. To the extent permitted under the terms of the Buyer Benefit Plans, Buyer
shall cause service with the Companies and their respective Affiliates prior to
the Closing to be treated the same as service with any of Buyer or its
Affiliates from and after the Closing Date for purposes of eligibility, vesting,
and benefit accrual under 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. To the
extent permitted under the terms of Buyer’s medical benefit plans, to the extent
not administratively impracticable, Buyer shall use commercially reasonable
efforts to (A) 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 Companies
for their benefit immediately prior to the Closing Date and (B) waive all
limitations as to preexisting conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the Transferred
Employees under any welfare benefit plans in which such employees may be
eligible to participate after the Closing Date, other than limitations or
waiting periods that are already in effect with respect to such employees and
that have not been satisfied as of the Closing Date under any welfare plan
maintained or contributed to by the Companies or their Affiliates for their
benefit immediately prior to the Closing Date.

(d) 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”),
except to the extent giving such credit would result in a duplication of
benefits. Buyer shall cause service with

 

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the Companies and their respective 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’s 401(k) Plan. Consistent with Section 8.4(b) above, Buyer or its
applicable Subsidiary shall cause each Transferred Employee to be eligible to
participate in the Buyer’s 401(k) Plan, and any Transferred Employee who
satisfies the eligibility requirements of Buyer’s 401(k) Plan, taking into
account the foregoing, shall become a participant in accordance with the terms
of the Buyer’s 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 Pinnacle
Entertainment, Inc. 401(k) investment plan in the form of cash (and, as
applicable, promissory notes with respect to loans), if elected by such
Transferred Employees.

(e) No provision of this Agreement shall create any third party beneficiary
rights in any Transferred Employee, or any beneficiary or eligible family member
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 Companies or any Subsidiary of the Companies 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 Companies or any
Subsidiary of the Companies) 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 Companies or any Subsidiary of the
Companies), or constitute or create an employment or other agreement with any
Property Employee.

(f) Sellers shall take all actions and execute all documents that are necessary
or advisable to ensure that, immediately prior to the Closing Date, the
Companies cease to participate in all Company Benefit Plans.

(g) 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 11 hereof, Buyer shall indemnify, defend and hold Sellers and the
Companies harmless from and against any liability to any Transferred Employees
or any Governmental Entity that may result to Sellers and/or the Companies based
on Buyer’s failure to comply with any provision of the WARN Act as required by
this Section 8.4(g), 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 Companies that occur during the ninety
(90)-day period prior to the Closing.

 

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Section 8.5 Access to Information and the Real Property; Post-Closing
Cooperation; Furnishing of Financial Statements.

(a) Upon reasonable notice, subject to applicable Law, including antitrust Laws
and Gaming Laws, the Companies shall afford Buyer’s Representatives reasonable
access, during normal business hours, during the period from the Effective Date
to the Closing, to the Real Property (including the Casino) and to all
personnel, properties, books, Contracts and records (whether in paper or
electronic form) of the Casino and, during such period, the Companies 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 Companies
with at least twenty-four (24) hours’ prior notice of any Inspection; (ii) if
any Company so requests, Buyer’s Representatives shall be accompanied by a
Representative of such Company; (iii) Buyer shall not initiate contact with
employees or other representatives of any Company other than such Representative
designated by such Company without the prior consent of Sellers, such Company or
such Representative, which consent shall not be unreasonably withheld,
conditioned 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 a Company’s prior written consent, such consent not to be
unreasonably withheld, conditioned or delayed; (v) Buyer shall not materially
interfere with the Business; (vi) with respect to any inspection of the gaming
areas in the Casino (floor, casino cage, accounting, and Missouri Gaming
Commission security areas), Buyer and Sellers shall agree on the date, time and
scope of the inspection and also obtain the concurrence of the Missouri Gaming
Commission; and (vii) Buyer shall, at its sole cost and expense, repair any
damage (including damage relating to the worsening or alteration of
environmental conditions or migration of Hazardous Materials) to the Purchased
Assets or any other property owned by a Person other than Buyer caused by
Inspection, and shall reimburse the Companies for any loss caused by any
Inspection, and restore the Purchased Assets or such other third-party property
to substantially similar condition as existed prior to such Inspection, and
shall indemnify, defend and hold harmless Sellers, the Companies 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. Prior to entering the
Real Property to perform any tests and assessments or for any other reason
permitted hereunder and, thereafter, Buyer’s contractors or consultants who
shall perform the Inspection shall obtain a policy of comprehensive public
liability insurance in an amount not less than Ten Million Dollars
($10,000,000.00) naming the Companies as additional insureds and insuring
against any and all liabilities for damages to property or injury or death to
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 and Buyer shall endeavor to provide the Companies
at least thirty (30) days’ written notice prior to the termination of such
policy. Sellers and the Companies shall permit Buyer to meet with the Trustee to
discuss the Companies, the Business and the finances and operations of the
Companies, all in such detail and at such times and as often as Buyer may
reasonably request, so long as, in the reasonable judgment of the Companies,
such meetings and discussions would not be reasonably be expected to materially
interfere with the Business or the Trustee’s duties and responsibilities under
the FTC Documents. In addition to the foregoing, at all times from the Effective
Date to the Closing Date, Sellers shall take all action reasonably necessary to
cause Buyer to have direct and unlimited access to the Trustee, so long as, in
the reasonable judgment of the Sellers, such access would not be reasonably be
expected to materially interfere with the Business or the Trustee’s duties and
responsibilities under the FTC Documents. Notwithstanding the foregoing,
(i) Target agrees to provide Buyer a complete copy of all documented Internal
Controls within forty-five (45) days after the Effective Date and (ii) Buyer,
directly or indirectly, shall not have the right to control or direct any
Company’s operations prior to the Closing.

 

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(b) Following the Closing Date, each party hereto will hold, and will use its
commercially reasonable 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 Companies 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 1.2 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.

(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, the other party shall (and shall cause its Affiliates, and its and their
respective Representatives, to) (A) reasonably 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 to all properties, books, contracts,
commitments and records (whether in paper or electronic form) related to the
Real Property and (C) reasonably make available to such party and its Affiliates
and their Representatives its personnel (including, by Buyer, the Transferred
Employees), including for 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. Without limiting the generality of the
foregoing, following the Closing, Buyer shall, upon reasonable notice, afford
Sellers reasonable access during normal business hours to the books and records
of the Companies (including information regarding accounts receivable and
accounts payable that may have been received by the Companies following the
Closing but relate to periods prior to or through the Closing) relating to the
periods prior to and through the Closing in connection with the preparation of
the Final Closing Statement and in connection with Parent’s reporting
obligations under Law (including Gaming Laws and securities Laws).

 

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(d) During the period from the Effective Date through the earlier of the
termination of this Agreement and the Closing, Sellers shall furnish or cause to
be furnished to Buyer:

(i) Monthly Financial Statements. As soon as available, and in any event within
thirty (30) calendar days after the end of each calendar month, financial
statements of the Companies, consisting of an unaudited balance sheet and
related unaudited statement of income as of the end of such calendar month, all
in reasonable detail and certified (subject to normal year-end audit adjustments
and the absence of footnotes) by an officer of the Companies as having been
prepared in accordance with GAAP, consistently applied.

(ii) Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) calendar days after the end of each fiscal quarter,
including the last fiscal quarter in each fiscal year, financial statements of
the Companies, consisting of an unaudited balance sheet and related unaudited
statement of income for the fiscal quarter then ended and the fiscal year
through that date, all in reasonable detail and certified (subject to normal
year-end audit adjustments and the absence of footnotes) by an officer of the
Companies as having been prepared in accordance with GAAP, consistently applied.

(iii) Other Reports. Promptly upon becoming available, any budget, forecast,
projection, report or notice made, submitted or delivered in writing that was
required to be given pursuant to any Material Contract.

Section 8.6 Governmental Approvals.

(a) The parties hereto shall reasonably 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 Companies 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, in connection with
the authorization, execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement; and (iii) make all necessary
registrations, declarations, information request responses 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
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 (C) 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

 

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thirty (30) days after the Effective Date, all required initial applications and
documents in substantially complete form in connection with obtaining the
Governmental Approvals (including under applicable Gaming Laws and with respect
to the FTC) and shall act diligently and promptly to pursue the Governmental
Approvals and shall reasonably cooperate with each other in connection with the
making of all filings and the obtaining of all such Governmental Approvals
referenced in the preceding sentence, provided, that Buyer shall bear the
ultimate responsibility of obtaining all Gaming Approvals and that nothing in
this Section 8.6(b) shall be deemed to create any obligation to provide to
Sellers personal information regarding any individual applicant for licensing
under applicable Gaming Laws. 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 (other than information related to Buyer’s casino license
applications and personal information concerning individuals who are filing
applications), 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 Companies shall use reasonable best efforts to schedule
and attend any hearings or meetings with Governmental Entities to obtain the
Governmental Approvals as promptly as practicable, 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 meetings with
any Governmental Entity (other than information related to Buyer’s casino
license applications and personal information concerning individuals who are
filing applications) to the extent relating to Governmental Approvals. Buyer,
Sellers and the Companies 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
non-confidential information relating to Buyer, Sellers or the Companies, 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 information
related to Buyer’s casino license applications and personal information
concerning individuals who are filing applications).

(b) Without limiting Section 8.6(a) hereof, Buyer, each Seller and each 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.

 

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(c) Buyer, Sellers and each 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
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
transactions contemplated hereby and use reasonable best efforts to have any
such decree, injunction or other order vacated or reversed.

(d) From the Effective Date 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 any 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 8.7 Publicity. 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 negotiate in good faith 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 (including in connection with corporate transactions
that Sellers or Buyer elect to undertake). 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 or in connection with a
financing, 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 8.8 Further Assurances and Actions.

(a) Subject to the terms and conditions herein, each of the parties hereto
agrees to use its commercially reasonable 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) as
promptly as practicable 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. Without limiting the foregoing, Sellers agree to use
their commercially reasonable efforts to obtain the consents set forth on
Section 8.8(a) of the Company Disclosure Letter.

 

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(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 or to vest Sellers with full title to the Excluded Assets,
Buyer, Sellers and the Companies shall take all commercially reasonable action
necessary (including executing and 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.

(c) Except with respect to the Assigned Contracts which the parties agree shall
be assigned to one of the Companies prior to Closing, this Agreement shall not
constitute an agreement to assign any Contract or Permit included in the
Purchased Assets or the Excluded Assets if an attempted assignment of such
Contract or Permit, without the consent of any third parties thereto, would
constitute a breach thereof or in any material adverse way affect the rights
thereunder of the party that is to be assigned such Contract or Permit hereunder
(the “Intended Assignee”). If any such consent has not been obtained prior to
the Closing, the holder of the applicable Contract or Permit agrees to hold the
benefit of such Contract or Permit in trust for the Intended Assignee and to
cooperate with the Intended Assignee in any reasonable arrangements designed to
provide all benefits thereunder to the Intended Assignee, including enforcement
for the benefit of the Intended Assignee of any and all rights under such
Contract or Permit against the other party or parties thereto arising out of the
cancellation of such Contract or Permit by such other party or parties or
otherwise, all at Intended Assignee’s sole cost and expense.

(d) Sellers shall use their commercially reasonable efforts to obtain the
consent of any third parties necessary to remove the Companies as parties to any
Excluded Contract to which either of Sellers or any of their Subsidiaries other
than the Companies is also party. If Sellers are not able to obtain any such
necessary consents prior to the Closing, Buyer agrees to cause the Companies not
to assert or enforce any rights under the applicable Excluded Contracts against
the other party or parties thereto. Sellers agree, jointly and severally, to
indemnify, defend and hold harmless the Companies for any obligation or
liability asserted against the Companies arising out of Sellers’ or their
Subsidiaries’ performance of such Excluded Contracts for periods from and after
the Closing.

(e) Sellers shall use their commercially reasonable efforts to obtain the
consent of any third parties necessary to remove themselves or their
Subsidiaries, as applicable, as parties to any Contract constituting a Purchased
Asset to which Sellers or any of their Subsidiaries other than the Companies is
also party. If Sellers are not able to obtain any such consents prior to the
Closing, Sellers agree not to assert or enforce, and to cause their
Subsidiaries, if applicable, not to assert or enforce, any rights under the
applicable Contracts against the other party or parties thereto. Buyer agrees to
indemnify, defend and hold harmless Sellers and their Subsidiaries, as
applicable, for any obligation or liability asserted against Sellers or their
Subsidiaries arising out of the Companies’ performance of such Contracts for
periods from and after the Closing.

Section 8.9 Transfer Taxes. All transfer, recording, documentary, sales, use,
stamp, registration and other such Taxes (including real estate transfer or
similar Taxes 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

 

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sale of the Equity Interests pursuant to this Agreement (“Transfer Taxes”) shall
be paid half by Sellers and half by Buyer; provided, however, that any increase
in Transfer Taxes that result from any transaction requested by Buyer and
undertaken pursuant to Section 12.5 shall be paid by Buyer. The parties that are
obligated to pay the Transfer Taxes shall indemnify, defend and hold the other
parties harmless from and against any and all amounts for which such other
parties are not liable pursuant to this Section 8.9. 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 a party pays Transfer Taxes for which such party is not responsible,
such party shall be promptly reimbursed for such Taxes by the responsible party.
Buyer and Sellers shall reasonably 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.

Section 8.10 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 Companies, including the Casino, the Real Property, HoteLumière and
the other Purchased Assets. Until the Closing, the operations and affairs of the
Companies, including the Casino, the Real Property and the other Purchased
Assets, are the sole responsibility of and under the Companies’ complete and
exclusive control, except as expressly provided for in this Agreement and the
FTC Documents.

Section 8.11 Reservations; Guests’ Safe Deposit Boxes; 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 in the Ordinary Course of
Business prior to the Closing by guests or customers, including advance
reservation cash deposits, for rooms or services confirmed by the Companies for
dates after the Closing Date. From and after the Effective Date, the Companies
may continue to accept reservations made in the Ordinary Course of Business for
periods after the Closing. 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 after the Closing Date at the
rates and terms provided in such agreements. Buyer agrees that Sellers cannot
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 Companies 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

 

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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 Companies, 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 Companies and Buyer, respectively.
The Notary Public and the Representatives of the Companies 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 11 hereof, and Sellers shall be responsible for and indemnify Buyer
against claims of alleged missing items not listed 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 Companies 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 Companies 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 Parent (if it so elects), the Companies and Buyer as of the
Closing. Said baggage and other items shall continue to be stored by the
Companies 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 Companies 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 Companies agree reasonably to coordinate and cooperate with each other in
effectuating the plan that is approved by the applicable Gaming Authorities.

(ii) Effective as of the Closing, Representatives of Buyer and the Companies
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, Parent and the Companies 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 8.11(d).

(e) Vehicles with Valet Parking. On the Closing Date, the Companies 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.

 

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Section 8.12 Certain Transactions. From the Effective Date until the Closing
Date, Buyer shall not, and shall not permit any of its Affiliates to, acquire or
agree to acquire by merging or by consolidating with, or by purchasing assets of
or equity in excess of ten percent (10%) of, 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 St. Louis MO-IL metropolitan statistical area if such acquisition or
agreement to acquire could reasonably be expected to adversely affect Buyer’s
ability to obtain the Gaming Approvals or other Required Governmental
Consent(s) or to consummate the transactions contemplated by this Agreement, as
applicable.

Section 8.13 Insurance and Casualty. If, before the Closing, the Casino and/or
HoteLumière 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 9 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 and/or HoteLumière, 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 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/or HoteLumière, and Sellers and their Affiliates shall
have no responsibility for restoration or repair of the Casino and/or
HoteLumière 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, 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 8.14 Non-Solicitation.

(a) Buyer agrees that it shall not, and shall cause its Affiliates (including
the Companies on or after the Closing) not to, for a period commencing on the
Effective Date and ending on the date that is twelve (12) months after the
Closing Date, except as provided in the FTC Documents, solicit employment of
employees of Sellers or their Affiliates (but, following the Closing, excluding
the employees of the Companies) with whom Buyer had substantial contact with as
a result of the transactions contemplated by this Agreement; provided, however,
that the restrictions contained in this Section 8.14(a) shall not apply to
(a) general solicitations not specifically directed to any employee of Sellers
or their Affiliates, (b) any solicitation of

 

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employees of the Companies in connection with employment at the Companies, and
(c) any solicitation or hiring of an individual who is not employed by Seller or
its 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 Sellers or their Affiliates.

(b) Buyer shall not, and shall cause its Affiliates (including the Companies on
or after the Closing) not to, for a period commencing on the Effective Date and
ending on the date that is twelve (12) months after the Closing Date, directly
or indirectly, solicit for employment or in any other capacity any employee of
Sellers or their Affiliates (but, following the Closing, excluding the employees
of the Companies) in the St. Louis MO-IL metropolitan statistical area (except
as provided for in the FTC Documents); provided, however, that Buyer and its
Affiliates may:

(i) solicit employees of the Companies in connection with employment at the
Companies;

(ii) advertise for employees in newspapers, trade publications, or other media,
or engage recruiters to conduct general employee search activities, in either
case not targeted specifically at employees of Sellers or their Affiliates in
the St. Louis MO-IL metropolitan statistical area;

(iii) hire employees of Sellers or their Affiliates in the St. Louis MO-IL
metropolitan statistical area who apply for employment with Buyer or its
Affiliates, as long as such employees were not solicited by Buyer or its
Affiliates in violation of this Section 8.14;

(iv) make offers of employment to or employ or hire any employee of Sellers or
their Affiliates in the St. Louis MO-IL metropolitan statistical area if Sellers
have notified Buyer or its Affiliates in writing that Sellers and their
Affiliates do not intend to make an offer of employment to that employee, or
where such an offer has been made and the employee has declined the offer, or
where the employee’s employment has been terminated by Sellers or their
Affiliates; or

(v) solicit or hire any former employee of Sellers or their Affiliates in the
St. Louis MO-IL metropolitan statistical area who is not employed by Sellers or
their Affiliates at the time of such solicitation or hiring of such employee and
so long as Buyer and its Affiliates did not cause, induce or attempt to cause or
induce such employee to no longer be employed by Sellers or their Affiliates in
violation of this Section 8.14.

(c) Sellers shall not, and shall cause their Affiliates not to, for a period
commencing on the Effective Date and ending on the date that is (x) with respect
to employees listed on Section 8.14(c) of the Company Disclosure Letter,
twenty-four (24) months after the Closing Date, or (y) for any other applicable
employee, twelve (12) months after the Closing Date, directly or indirectly,
solicit for employment or in any other capacity any employee of Buyer or its
Affiliates or the Companies in the St. Louis MO-IL metropolitan statistical
area; provided, however, that Sellers and their Affiliates may:

 

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(i) advertise for employees in newspapers, trade publications, or other media,
or engage recruiters to conduct general employee search activities, in either
case not targeted specifically at employees of Buyer or its Affiliates;

(ii) hire employees of Buyer or its Affiliates who apply for employment with
Sellers or their Affiliates, as long as such employees were not solicited by
Sellers or their Affiliates in violation of this Section 8.14;

(iii) make offers of employment to or employ or hire any employee of Buyer or
its Affiliates if Buyer has notified Sellers or their Affiliates in writing that
Buyer and its Affiliates do not intend to make an offer of employment to that
employee, or where such an offer has been made and the employee has declined the
offer, or where the employee’s employment has been terminated by Buyer or its
Affiliates; or

(iv) solicit or hire any former employee of Buyer or its Affiliates who is not
employed by Buyer or its Affiliates at the time of such solicitation or hiring
of such employee and so long as Sellers and their Affiliates did not cause,
induce or attempt to cause or induce such employee to no longer be employed by
Buyer or its Affiliates in violation of this Section 8.14.

Section 8.15 Customer Database.

(a) At the Closing, Sellers shall transfer to Buyer the Customer Database
Records dating back to the opening of the Casino.

(b) From and after the earlier of two days following the Effective Date or
two (2) days following the date that Parent closes the Merger and prior to the
Closing (the “Interim Period”), Parent will segregate in its customer database
the Customer Database Records for customers referenced in Parent’s database
records as having visited the Casino and restrict access to the Customer
Database Records to Casino employees and those Parent’s employees in its
Database Marketing Shared Services Group who need access to the Customer
Database Records to provide support services required by the Trustee and Casino
marketing employees; provided, however, that Parent and its Affiliates may
retain each Lumière Only Customer’s (as defined below) name, address, email and
tier status in the Customer Loyalty Program and total comp balance for all of
Parent’s and its Affiliates’ casinos (including the Casino) in the aggregate;
provided further, that Parent shall also have access to the Customer Database
Records to the extent such information is necessary to ensure compliance with
Law or other legal obligations or to defend or prosecute actual or potential
litigation. Parent shall adopt written policies to provide that, once access to
the Customer Database Records has been appropriately restricted as required
under the terms of the FTC Documents and this Section 8.15, additional access
may not be granted to other individuals and positions at Parent or its
Affiliates (other than Casino employees and Parent’s Database Marketing Shared
Services Group employees) without a written approval from Parent’s general
counsel. During the Interim Period, Parent’s marketing strategies and activities
with respect to the Casino shall be managed and directed by the Trustee and
Casino employees, and the Trustee will be able to utilize Parent’s Database
Marketing Shared Services Group to obtain necessary support services to
implement such marketing activities. Except for joint marketing activities
approved by the

 

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Trustee or Casino employees under the direction of the Trustee, Parent or its
Affiliates shall not directly market any other casino or hotel owned by Parent
or its Affiliates to any Lumière Only Customer during the Interim Period unless
or until such customer visits another casino or hotel owned by Parent or its
Affiliates (other than the Casino) and furnishes personal information to such
casino or hotel (by presenting such customer’s Customer Loyalty Program card or
otherwise); provided, however, that Parent and its Affiliates may engage in
general advertising and general marketing for other casinos or hotels owned by
Parent or its Affiliates not specifically directed to Lumière Only Customers.
For purposes of clarity, during the Interim Period, Parent may retain and use
the Retained Database Records.

(c) From and after the Closing Date, for customers referenced in Parent’s
database records as of the Closing Date as having visited only the Casino, and
not any other casinos or hotels owned by Parent or its Affiliates (“Lumière Only
Customers”), Parent and its Affiliates may retain each Lumière Only Customer’s
name, address, email and tier status in the Customer Loyalty Program and total
comp balance as of the Closing Date for all of Parent’s and its Affiliates’
casinos (including the Casino) in the aggregate. In addition, on the Closing
Date Parent will segregate in its customer database all other information
regarding Lumière Only Customers and shall only permit access to such
information to the extent such information is necessary to ensure compliance
with Law or other legal obligations or to defend or prosecute actual or
potential litigation. At no time following the Closing Date shall Parent or its
Affiliates directly market to any Lumière Only Customer unless or until such
customer visits another casino or hotel owned by Parent or its Affiliates (other
than the Casino) and furnishes personal information to such casino or hotel (by
presenting such customer’s Customer Loyalty Program card or otherwise);
provided, however, that Parent and its Affiliates may use the name, address and
email of Lumière Only Customers to send (i) one (1) notification (in the form
and substance reasonably acceptable to Buyer) within thirty (30) days after the
Closing Date to each Lumière Only Customer informing such Lumière Only Customer
of his or her total comp balance as of the Closing Date and of the
discontinuance of the Customer Loyalty Program at the Casino and (ii) one
(1) notification (in the form and substance reasonably acceptable to Buyer) to
each Lumière Only Customer, if applicable, seeking or conveying information
(e.g., selection of type of car or color) from or to such Lumière Only Customer
relating to the fulfillment of the prior year’s tier benefits under the Customer
Loyalty Program; provided, further, that Parent and its Affiliates may engage in
general advertising and general marketing for other casinos or hotels owned by
Parent or its Affiliates not specifically directed to Lumière Only Customers.

(d) From and after the Closing Date, for customers referenced in Parent’s
database records as having visited the Casino and any other casino or hotel
owned by Parent or its Affiliates other than the Casino (the “Shared
Customers”), Parent and its Affiliates may retain and use the Retained Database
Records. Parent will segregate in its customer database the information
described in items 2 and 3 referenced in the definition of Customer Database
Records with respect to the Shared Customers and shall only permit access to
such information to the extent such information is necessary to ensure
compliance with Law or other legal obligations or to defend or prosecute actual
or potential litigation. For the avoidance of doubt, nothing in this Agreement
shall restrict Parent or its Affiliates from retaining and using any
information, including, without limitation, the Retained Database Records, with
respect to customers who have not visited the Casino.

 

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(e) For purposes of this Section 8.15, the Companies shall not be considered
Affiliates of Parent from and after the Closing.

Section 8.16 Lien and Guaranty Release. Sellers shall use their commercially
reasonable 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 of indebtedness of
Parent or its other subsidiaries) of the Companies is outstanding (the
“Lenders”) of all Liens and Encumbrances in connection therewith relating to the
Purchased Assets, the Equity Interests, the Business or the Companies (“Lender
Liens”), and all obligations (including guarantee obligations) of the Companies
in respect of such Indebtedness (“Loan Obligations”), on or prior to the Closing
Date.

Section 8.17 Rebranding. Until six (6) months following the Closing, the
Companies shall have a non-exclusive, non-transferable license to use the names
“Stadium Sports Bar,” “ETC,” “Blush” and “globar” in connection with the
operation of the venues within the Casino bearing such names at no cost to
Buyer. Within such six-month period, Buyer shall timely complete all steps
required to rebrand such venues under different names. Buyer, the Companies and
their Affiliates shall not (a) use the “Stadium Sports Bar,” “ETC,” “Blush,” and
“globar” names or trademarks in any manner after such name change and (b) shall
not use any other Intellectual Property of Sellers, including the “mychoice”
name or trademark after the Closing. Buyer and the Companies (after Closing)
shall use commercially reasonable efforts to obtain any necessary approvals from
Gaming Authorities with respect to the name change contemplated by this
Section 8.17.

Section 8.18 FTC Approval. Subject to this Section 8.18, all terms and
conditions of this Agreement shall be subject to FTC approval and the
substitution or addition of such modified or other terms and conditions as the
FTC may require.

(a) Each party hereto agrees to accept such changes to this Agreement as shall
be required by the FTC and to negotiate in good faith and execute promptly an
appropriate amendment to this Agreement to reflect such required changes (an
“Amendment”), unless (i) such changes would reasonably be expected to have, in
the aggregate, a Company Material Adverse Effect or a Buyer Material Adverse
Effect, (ii) as a result of such changes, either party requires a change in the
Purchase Price, or (iii) such changes would adversely affect the economics of
the transactions contemplated by this Agreement (other than as a result of
either party’s requirement of a change in the Purchase Price, which shall be
subject to Section 8.18(a)(ii)); provided, that in the case of clauses (ii) and
(iii), only the party who is not requiring the change in Purchase Price or whose
economics would be adversely affected (the “Affected Party”) may elect not to
execute an Amendment and may terminate this Agreement pursuant to
Section 8.18(b) hereof. Prior to entering any Amendment, the parties shall use
reasonable efforts to seek consultation with the FTC or its staff to review the
Amendment in light of the requirements of the FTC giving rise to such Amendment.

 

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(b) If either party elects not to execute an Amendment pursuant to
Section 8.18(a)(i) or the Affected Party elects not to execute an Amendment
pursuant to Section 8.18(a)(ii) or (iii), either party may terminate this
Agreement and, upon such termination, the Deposit, together with any interest
earned thereon, shall be paid to Buyer; provided, that in the case of
Section 8.18(a)(iii), the parties hereto shall take the actions set forth in
Section 8.18(c) below prior to any termination of this Agreement pursuant to
this Section 8.18(b).

(c) If the Affected Party elects not to execute an Amendment pursuant to
Section 8.18(a)(iii), then the parties hereto shall, in good faith, use their
respective commercially reasonable efforts to reach prompt (but in any event
within ten (10) Business Days after receiving the FTC’s request to make the
required changes) mutual agreement with respect to an Amendment reflecting such
changes. If the parties hereto, after complying with the preceding sentence are
unable to reach mutual agreement with respect to an Amendment within such ten
(10) Business Day period, then the parties shall submit the matters that the
parties have been unable to resolve with respect to such Amendment, including,
without limitation, economic accommodations arising from or related to the
changes required by the FTC, but excluding changes to the Purchase Price, to an
independent nationally recognized investment banking firm, independent
nationally recognized accounting firm or other independent arbitrator
(“Arbitrator”) mutually agreed upon by Parent and Buyer for final and binding
resolution of such dispute in accordance with procedures mutually agreed upon by
Parent and Buyer. If Parent and Buyer are unable to agree on an Arbitrator, then
Parent and Buyer shall each select such an Arbitrator, and the two Arbitrators
so selected shall select a third Arbitrator to be the Arbitrator with respect to
the unresolved matters with respect to such Amendment. Subject to the last
sentence of this Section 8.18(c), the findings of the Arbitrator so selected by
Parent and Buyer (or, if Parent and Buyer are unable to agree on an Arbitrator,
so selected by the Arbitrators pursuant to the foregoing sentence) shall be
final and binding on all of the parties hereto, and the fees and expenses of the
Arbitrator(s) shall be paid by one-half by Parent and one-half by Buyer. In the
event that the findings of the Arbitrator include a change to the Purchase Price
or changes that cause either party to require a change to the Purchase Price,
the party who is not requiring the change in Purchase Price or whose economics
would be adversely affected may elect not to execute an Amendment and terminate
this Agreement, and, upon such termination, the Deposit, together with any
interest earned thereon, shall be paid to Buyer.

Section 8.19 FTC Documents. In connection with the FTC Documents and unless
prohibited or restricted by any Gaming Authority or the express provisions of
the FTC Documents, Sellers hereby covenant with Buyer as follows:

(a) Sellers shall comply with the FTC Documents, as they may from time to time
be amended, supplemented or implemented (provided, that any noncompliance by
Sellers with the FTC Documents shall not constitute a breach of this
Section 8.19(a) to the extent such noncompliance is waived in writing by the FTC
or its staff or Sellers certify in writing to Buyer that such noncompliance has
been otherwise waived by the FTC or its staff), and Sellers shall provide to
Buyer a copy of any amendment, modification or supplement of the FTC Documents.

(b) Sellers shall consult with Buyer in connection with the appointment of any
substitute or new Trustee.

 

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(c) Sellers shall provide to Buyer a copy of any Monitor Agreement, Manager
Agreement (each, as defined in the FTC Orders) or other agreement entered into
in connection with the FTC Orders, together with any amendment, modification or
supplement thereto, promptly upon receipt of an executed final copy thereof;
provided, that any such agreement may be redacted to exclude any information
relating to the compensation of any monitor or manager and any other information
proprietary to Sellers.

Section 8.20 Agreement between Buyer and Four Seasons Hotels Limited. Buyer and
Sellers shall use their reasonable best efforts to obtain the Four Seasons
Agreement, executed by Four Seasons Hotels Limited and effective as of the
Closing Date, within ninety (90) days after the Effective Date. Buyer agrees to
furnish to Four Seasons Hotels Limited as promptly as practicable all
information reasonably requested by Four Seasons Hotels Limited in connection
with its consideration of Buyer’s qualifications and review and execution of the
Four Seasons Agreement.

Section 8.21 Financing Cooperation. In the event that Buyer determines to obtain
financing at any time prior to the Closing Date, Sellers shall, and shall cause
the Companies to, use their commercially reasonable efforts prior to the Closing
to assist Buyer and Buyer’s Representatives to obtain such financing, including,
without limitation, providing Buyers with such financial statements, forecasts,
budgets, accounting work papers, and other financial information and accounting
records as reasonably requested in connection with such financing or by
potential financing sources and other third parties and reasonable access to the
books and records of the Companies, and at any time prior to the Closing Date,
or within twelve (12) months after the Closing Date, Sellers shall use
commercially reasonable efforts to cause Sellers’ external auditors to
reasonably cooperate with Buyer in connection with preparing audited financial
statements of the Companies covering periods prior to the Closing in connection
with such financing or filing with the Securities and Exchange Commission and,
to the extent reasonably requested by Buyer, shall consent to Sellers’ external
auditors provision to Buyer of accounting work papers of the Companies relating
to such periods and shall permit Buyer access to the Companies’ accounting
records for such periods to the extent in Sellers’ possession or control.

Section 8.22 Certain Property. Notwithstanding any other provision hereof, Buyer
and Sellers acknowledge that Buyer has not yet completed its due diligence
investigation with respect to the title, survey and environmental issues
relating to the real property (i) owned by Target located at 806 – 808 N. 1st
Street (Parcel Number 0016-0-00200), 810 – 812 N. 1st Street (Parcel Number
0016-0-00250) and 814 N. 1st Street (Parcel Number 0016-0-00200) (collectively,
the “Bronson Hide Parcels”) and (ii) owned by Port St. Louis Condominium, LLC
located at 801 and 807 N. Leonor K. Sullivan Boulevard (Parcel Numbers
0016-00-1010 and 0016-00-0650) (collectively, the “Port St. Louis Parcels”).
Accordingly, at any time prior to fifteen (15) days before the Closing Date,
Buyer may notify Parent by one or more written notices that Buyer does not elect
to include either or both of the Bronson Hide Parcels and the Port St. Louis
Parcels as part of the acquisitions by Buyer hereunder on the Closing Date. In
the event that Buyer elects not to include the Bronson Hide Parcels as Purchased
Assets, Target shall transfer title to the Bronson Hide Parcels to another
Person (other than one of the Companies) on or before the Closing Date such that
Target no longer holds title to the Bronson Hide Parcels on the Closing Date,
and the Bronson Hide Parcels shall be excluded from the Real Property defined
herein for all purposes of this Agreement. In the event that Buyer elects not to
include the Port St. Louis Parcels as Purchased Assets, Parent shall not cause
Port St. Louis Condominium, LLC

 

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to convey the Port St. Louis Parcels to any of the Companies prior to the
Closing Date, Buyer shall not acquire any interest therein and the Port St.
Louis Parcels shall be excluded from the Real Property defined herein for all
purposes of this Agreement. However, if Buyer does not notify Seller within the
time period set forth above that it does not elect to include the Port St. Louis
Parcels in the acquisitions by Buyer hereunder, Parent shall cause Port St.
Louis Condominium, LLC to convey all of its Property located at 801 and 807 N.
Leonor K. Sullivan Boulevard (Parcel Numbers 0016-00-1010 and 0016-00-0650) to
RE prior to the Closing Date by special warranty deed and shall obtain an
endorsement to its Owner’s Title Insurance Policy issued by Land American Title
Insurance Company reflecting RE as the owner, and the Port St. Louis Parcels
shall constitute owned Real Property, as of the date of recording of such
special warranty deed, for all purposes of this Agreement.

Section 8.23 Contribution of STLH Equity Interests. Immediately prior to the
Closing, (i) Parent shall contribute all of the issued and outstanding
membership interests of STLH (the “STLH Equity Interests”) to Holdco and
(ii) Holdco shall in turn contribute the STLH Equity Interests to Target.
Sellers reserve the right, in lieu of such contributions referenced in the
preceding sentence, to alter the transaction structure with respect to the
transfer of the STLH Equity Interests to Buyer (including making a direct sale
from Parent to Buyer of the STLH Equity Interests as part of the Membership
Interests) if Parent determines that it is desirable for tax or other reasons to
do so, and Buyer agrees to take all reasonable steps on or before the Closing to
cooperate with Sellers in effectuating such change in transaction structure
(which steps and cooperation will not result in any increased costs (unless
reimbursed by Sellers) to Buyer); provided, that Sellers shall not effect such
alternate transaction structure without the prior written consent of Buyer, not
to be unreasonably withheld, conditioned or delayed.

Section 8.24 Alley Vacation. Seller shall complete the alley vacation in City
Block 22 and the consolidation of the property in City Block 22 at the Buyer's
cost not to exceed the sum of $20,000, and Sellers shall pay any costs in excess
thereof.

ARTICLE 9

CONDITIONS TO CLOSING

Section 9.1 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
issued any moratorium, or 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
any party hereto to consummate the transactions contemplated by this Agreement.

 

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(b) FTC Approval. The FTC shall have approved the FTC Documents and this
Agreement (and, if approval thereof is required by the FTC, the Ancillary
Documents and any amendments, modifications and waivers hereof and thereof), the
transactions contemplated hereby and Buyer.

Section 9.2 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 9.2(d) below:

(a) Representations and Warranties. (i) The representations and warranties of
Sellers contained in Section 5.1 (Organization of Sellers),
Section 5.2(a) (Authority; Enforceability), Section 5.3 (Title to Equity
Interests), Section 6.1 (Organization of the Companies; Capitalization) and
Section 6.2(a) (Authority; Enforceability) shall be true and correct in all
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 Sellers 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, be reasonably likely to
result in a material adverse effect on the ability of Sellers to consummate the
transactions contemplated hereby (in the case of such other representations and
warranties of Sellers), a Company Material Adverse Effect (in the case of such
other representations and warranties with respect to the Companies) or a Buyer
Material Adverse Effect. Buyer shall have received a certificate signed on
behalf of Sellers by an executive officer of Sellers to such effect.

(b) Performance of Obligations of Sellers and the Companies. Sellers and the
Companies shall have performed in all material respects all covenants,
agreements and obligations required to be performed by Sellers and the Companies
under this Agreement at or prior to the Closing (other than the covenant in
Section 8.1(i), for which the remedy for failure to perform shall be the Capex
Shortfall adjustment to the Purchase Price under Section 2.1(b)), including,
without limitation, delivery of items listed in Section 4.2 hereof. Buyer shall
have received a certificate signed on behalf of Sellers by an executive officer
of Sellers to such effect.

(c) Deliverables. Sellers and the Companies shall have delivered executed copies
of the Ancillary Agreements and other closing deliverables described in
Article 4 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 or other 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 (x) approval of
the Petition for Change in Control and issuance of Missouri Gaming Commission
liquor licenses, (y) consent by the LCRA to the assignment and assumption by
Buyer of the Redevelopment Agreement, and (z) the approval, licensing or
registration of Buyer and such of

 

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its (i) officers, executive directors, key employees or Persons performing
management functions similar to officers, (ii) shareholders and (iii) key
business affiliates, each 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.

(e) Lien Releases. Sellers shall have obtained full, absolute and unconditional
releases of all Lender Liens and Loan Obligations.

(f) No Company Material Adverse Effect. Between the Effective Date and the
Closing Date, no Company Material Adverse Effect shall have occurred and be
continuing.

(g) No Bankruptcy. Between the Effective Date and the Closing Date, no voluntary
or involuntary case under any applicable bankruptcy, insolvency, reorganization
or other similar laws shall have occurred or been instituted and be continuing,
no receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) shall have been appointed and not dismissed, and no
assignment for the benefit of its creditors shall have been instituted, in each
case, against any Seller or any Company.

Section 9.3 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 Section 7.1 (Organization), Section 7.2(a) (Authority;
Enforceability), Section 7.4 (Financing), Section 7.5 (Licensability of
Principals) and Section 7.7 (Qualified Person) shall be true and correct in all
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 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, be reasonably likely 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 4.2.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 4 to be delivered
by it.

(d) Release of Redevelopment Agreement Obligations. Buyer shall have assumed
Parent’s obligations under the Redevelopment Agreement and Parent shall have
received an acknowledgment and release from the LCRA, in form and substance
reasonably satisfactory to Parent, of all obligations and covenants of Parent
under the Redevelopment Agreement accruing or arising from and after the Closing
Date.

 

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(e) Governmental Consents. The Required Governmental Consents shall have been
obtained by Buyer or Parent or Sellers and shall remain in full force and
effect.

ARTICLE 10

TERMINATION AND AMENDMENT

Section 10.1 Termination. This Agreement may be terminated at any time prior to
the Closing (with respect to Section 10.1(b) through Section 10.1(h) hereof, by
written notice by the terminating party to the other parties):

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

(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 (i) if
the Closing shall not have occurred by the Outside Date and the receipt of
Gaming Approval of the Missouri Gaming Commission is the sole remaining
condition to Closing (other than conditions to be satisfied or waived at or upon
the Closing) and the satisfaction of such conditions remains reasonably
possible, (x) each of Sellers and Buyer shall have the right, exercisable in its
sole discretion, to extend the Outside Date by written notice given to the other
parties to this Agreement for up to an additional thirty (30) days, and such
right may be exercised on successive occasions up to two (2) times, (y) Buyer
shall have the right, exercisable with consent of Sellers, not to be
unreasonably withheld, conditioned or delayed (taking into account, among other
factors, the likelihood of the receipt by Buyer of Gaming Approval of the
Missouri Gaming Commission), by written notice to Sellers at least thirty
(30) days prior to the Outside Date (as extended pursuant to the preceding
clause (x)), to require Sellers to use reasonable best efforts to obtain FTC
approval to further extend the time permitted under the FTC Documents to
consummate the Closing, and (z) in the event the FTC provides its approval
pursuant to the foregoing clause (y), Buyer shall have the right, in each case
exercisable with consent of Sellers, not to be unreasonably withheld,
conditioned or delayed (taking into account, among other factors, the likelihood
of the receipt by Buyer of Gaming Approval of the Missouri Gaming Commission),
by written notice to Sellers to extend the Outside Date for up to an additional
thirty (30) days, and such right may be exercised on successive occasions up to
three (3) times; provided, that in any case no extension may be longer than is
permitted under the FTC Documents; provided, further, that the right to
terminate this Agreement under this Section 10.1(b) shall not be available to
Sellers or Buyer, respectively, if Sellers’ (or the Companies’) or Buyer’s
failure, respectively, to fulfill any obligation of Sellers (or the Companies)
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 (it being agreed
solely for purposes of this Section 10.1(b), and without limiting
Section 10.1(c) or any other provision of this Agreement, that the failure to
obtain the Gaming Approval of the Missouri Gaming Commission shall not be deemed
to have been primarily caused by Buyer’s failure to fulfill any of its
obligations under this Agreement if Buyer has used its reasonable best efforts
to obtain such Gaming Approval under Section 8.6);

(c) by Sellers or Buyer, if the Missouri Gaming Commission has made a final,
non-appealable determination that the Missouri Gaming Commission will not issue
to Buyer all Gaming Approvals issuable by the Missouri Gaming Commission;

 

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(d) by Sellers or Buyer, if a court of competent jurisdiction or other
Governmental Entity (other than the Missouri Gaming Commission, which shall be
governed by Section 10.1(c)) 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;

(e) by Buyer, if the Companies or Sellers have breached any representation,
warranty, covenant or agreement on the part of the Companies or Sellers set
forth in this Agreement which (i) would result in a failure of a condition set
forth in Section 9.1 or Section 9.2 hereof to be satisfied 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
Companies and Sellers are diligently proceeding to cure such breach, this
Agreement may not be terminated pursuant to this Section 10.1(e); provided,
further, that Buyer’s right to terminate this Agreement under this
Section 10.1(e) shall not be available if, at the time of such intended
termination, Sellers have the right to terminate this Agreement under
Section 10.1(b), Section 10.1(c), Section 10.1(d), Section 10.1(f),
Section 10.1(g), or Section 10.1(h) 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 Section 9.1 or Section 9.3 to be
satisfied 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) calendar 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 10.1(f);
provided, further, that Sellers’ right to terminate this Agreement under this
Section 10.1(f) shall not be available if, at the time of such intended
termination, Buyer has the right to terminate this Agreement under
Section 10.1(b), Section 10.1(d) , Section 10.1(e) or Section 10.1(g) hereof;

(g) by Sellers or Buyer, pursuant to Section 8.18(b) or Section 8.18(c); or

(h) by Sellers or Buyer, if the FTC shall have made a final determination that
the FTC will not approve the FTC Documents, this Agreement and, if approval
thereof is required by the FTC, the Ancillary Documents, Buyer or the
transactions contemplated by this Agreement.

Section 10.2 Effect of Termination.

(a) Liability. In the event of termination of this Agreement as provided in
Section 10.1 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 pursuant to this Section 10.2 and
Article 13 hereof; provided, however, that nothing contained in this
Section 10.2 shall relieve or limit the liability of any party to this Agreement
for any fraud or willful misconduct.

 

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(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; Specific Performance; Liability Limitation.

(i) Except as expressly provided in this Section 10.2(c)(i), upon the
termination of this Agreement, the Deposit, together with interest earned
thereon, shall be paid to Buyer. In the event that this Agreement is terminated
by Buyer or Sellers under (A) Section 10.1(b) and any Gaming Authority has made
a final determination that such Gaming Authority will not issue to Buyer all
Gaming Approvals, regardless of whether such determination is appealable or then
being appealed, (B) Section 10.1(c), or (C) Section 10.1(f), then, in each such
case, within ten (10) Business Days after termination of this Agreement, Sellers
shall elect in writing to either (x) pursue specific performance of this
Agreement and/or money damages for breach of this Agreement (and to the extent
Sellers elect to pursue specific performance, this Agreement shall be deemed not
to have terminated), or (y) direct Buyer to give the Escrow Agent instructions
to pay the Deposit, together with any interest thereon, to Parent (or its
designee) by wire transfer of immediately available funds to an account
designated by Parent. If Sellers fail to make an election pursuant to the prior
sentence within such ten (10) Business Day period, then Sellers shall be deemed
to have elected to receive the Deposit pursuant to the preceding clause (y), and
Buyer shall give the Escrow Agent instructions to such effect. Notwithstanding
the foregoing, if, at any time prior to the time of termination of this
Agreement by Sellers as described in this Section 10.2(c)(i), Buyer had any
right to terminate this Agreement pursuant to any other provision of this
Agreement, the Deposit, together with any interest thereon, shall not be payable
to Parent (or its designee), and the Deposit, together with any interest
thereon, shall be paid to Buyer.

(ii) Each of Sellers and Buyer acknowledge that, without the provisions set
forth in Section 10.2(c)(i), and the other provisions of this Section 10.2(c),
Sellers would not have entered into this Agreement; and that the payment of the
Deposit pursuant to Section 10.2(c)(i)(y) is not a penalty, but rather is
liquidated damages in a reasonable amount that will appropriately compensate
Sellers in the event this Agreement is terminated as described in
Section 10.2(c)(i). The payment of the Deposit to Parent (or its designee) in
accordance with Section 10.2(c)(i)(y) shall be liquidated damages and shall be
the sole and exclusive remedy of Sellers in connection with the termination of
this Agreement as provided in Section 10.2(c)(i)(y).

(iii) Notwithstanding anything herein to the contrary, in the event of a
termination of this Agreement, Sellers’ aggregate recovery of monetary damages
against Buyer or any of Buyer’s Affiliates in any lawsuit, arbitration, claim or
other action brought in law against Buyer or any of Buyer’s Affiliates, in
connection with this Agreement or the transactions contemplated hereby, shall
not exceed Thirty Million Dollars ($30,000,000.00). For the avoidance of doubt,
the foregoing limitation shall not prevent Sellers from recovering the full
Purchase Price, as it may be adjusted in accordance with the terms of this
Agreement, to the extent Sellers are granted specific performance of this
Agreement sought in accordance with Section 10.2(c)(i)(x).

 

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ARTICLE 11

SURVIVAL; INDEMNIFICATION

Section 11.1 Survival of Representations, Warranties, Covenants and Agreements.

(a) Except as set forth in Article 10 and Section 11.1(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 Sellers, the Companies 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) fifteen (15) months after the Closing Date, provided, however, that
(i) the representations and warranties made in Section 5.1 (Organization of
Sellers), Section 5.2(a) (Authority), Section 5.2(b)(i) (No Conflict With
Organizational Documents), Section 5.3 (Title to Equity Interests), Section 6.1
(Organization of the Companies; Capitalization), Section 6.2(a) (Authority),
Section 6.2(b)(i) (No Conflict With Organizational Documents), Section 6.14
(Brokers), Section 7.1 (Organization), Section 7.2(a) (Authority);
Section 7.2(b)(i) (No Conflict With Organizational Documents), Section 7.3
(Brokers) (collectively, the “Fundamental Representations”) and any claim based
on fraud or willful misconduct shall survive indefinitely, (ii) the
representations and warranties made in Section 6.10 (Environmental Matters) and
Section 6.13 (Employee Benefits) shall survive until three (3) years after the
Closing Date, and (iii) the representations and warranties in Section 6.5
(Taxes) 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 agree that, subject to
the last sentence of this Section 11.1(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
based in fraud or willful misconduct of the Indemnifying Party.

Section 11.2 Indemnification.

(a) Except with respect to Taxes that are governed by Section 11.2(d), from and
after the Closing, Sellers, jointly and severally, 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

 

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“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 made by Sellers or the
Companies in this Agreement;

(ii) any breach of any covenant or agreement made, or to be performed, by
Sellers or the Companies in this Agreement;

(iii) any remaining payment obligations of Target under the Yesco Agreement;

(iv) the Halsey Matter and the Franklin Matter;

(v) the Excluded Assets, including the Excluded Contracts.

(b) Except with respect to Taxes that are governed by Section 11.2(d), from and
after the Closing, Buyer shall indemnify, save and hold harmless Sellers, the
Companies and their respective Affiliates and its and their Representatives and
successors (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 made by Buyer in this
Agreement; or

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

(c) 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 absent fraud or willful misconduct.

(d) Without duplication of Taxes taken into account in the determination of the
Estimated Closing Payment or the Final Closing Payment, and aside from any
Transfer Taxes for which Buyer is liable under Section 8.9, 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 6.5 (Taxes); (B) any breach of any covenant or
agreement made, or to be performed by Sellers or the Companies on or prior to
the Closing Date, pursuant to Section 2.3, Section 8.1(q), Section 8.9 and
Section 11.8; (C) any Taxes of the Companies or relating to the Purchased Assets
for any Pre-Closing Period; (D) any and all liability for Taxes (as a result of
Treasury Regulation Section 1.1502-6 or otherwise) of any other Person with whom
Companies otherwise join or have ever joined (or is or has ever been required to
join) in filing any consolidated, combined or unitary Tax Return for a
Pre-Closing Period or a

 

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Straddle Period; (E) any and all liability for Taxes for any Pre-Closing Period
as a result of any of the Companies being party to or having any obligation
under any Tax-sharing, Tax indemnity or Tax allocation agreement or similar
agreement; (F) any Taxes imposed on the Buyer or the Companies resulting from
any transaction or action engaged in (or election made) by Sellers or the
Companies prior to the effective time of the Closing; and (G) any Taxes imposed
on the Companies (in their capacity as “old target” under Treasury Regulation
Section 1.338-2(c)(17) or Treasury Regulation Section 1.336-1(b)(3), as
applicable) or Parent as a result of consummating the transactions contemplated
by this Agreement, including making the elections under Section 338(h)(10) of
the Code and the protective election under Section 336(e) of the Code. From and
after the Closing, Buyer shall indemnify, save and hold harmless 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 2.3,
Section 8.9 and Section 11.8; and (B) any Taxes of the Companies or relating to
the Purchased Assets for any Post-Closing Period; in each case, other than Taxes
for which Sellers are responsible pursuant to this Section 11.2(d). Sellers
acknowledge that the rights to indemnification of Buyer Indemnified Parties
under this Section 11.2(d) are intended to be an unconditional “first dollar”
indemnification (an indemnification that is not subject to the Deductible or
Cap).

Section 11.3 Procedure for Claims between Parties. Except with respect to Taxes
which are governed by Section 11.2(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 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 11.
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 11.4 Defense of Third Party Claims.

(a) Except with respect to Taxes that are governed by Section 11.2(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 11 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 promptly as
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.

 

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(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, conditioned or delayed, 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 reasonably cooperate 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 reasonably 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, conditioned or delayed.

(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.

(f) This Section 11.4 shall not apply to any claim with respect to Taxes that
are governed by Section 11.2(d), which shall be governed exclusively by
Section 11.8(c).

 

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Section 11.5 Limitations on Indemnity.

(a) No Buyer Indemnified Party shall seek, or be entitled to, indemnification
from any of the Indemnifying Parties pursuant to Section 11.2(a)(i) hereof
(other than with respect to a breach of any Fundamental Representation,
Section 6.5 (Taxes), Section 6.12 (Labor Matters), or any claim based on fraud
or willful misconduct) to the extent the aggregate claims for Damages of the
Buyer Indemnified Parties for which indemnification is sought pursuant to
Section 11.2(a)(i) hereof (other than with respect to a breach of any
Fundamental Representation, Section 6.5 (Taxes), or any claim based on fraud or
willful misconduct) are less than Two Million Dollars ($2,000,000.00) (the
“Deductible”) or exceed an amount equal to Thirty-Five Million Dollars
($35,000,000.00) (the “Cap”); provided, that, if the aggregate of all claims for
Damages for which indemnification is sought pursuant to
Section 11.2(a)(i) hereof (other than with respect to a breach of any
Fundamental Representation, Section 6.5 (Taxes), or any claim based on fraud or
willful misconduct) equals or exceeds the Deductible, then the Buyer Indemnified
Parties shall be entitled to recover for such Damages, subject to the
limitations in Section 11.5(b), only to the extent such Damages exceed the
Deductible, but in any event not to exceed the Cap.

(b) In addition to, and subject to, the limitations set forth in
Section 11.5(a), no Buyer Indemnified Party shall seek, or be entitled to,
indemnification from any of the Indemnifying Parties pursuant to
Section 11.2(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 11.2(a)(i) hereof is less than
Seventy-Five Thousand Dollars ($75,000.00), 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). An Indemnified Party shall use commercially reasonable efforts to
recover insurance proceeds in respect of such claim. If an Indemnifying Party
pays an Indemnified Party for a claim and subsequently insurance proceeds in
respect of such claim are 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 the Indemnifying Party to the Indemnified 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 11.

(d) No Damages may be claimed under Section 11.2 by any Indemnified Party to the
extent such Damages are included in the calculation of the Estimated Closing
Payment or the Final Closing Payment.

 

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(e) For purposes of determining the amount of any Damages pursuant to this
Article 11, (i) any inaccuracy in or breach of any representation or warranty
shall be determined without regard to any materiality, Company Material Adverse
Effect or other similar qualification contained in or otherwise applicable to
such representation or warranty and (ii) any inaccuracy in or breach of
Section 6.9(a)(ii) or Section 6.12(b)(ii)(y) shall be determined without regard
to the Seven Hundred Fifty Thousand Dollar ($750,000) threshold contained
therein. For the avoidance of doubt, all materiality, Company Material Adverse
Effect, dollar thresholds and other qualifications shall be respected for
purposes of determining whether there has been any inaccuracy in or breach of
any representation or warranty.

(f) The representations, warranties and covenants of the Indemnifying Party, and
the Indemnified Party’s right to indemnification with respect thereto, shall not
be affected or deemed waived by reason of any investigation made by or on behalf
of the Indemnified Party (including by any of its Representatives) or by reason
of the fact that the Indemnified Party or any of its Representatives knew or
should have known that any such representation or warranty is, was or might be
inaccurate or by reason of the Indemnified Party’s waiver of any condition set
forth in Section 9.2 or Section 9.3, as applicable.

Section 11.6 Payment of Damages. Except as otherwise permitted in
Section 11.8(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 11, 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 11.7 Exclusive Remedy.

(a) After the Closing, except with respect to fraud or willful misconduct, the
indemnities provided in this Article 11 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 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 11). Notwithstanding anything to the contrary in this Section 11.7, in
the event of a fraudulent or willful 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.

 

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(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 11.

Section 11.8 Tax Matters.

(a) Treatment of Indemnification Payments. All indemnification payments made
pursuant to this Article 11 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 and Sellers
shall otherwise agree in writing.

(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 any of the Companies with respect to
taxable periods of the Companies 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 any of the Companies, shall be prepared consistent
with the Companies’ 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. To the extent Buyer is liable for such Taxes under
Section 8.9, Buyer shall promptly reimburse Sellers. Buyer shall file or cause
to be filed all Pre-Closing Separate Tax Returns for the Companies (to the
extent such Tax Returns need to be filed by the Companies) that are prepared by
Sellers pursuant to the first sentence of this Section 11.8(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. 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, except to the extent the amount shown
represents Taxes for which Buyer is liable under Section 8.9 or to the extent
such Taxes were taken into account in the determination of the Estimated Closing
Payment or Final Closing Payment. Sellers shall provide Buyer a copy of each
such Pre-Closing Separate Tax Return, other than any consolidated or combined
Tax Return which Parent is responsible for filing, for its review and comment a
reasonable number of days prior to the due date (including any applicable
extension) of such Tax Return, (which reasonable time period shall in no event
be less than ten (10) Business Days), and Sellers shall reasonably consider any
written comments of Buyer received prior to filing such Pre-Closing Separate Tax
Return. If the Companies are 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
Companies 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

 

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Returns to be prepared consistent with past practices, except as otherwise
required by applicable Law. The Companies 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 Pre-Closing Period pursuant to clause
(iii) below, except to the extent such Taxes were taken into account in the
determination of the Estimated Closing Payment or Final Closing Payment. 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 Pre-Closing Period 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 (excluding any
reassessment arising out of any event occurring on or after the Closing Date)
multiplied by a fraction the numerator of which is the number of days in the
Pre-Closing Period 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 Companies) or Sellers, as applicable, of a written notice of any
audit or administrative or judicial proceeding with respect to Taxes of the
Companies which Sellers or Buyer, as applicable, may be responsible for pursuant
to Section 11.2(d) (a “Tax Claim”); provided, however, no failure or 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 reasonably 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 their election to control such claim within twenty
(20) days after Buyer giving notice to 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 be reasonably likely 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 Companies for any taxable period other than a Straddle Period beginning
after the Closing Date.

 

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(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 Companies. 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
Companies 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 Companies) shall, without the prior written
consent of Sellers (such consent not to be unreasonably withheld, conditioned or
delayed), (i) make or change any Tax election of any Company for a taxable
period (or portion thereof) ending on or before the Closing Date, (ii) amend,
refile or otherwise modify (or grant an extension of any applicable statute of
limitations with respect to) any Tax Return of the Companies for a taxable
period (or portion thereof) ending on or before the Closing Date, or (iii) cause
any Company to engage in any transaction on the Closing Date after the Closing
that is 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 Companies) that is material;
provided, however, that the parties have agreed to make a
Section 338(h)(10) Election (and a protective election under Section 336(e) of
the Code) pursuant to Section 2.3(a).

(f) Tax Sharing Agreements. Sellers shall cause any and all existing Tax
sharing, Tax allocation or similar agreements between Sellers or any of their
Affiliates, on the one hand, and any Company, on the other hand, to be
terminated, and all payables and receivables arising thereunder shall be
settled, in each case prior to the Closing Date such that after the Closing,
neither Buyer nor any 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 Companies of Taxes in respect of a Pre-Closing Period; 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 Companies
or with respect to Transfer Taxes paid by Buyer pursuant to Section 8.9 and not
reimbursed by Seller. If

 

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any party receives a refund to which another party is entitled pursuant to this
Section 11.8(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 12

TITLE TO REAL PROPERTY

Section 12.1 Title Policies.

(a) Section 12.1 of the Company Disclosure Letter sets forth the Companies’
existing Owner’s Title Insurance Policies on the owned Real Property designated
on Section 6.6(a) of the Company Disclosure Letter as Property Numbers 1, 5-22,
30 and 31 (the “Existing Title Policies”) and the Title Commitments issued to
its lenders for the owned Real Property designated on Section 6.6(a) of the
Company Disclosure Letter as Properties 1-22, 25-31 (the “Title Commitments”),
copies of which have been made available to Buyer. Buyer hereby acknowledges
receipt of the Existing Title Policies and Title Commitments as evidence of the
status of the Companies’ title to the Real Property as reflected in the Existing
Title Policies and the Title Commitments and acceptance of all matters thereon
as Permitted Encumbrances or Permitted Liens. With respect to the
tunnel/pedestrian link connecting Property 1 to the vestibule, Buyer hereby
acknowledges receipt of the Agreements referenced in Section 6.6(a) of the
Company Disclosure Letter pertaining to such link and the City Encroachment
Permit referenced on Section 5.2(c) of Sellers Disclosure Letter and, subject to
receipt of the replacement encroachment permit referenced in Section 4.2(p) of
this Agreement, accepts same as evidence of the Company’s title to the
tunnel/pedestrian link. With respect to the vacated streets listed on
Section 6.6(a) of the Company Disclosure Letter, Buyer may obtain an Owner’s
title insurance policy at Buyer’s sole cost and expense.

(b) Sellers and Buyer shall split the cost of a new Owner’s Title Insurance
Policy, provided that Sellers maximum payment for the new Owner’s Title
Insurance Policy shall not exceed the sum of Fifty Thousand Dollars ($50,000)
and Buyer shall be responsible for all costs and expenses in excess of $100,000.
Such new Owner’s Title Insurance Policy shall be in an amount determined by
Buyer issued by Title Company for the owned Real Property referenced on Schedule
6.6(a) on the Company Disclosure Letter including a non-imputation endorsement,
if available, (the “Closing Title Policy”), which shall be subject only to the
Permitted Liens and Permitted Encumbrances. Buyer agrees to accept valid and
insurable (at ordinary rates) fee simple title to the owned Real Property
subject to the Permitted Liens and Permitted Encumbrances.

(c) In the event that any new liens or encumbrances to the title to the owned
Real Property other than the Permitted Encumbrances or the Permitted Liens shall
be created or appear on the title to the owned Real Property that unreasonably
interfere with or impair the ability to use the owned Real Property as presently
constructed and located on the owned Real Property, materially diminish the
value of the owned Real Property or any other matter which would render title to
the owned Real Property uninsurable and unmarketable, Sellers shall cause such
liens or encumbrances to be removed from title prior to the Closing Date and, if
Sellers

 

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shall fail to cause such matters to be removed, Buyer may cause such matters to
be removed from title, and Buyer shall receive a credit against the Purchase
Price at Closing equal to the cost of having such matters removed from title.

Section 12.2 Survey. Section 12.2 of the Company Disclosure Letter sets forth
the most current ALTA Surveys for the owned Real Property designated on
Section 6.6(a) of the Company Disclosure Letter as Property Numbers 1, 5-9,
11-24, 30 and 31 (the “Existing Surveys”), copies of which have been made
available to Buyer. Sellers’ Lenders obtained ALTA surveys on the Real Property
designated on Schedule 6.6(a) on the Company Disclosure Letter as Property
numbers 1-4, 5-7, 8-9, and 13-22 (the “Lender’s Surveys”), copies of which have
been made available to Buyer. Buyer agrees to accept the Real Property subject
to all matters shown by the Existing Surveys and the Lender’s Surveys. Sellers
shall cause the Lender’s Surveys (or the most recent Existing Survey, if there
is no Lender’s Survey) to be updated and recertified to the respective Companies
no more than thirty (30) days and not less than five (5) days prior to the
Closing Date, at Buyer’s option and at Buyer’s sole expense such that Buyer
shall receive current, certified ALTA surveys with respect to all Real Property
identified in Section 6.6(a) of the Company Disclosure Letter (the “Surveys”).
Buyer may obtain a survey on Property 10 at its sole cost and expense. Except as
set forth in Section 12.2 of the Company Disclosure Letter, if a recertified
updated Lender’s Survey reveals any matters not already shown on the Existing
Surveys that would materially and adversely affect the ability to use the Real
Property as presently constructed and located on the Real Property, materially
diminish the value of the Real Property or any other matter which would render
title to the Real Property uninsurable and unmarketable, Sellers shall correct
such condition prior to the Closing, at Sellers’ sole cost and expense. Buyer
acknowledges that there is no survey for the Real Property designated as
Property 10 on Section 6.6(a) of the Company Disclosure Letter.

Section 12.3 AS IS. SUBJECT ONLY TO SELLERS’ 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 SELLERS AND THE COMPANIES, 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’ 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 COMPANIES, SELLERS 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 BASED ON WARRANTIES AND REPRESENTATIONS EXPRESSLY SET

 

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FORTH IN THIS AGREEMENT AND REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH
IN ANY CERTIFICATE DELIVERED PURSUANT HERETO. SUBJECT ONLY TO SELLERS’
REPRESENTATIONS, WARRANTIES AND COVENANTS EXPRESSLY CONTAINED HEREIN, THE
CONDITIONS SET FORTH IN ARTICLE 9 AND THE REPRESENTATIONS, WARRANTIES, AND
CONDITIONS SET FORTH HEREIN AND IN ALL CERTIFICATES AND AGREEMENTS DELIVERED BY
SELLERS PURSUANT TO THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT NEITHER
THE COMPANIES, SELLERS, 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
COMPANIES, SELLERS, ANY OF THEIR RESPECTIVE 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 COMPANIES OR ANY ENTRY MADE IN THE COMPANIES’ 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;

(f) THE NATURE, QUALITY OR CONDITION OF THE PURCHASED ASSETS, INCLUDING SOIL
CONDITIONS, 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;

 

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(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.

Section 12.4 No Conflict. Nothing in this Article 12 shall limit or modify any
of Company’s obligations pursuant to Section 8.1(e) hereof or any remedies that
may be available to Buyer in connection with any breach of such obligations
pursuant to this Agreement.

Section 12.5 Section 1031 Transactions. Sellers and Buyer acknowledge and agree
that the purchase and sale of all or any portion of the Purchased Assets may be
part of a tax-free exchange under Section 1031 (“1031 Transaction”) of the Code
for either Buyer or Sellers. Each party hereby agrees to take all reasonable
steps on or before the Closing Date to facilitate such exchange if requested by
the other party, provided that (a) no party making such accommodation shall be
required to acquire any substitute property, (b) such exchange shall not affect
the representations, warranties, liabilities, covenants and obligations of the
Parties to each other under this Agreement, (c) no party making such
accommodation shall incur any additional cost, expense or liability, including
liability for Transfer Taxes, in connection with such exchange, and (d) except
as specifically provided in this Section 12.5, no dates in this Agreement will
be extended as a result thereof. Notwithstanding anything to the contrary
contained in the foregoing, if Buyer so elects to close the transfer of some or
all of the Purchased Assets as such an exchange, then (i) Buyer, at its sole
option, may delegate its obligations to acquire some or all of the Purchased
Assets under this Agreement, and may assign its rights to receive some or all of
the Purchased Assets from Sellers or the Companies, to a

 

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deferred exchange intermediary (an “Intermediary”) or to an exchange
accommodation titleholder, as the case may be; (ii) such delegation and
assignment shall in no way reduce, modify or otherwise affect the obligations of
Buyer pursuant to this Agreement; (iii) Buyer shall remain fully liable for its
obligations under this Agreement as if such delegation and assignment shall not
have taken place; (iv) Intermediary or exchange accommodation titleholder, as
the case may be, shall have no liability to Seller; and (v) the closing of the
acquisition of some or all of the Purchased Assets by Buyer or the exchange
accommodation titleholder shall be undertaken by direct deed, assignment and/or
other appropriate conveyance from Sellers or the Companies to Buyer or to an
exchange accommodation titleholder, as the case may be. In connection with a
1031 Transaction, at the request of Buyer, Sellers shall undertake (or cause to
be undertaken) any and all restructuring steps and actions not described in this
Agreement and make or not make any such elections, and take such further actions
as may be reasonably requested by the Buyer, (which steps, by way of example and
not by limitation, may include, but are not be limited to, Target: (i) selling
some or all of its real estate assets to Buyer or Buyer’s designee and / or
assignee; (ii) contributing some or all of its real estate assets to a wholly
owned limited liability company followed by a sale by Target of 100% of such
limited liability company membership interests to Buyer or Buyer’s designee and
/ or assignee; and / or (iii) any combination of the forgoing two clauses
(i) and (ii)); provided however, that such restructuring steps shall not cause a
material adverse effect on Sellers, shall not delay the Closing and the cost of
such restructuring shall be borne by Buyer. For the avoidance of doubt, any
increase in Transfer Taxes that results from any request by Buyer pursuant to
this Section 12.5 shall be borne solely by Buyer.

ARTICLE 13

MISCELLANEOUS

Section 13.1 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, and the Tray
Ledgers), notes receivable or overdue accounts receivable, in each case, due and
owing by any third party.

“Acquisition Proposal” means any proposal or offer from any Person relating to
any merger or consolidation involving any of the Companies or the direct or
indirect sale, lease, exchange or other acquisition, disposition or purchase all
or any part of the Real Property or the other Purchased Assets the value of
which exceeds 10% of the Purchase Price, 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; provided that, with
respect to Buyer, the term Affiliate shall refer only to a Person that directly
or indirectly controls or is controlled by Tropicana.

“Amenity Services” means food, beverage, hotel, spa, shopping, entertainment,
and other services provided at a casino.

 

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“Ancillary Agreements” means the Trademark Assignment Agreement, the Assignment
of Membership Interests, the Limited Guarantee, the 338(h)(10) Letter, the
Transition Services Agreement, if any, and the Deposit Escrow Agreement.

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

“Business Day” means each day, other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

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

“Capex Shortfall” means the aggregate negative amount, if any, by which the
aggregate amount of the Monthly Capital Expenditures for the period commencing
on August 1, 2013 and continuing through and until the Closing Date is less than
the aggregate Monthly Target Capital Expenditures for the same period.

“Casino” means (a) that certain casino located on the Real Property and commonly
known as Lumière Place Casino, (b) HoteLumiere, and (c) that certain hotel
located on the Real Property and commonly known as the Four Seasons Hotel St.
Louis®, including all restaurants, meeting spaces and other amenities associated
with such casino and hotel.

“Casino Services” means Gaming Services and Amenity Services.

“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 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
Companies, other than the Excluded Contracts and Contracts that relate to the
Excluded Assets. Company Contracts shall include Hotel Agreements.

“Company Material Adverse Effect” means any change, event, circumstance,
occurrence, condition, development or effect that has had, will have or would
reasonably be expected to have, a material and adverse effect on the business,
condition (financial or otherwise), assets or results of operations of the
Purchased Assets or the Business, taken as a whole; provided, that to the extent
that any change, event, occurrence, condition, development or effect is caused
by or results from any of the following, it shall not 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 Companies operate or (B) the
financial, banking, currency or capital markets (in each case of (A) and (B), to
the extent that the same does not have a disproportionate effect on the
Companies compared with other

 

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businesses in the same industry), (ii) (A) 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 Closing) (in each case, to
the extent that the same does not have a disproportionate effect on the
Companies compared with other businesses in the same industry) or (B) any change
in Law permitting or expanding casino gambling (such as electronic gaming
machines or table games) at racetracks in the State of Illinois or having the
effect of banning or restricting smoking at the Casino, (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 (other than any physical damage to
the Casino by fire or other casualty caused by an act of terrorism), (v) changes
in Laws that do not disproportionately affect the Companies in a manner
different from other businesses subject to such Laws, (vi) the taking of any
action contemplated by this Agreement and/or any of the Ancillary Agreements or
the announcement of the transactions contemplated hereby or thereby, (vii) the
general decrease in the market value of comparable assets, including casinos
generally (in each case, to the extent that the same does not have a
disproportionate effect on the Companies compared with other businesses in the
same industry), and (viii) the failure of the Companies to meet any financial or
other projections (provided that the underlying cause of, or factors
contributing to, any such failure to meet financial or other projections shall
be considered in determining whether a Company Material Adverse Effect has
occurred).

“Confidentiality Agreement” means that certain agreement entered into as of
June 17, 2013 between Parent and an Affiliate of Buyer.

“Contract” means any oral or written agreement, contract, lease, sublease,
license, sublicense, mortgage, indenture, instrument, power of attorney, note,
loan, evidence of indebtedness, purchase order, letter of credit, settlement
agreement, franchise agreement, restriction, obligation, undertaking, covenant
not to compete, employment agreement, 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.

“Credit Agreement” means the credit facility provided to the Companies pursuant
to the Amended and Restated Credit Facility, dated August 13, 2013, by and among
Pinnacle Entertainment, Inc., as borrower, among the financial institutions
party thereto as lenders and other financial institutions from time to time
party thereto, and JPMorgan Chase Bank, N.A. as Administrative Agent, as
amended, restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt
securities to institutional investors or other purchasers) in whole or in part
from time to time.

 

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“Customer Database Records” means a copy, in machine-readable format usable,
including a .csv file, by Buyer, of data and information, whether stored
digitally, electronically, magnetically, or in any other format, of all data and
information in Sellers’ or the Companies’ possession relating to persons that
visit the Casino or activities by persons at the Casino, including where
available:

1. Each person’s personal and demographic information, including, without
limitation, the customer’s name, address, phone number, social security number,
birth date, gender, email, and disassociated patron status (where available);

2. Each person’s transactional history at the Casino and/or each person’s
patronage, purchase, and use of Casino Services during visits to the Casino,
including the dates, game types, average wager, times, length of visits, and
hotel room reservation details (i.e., room types, dates, booked rates for future
reservations, payment method);

3. All data and information relating to the value spent or lost by persons
during their visits to the Casino or value as a consumer of Casino Services at
the Casino, including information such as each customer’s total actual win or
loss, total theoretical win or loss value, average daily worth (ADW), average
daily theoretical value (ADT or THEO), or other metrics related to the
customer’s transaction history or purchases of Casino Services at the Casino;

4. Each person’s tier status in the Customer Loyalty Program and total comp
balance on the Closing Date for all of Parent’s and its Affiliate’ casinos
(including the Casino) in the aggregate; and

5. Any other data and information customarily used by Parent or its Affiliates
at the Casino to market or sell Casino Services to persons, including, but not
limited to, survey data, Twitter accounts, and Facebook accounts;

provided, however, Customer Database Records does not include: (a) a copy of any
Retained Database Records; or (b) competitively sensitive information relating
to Parent’s or its Affiliates’ (including the Casino for periods prior to the
Closing) pricing strategies, including data (other than that described in
paragraph 5 of this definition) relating to the value of any benefits, rewards,
gifts, coupons, or other player reinvestment incentives provided or offered by
Parent or its Affiliates (including the Casino for periods prior to the Closing)
to the customer.

“Customer Loyalty Program” means the mychoice® player loyalty program of Parent
and its Affiliates.

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

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

 

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“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 any 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 any 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 substantially remediated or otherwise
substantially corrected prior to the Effective Date in accordance with
Environmental Laws 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 Effective Date, 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
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 Companies, 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 Sellers’ good faith estimate of
the Net Working Capital of the Companies, on a consolidated basis, 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.

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

“Excluded Contracts” means all Contracts identified as such in Schedule A of the
Company Disclosure Letter.

 

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“Excluded Software” means all computer software owned by or licensed for use by
the Companies or their 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 Parent’s customer database (except to the
extent provided in Section 8.15) and any customer tracking system.

“Final Closing Net Working Capital” means the Net Working Capital of the
Companies, on a consolidated basis, 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 any Company and placed on,
attached to, or located at the Real Property.

“Four Seasons Hotel” means the Four Seasons Hotel St. Louis®, which is owned by
Target and located at 999 N. 2nd Street, St. Louis, Missouri and operated by
Four Seasons Hotels Limited.

“Franklin Matter” means the lawsuit captioned Diane Franklin et al. v. Pinnacle
Entertainment, Inc. (United States District Court for the Eastern District of
Missouri No. 4:12-CV-00307).

“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 a Company or an Affiliate of
a Company.

“FTC Documents” means the Consent Agreement, the Decision and Order accepted by
the FTC (Docket No.9355) and the related Order to Hold Separate and Maintain
Assets issued by the FTC, Management Agreement, Monitor Agreement (each, as
described more fully in the Decision and Order or Order to Hold Separate and
Maintain Assets), but only insofar as such documents relate to the “Lumiere
Assets”, as such term is defined in the aforementioned Decision and Order.

“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
Companies from Sellers to Buyer as contemplated by and upon the terms set forth
in this Agreement.

 

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“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 Services” means services for slot, video poker, table gaming, and any
other gambling lawfully permitted at a casino, including both gambling actually
offered at a casino and gambling which could be offered there.

“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 Companies.

“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.

“Governing Documents” means, with respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws of such
corporation; (b) if a limited liability company, the articles of organization or
certificate of formation and operating agreement, regulations, limited liability
company agreement, or company agreement of such limited liability company;
(c) if another type of entity, any other charter or similar document adopted or
filed in connection with the creation, formation or organization of such entity;
and (d) any amendment or supplement to any of the foregoing.

“Halsey Matter” means the lawsuit captioned Linda Halsey, et al. v. Casino One
Corporation (United States District Court for the Eastern District of Missouri
No. 4:12-CV-01602-CDP).

“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.

“Hotel Agreements” means collectively, (i) the Hotel Management Agreement;
(ii) the Hotel License Agreement; (iii) the Hotel Revenue Management Agreement,
and (iv) Hotel Letter Agreements.

 

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“Hotel Letter Agreements” means collectively, (i) Letter Agreement between
Target and Four Seasons Hotels Limited dated October 30, 2007 regarding
Additional Financial Reporting; (ii) Letter Agreement between Target and Four
Seasons Hotels Limited dated October 30, 2007 regarding Insurance Matters; and
(iii) Letter Agreement between Target and Four Seasons Hotels Limited dated
October 30, 2007 regarding benefits and privileges to be made available to
Target.

“Hotel License Agreement” means the Hotel License Agreement between Four Seasons
Hotels Limited and Target dated October 30, 2007.

“Hotel Management Agreement” means the Hotel Management Agreement between Four
Seasons Hotels Limited and Target dated October 30, 2007.

“Hotel Revenue Management Agreement” means the Revenue Management Agreement
between Four Seasons Hotels Limited and Target dated February 2, 2011.

“HoteLumière” means HoteLumière, located at 999 N. 2nd Street, St. Louis,
Missouri, and owned and operated by ES.

“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 Casino (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 8.11(d) hereof.

“Indebtedness” of any Person means (i) indebtedness for borrowed money or
indebtedness issued or incurred in substitution or exchange for indebtedness for
borrowed money, including any related interest, prepayment penalties or
premiums, fees and expenses, (ii) amounts owing as deferred purchase price for
property or services (other than trade payables and accrued expenses that are
current liabilities), including all capital leases, seller notes and “earn-out”
payments, (iii) indebtedness evidenced by any note, bond, debenture, mortgage or
other debt instrument or debt security, including any related interest,
prepayment penalties or premiums, fees and expenses, (iv) net obligations under
any interest rate, currency or other hedging agreement or reimbursement
obligations in connection with letters of credit, or (v) guarantees with respect
to any indebtedness of any other Person of a type described in clauses
(i) through (iv) above.

“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.

 

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“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 “knowledge of Sellers” and words
of similar import, the knowledge, after reasonable inquiry, of: Anthony
Sanfilippo, Carlos Ruisanchez, John A. Godfrey, Neil Walkoff and Jeffrey
Babinski, and for the purposes of Section 6.10 only, Bob Herr, and (ii) when
used in the phrase “knowledge of Buyer” or “Buyer’s knowledge” and words of
similar import, the knowledge, after reasonable inquiry, of: Lance Millage,
William Murtha and Chris Benak.

“LCRA” means the Land Clearance Redevelopment Authority of the City of St.
Louis, a public body corporate and politic established pursuant to the Land
Clearance for Redevelopment Authority Law of the State of Missouri.

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

“Liability” or “Liabilities” means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of such
Person.

“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.

“Monthly Capital Expenditures” means the aggregate dollar amount of capital
expenditures actually made by the Companies, taken together, during a specified
calendar month, commencing with August 1, 2013, and measured as of the last day
of such month, or the Closing Date, as applicable.

“Monthly Target Capital Expenditures” means an amount of Three Hundred Thousand
Dollars ($300,000.00) per calendar month, commencing with the calendar month of
August 2013. The Monthly Target Capital Expenditures for the month in which the
transactions contemplated by this Agreement are consummated shall be equal to
Three Hundred Thousand Dollars ($300,000.00) multiplied by a fraction, the
numerator of which is the number of days elapsed in such month through the
Closing Date and the denominator of which is the total number of days in such
month.

“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, and current prepaid expenses, and (b) the
current liabilities of the Business, including accounts payable, all accrued
expenses, all accrued current Tax liabilities, all accrued liabilities with
respect to the Transferred Employees, all Gift Certificates, all Customer
Deposits and all Progressive Liabilities, but excluding any liabilities relating
to remaining payment obligations of the Companies (if any) under (i) Section 1
of that certain Seventh

 

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Amendment to Redevelopment Agreement dated as of December 11, 2012 by and
between the LCRA and Parent, (ii) the Excluded Contracts and (iii) the Yesco
Agreement, with each amount determined in accordance with GAAP applied on a
basis consistent with the past practices of the Companies and their Affiliates.
For purposes of this Agreement, Net Working Capital shall exclude any deferred
Tax assets or deferred Tax liabilities. Net Working Capital also shall exclude
any liabilities for Transfer Taxes for which the Buyer is liable under
Section 8.9.

“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.

“Parent Transferred Intellectual Property” means the trademarks identified on
Section 6.7(a)(1) of the Company Disclosure Letter as Intellectual Property to
be transferred to the Companies.

“Permitted Encumbrances” means (i) any lien to secure payment of real estate
Taxes, including assessments, which is a lien not yet due or payable, (ii) all
matters disclosed by the Existing Surveys and Lender’s Surveys which do not
interfere with the current use of the Property, (iii) zoning and subdivision
ordinances and Laws limiting or restricting the use to which the property may be
put (provided such ordinances are not currently violated or in anticipation of
being violated), (iv) underground and overhead cables, lines and utility
services, (v) terms and conditions of licenses, permits and approvals for the
Real Property, Laws of any Governmental Entity having jurisdiction over the Real
Property, (vi) Private Restrictions disclosed in Section 6.6(i) of the Company
Disclosure, and (vii) any easements granted to utilities in connection with the
vacation of the alley in City Block 22 or vacated streets.

“Permitted Liens” means, with respect to the Companies (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, including assessments, 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 Companies shall in good faith
currently be prosecuting an appeal or other proceeding for review and with
respect to which the Companies 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 Companies; 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 Existing Title Policies and the Title
Commitments; and (viii) any Lien or Encumbrance that will be released and
discharged at or prior to the Closing, including, without limitation, Liens and
Encumbrances under the Credit Agreement.

 

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“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, boat in a moat, 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 any 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
Companies under the Gaming Laws that would occur absent such approval.

“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.

“Private Restriction” means any unrecorded covenant, restriction, or condition
imposed on the owned Real Property other than by Law.

“Progressive Liabilities” means the liability of the Companies, determined in
accordance with GAAP, in respect of slot machines and table games with an in
house progressive jackpot feature (and, with respect to slot machines, if such
slot machines are not removed by the vendor at or before the Closing).

“Purchased Assets” means all assets owned by the Companies except for the
Excluded Assets.

“Real Property” means the real property described on Sections 6.6(a) and 6.6(b)
of the Company Disclosure Letter attached hereto, in each case together with the
buildings located thereon and the boat in a moat 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,

 

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hereditaments, covenants, conditions, restrictions, easements and other
appurtenances on the Real Property or otherwise appertaining to or benefitting
the Real Property, 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.

“Redevelopment Agreement” means that certain Redevelopment Agreement between the
LCRA for itself and on behalf of the City of St. Louis, Missouri and Parent
dated as of April 22, 2004, as amended.

“Retained Database Records” means the data and information, whether stored
digitally, electronically, magnetically, or in any other format, relating to
persons that visit Parent’s or its Affiliates’ casinos or hotels other than the
Casino or activities by persons at such casino or hotels and includes, without
limitation:

1. Each person’s personal and demographic information, including, without
limitation, the customer’s name, address, phone number, social security number,
birth date, gender, email, and disassociated patron status;

2. Each person’s transactional history at Parent’s or its Affiliates’ casinos or
hotels other than the Casino and/or each person’s patronage, purchase, and use
of Casino Services during visits to Parent’s or its Affiliates’ casinos or
hotels other than the Casino, including the dates, game types, average wager,
times, length of visits, and hotel room reservation details (i.e., room types,
dates, booked rates for future reservations, payment method);

3. All data and information relating to the value spent or lost by persons
during their visits to Parent’s or its Affiliates’ casinos or hotels other than
the Casino or value as a consumer of Casino Services at Parent’s or its
Affiliates’ casinos or hotels other than the Casino, including information such
as each customer’s total actual win or loss, total theoretical win or loss
value, average daily worth (ADW), average daily theoretical value (ADT or THEO),
or other metrics related to customer’s transaction history or purchases of
Casino Services at Parent’s or its Affiliates’ casinos or hotels other than the
Casino;

4. Each person’s tier status in the Customer Loyalty Program and total comp
balance on the Closing Date for all of Parent’s and its Affiliate’ casinos
(including the Casino) in the aggregate; and

5. Any other data and information customarily used by Parent or its Affiliates
at a casino or hotels other than the Casino to market or sell Casino Services to
persons, including survey data, Twitter accounts, and Facebook accounts,
provided that such information relates to the person’s visits to a casino or
hotel other than the Casino.

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

 

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“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 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.

“Target Net Working Capital” means $0, provided that Target Net Working Capital
shall include at least $11,000,000 of cash and cash equivalents (including House
Funds).

“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, lodging, 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 Insurer” means First American Title Insurance Company.

“Title Policies” means the Title Policies listed on Section 6.6 of the Company
Disclosure Letter.

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

“Trustee” means any Hold Separate Monitor, Hold Separate Manager or Divestiture
Trustee (each term and their respective roles as described in the FTC Orders),
if any, appointed by the FTC to oversee, manage and operate the Business at the
applicable time.

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

“Yesco Agreement” means the Conditional Sale Agreement, dated February 6, 2007,
between Target and Young Electric Sign Company, as modified by the addendum
thereto.

 

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

 

Term

   Page  

1031 Transaction

     70   

338(h)(10) Letter

     2   

Action

     20   

Administrative Complaint

     1   

Amendment

     49   

Ameristar

     1   

Arbitrator

     49   

Assigned Contracts

     10   

Assignment of Membership Interests

     9   

Auditor

     6   

Buyer Benefit Plans

     35   

Buyer Disclosure Letter

     27   

Buyer Indemnified Parties

     58   

Buyer Indemnified Party

     58   

Buyer Permits

     29   

Buyer Related Parties

     29   

Buyer’s 401(k) Plan

     35   

Cap

     61   

CID

     9   

CID Special Assessment

     9   

Closing

     8   

Closing Date

     8   

Closing Payment

     3   

Companies

     1   

Company

     1   

Company Benefit Plans

     23   

Company Disclosure Letter

     13   

Company Permits

     22   

Consent Agreement

     1   

Customer Deposits

     7   

Damages

     58   

Deductible

     61   

Deposit

     3   

Deposit Escrow Agreement

     3   

Determination Date

     7   

Equity Interests

     1   

ERISA

     23   

ES

     1   

Escrow Agent

     3   

Estimated Closing Payment

     5   

Estimated Closing Statement

     5   

Excluded Assets

     2   

Existing Surveys

     67   

Existing Title Policies

     66   

Final Closing Payment

     6   

Final Closing Statement

     6   

Financial Information

     15   

Four Seasons Agreement

     9   

FTC

     1   

FTC Orders

     1   

Fundamental Representations

     57   

Governmental Approvals

     39   

Governmental Entity

     12   

Hold Separate Order

     1   

Improvements

     81   

Indemnified Parties

     59   

 

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Indemnified Party

     59   

Indemnifying Parties

     59   

Indemnifying Party

     59   

Inspection

     36   

Intended Assignee

     41   

Interim Period

     47   

Intermediary

     70   

Inventoried Vehicles

     44   

Labor Agreement

     22   

Lender Liens

     48   

Lender’s Surveys

     67   

Lenders

     48   

Limited Guarantee

     2   

Loan Obligations

     48   

Lumière Only Customers

     47   

Material Contracts

     20   

Membership Interests

     1   

Merger

     1   

Merger Agreement

     1   

Multiemployer Plan

     23   

Multiple Employer Plan

     23   

Notice

     59   

Order

     1   

Other Transferred Registered IP

     19   

Outside Date

     8   

Parent

     1   

Pre-Closing Separate Tax Returns

     63   

Property Employees

     23   

Purchase Price

     3   

Purchase Price Allocation

     4   

RE

     1   

Representatives

     34   

Required Governmental Consents

     53   

Section 338(h)(10) Election

     4   

Seller Indemnified Parties

     58   

Seller Indemnified Party

     58   

Sellers

     1   

Sellers Disclosure Letter

     11   

Shared Customers

     48   

STLH Equity Interests

     51   

Straddle Period

     64   

Survival Period

     58   

Target

     1   

Target Stock

     1   

Tax Arbiter

     4   

Tax Claim

     64   

Third Party

     34   

Third Party Claim

     60   

Title Commitments

     66   

Trademark Assignment Agreement

     8   

Transfer Taxes

     42   

Transferred Employee

     34   

Transferred Marks and Domain Names

     19   

Transition Services Agreement

     9   

Tropicana

     2   

 

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Section 13.2 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury;
Limitation on Damages.

(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
Delaware applicable to contracts executed in and to be performed entirely within
the State of Delaware, 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 Federal
District Court for the District of Delaware (and appellate courts from any of
the foregoing) as the party instituting such suit, action or proceeding may, in
its sole discretion, elect, 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 Delaware, appoints Corporation
Service Company as such party’s agent in the State of Delaware 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 13.3 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 13.2(c).

 

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(d) The parties hereby acknowledge and agree that, in the circumstances where
Sellers are entitled to under this Agreement pursue a specific performance
remedy, the failure of Buyer or any of Buyer’s Affiliates to perform its
agreements and covenants hereunder, including the failure to take all actions as
are necessary on its part to consummate the transactions contemplated hereby,
will cause irreparable injury to Sellers, for which damages, even if available,
will not be an adequate remedy. Accordingly, except as otherwise limited by this
Agreement, Buyer on behalf of itself and its Affiliates agrees that Sellers
shall be entitled to seek an injunction or injunctions in the circumstances
where Sellers are entitled under this Agreement to pursue a specific performance
remedy in any federal court located in the Federal District Court for the
District of Delaware, without bond or other security.

Section 13.3 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):

if to Buyer, to:

Tropicana Entertainment, Inc.

Brighton and The Boardwalk

Atlantic City, New Jersey 08401

Attention: General Counsel

Facsimile: (609) 345-7190

with a copy, which shall not constitute notice, to:

Brownstein Hyatt Farber Schreck, LLP

410 17th Street, Suite 220

Denver, Colorado 80202

Attn: Kevin A. Cudney, Esq.

Facsimile: 303-223-0966

if to Sellers, or the Companies (prior to the Closing), to:

Pinnacle Entertainment, Inc.

8918 Spanish Ridge Avenue

Las Vegas, Nevada 89148

Attention: General Counsel

Facsimile: (702) 541-7773

 

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with a copy, which shall not constitute notice, to:

Irell & Manella LLP

1800 Avenue of the Stars

Suite 900

Los Angeles, California 90067

Attention: Ashok W. Mukhey, Esq.

Facsimile: (310) 203-7199

Section 13.4 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 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 each Company
will be referred to herein individually as a “party” and collectively as
“parties” (except where the context otherwise requires).

Section 13.5 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 pursuant to
the terms thereof. Each party hereto agrees that, except for the representations
and warranties contained in this Agreement, the Company Disclosure Letter, the
Sellers Disclosure Letter, the Buyer Disclosure Letter, and any certificates or
other documents delivered in connection with the consummation of the
transactions contemplated by this Agreement, neither Sellers, the Companies, 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 13.6 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.

 

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Section 13.7 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 or otherwise; provided, however, Buyer may
assign any of its rights in whole or in part to one or more of Tropicana, or any
of its direct or indirect wholly owned Subsidiaries if it has obtained written
consent of Sellers, not to be unreasonably withheld, conditioned or delayed;
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 13.8 Parties of Interest. Except as set forth in Article 11 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.

Section 13.9 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 13.10 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 13.11 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of Buyer and Sellers.

Section 13.12 Non-Recourse. This Agreement may only be enforced against, and any
Action based upon, arising out of, or related to this Agreement, or the
negotiation, execution or performance of this Agreement, may only be brought
against the entities that are expressly named as parties hereto and then only
with respect to the specific obligations set forth herein with respect to such
party. No past, present or future director, officer, employee, incorporator,
manager, member, partner, stockholder, Affiliate (other than the Companies prior
to the Closing as an Affiliate of Sellers and Sellers prior to the Closing as
Affiliates of the Companies; and other than the Companies on or after the
Closing as an Affiliate of Buyer and the Buyer on or after the Closing as an
Affiliate of the Companies), agent, attorney or other Representative of any
party hereto or of any Affiliate of any party hereto, or any of their successors
or permitted assigns, shall have any liability for any obligations or
liabilities of any party hereto under this Agreement or for any claim or action
based on, in respect of or by reason of the transactions contemplated hereby.

Section 13.13 Extension; Waiver. At any time prior to the Closing, Buyer,
Sellers and the Companies by action taken or authorized by their respective
boards of directors, managing members, or equivalent governing body or Person
may, to the extent legally allowed (i) extend

 

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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, or
(iii) waive compliance with any of the agreements or conditions contained
herein. 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 13.14 Time of Essence. Time is of the essence with respect to this
Agreement and all terms, provisions, covenants and conditions hereof.

 

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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

    HOLDCO

 

TROPICANA ST. LOUIS LLC,

a Delaware limited liability company

   

CASINO MAGIC, LLC, a Minnesota limited liability

company

By:

 

/s/ Anthony P. Rodio

    By:   Pinnacle Entertainment, Inc., a

Name: Anthony P. Rodio

Its: President & CEO

     

Delaware corporation

Its Sole Member

        By:  

/s/ John A. Godfrey

         

John A. Godfrey,

Executive Vice President,

Secretary and General Counsel

TARGET

    ES

CASINO ONE CORPORATION, a

    PNK (ES), LLC, a Delaware limited liability company

Mississippi corporation

   

 

By:

 

 

Pinnacle Entertainment, Inc., a

By:

 

/s/ John A. Godfrey

      Delaware corporation  

John A. Godfrey,

Vice President and Secretary

      Its Sole Member         By:  

/s/ John A. Godfrey

         

John A. Godfrey,

Executive Vice President,

Secretary and General Counsel

PARENT

 

PINNACLE ENTERTAINMENT, INC.

a Delaware corporation

   

RE

 

PNK (ST. LOUIS RE), LLC, a Delaware

limited liability company

By:

 

/s/ John A. Godfrey

    By:   Pinnacle Entertainment, Inc., a   John A. Godfrey,       Delaware
corporation  

Executive Vice President, Secretary

and General Counsel

      Its Sole Member         By:  

/s/ John A. Godfrey

         

John A. Godfrey,

Executive Vice President,

Secretary and General Counsel

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

STLH

 

PNK (STLH), LLC, a Delaware limited

liability company

 

By:    Pinnacle Entertainment, Inc., a

Delaware corporation

Its Sole Member

 

    By:   /s/ John A. Godfrey       John A. Godfrey,       Executive Vice
President,       Secretary and General Counsel