EXHIBIT 10.3

$47,000,000

LANDRY’S RESTAURANTS, INC.

11  5/8% Senior Secured Notes due 2015

PURCHASE AGREEMENT

April 23, 2010

JEFFERIES & COMPANY, INC.

520 Madison Avenue

New York, New York 10022

Ladies and Gentlemen:

Landry’s Restaurants, Inc., a Delaware corporation (the “Company”), and each of
the Guarantors (as hereinafter defined) hereby agree with you as follows:

1. Issuance of Notes. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to Jefferies & Company, Inc. (the “Initial
Purchaser”) $47,000,000 aggregate principal amount of its 11 5/8% Senior Secured
Notes due 2015 (the “Notes”). The Notes will be issued pursuant to the indenture
(the “Indenture”), dated as of November 30, 2009, by and among the Company, the
Guarantors and Deutsche Bank Trust Company Americas, as collateral agent (in
such capacity, the “Collateral Agent”), and Wilmington Trust FSB, as successor
trustee. (in such capacity, the “Trustee”). Capitalized terms used, but not
defined herein, shall have the meanings set forth in the “Description of
Exchange Notes” section of our registration statement on Form S-4 (File
No. 333-164887) (the “Exchange Offer Registration Statement”).

The Notes will be offered and sold to the Initial Purchaser pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the “Securities Act”). Upon original issuance thereof, and until
such time as the same is no longer required under the applicable requirements of
the Securities Act, the Notes shall bear the legends set forth in the “Notice to
Investors” section of the preliminary offering term sheet, dated the date hereof
(the “Preliminary Offering Term Sheet”), including the information incorporated
by reference therein and the final offering term sheet (the “Final Offering Term
Sheet”) which includes the pricing terms relating to the purchase and sale of
the Notes by the Initial Purchaser (the “Offering”). The Preliminary Offering
Term Sheet and the Final Offering Term Sheet as amended and supplemented are
referred to herein as the “Pricing Disclosure Package.”

Approximately $24.0 million of the net proceeds from the sale of the Notes will
be used to finance the acquisition of the stock of The Oceanaire, Inc., an
upscale seafood restaurant chain, if such acquisition is consummated. The
remaining amount of net proceeds from the sale of the notes, or all of the net
proceeds from this Offering if the acquisition is not consummated, will be used
to repay outstanding revolver balances and for general corporate purposes.

2. Terms of Offering. The Initial Purchaser has advised the Company, and the
Company understands, that the Initial Purchaser will make an offer to sell (the
“Exempt Resales”) some or all of the Notes purchased by the Initial Purchaser
hereunder on the terms set forth in the Pricing Disclosure Package, as amended
or supplemented, solely to persons (the “Subsequent Purchasers”) whom the
Initial Purchaser reasonably believes to be (a) “qualified institutional buyers”
as defined in Rule 144A under the

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Securities Act (“QIBs”), as such rule may be amended from time to time, and
(b) non-U.S. persons permitted to purchase the Notes in offshore transactions in
reliance upon Regulation S under the Securities Act (“Regulation S Persons”), as
such rule may be amended from time to time.

Pursuant to the Indenture, each Domestic Restricted Subsidiary of the Company
shall fully and unconditionally guarantee to each holder of the Notes and the
Trustee, on a senior secured basis, the payment and performance of the Company’s
Obligations under the Indenture and the Notes (each such subsidiary being
referred to herein as a “Guarantor” and each such guarantee being referred to
herein as a “Guarantee”).

Pursuant to the terms of the Indenture and the Collateral Agreements, all of the
Company’s and each Guarantor’s obligations under the Indenture, the Notes and
the Guarantees will be secured by a Lien on substantially all the assets of the
Company and the Guarantors; provided, however, that pursuant to the terms of the
Intercreditor Agreement, such Lien will be contractually subordinated to a Lien
on the Collateral that secures all Obligations under the Amended and Restated
Credit Agreement, dated November 30, 2009, by and among the Company, the
Guarantors, Wells Fargo Capital Finance, LLC (formerly known as Wells Fargo
Foothill, LLC), as administrative agent, co-lead arranger and co-syndication
agent, Jefferies Finance LLC, as co-lead arranger (the “Amended and Restated
Credit Agreement”) and certain other permitted indebtedness.

Holders of the Notes will have the registration rights set forth in the
registration rights agreement applicable to the Notes (the “Registration Rights
Agreement”), to be executed on and dated as of the Closing Date, in a form
reasonably acceptable to the Initial Purchaser in conformity in all material
respects with the description of such registration rights contained in the
Pricing Disclosure Package. Pursuant to the Registration Rights Agreement, the
Company and the Guarantors will agree, among other things, to file with the SEC
(i) a registration statement under the Securities Act relating to the 11 5/8%
Senior Secured Notes due 2015 (the “Exchange Notes”), which shall be identical
to the Notes (except that the Exchange Notes shall have been registered pursuant
to such registration statement and will not be subject to restrictions on
transfer or contain additional interest provisions) to be offered in exchange
for the Notes (such offer to exchange being referred to as the “Exchange
Offer”), and/or (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the “Shelf Registration
Statement”) relating to the resale by certain holders of the Notes. If required
under the Registration Rights Agreement, the Company will issue Exchange Notes
and cause the Guarantors to issue exchange guarantees to the Initial Purchaser
(the “Private Exchange Notes” and “Private Exchange Guarantees,” respectively).
If the Company fails to satisfy its obligations under the Registration Rights
Agreement, it will be required to pay additional interest to the holders of the
Notes under certain circumstances in accordance with the terms of the
Registration Rights Agreement.

This Agreement, the Indenture, the Collateral Agreements, the Registration
Rights Agreement, the Notes, the Exchange Notes, the Private Exchange Notes, the
Guarantees and the Private Exchange Guarantees are collectively referred to
herein as the “Transaction Documents.” The Offering and the application of the
proceeds therefrom as described in the Pricing Disclosure Package and the
issuance and sale of the Notes in accordance with this Agreement are
collectively referred to herein as the “Transactions”.

3. Purchase, Sale and Delivery. On the basis of the representations, warranties,
agreements and covenants contained herein and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Company the
principal amount of the Notes at a purchase price of 106.00% of the aggregate
principal amount thereof. Delivery to the Initial Purchaser of and payment for
the Notes shall be made at a closing (the “Closing”) to be held at 10:00 a.m.,
New York time, on April 28, 2010 (the “Closing Date”) at the New York offices of
Proskauer Rose LLP.

 

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The Company shall deliver to the Initial Purchaser one or more certificates
representing the Notes in global form, registered in such names and
denominations as the Initial Purchaser may request against payment by the
Initial Purchaser of the purchase price therefor (net of expenses of the Initial
Purchaser that are reimburseable by the Company) by immediately available
Federal funds bank wire transfer to such bank account or accounts as the Company
shall designate to the Initial Purchaser at least two business days prior to the
Closing Date. The certificates representing the Notes in definitive form shall
be made available to the Initial Purchaser for inspection at the New York
offices of Proskauer Rose LLP (or such other place as shall be reasonably
acceptable to the Initial Purchaser) not later than 10:00 a.m. one business day
immediately preceding the Closing Date. Notes to be represented by one or more
definitive global securities in book-entry form will be deposited on the Closing
Date, by or on behalf of the Company, with The Depository Trust Company (“DTC”)
or its designated custodian, and registered in the name of Cede & Co.

4. Representations and Warranties of the Company and the Guarantors. The Company
and the Guarantors jointly and severally represent and warrant to the Initial
Purchaser that, as of the date hereof and as of the Closing Date:

(a) No Material Misstatement or Omission. The Pricing Disclosure Package, and
any amendment or supplement thereto as of the date thereof and at all times
subsequent thereto up to the Closing Date and at all times subsequent thereto up
to the Closing Date, do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 4(a) do not apply to
statements or omissions made in reliance upon and in conformity with the
Initial Purchaser Information (as defined in Section 11). No injunction or order
has been issued and no proceeding is pending or threatened, that either
(i) asserts that any of the Transactions is subject to the registration
requirements of the Securities Act or (ii) would prevent or suspend the issuance
or sale of any of the Notes or the use of the Pricing Disclosure Package, in
any jurisdiction. The Pricing Disclosure Package, as of its date, contained all
the information specified in Rule 144A(d)(4) of the Securities Act.

(b) Additional Written Communication. The Company has not prepared, made, used,
authorized, approved or distributed and will not prepare, make, use, authorize,
approve or distribute any written communication that constitutes an offer to
sell or solicitation of an offer to buy the Notes (each such communication by
the Company or its agents and representatives (other than a communication
referred to in clauses (i) and (ii) below) a “Company Additional Written
Communication”) other than (i) the Pricing Disclosure Package and (ii) any
electronic road show or other written communications, in each case used in
accordance with Section 5(c). Each such Company Additional Written
Communication, when taken together with the Pricing Disclosure Package, did not,
and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from each such Company Additional Written
Communication made in reliance upon and in conformity with information furnished
to the Company in writing by the Initial Purchaser expressly for use in any
Company Additional Written Communication.

 

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(c) Subsidiaries. Each corporation, partnership, limited liability company or
other entity in which the Company, directly or indirectly through any of its
subsidiaries, owns more than 50% of any class of equity securities or interests
is listed on Schedule II attached hereto (the “Subsidiaries”). Each Subsidiary
that is an Unrestricted Subsidiary has an asterisk (“*”) next to its name on
such schedule.

(d) Incorporation and Good Standing. Each of the Company and its Subsidiaries
(i) has been duly organized or formed, as the case may be, is validly existing
and, is in good standing under the laws of its jurisdiction of organization,
(ii) has all requisite corporate, limited liability company or partnership power
and authority, as applicable, to carry on its business and to own, lease and
operate its properties and assets as currently being operated, and (iii) is duly
qualified or licensed to do business and is in good standing as a foreign
corporation, limited liability company, partnership or other entity as the case
may be, authorized to do business in each jurisdiction in which the nature of
such businesses or the ownership or leasing of such properties requires such
qualification, except, in each case, where such failure would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
(A) the properties, business, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, (B) the ability of the Company or the Guarantors to perform their
obligations in all material respects under any of the Transaction Documents,
(C) the enforceability of any Collateral Agreement or the attachment, perfection
or priority of any of the Liens or security interests intended to be created
under the Transaction Documents, (D) the validity or enforceability of any of
the Transaction Documents, or (E) the consummation of any of the Transactions
(each, a “Material Adverse Effect”).

(e) Capitalization and Other Stock Matters. All of the issued and outstanding
shares of capital stock or membership interests in, as the case may be, of the
Company and the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and were not issued in violation of, and are not
subject to, any preemptive or similar rights. The table in the “Capitalization”
section of the Exchange Offer Registration Statement (including the footnotes
thereto) incorporated by reference in the Pricing Disclosure Package sets forth,
as of its date, (i) the actual cash and cash equivalents and capitalization of
the Company and the Subsidiaries on a consolidated basis and (ii) the as
adjusted cash and cash equivalents and capitalization of the Company and the
Subsidiaries on a consolidated basis after giving effect to the acquisition by
Tilman J. Fertitta directly or indirectly of all the common stock of the Company
not already owned by Tilman J. Fertitta for $14.75 per share, in cash. Except as
set forth in the table in the “Capitalization” section of the Exchange Offer
Registration Statement incorporated by reference in the Pricing Disclosure
Package, immediately following the Closing neither the Company nor any of the
Subsidiaries will have any liabilities, absolute or accrued, contingent or
otherwise, other than (A) liabilities that are reflected in the Financial
Statements (as hereinafter defined) or (B) liabilities incurred subsequent to
the date thereof in the ordinary course of business, consistent with past
practice, or in connection with the Transactions, that would not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect.
All of the outstanding shares of capital stock or other equity interests of each
of the Subsidiaries are owned, directly or indirectly, by the Company, free and
clear of all liens, security interests, mortgages, pledges, charges, equities,
claims or restrictions on transferability or encumbrances of any kind
(collectively, “Liens), except as set forth in the Pricing Disclosure Package
and other than those imposed by the Securities Act and the securities or “Blue
Sky” laws of certain domestic or foreign jurisdictions and Liens constituting
Permitted Liens. Except as disclosed in the Pricing Disclosure Package, there
are no outstanding (A) options, warrants, subscriptions, calls or other rights
for unaffiliated third parties to purchase from the Company or any of the
Subsidiaries, (B) agreements, contracts, arrangements or other obligations of
the

 

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Company or any of the Subsidiaries to issue to, or to repurchase or otherwise
acquire from, any unaffiliated third parties or (C) other rights of unaffiliated
third parties to convert any obligation into or exchange any securities for, in
the case of each of clauses (A) through (C), any shares of capital stock of or
other ownership or equity interests in the Company or any of the Subsidiaries.

(f) Organizational Authority. The Company and each of the Guarantors has all
requisite corporate or partnership power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Transaction
Documents to which they are a party to consummate the transactions contemplated
thereby; and all necessary corporate or partnership action, as the case may be,
has been taken by the Company and each of the Guarantors to authorize the
making, execution, delivery, performance and consummation, as the case may be,
of the Transaction Documents.

(g) The Transactions. This Agreement has been duly and validly authorized,
executed and delivered by the Company and the Guarantors. At the Closing Date,
the Transaction Documents will be duly and validly authorized by the Company and
the Guarantors. Each of this Agreement, the Indenture and the Collateral
Agreements, constitute a legal, valid and binding obligation of each of the
Company and the Guarantors, enforceable against each of the Company and the
Guarantors in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance and other laws now or hereafter in
effect relating to creditors’ rights generally and (ii) general principles of
equity (whether applied by a court of law or equity) and the discretion of the
court before which any proceeding therefore may be brought.

(h) The Notes and Exchange Notes. The Notes, when issued, will be in the form
contemplated by the Indenture. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the “TIA”). At
the Closing Date, the Notes, the Exchange Notes and the Private Exchange Notes
will have each been duly and validly authorized by the Company and, in the case
of the Notes, when delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement and the Indenture and authenticated
by the Trustee, will have been duly executed, authenticated, issued and
delivered and will be legal, valid and binding obligations of the Company,
entitled to the benefit of the Indenture, the Registration Rights Agreement and
the Collateral Agreements, and enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance and other laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefore may be brought. The Exchange Notes have been, or
on or before the Closing Date will be, duly and validly authorized for issuance
by the Company, and when issued, authenticated an delivered by the Company in
accordance with the terms of the Registration Rights Agreement, the Exchange
Offer and the Indenture, the Exchange Notes will be legally binding and valid
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance and other
laws now or hereafter in effect relating to creditors’ rights generally and
(ii) general principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding therefore may be
brought.

(i) The Guarantees and Exchange Guarantees. The Guarantees, when issued, will be
in the form contemplated by the Indenture. At the Closing Date, the Guarantees
will have been duly and validly authorized by the Guarantors and, when executed
by the Guarantors, will have

 

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been duly executed, issued and delivered and will be legal, valid and binding
obligations of the Guarantors, entitled to the benefit of the Indenture, the
Registration Rights Agreement and the Collateral Agreements, and enforceable
against the Guarantors in accordance with their terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance and other
laws now or hereafter in effect relating to creditors’ rights generally and
(ii) general principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding therefore may be
brought. The guarantees of the Exchange Notes have been duly and validly
authorized by each of the Guarantors and, when the Exchange Notes are issued,
authenticated by the Trustee and delivered in accordance with the terms of the
Registration Rights Agreement, the Exchange Offer and the Indenture, will be
legally binding and valid obligations of the Guarantors, enforceable against
each of them in accordance with their terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, fraudulent conveyance and other laws now or
hereafter in effect relating to creditors’ rights generally and (ii) general
principles of equity (whether applied by a court of law or equity) and the
discretion of the court before which any proceeding therefore may be brought.

(j) Registration Rights Agreement. At the Closing Date, the Registration Rights
Agreement will be duly and validly authorized by the Company and the Guarantors.
The Registration Rights Agreement, when executed by the Company and the
Guarantors, will constitute a legal, valid and binding obligation of the Company
and the Guarantors, and enforceable against the Company and the Guarantors in
accordance with its terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance and other laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefore may be brought. No holder of securities of the
Company or any of the Subsidiaries will be entitled to have such securities
registered under the registration statements required to be filed by the Company
and the Guarantors with respect to the Notes pursuant to the Registration Rights
Agreement.

(k) No Violations. Neither the Company nor any of its Subsidiaries is (i) in
violation of its certificate of incorporation, by-laws or similar organizational
documents (the “Charter Documents”), (ii) in violation of any federal, state,
local or foreign statute, law (including, without limitation, common law) or
ordinance, or any judgment, decree, rule, regulation or order (collectively,
“Applicable Law”) of any federal, state, local and other governmental authority,
governmental or regulatory agency or body, court, arbitrator or self-regulatory
organization, domestic or foreign (each, a “Governmental Authority”) applicable
to any of them or any of their respective properties or assets, or (iii) in
breach of the terms or provisions of or in default under any bond, debenture,
note or other evidence of indebtedness, indenture, mortgage, deed of trust,
lease or any other agreement or instrument to which any of them is a party or by
which any of them or their respective property or assets are or may be bound
(collectively, “Applicable Agreements”), except with respect to (ii) and
(iii) above for such violations, breaches or defaults that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All Applicable Agreements material to the Company and its
Subsidiaries are in full force and effect and are legal, valid and binding
obligations of the Company or any of its Subsidiaries, as the case may be. There
exists no condition that, with the passage of time or otherwise, would
constitute (a) a violation of the Charter Documents or Applicable Laws, (b) a
breach of or default under any Applicable Agreement, or (c) result in the
imposition of any penalty or the acceleration of any indebtedness, except with
respect to (b) and (c) above, that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

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(l) No Conflict. Neither the execution, delivery or performance of the
Transaction Documents nor the consummation of any transactions contemplated
therein will violate or constitute a breach of or a default (with the passage of
time or otherwise) under, require the consent of any person (other than consents
already obtained and in full force and effect and consents described under
Section 4(p)) under, result in the imposition of a Lien on any properties or
assets of the Company or any of its Subsidiaries (except for Liens pursuant to
the Collateral Agreements), or result in an acceleration of indebtedness under
or pursuant to (i) the Charter Documents, (ii) any Applicable Agreement, or
(iii) any Applicable Law. Immediately after consummation of the Offering and the
Transactions, no Default or Event of Default under the Notes or the Indenture or
the Amended and Restated Credit Agreement.

(m) Accurate Description. To the extent described in the Pricing Disclosure
Package, when executed and delivered, the Transaction Documents will conform in
all material respects to the descriptions thereof in the Pricing Disclosure
Package.

(n) Incorporation by Reference. Our Annual Report on Form 10-K for the fiscal
year ended December 31, 2009, our Current Reports on Form 8-K dated February 11,
2010 and February 18, 2010, and the sections titled “Risk Factors,”
“Capitalization,” “Selected Consolidated Financial Information” and “Description
of Exchange Notes” and Exhibit 4.1 of the Exchange Offer Registration Statement
incorporated by reference into the Pricing Disclosure Package (the “Incorporated
Information”) complies in all material respects with all applicable requirements
of the Exchange Act, including the rules and regulations promulgated thereunder,
and the Incorporated Information does not and (as amended or supplemented, if
amended or supplemented) will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made,
not misleading.

(o) Summaries of Certain Information. The statements set forth in the Exchange
Offer Registration Statement incorporated by reference into the Pricing
Disclosure Package under the captions “Description of Exchange Notes” and under
the “Certain Material United States Income Tax Considerations” section of the
Pricing Disclosure Package insofar as they constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present, in all
material respects, the information called for with respect to such legal
matters, documents or proceedings.

(p) No Third Party Consents. No consent, approval, authorization or order of any
Governmental Authority, or third party is required for the issuance and sale by
the Company of the Notes to the Initial Purchaser, the issuance of the Guarantee
by the Guarantors, or the consummation by the Company and the Guarantors of the
other transactions contemplated by the Transaction Documents, except such as
have been obtained and such as may be required under state securities or “Blue
Sky” laws in connection with the purchase and resale of the Notes by the Initial
Purchaser.

(q) No Material Actions or Proceedings. Except as disclosed in the Pricing
Disclosure Package, there is no action, claim, suit, demand, hearing, notice of
violation or deficiency, or proceeding, domestic or foreign (collectively,
“Proceedings”), pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened, that either (i) seeks to restrain, enjoin, prevent the
consummation of, or otherwise challenge any of the Transaction Documents or any
of the Transactions contemplated therein, or (ii) would, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. Neither the
Company nor any of the Subsidiaries are subject to any judgment, order, decree,
rule or regulation of any Governmental Authority that would, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect.

 

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(r) All Necessary Permits. The Company and the Subsidiaries possess all material
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all material declarations and filings with,
all Governmental Authorities presently required or necessary to own or lease, as
the case may be, and to operate their respective properties and to carry on
their respective businesses as now or proposed to be conducted as set forth in
the Pricing Disclosure Package (“Permits”). Each of the Company and its
Subsidiaries has fulfilled and performed all of its obligations with respect to
such Permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit. None of the
Company or its Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except where such revocation
or modification would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect.

(s) Title to Properties. Each of the Company and its Subsidiaries has good and
marketable title to all real property owned by it, good and valid title to all
personal property owned by it and good and valid title to all leasehold estates
in real and personal property being leased by it and, as of the Closing Date,
will be free and clear of all Liens (other than Permitted Liens). All Applicable
Agreements to which the Company or any of its respective Subsidiaries is a party
or by which any of them is bound are valid and enforceable against each of the
Company or such Subsidiary, as applicable, and, to the Company’s knowledge, are
valid and enforceable against the other party or parties thereto in accordance
with its terms and are in full force and effect with only such exceptions as
would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.

(t) Tax Law Compliance. All Tax returns required to be filed by the Company and
each of the Subsidiaries have been filed and all such returns are true,
complete, and correct in all material respects. All material Taxes that are due
and payable by the Company and any of its Subsidiaries have been paid other than
those (i) currently payable without penalty or interest or (ii) being contested
in good faith and by appropriate proceedings and for which adequate reserves
have been established in accordance with generally accepted accounting
principles of the United States, consistently applied (“GAAP”). To the knowledge
of the Company there are no actual or proposed material Tax assessments due and
payable against the Company or any of the Subsidiaries. The accruals and
reserves on the books and records of the Company and its Subsidiaries in respect
of any material Tax liability for any period not finally determined are adequate
to meet any assessments of Tax for any such period. For purposes of this
Agreement, the term “Tax” and “Taxes” shall mean all federal, state, local and
foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto.

(u) Intellectual Property Rights. Each of the Company and its Subsidiaries owns,
or has a valid and enforceable license to use, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, logos, designs, domain names and
trade names (collectively, “Intellectual Property”) used in the conduct of its
business as is currently operated except as would not reasonably be expected to
have a Material Adverse Effect, and, as of the Closing Date, such Intellectual
Property owned by the Company or its Subsidiaries will be free and clear of all
Liens other than Permitted Liens except as would not reasonably be expected to
have a Material Adverse Effect. No claims or notices of

 

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any potential claim have been asserted by any person challenging the use of any
such Intellectual Property by the Company or any of the Subsidiaries or
questioning the validity, effectiveness or enforceability of the Intellectual
Property or any license or agreement related thereto, other than any claims
that, if successful, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Neither the Company, nor to the
Company’s knowledge, any other party to any licenses, sublicenses, and other
agreements or arrangements to which the Company is a party and pursuant to which
any other Person is authorized to have access to, or use of, Intellectual
Property owned by the Company, or to exercise any other right with regard
thereto (“Intellectual Property Licenses”), is in breach or default under such
Intellectual Property License, and no event has occurred which with notice or
lapse of time would constitute a breach or default by the Company (or to the
Company’s knowledge, any other party thereto) or permit termination by the
Company other than any claims that, if successful, would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. To the
knowledge of the Company, the use of such Intellectual Property by the Company
or its Subsidiaries will not violate, misappropriate or infringe on the
Intellectual Property rights of any other person, and there are no pending or to
the knowledge of the Company, threatened, proceedings or litigation or other
adverse claims or communications by any person alleging any such violation,
misappropriation or infringement.

(v) Accounting Systems. Except as disclosed in the Pricing Disclosure Package,
the Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) material transactions are executed in
accordance with management’s general or specific authorization, (ii) material
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any material differences.

(w) Preparation of the Financial Statements. The audited and unaudited
consolidated financial statements and related notes of the Company and its
Subsidiaries contained in the Pricing Disclosure Package (the “Financial
Statements”) present fairly the financial position, results of operations, cash
flows and changes in stockholders’ equity of the Company and its consolidated
Subsidiaries, as of the respective dates and for the respective periods to which
they apply and have been prepared in accordance with GAAP consistently applied
throughout the periods involved (except as otherwise expressly disclosed in the
notes thereto) and comply as to form with the applicable accounting requirements
of the Securities Act and the related rules and regulations and has been
accurately extracted from the financial statements of the Company and its
Subsidiaries. The non-GAAP financial measures set forth in the Pricing
Disclosure Package comply with Regulation G and Item 10(e) of Regulation S-K.
The financial data set forth under “Selected Consolidated Financial Information”
incorporated by reference in the Pricing Disclosure Package has been prepared on
a basis consistent with that of the Financial Statements and present fairly the
financial position and results of operations of the Company and its consolidated
Subsidiaries as of the respective dates and for the respective periods
indicated. All other financial, statistical and market and industry-related data
included in the Pricing Disclosure Package are fairly and accurately presented
and are based on or derived from sources that the Company believes to be
reliable and accurate in all material respects.

(x) No Material Adverse Change. Subsequent to the respective dates as of which
information is given in the Pricing Disclosure Package, except as disclosed
therein, (i) neither the Company nor any of its Subsidiaries has incurred any
liabilities, direct or contingent, that are material, individually or in the
aggregate, to the Company, or has entered into any transactions

 

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not in the ordinary course of business, (ii) there has not been any material
decrease in the capital stock or any material increase in long-term indebtedness
or any material increase in short-term indebtedness of the Company, or any
payment of or declaration to pay any dividends or any other distribution with
respect to the Company or any of its Subsidiaries, and (iii) there has not been
any material adverse change in the properties, business, operations, earnings,
assets, liabilities or financial condition of the Company and the Subsidiaries
in the aggregate. To the knowledge of the Company after reasonable inquiry,
there is no event that is reasonably likely to occur, which if it were to occur,
would, individually or in the aggregate, have a Material Adverse Effect, except
as disclosed in the Pricing Disclosure Package.

(y) Rating Agencies. No “nationally recognized statistical rating organization”
(as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act) (i) has imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the Company retaining any
rating assigned to the Company or any of its Subsidiaries or to any securities
of the Company or any of the Subsidiaries, or (ii) has indicated to the Company
(other than as already publicly disclosed as of the date hereof) that it is
considering (A) the downgrading, suspension, or withdrawal of, or any review for
a possible change that does not indicate the direction of the possible change
in, any rating so assigned, or (B) any change in the outlook for any rating of
the Company or any of the Subsidiaries or any securities of the Company or any
of the Subsidiaries.

(z) Use of Proceeds; Going Concern of the Company. All indebtedness represented
by the Notes is being incurred for the purposes set forth in the Pricing
Disclosure Package as indicated in the “Use of Proceeds” section of the Pricing
Disclosure Package and in good faith. On the Closing Date, after giving pro
forma effect to the Offering and the use of proceeds therefrom as indicated in
the “Use of Proceeds” section of the Pricing Disclosure Package, the Company and
the Guarantors (i) will be Solvent, (ii) will have sufficient capital for
carrying on its business as presently conducted and (iii) will be able to pay
its debts as they mature. As used in this paragraph, the term “Solvent” means,
with respect to a particular date, that on such date (i) the present fair market
value (or present fair saleable value) of the assets of the Company and each
Guarantor is not less than the total amount required to pay the liabilities of
the Company and each Guarantor on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured; (ii) the
Company and each Guarantor is able to pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in the
normal course of business; (iii) assuming consummation of the Offering and
issuance of the Notes and Guarantees as contemplated by this Agreement and the
Pricing Disclosure Package, neither the Company nor any Guarantor is incurring
debts or liabilities beyond its ability to pay as such debts and liabilities
mature; (iv) neither the Company nor any Guarantor is engaged in any business or
transaction, and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company or
any Guarantor is engaged; and (v) neither the Company nor any Guarantor is
otherwise insolvent under the standards set forth in Applicable Laws.

(aa) Market Manipulation. The Company has not and, to its knowledge, no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Notes,
(ii) sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, any of the Notes, or (iii) except as disclosed in the Pricing
Disclosure Package, paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company; provided,
that no representation is made in this subsection with respect to the actions of
the Initial Purchaser.

 

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(bb) Securities Act; Trust Indenture Act. Without limiting any provision herein,
no registration under the Securities Act and no qualification of the Indenture
under the TIA is required for the sale of the Notes and Guarantees to the
Initial Purchaser as contemplated hereby or for the Exempt Resales, assuming
(i) that the purchasers in the Exempt Resales are QIBs or Regulation S Persons
and (ii) the accuracy of the Initial Purchaser’s representations and warranties
contained in this Agreement.

(cc) Rule 144A. The Notes are eligible for resale pursuant to Rule 144A under
the Securities Act and no other securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the Notes and
listed on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended, including the rules and regulations
promulgated thereunder (the “Exchange Act”), or quoted in a U.S. automated
inter-dealer quotation system. No securities of the Company of the same class as
the Notes have been offered, issued or sold by the Company or any of its
Affiliates within the six-month period immediately prior to the date hereof that
would require registration under the Securities Act.

(dd) Regulation D; Regulation S. Neither of the Company nor any of its
Affiliates or other person acting on behalf of the Company has offered or sold
the Notes by means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or, with respect to Notes sold
outside the United States to Regulation S Persons, by means of any directed
selling efforts within the meaning of Rule 902 under the Securities Act, and the
Company, any affiliate of the Company and any person acting on behalf of the
Company have complied with and will implement the “offering restrictions” within
the meaning of such Rule 902; provided, that no representation is made in this
subsection with respect to the actions of the Initial Purchaser.

(ee) Benefit Plans. With respect to each employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)), and each other employee benefit plan, program, policy or arrangement
(collectively, “Benefit Plans”), maintained, sponsored or contributed to by the
Company, the Subsidiaries or any entity that would be deemed a “single employer”
with the Company or any Subsidiary under Section 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the “Code”) or Section 4001 of ERISA
(each, an “ERISA Affiliate”): (i) each Benefit Plan complies in form and has
been maintained, operated and administered in accordance with its terms and
Applicable Law, including without limitation, ERISA and the Code, except where
non-compliance would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and (ii) no “prohibited
transaction,” within the meaning of Section 4975 of the Code and Section 406 of
ERISA, has occurred or is reasonably expected to occur with respect to the
Benefit Plans that would reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect. None of the Company, any Subsidiary
or any ERISA Affiliate contributes to, is required to contribute to, or
otherwise participated in or participates in or in any way, directly or
indirectly, has any liability with respect to any plan subject to Section 412 of
the Code, Section 302 of ERISA or Title IV of ERISA, including, without
limitation, any “multiemployer plan” (within the meaning of Sections 3(37) or
4001(a)(3) of ERISA or Section 414(f) of the Code) or any single employer
pension plan (within the meaning of Section 4001(a)(15) of ERISA) which is
subject to Sections 4063, 4064 and 4069 of ERISA.

 

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(ff) Labor Matters. (i) Other than as disclosed in the Pricing Disclosure
Package, neither the Company nor any of its Subsidiaries is party to or bound by
any collective bargaining agreement with any labor organization; (ii) none of
the employees of the Company or any of its Subsidiaries is represented by a
labor union, and, to the knowledge of the Company, no union organizing
activities are taking place that could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect; (iii) to the Company’s
knowledge, no union organizing or decertification efforts are underway or
threatened against the Company or any of its Subsidiaries; (iv) no labor strike,
work stoppage, slowdown, or other material labor dispute is pending against the
Company or any of its Subsidiaries, or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries; (v) there is no
worker’s compensation liability, experience or matter that could be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect;
(vi) to the knowledge of the Company, there is no threatened or pending
liability against the Company or any of its Subsidiaries pursuant to the Worker
Adjustment Retraining and Notification Act of 1988, as amended (“WARN”), or any
similar state or local law; (vii) other than as disclosed in the Pricing
Disclosure Package, there is no employment-related charge, complaint, grievance,
investigation, unfair labor practice claim, or inquiry of any kind, pending
against the Company or any of its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect;
(viii) other than as disclosed in the Pricing Disclosure Package, to the
knowledge of the Company, no employee or agent of the Company or any of its
Subsidiaries has committed any act or omission giving rise to liability for any
violation identified in subsection (vi) and (vii) above, other than such acts or
omissions that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and (ix) no term or condition of
employment exists through arbitration awards, settlement agreements, or side
agreement to which the Company or its Subsidiaries is a party is contrary to the
express terms of any applicable collective bargaining agreement.

(gg) Federal Reserve Regulations. None of the transactions contemplated in the
Transaction Documents or the application of the proceeds from the sale of the
Notes will violate or result in a violation of Section 7 of the Exchange Act,
(including, without limitation, Regulation T (12 C.F.R. Part 220), Regulation U
(12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System).

(hh) Investment Company Act. Neither the Company nor any of its Subsidiaries is
an open-end investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the United
States Investment Company Act of 1940, as amended, including the rules and
regulations promulgated thereunder (the “Investment Company Act”). Neither the
Company nor any of its Subsidiaries, after giving effect to the Offering and
sale of the Notes and the application of the proceeds thereof as described in
the Pricing Disclosure Package, will be an “investment company” as defined in
the Investment Company Act.

(ii) Brokers. The Company has not engaged any broker, finder, commission agent
or other person (other than the Initial Purchaser) in connection with the
Offering or any of the transactions contemplated in the Transaction Documents,
and the Company is not under any obligation to pay any broker’s fee or
commission in connection with such transactions, except for commissions and fees
to the Initial Purchaser.

(jj) Environmental Matters. The Company and each of its Subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to health and safety (as it applies to exposure to
hazardous substances), or pollution or the protection of the environment or the
handling, storage, generation, discharge, treatment or

 

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disposal of or the release into the environment of hazardous or toxic
substances, hazardous wastes, pollutants or contaminants (collectively and
individually, “Environmental Laws”), (ii) has received and is in compliance with
all permits, licenses or other approvals required of them under applicable
Environmental Laws (“Environmental Permits”) to conduct its respective
businesses and (iii) has not received written notice of a claim, and does not
have knowledge of, any threatened or pending claim for damages to natural
resources relating to or arising from, or the investigation or remediation of,
any release or disposal of hazardous or toxic substances, hazardous wastes,
pollutants or contaminants, in each case, except where such non-compliance with
Environmental Laws, such failure to receive and comply with required
Environmental Permits, or such claim would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business. Neither the
Company nor any of its Subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or any similar Environmental Laws requiring
them to investigate or remediate any pollutants or contaminants, except where
such requirement would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(kk) Environmental Review. In the ordinary course of its business, the Company
periodically reviews the effects of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs (if any) would not
have a Material Adverse Effect.

(ll) Encumbrances and Restrictions. As of the Closing Date, other than (i) the
Transactions, (ii) the First Lien Credit Agreement, dated as of June 14, 2007,
by and among Golden Nugget, Inc., Wachovia Bank, National Association, and the
other lenders party thereto, (iii) the Second Lien Credit Agreement, dated as of
June 14, 2007, by and among Golden Nugget, Inc., Wachovia Bank, National
Association, and the other lenders party thereto, (iv) the Deed of Trust Note,
dated as of May 10, 2000, payable to Wingate Realty Finance Corporation by
Seawall Investments, LLC and assumed by Island Hospitality, Inc. as of March 14,
2003, (v) the Amended and Restated Credit Agreement and (vi) the Transaction
Documents, there will be no encumbrances or restrictions on the ability of any
Subsidiary of the Company (x) to pay dividends or make other distributions on
such Subsidiary’s capital stock or to pay any indebtedness to the Company or any
other Subsidiary of the Company, (y) to make loans or advances or pay any
indebtedness to, or investments in, the Company or any other Subsidiary of the
Company or (z) to transfer any of its property or assets to the Company or any
other Subsidiary of the Company (other than Permitted Liens or provisions that
restrict any such transfer).

(mm) Valid Security Interest. Due to the filing or recording of the Collateral
Agreements (including the mortgage modifications being executed and recorded in
connection with the issuance of the Notes) or appropriate financing statements
with the appropriate filing records, registry or other public office, together
with the payment of the requisite filing or recordation fees related thereto,
the security interest of the Collateral Agent in the Collateral (as defined in
the Collateral Agreements) has created or will create a valid and enforceable
perfected security interest (other than (i) in respect of the equipment subject
to certificate of title laws, (ii) any deposit account and securities accounts
not required to be subject to a control agreement pursuant to the terms of the
Transaction Documents and (iii) prior to the date they are required to

 

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be made, or otherwise delivered to the Collateral Agent for filing or
recordation, pursuant to the terms of the Transaction Documents, other filings,
recordings or other actions necessary to perfect liens granted to the Collateral
Agent), which security interests is superior to and prior to the rights of all
third persons other than holders of Permitted Liens.

(nn) Future Liens. As of the Closing Date, except with respect to Permitted
Liens, there will be no currently effective financing statement, security
agreement or other document filed or recorded with any filing records, registry
or other public office that purports to cover, affect or give notice of any
present or possible future Lien on, or security interest in, any assets or
property of the Company or any Guarantor, except for Permitted Liens.

(oo) Certificates. Each certificate signed by any officer of the Company or any
of its Subsidiaries delivered to the Initial Purchaser shall be deemed a
representation and warranty by the Company or any such Subsidiary thereof (and
not individually by such officer) to the Initial Purchaser with respect to the
matters covered thereby.

(pp) Insurance. Each of the Company and its Subsidiaries are insured by
reputable insurers against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged and locations
in which they operate. All policies of insurance insuring the Company or any of
its Subsidiaries or their respective businesses, assets, employees, officers and
directors are in full force and effect. The Company and its Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects, and there are no material claims by the Company or any of the
Subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause.
Neither the Company nor any of its Subsidiaries has been refused any insurance
coverage sought or applied for, and neither the Company nor any such Subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not, individually or in the aggregate, have a Material Adverse
Effect.

(qq) Controls. Each of the Company and each of its Subsidiaries has established
and maintains and evaluates “disclosure controls and procedures” (as such term
is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and “internal
control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); except as described in the Pricing Disclosure
Package, such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to each of the Company’s chief executive officer and
chief financial officer by others within the Company, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s independent auditors and board of managers have
been advised of: (i) all significant deficiencies, if any, in the design or
operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data and (ii) all
fraud, if any, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls; all material
weaknesses, if any, in internal controls have been identified to the Company’s
independent auditors; except as disclosed in the Pricing Disclosure Package,
since the date of the most recent evaluation of such disclosure controls and
procedures and internal controls, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses; the principal executive officers (or their
equivalents) and principal financial officers (or their equivalents) of the
Company have made all certifications required by

 

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the Sarbanes-Oxley Act of 2002, as amended, including the rules and regulations
promulgated thereunder (the “Sarbanes-Oxley Act”), and the statements contained
in each such certification are complete and correct.

(rr) Compliance with Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company, the Subsidiaries or any of the officers and directors of
the Company, any of the Subsidiaries, in their capacities as such, to comply in
all material respects with the applicable provisions of the Sarbanes-Oxley Act
of 2002 and the rules and regulations in connection therewith.

(ss) Exchange Act. The Company is subject to and is in full compliance with the
reporting requirements of Section 13 and Section 15(d), as applicable, of the
Exchange Act.

(tt) Stamp or Transfer Taxes. There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid in
connection with the execution and delivery of this Agreement on the issuance or
sale by the Company of the Notes.

(uu) Independent Accounting Firm. To the Company’s knowledge, Grant Thornton
LLP, who has certified the audited financial statements contained in the Pricing
Disclosure Package, is an independent registered public accounting firm with
respect to the Company and its Subsidiaries within the applicable rules and
regulations adopted by the SEC and the Public Accounting Oversight Board (United
States) and as required by the Securities Act.

(vv) FCPA. Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or Subsidiary of the Company is aware of or
has taken any action, directly or indirectly, that would result in a violation
by such persons of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of U.S.
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA; and the Company and its Subsidiaries have
conducted their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.

(ww) Money Laundering Laws. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all applicable jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

(xx) OFAC. None of the Company, any of its Subsidiaries or, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department of
Treasury (“OFAC”); and the Company will not directly

 

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or indirectly use the proceeds of the offering of the Notes hereunder, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.

5. Covenants of the Company and the Guarantors. Each of the Company and the
Guarantors agrees with the Initial Purchaser that:

(a) At any time prior to the date of the completion of the resale of the Notes
by the Initial Purchaser, to (i) advise the Initial Purchaser as promptly as
practicable after obtaining knowledge (and, if requested by the Initial
Purchaser, confirm such advice in writing) of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Notes for offer or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority, or (B) the happening of any
event that makes any statement of a material fact made in the Pricing Disclosure
Package, any Company Additional Written Communication untrue or that requires
the making of any additions to or changes in the Pricing Disclosure Package, any
Company Additional Written Communication in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (ii) use its reasonable best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption from qualification
of any of the Notes under any state securities or Blue Sky laws, and (iii) if,
at any time, any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from qualification of
any of the Notes under any such laws, use its reasonable best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.

(b) To (i) furnish the Initial Purchaser, without charge, as many copies of the
Pricing Disclosure Package, and any amendments or supplements thereto, as the
Initial Purchaser may reasonably request, and (ii) promptly prepare, upon the
Initial Purchaser’s reasonable request, any amendment or supplement to the
Pricing Disclosure Package that the Initial Purchaser, upon advice of legal
counsel, determines may be necessary in connection with Exempt Resales (and the
Company and the Guarantors hereby consent to the use of the Pricing Disclosure
Package, and any amendments and supplements thereto, by the Initial Purchaser in
connection with Exempt Resales).

(c) Not to amend or supplement the Pricing Disclosure Package prior to the
Closing Date, or at any time prior to the completion of the resale by the
Initial Purchaser of all the Notes purchased by the Initial Purchaser, unless
the Initial Purchaser shall previously have been advised thereof and shall have
provided their written consent thereto. Before making, preparing, using,
authorizing, approving or referring to any Company Additional Written
Communications, the Company will furnish to the Initial Purchaser and counsel
for the Initial Purchaser a copy of such written communication for review and
will not make, prepare, use, authorize, approve or refer to any such written
communication to which the Initial Purchaser reasonably object.

(d) So long as the Initial Purchaser shall hold any of the Notes, (i) if any
event shall occur as a result of which, in the reasonable judgment of the
Company or any of the Initial Purchaser, it becomes necessary or advisable to
amend or supplement the Pricing Disclosure Package in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to amend or supplement the Pricing
Disclosure Package to comply with Applicable Law, to prepare, at the expense of
the Company, an appropriate amendment or supplement to the Pricing Disclosure
Package (in form and

 

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substance reasonably satisfactory to the Initial Purchaser so that (A) as so
amended or supplemented, the Pricing Disclosure Package will not include an
untrue statement of material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (B) the Pricing Disclosure Package
will comply with Applicable Law and (ii) if in the reasonable judgment of the
Company it becomes necessary or advisable to amend or supplement the Pricing
Disclosure Package so that the Pricing Disclosure Package will contain all of
the information specified in, and meet the requirements of, Rule 144A(d)(4) of
the Securities Act, to prepare an appropriate amendment or supplement to the
Pricing Disclosure Package (in form and substance reasonably satisfactory to
each of the Initial Purchaser) so that the Pricing Disclosure Package, as so
amended or supplemented, will contain the information specified in, and meet the
requirements of, such rule.

(e) To cooperate with the Initial Purchaser and the Initial Purchaser’s counsel
in connection with the qualification of the Notes under the securities or Blue
Sky laws of such jurisdictions as the Initial Purchaser may request and continue
such qualification in effect so long as reasonably required for Exempt Resales.

(f) Whether or not any of the Transactions contemplated under the Transaction
Documents are consummated or this Agreement is terminated, to pay (i) all costs,
expenses, fees and taxes incident to and in connection with: (A) the
preparation, printing and distribution of the Pricing Disclosure Package and all
amendments and supplements thereto (including, without limitation, financial
statements and exhibits), and all other agreements, memoranda, correspondence
and other documents prepared and delivered in connection herewith, (B) the
negotiation, printing, processing and distribution (including, without
limitation, word processing and duplication costs) and delivery of, each of the
Transaction Documents, (C) the preparation, issuance and delivery of the Notes,
(D) the qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the fees and
disbursements of the Initial Purchaser’s counsel relating to such registration
or qualification), (E) furnishing such copies of the Pricing Disclosure Package,
and all amendments and supplements thereto, as may reasonably be requested for
use by the Initial Purchaser, and (F) the performance of the obligations of the
Company and the Guarantors obligations under the Registration Rights Agreement,
including but not limited to the Exchange Offer and any Shelf Registration
Statement (ii) all fees and expenses of the counsel, accountants and any other
experts or advisors retained by the Company, (iii) all fees and expenses
(including fees and expenses of counsel) of the Company in connection with
approval of the Notes by DTC for “book-entry” transfer, (iv) all fees charged by
rating agencies in connection with the rating of the Notes, (v) all fees and
expenses (including reasonable fees and expenses of counsel) of the Trustee and
all collateral agents, (vi) all costs and expenses in connection with the
perfection of the security interests under the Security Agreement (including
without limitation, filing and recording fees, search fees, taxes and costs of
title policies) and (vii) all reasonable fees, disbursements and out-of-pocket
expenses incurred by the Initial Purchaser in connection with its services to be
rendered hereunder (including, without limitation, the fees and expenses of
Proskauer Rose LLP as counsel to the Initial Purchaser), travel and lodging
expenses, word processing charges, messenger and duplicating services, facsimile
expenses, costs and expenses relating to investor presentations on any “road
show” undertaken in connection with marketing the Notes and other customary
expenditures. If the sale of the Notes provided for herein is not consummated
because any condition to the to the obligations of the Initial Purchaser set
forth in Section 7 is not satisfied, because this Agreement is terminated
pursuant to Section 9 or because of any failure, refusal or inability on the
part of the Company to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder (other than in each case solely by
reason of a default by the Initial Purchaser on its obligations hereunder after
all conditions hereunder have been satisfied in accordance

 

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herewith), the Company agrees to promptly reimburse the Initial Purchaser for
all fees, disbursements and out-of-pocket expenses (including the fees and
expenses of Proskauer Rose LLP as counsel for the Initial Purchaser), travel and
lodging expenses, word processing charges, messenger and duplicating services,
facsimile expenses and other reasonable and customary expenditures) that shall
have been incurred by the Initial Purchaser in connection with the proposed
purchase and sale of the Notes.

(g) To use the proceeds of the Offering in the manner described in the Pricing
Disclosure Package under the caption “Use of Proceeds.”

(h) To do and perform all things required to be done and performed under the
Transaction Documents prior to and after the Closing Date.

(i) Not to, and to ensure that no affiliate (as defined in Rule 501(b) of the
Securities Act) of the Company will, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any “security” (as defined in the
Securities Act) that would be integrated with the sale of the Notes in a manner
that would require the registration under the Securities Act of the sale to the
Initial Purchaser or to the Subsequent Purchasers of the Notes.

(j) For so long as any of the Notes remain outstanding, during any period in
which the Company is not subject to Section 13 or 15(d) of the Exchange Act, to
make available, upon request, to any owner of the Notes in connection with any
sale thereof and any prospective Subsequent Purchasers of such Notes from such
owner, the information required by Rule 144A(d)(4) under the Securities Act.

(k) To comply with the representation letter of the Company to DTC relating to
the approval of the Notes by DTC for “book entry” transfer.

(l) For so long as any of the Notes remain outstanding, to furnish to the
Initial Purchaser copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee or to the holders of the
Notes and, as soon as available, copies of any reports or financial statements
furnished to or filed by the Company with the SEC or any national securities
exchange on which any class of securities of the Company may be listed unless
such reports or financial statements are filed with the SEC and are publicly
available.

(m) Except in connection with the Exchange Offer or the filing of the Shelf
Registration Statement, to not, and to not authorize or permit any person acting
on its behalf to, (i) distribute any offering material in connection with the
offer and sale of the Notes other than the Pricing Disclosure Package and any
amendments and supplements prepared in compliance with this Agreement, or
(ii) solicit any offer to buy or offer to sell the Notes by means of any form of
general solicitation or general advertising (including, without limitation, as
such terms are used in Regulation D under the Securities Act) or in any manner
involving a “public offering” within the meaning of Section 4(2) of the
Securities Act.

(n) During the one-year period after the Closing Date (or such shorter period as
may be provided for in Rule 144 under the Securities Act, as the same may be in
effect from time to time), to not, and to not permit any current or future
Subsidiaries of either the Company or any other affiliates (as defined in Rule
144A under the Securities Act) controlled by the Company to, resell any of the
Notes which constitute “restricted securities” under Rule 144 that have been
reacquired by the Company, any current or future Subsidiaries or any other
“affiliates” (as defined in Rule 144A under the Securities Act) controlled by
the Company, except pursuant to an effective registration statement under the
Securities Act.

 

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(o) To pay all stamp, documentary and transfer taxes and other duties, if any,
which may be imposed by the United States or any political subdivision thereof
or taxing authority thereof or therein with respect to the issuance of the Notes
or the sale thereof to the Initial Purchaser.

(p) To use its best efforts to complete on or prior to the Closing Date all
filings and other similar actions required in connection with the perfection of
the security interests as and to the extent contemplated by the Collateral
Agreements.

(q) To agree with the Initial Purchaser on a transaction fee in connection with
the Offering to be paid on the Closing Date, which such fee shall be based on
the prevailing market for similar services performed by Initial Purchaser in
connection with the Offering.

6. Representations and Warranties of the Initial Purchaser. The Initial
Purchaser, represents and warrants that:

(a) It is a QIB and it will offer the Notes for resale only upon the terms and
conditions set forth in this Agreement and in the Pricing Disclosure Package.

(b) It is not acquiring the Notes with a view to any distribution thereof that
would violate the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction. In connection with the
Exempt Resales, it will solicit offers to buy the Notes only from, and will
offer and sell the Notes only to, (A) persons reasonably believed by the Initial
Purchaser to be QIBs or (B) non-U.S. persons reasonably believed by the Initial
Purchaser to be Regulation S Persons; provided, however, that in purchasing such
Notes, such persons are deemed to have represented and agreed as provided under
the caption “Notice to Investors” contained in the Pricing Disclosure Package.

(c) No form of general solicitation or general advertising in violation of the
Securities Act has been or will be used nor will any offers in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act or, with respect to Notes to be sold in reliance on Regulation S under the
Securities Act, by means of any directed selling efforts be made by the Initial
Purchaser or any of its representatives in connection with the offer and sale of
any of the Notes.

7. Conditions. The obligation of the Initial Purchaser to purchase the Notes
under this Agreement is subject to the performance by each of the Company and
each of the Guarantors of their respective covenants and obligations hereunder
and the satisfaction of each of the following conditions:

(a) All of the representations and warranties of the Company and the
Subsidiaries contained in this Agreement and in each of the Transaction
Documents shall be true and correct as of the date hereof and at the Closing
Date, except to the extent that the failure of such representations and
warranties (without giving effect to any “material,” “materiality,” “Material
Adverse Effect” or any similar terms, qualifications or limitations to such
representations and warranties) to be true or correct individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect. On
or prior to the Closing Date, the Company and each other party to the
Transaction Documents (other than the Initial Purchaser) shall have performed or
complied with all of the agreements and satisfied all conditions on their
respective

 

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parts to be performed, complied with or satisfied pursuant to the Transaction
Documents (other than conditions to be satisfied by such other parties, which
the failure to so satisfy would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect).

(b) No injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the Closing Date that would prevent or
materially interfere with the consummation of the Offering or any of the
transactions contemplated under the Transaction Documents. No stop order
suspending the qualification or exemption from qualification of any of the Notes
in any jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or, to the knowledge of the Company, be pending or
contemplated as of the Closing Date.

(c) No action shall have been taken and no Applicable Law shall have been
enacted, adopted or issued that would, as of the Closing Date, prevent the
consummation of the Offering or any of the transactions contemplated under the
Transaction Documents. No Proceeding shall be pending or, to the knowledge of
the Company, threatened other than Proceedings that (A) if adversely determined
would not, individually or in the aggregate, adversely affect the issuance or
marketability of the Notes, and (B) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(d) Subsequent to the respective dates as of which data and information is given
in the Pricing Disclosure Package, there shall not have been any event that
would have a Material Adverse Effect.

(e) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred
any change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any securities of the
Company by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning) a
lower rating to the Notes than that on which the Notes were marketed.

(f) The Initial Purchaser shall have received on the Closing Date:

(i) certificates dated the Closing Date, signed by (1) the Chief Executive
Officer of the Company and (2) the Chief Financial Officer of the Company, on
behalf of the Company, to the effect that (a) the representations and warranties
set forth in Section 4 hereof and in each of the Transaction Documents are true
and correct in all respects, except to the extent that the failure of such
representations and warranties (without giving effect to any “material,”
“materiality,” “Material Adverse Effect” or any similar terms, qualifications or
limitations to such representations and warranties) to be true or correct
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, with the same force and effect as though expressly made
at and as of the Closing Date, (b) the Company has performed and complied with
all agreements and satisfied all conditions in all material respects on its part
to be performed or satisfied at or prior to the Closing Date, (c) at the Closing
Date, since the date

 

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hereof or since the date of the most recent financial statements in the Pricing
Disclosure Package (exclusive of any amendment or supplement thereto after the
date hereof), no event or events have occurred, no information has become known
nor does any condition exist that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, (d) since the date of
the most recent financial statements in the Pricing Disclosure Package
(exclusive of any amendment or supplement thereto after the date hereof), other
than as described in the Pricing Disclosure Package or contemplated hereby,
neither the Company nor any Subsidiary of the Company has incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business, that are material to the Company and the Subsidiaries, taken as a
whole, or entered into any transactions not in the ordinary course of business
that are material to the business, financial condition or results of operations
or prospects of the Company and the Subsidiaries, taken as a whole, and there
has not been any change in the capital stock or long-term indebtedness of the
Company or any Subsidiary of the Company that is material to the business,
financial condition or results of operations or prospects of the Company and the
Subsidiaries, taken as a whole, and (e) the sale of the Notes has not been
enjoined (temporarily or permanently).

(ii) a certificate, dated the Closing Date, executed by the Secretary of the
Company and each Guarantor, certifying such matters as the Initial Purchaser may
reasonably request covering such matters as are customarily covered in such
certificates.

(iii) a certificate of solvency, dated the Closing Date, executed by the
principal financial or accounting officer of the Company substantially in the
form previously approved by the Initial Purchaser or its counsel.

(iv) the opinion of Haynes and Boone, LLP, counsel to the Company, dated the
Closing Date and addressed to the Initial Purchaser, substantially in the form
of Exhibit A attached hereto.

(v) the opinion of Holme Roberts & Owen LLP, local Colorado counsel to the
Company, dated the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit B attached hereto.

(vi) the opinion of Carlin, Edwards, Brown & Howe, PLLC, local Michigan counsel
to the Company, dated the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit C attached hereto.

(vii) the opinion of Davis Wright Tremaine LLP, local Oregon counsel to the
Company, dated the Closing Date and addressed to the Initial Purchaser,
substantially in the form of Exhibit D attached hereto.

(viii) the opinion of Steven Scheinthal, General Counsel of the Company, dated
the Closing Date and addressed to the Initial Purchaser, substantially in the
form of Exhibit E attached hereto.

(ix) the opinion of Proskauer Rose LLP, counsel to the Initial Purchaser, dated
the Closing Date, in form satisfactory to the Initial Purchaser covering such
matters as are customarily covered in such opinions.

 

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(g) The Initial Purchaser shall have received (A) a customary comfort letter
from Grant Thornton LLP, independent auditors, with respect to the Company,
dated as of the date hereof, in form and substance satisfactory to the Initial
Purchaser and its counsel, with respect to the financial statements and certain
financial information contained in the Pricing Disclosure Package and (B) a
customary bring-down comfort letter from Grant Thornton LLP, dated the Closing
Date, in form and substance satisfactory to the Initial Purchaser and its
counsel, to the effect that Grant Thornton LLP reaffirms the statements made in
its letter furnished pursuant to clause (A) with respect to the financial
statements and certain financial information contained in the Pricing Disclosure
Package.

(h) Each of the Transaction Documents shall have been executed and delivered by
all parties thereto, and the Initial Purchaser shall have received a fully
executed original of each of the Transaction Documents.

(i) The Initial Purchaser shall have received copies of all opinions,
certificates, letters and other documents delivered under or in connection with
the Offering or any transaction contemplated in the Transaction Documents.

(j) The terms of each Transaction Document shall conform in all material
respects to the description thereof in the Pricing Disclosure Package.

(k) The Collateral Agent shall have received (with a copy for the Initial
Purchaser) on the Closing Date:

(i) modifications to the Mortgages in connection with the issuance of the Notes;

(ii) such other approvals, opinions, or documents as the Collateral Agent may
reasonably request in form and substance reasonably satisfactory to the
Collateral Agent; and

(iii) the Collateral Agent and its counsel shall be satisfied that (A) the Lien
granted to the Collateral Agent, for the benefit of the Secured Parties in the
collateral described above is of the priority described in the Pricing
Disclosure Package; and (B) no Lien exists on any of the collateral described
above other than the Lien created in favor of the Collateral Agent, for the
benefit of the Secured Parties, pursuant to a Collateral Agreement, in each case
subject to the Permitted Liens.

8. Indemnification and Contribution.

(a) The Company and each of the Guarantors shall, jointly and severally,
indemnify and hold harmless the Initial Purchaser and its directors, officers
and affiliates, and each person, if any, who controls, within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, the Initial Purchaser
(collectively, the “Purchaser Indemnified Persons”) against any losses, claims,
damages, liabilities, costs or expenses (collectively, “Losses”) of any kind to
which the Purchaser Indemnified Persons may become subject under the Securities
Act, the Exchange Act or otherwise, to the fullest extent lawful, insofar as any
such Losses (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Company Additional Written Communication or the Pricing
Disclosure Package or any amendment or supplement thereto, (ii) the omission or
alleged omission to state, in any Company Additional Written Communication or
the Pricing Disclosure Package or any amendment or supplement thereto, a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iii) any breach by the Company or any of the Guarantors of their
respective representations, warranties and agreements set forth herein, material
breach of Applicable Law, and subject to the provisions hereof, will reimburse,
as incurred, the Purchaser Indemnified Persons for

 

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any legal or other expenses reasonably incurred by the Purchaser Indemnified
Persons in connection with investigating, defending against or appearing as a
third-party witness in connection with any such Loss in respect thereof;
provided, that the Company and the Guarantors shall not be liable under the
indemnity provided in this Section 8(a) to any Purchaser Indemnified Party for
any Losses that are based on an untrue statement or omission or alleged untrue
statement or omission or alleged omission made in reliance on, and in conformity
with, the Initial Purchaser Information (as defined in Section 11). The Company
and the Guarantors shall not be liable under this Section 8 for any settlement
of any claim or action effected without their prior written consent, which shall
not be unreasonably withheld.

(b) The Initial Purchaser shall indemnify and hold harmless each of the Company
and the Guarantors and their respective directors, officers and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any Losses which the Company or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such Losses (or actions in respect
thereof) have resulted solely from any untrue statement or alleged untrue
statement of any material fact contained in the Pricing Disclosure Package, or
any amendment or supplement thereto, or from the omission or alleged omission to
state, in the Pricing Disclosure Package, or any amendment or supplement
thereto, a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in each case to
the extent (but only to the extent) that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the Initial Purchaser Information; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Company, each of the
Guarantors or any such director, officer or controlling person in connection
with any such Loss or action in respect thereof.

(c) If any proceeding shall be brought or asserted against any person entitled
to indemnification hereunder (an “Indemnified Party”), such Indemnified Party
shall give prompt written notice to the party or parties from which such
indemnification is sought (the “Indemnifying Parties” and each, an “Indemnifying
Party”); provided, that the failure to so notify the Indemnifying Parties shall
not relieve any of the Indemnifying Parties from any obligation or liability
except to the extent (but only to the extent) that such Indemnifying Party has
been prejudiced materially by such failure. In case any such action is brought
against any Indemnified Party, and it notifies the Indemnifying Party of the
commencement thereof, the Indemnifying Party will be entitled to participate
therein and, to the extent that it may determine, jointly with any other
Indemnifying Party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party; provided, however,
that if (i) the use of counsel chosen by the Indemnifying Party to represent the
Indemnified Party would present such counsel with a conflict of interest,
(ii) the defendants in any such action include both the Indemnified Party and
the Indemnifying Party, and the Indemnified Party shall have been advised by
counsel in writing that there may be one or more legal defenses available to it
and/or other Indemnified Parties that are different from or additional to those
available to the Indemnifying Party, or (iii) the Indemnifying Party shall not
have employed counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after receipt by the
Indemnifying Party of notice of the institution of such action, then, in each
such case, the Indemnifying Party shall not have the right to direct the defense
of such action on behalf of such Indemnified Party or Parties and such
Indemnified Party or Parties shall have the right to select separate counsel to
defend such action on behalf of such Indemnified Party or Parties at the expense
of the Indemnifying Party. After notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof and approval
by such Indemnified Party of counsel appointed to defend such action, the
Indemnifying Party will not be liable to such Indemnified Party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such Indemnified Party in connection
with the defense thereof, unless (i) the Indemnified Party shall have employed
separate counsel in accordance with the proviso to

 

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the immediately preceding sentence (it being understood, however, that in
connection with such action the Indemnifying Party shall not be liable for the
expenses of more than one separate counsel (in addition to one local counsel in
any applicable jurisdiction) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchaser in the case of
paragraph (a) of this Section 8 or the Company in the case of paragraph (b) of
this Section 8, representing the Indemnified Party under such paragraph (a) or
paragraph (b), as the case may be, who are parties to such action or actions) or
(ii) the Indemnifying Party has authorized in writing the employment of counsel
for the Indemnified Party at the expense of the Indemnifying Party. After such
notice from the Indemnifying Party to such Indemnified Party, the Indemnifying
Party will not be liable for the costs and expenses of any settlement of such
action effected by such Indemnified Party without the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably withheld),
unless such Indemnified Party waived in writing its rights under this Section 8,
in which case the Indemnified Party may effect such a settlement without such
consent; provided, that, in any case, any settlement shall be subject to
paragraph (d) of this Section 8. None of the Indemnifying Parties shall, without
the prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld), consent to entry of any judgment in or enter into any
settlement of any pending or threatened Proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
reasonably satisfactory to the Indemnified Party, from all Losses that may arise
from such Proceeding or the subject matter thereof (whether or not any
Indemnified Party is a party thereto).

(d) If the indemnification provided for in this Section 8 is unavailable to an
Indemnified Party or is insufficient to hold such Indemnified Party harmless for
any Losses in respect of which this Section 8 would otherwise apply by its terms
(other than by reason of exceptions provided in this Section 8), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchaser, on
the other hand, from the Offering or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and the
Initial Purchaser, on the other hand, in connection with the actions, statements
or omissions that resulted in such Losses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial Purchaser, on the
other hand, shall be deemed to be in the same proportion as the total proceeds
from the Offering (before deducting expenses) received by the Company, on the
one hand, to the total discounts and commissions received by the Initial
Purchaser, on the other hand. The relative fault of the Company, on the one
hand, and the Initial Purchaser, on the other hand, shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the Initial
Purchaser, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The amount paid or payable by an Indemnified Party as a result of
any Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 8 was available to such party.

Each party hereto agrees that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding

 

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paragraph. Notwithstanding the provisions of this Section 8, none of the Initial
Purchaser shall not be obligated to make contributions hereunder that in the
aggregate exceed the total discounts, commissions and other compensation
received by such Initial Purchaser under this Agreement, less the aggregate
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchaser’ obligation to contribute hereunder
shall be several in proportion to their respective purchase obligations
hereunder and not joint. For purposes of the immediately preceding paragraph,
each person, if any, who controls the Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Initial Purchaser, and each director of the
Company and the Guarantors, each officer of the Company and the Guarantors and
each person, if any, who controls either of the Company or the Guarantors within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company and the Guarantors.

(e) The indemnification and contribution obligations contained in this Section 8
are in addition to any liability that any of the Indemnifying Parties may
otherwise have to the Indemnified Parties, and do not limit in any way rights or
remedies which may otherwise be available at law or in equity.

9. Termination. The Initial Purchaser may terminate this Agreement at any time
prior to the Closing Date by written notice to the Company if any of the
following has occurred:

(a) since the date hereof, any Material Adverse Effect or development involving
or expected to result in a prospective Material Adverse Effect that could, in
any of the Initial Purchaser’s sole judgment, be expected to (i) make it
impracticable or inadvisable to proceed with the offering or delivery of the
Notes on the terms and in the manner contemplated in the Pricing Disclosure
Package, or (ii) materially impair the investment quality of any of the Notes;

(b) the failure of the Company or the Guarantors to satisfy the conditions
contained in Section 7(a) hereof on or prior to the Closing Date;

(c) any outbreak or escalation of hostilities, or declaration of war by the
United States or other national or international calamity or crisis, including
acts of terrorism, or material adverse change or disruption in economic
conditions in, or in the financial markets of, the United States (it being
understood that any such change or disruption shall be relative to such
conditions and markets as in effect on the date hereof), if the effect of such
outbreak, escalation, calamity, crisis, act or material adverse change in the
economic conditions in, or in the financial markets of, the United States could
be reasonably expected to make it, in any of the Initial Purchaser’s sole
judgment, impracticable or inadvisable to market or proceed with the offering or
delivery of the Notes on the terms and in the manner contemplated in the Pricing
Disclosure Package or to enforce contracts for the sale of any of the Notes;

(d) trading in the Company’s common stock shall have been suspended by the SEC
or The New York Stock Exchange or the suspension or limitation of trading
generally in securities on the New York Stock Exchange or The NASDAQ Global
Market shall have occurred or any setting of limitations on prices for
securities on any such exchange shall have occurred;

(e) the enactment, publication, decree or other promulgation after the date
hereof of any Applicable Law that in the Initial Purchaser’s counsel’s
reasonable opinion materially and adversely affects, or could be reasonably
expected to materially and adversely affect, the properties, business,
prospects, operations, earnings, assets, liabilities or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole;

 

25

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(f) any securities of the Company shall have been downgraded or placed on any
“watch list” for possible downgrading by any “nationally recognized statistical
rating organization,” as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; or

(g) the representation and warranty contained in the first sentence of
Section 4(a) of this Agreement is incorrect in any way; or

(h) the declaration of a banking moratorium by any Governmental Authority; or
the taking of any action by any Governmental Authority after the date hereof in
respect of its monetary or fiscal affairs that in any of the Initial Purchaser’s
opinion could reasonably be expected to have a material adverse effect on the
financial markets in the United States or elsewhere.

10. Survival of Representations and Indemnities. The respective representations
and warranties, covenants, indemnities and contribution and expense
reimbursement provisions and other agreements, representations and warranties of
the Company and the Guarantors set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchaser (ii) acceptance of the Notes, and
payment for them hereunder, and (iii) any termination of this Agreement.
Notwithstanding any termination of this Agreement, the Company shall remain
liable for all expenses pursuant to Sections 5(f) and 8.

11. Information Supplied by the Initial Purchaser. The name of the Initial
Purchaser set forth in the Pricing Disclosure Package, the statements set forth
on the cover page with respect to price and the statements set forth in (a) the
first sentence of the fifth paragraph, and (b) the first sentence of the seventh
paragraph under the heading “Plan of Distribution” in the Pricing Disclosure
Package (to the extent such statements relate to the Initial Purchaser) (the
“Initial Purchaser Information) constitute the only information furnished by the
Initial Purchaser to the Company or the Guarantors for the purposes of Sections
4(a) and 8 hereof.

12. No Fiduciary Relationship. The Company and the Guarantors hereby acknowledge
that the Initial Purchaser is acting solely as initial purchaser in connection
with the purchase and sale of the Notes. The Company further acknowledges that
the Initial Purchaser is acting pursuant to a contractual relationship created
solely by this Agreement entered into on an arm’s length basis, and in no event
do the parties intend that the Initial Purchaser act or be responsible as a
fiduciary to the Company, the Guarantors or their respective management,
stockholders or creditors or any other person in connection with any activity
that the Initial Purchaser may undertake or have undertaken in furtherance of
the purchase and sale of the Notes, either before or after the date hereof. The
Initial Purchaser hereby expressly disclaims any fiduciary or similar
obligations, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company and
the Guarantors hereby confirm their understanding and agreement to that effect.
The parties hereto agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any
opinions or views expressed by the Initial Purchaser to the Company or the
Guarantors regarding such transactions, including, but not limited to, any
opinions or views with respect to the price or market for the Notes, do not
constitute advice or recommendations to the Company or the Guarantors. The
Company and the Guarantors hereby waive and release, to the fullest extent
permitted by law, any claims that either of the Company may have against the
Initial Purchaser with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company or the Guarantors in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.

 

26

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13. [Intentionally Omitted].

14. Miscellaneous.

(a) Notices. Notices given pursuant to any provision of this Agreement shall be
addressed as follows:

 

  (i) if to the Company, to:

Landry’s Restaurants, Inc.

1510 West Loop South

Houston, Texas 77027

Attention: Steven L. Scheinthal

with a copy to:

Haynes and Boone, LLP

One Houston Center

1221 McKinney Street

Suite 2100

Houston, TX 77010

Attention: Arthur S. Berner

 

  (ii) if to the Initial Purchaser, to:

Jefferies & Company, Inc.

520 Madison Avenue

New York, NY 10022

Attention: General Counsel

with a copy to:

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention: Ian Blumenstein

or in any case to such other address as the person to be notified may have
requested in writing.

(b) Successors and Assigns. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Company and the Guarantors, the Initial
Purchaser and, to the extent provided in Section 8 hereof, the controlling
persons, officers, directors, partners, employees, and affiliates referred to in
Section 8, and their respective heirs, executors, administrators, successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term “successors and assigns” shall not include a purchaser of any of the Notes
from the Initial Purchaser merely because of such purchase. Notwithstanding the
foregoing, it is expressly understood and agreed that each purchaser who
purchases Notes from the Initial Purchaser is

 

27

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intended to be a beneficiary of the covenants of the Company and the Guarantors
contained in the Registration Rights Agreement to the same extent as if the
Notes were sold and those covenants were made directly to such purchaser by the
Company and the Guarantors, and each such purchaser shall have the right to take
action against the Company and the Guarantors to enforce, and obtain damages for
any breach of, those covenants.

(c) GOVERNING LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.

(d) VENUE. THE COMPANY AND EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY
(I) SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY; AND (II) WAIVE (A) THEIR RIGHT TO A TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE INITIAL PURCHASER AND FOR ANY
COUNTERCLAIM RELATED TO ANY OF THE FOREGOING AND (B) ANY OBJECTION WHICH THEY
MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(e) Counterparts. This Agreement may be signed in various counterparts, which
together shall constitute one and the same instrument.

(f) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

(g) Partial Unenforceability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(h) Amendment. This Agreement may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given,
provided that the same are in writing and signed by all of the signatories
hereto.

[Signature pages follow.]

 

28

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Please confirm that the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchaser.

Very truly yours,

THE COMPANY

LANDRY’S RESTAURANTS, INC., a Delaware corporation

 

By:  

 

Name:   Title:  

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

GUARANTORS

BRENNER’S ON THE BAYOU, INC., a Texas corporation

C.A. MUER CORPORATION, a Michigan corporation

CAPT. CRAB’S TAKE-AWAY OF 79TH STREET, INC., a Florida corporation

CHLN, INC., a Delaware corporation

CRAB HOUSE, INC., a Florida corporation

CRYO REALTY CORP., a Florida corporation

FSI DEVCO, INC., a Nevada corporation

HOSPITALITY HEADQUARTERS, INC., a Texas corporation

HOUSTON AQUARIUM, INC., a Texas corporation

INN AT THE BALLPARK CATERING, INC., a Texas corporation

LANDRY’S CRAB SHACK, INC., a Texas corporation

LANDRY’S DEVELOPMENT, INC, a Texas corporation

LANDRY’S DOWNTOWN AQUARIUM, INC., a Colorado corporation

LANDRY’S G.P., INC., a Delaware corporation

LANDRY’S HARLOWS, INC, a Texas corporation

LANDRY’S LIMITED, INC., a Delaware corporation

LANDRY’S PESCE, INC., a Texas corporation

LANDRY’S SEAFOOD & STEAK HOUSE–CORPUS CHRISTI, INC., a Texas corporation

LANDRY’S SEAFOOD HOUSE – ALABAMA, INC., an Alabama corporation

LANDRY’S SEAFOOD HOUSE–ARLINGTON, INC., a Texas corporation

LANDRY’S SEAFOOD HOUSE– BILOXI, INC., a Mississippi corporation

LANDRY’S SEAFOOD HOUSE – COLORADO, INC., a Colorado corporation

LANDRY’S SEAFOOD HOUSE – FLORIDA, INC., a Florida corporation

LANDRY’S SEAFOOD HOUSE – LAFAYETTE, INC., a Louisiana corporation

LANDRY’S SEAFOOD HOUSE – MEMPHIS, INC., a Tennessee corporation

LANDRY’S SEAFOOD HOUSE – MINNESOTA, INC., a Minnesota corporation

LANDRY’S SEAFOOD HOUSE – MISSOURI, INC., a Missouri corporation

LANDRY’S SEAFOOD HOUSE – NEVADA, INC., a Nevada corporation

LANDRY’S SEAFOOD HOUSE – NEW MEXICO, INC., a New Mexico corporation

LANDRY’S SEAFOOD HOUSE – NEW ORLEANS, INC., a Louisiana corporation

LANDRY’S SEAFOOD HOUSE – NORTH CAROLINA, INC., a North Carolina corporation

LANDRY’S SEAFOOD HOUSE – OHIO, INC., an Ohio corporation

LANDRY’S SEAFOOD HOUSE – SAN LUIS, INC., a Texas corporation

LANDRY’S SEAFOOD HOUSE – SOUTH CAROLINA, INC., a South Carolina corporation

LANDRY’S SEAFOOD INN & OYSTER BAR – GALVESTON, INC., a Texas corporation

 

By:                                                                          
                               , Name:   Rick H. Liem Title:  
Vice President of each of the above identified entities

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

GUARANTORS

LANDRY’S SEAFOOD INN & OYSTER BAR – KEMAH, INC., a Texas corporation

LANDRY’S SEAFOOD INN & OYSTER BAR – SAN ANTONIO, INC., a Texas corporation

LANDRY’S SEAFOOD INN & OYSTER BAR – SUGAR CREEK, INC., a Texas corporation

LANDRY’S SEAFOOD INN & OYSTER BAR II, INC., a Texas corporation

LANDRY’S SEAFOOD INN & OYSTER BAR, INC., a Texas corporation

LANDRY’S SEAFOOD KEMAH, INC., a Texas corporation

LANDRY’S TRADEMARK, INC., a Delaware corporation

LCH ACQUISITION, INC., a Delaware corporation

LSRI HOLDINGS, INC., a Delaware corporation

MARINA ACQUISITION CORPORATION OF FLORIDA, INC., a Florida corporation

NASHVILLE AQUARIUM, INC., a Texas corporation

V & A MANHATTAN, INC., a Delaware corporation

RAINFOREST CAFE, INC., a Minnesota corporation

RAINFOREST CAFE, INC. – CHA CHA, a Texas corporation

RAINFOREST CAFE, INC. – KANSAS, a Kansas corporation

RAINFOREST TRADEMARK, INC., a Delaware corporation

SALTGRASS, INC., a Texas corporation

SEAFOOD HOLDING SUPPLY, INC., a Delaware corporation

SUMMIT AIRCRAFT SERVICES, INC., a Delaware corporation

SUMMIT ONE NETWORK, INC., a Delaware corporation

SUMMIT SEAFOOD SUPPLY, INC., a Delaware corporation

SUMMIT SUPPLY, INC., a Delaware corporation

THE HOFBRAU, INC., a Texas corporation

T-REX CAFE – KANSAS CITY, INC., a Kansas corporation

T-REX CAFE – ORLANDO, INC., a Florida corporation

T-REX CAFE–RENO, INC., a Nevada corporation

T-REX CAFE, INC., a Delaware corporation

WEST END SEAFOOD, INC., a Texas corporation

WILLIE G’S GALVESTON, INC, a Texas corporation

WILLIE G’S POST OAK, INC., a Texas corporation

 

By:   

 

  , Name:    Rick H. Liem   Title:   
Vice President of each of the above identified entities  

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

GUARANTORS

CHLN-MARYLAND, INC., a Maryland corporation

RAINFOREST CAFÉ, INC. – BALTIMORE COUNTY, a Maryland corporation

FSI RESTAURANT DEVELOPMENT LIMITED, a Texas limited partnership

  By:   Saltgrass, Inc., its Sole General Partner

LANDRY’S MANAGEMENT, L.P., a Delaware limited partnership

  By:   Landry’s G.P., Inc., its Sole General Partner

WSI FISH LIMITED, a Texas limited partnership

  By:   Saltgrass, Inc., its Sole General Partner

 

By:  

 

Name:   Steven L. Scheinthal Title:  
Vice President of each of the above identified entities

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

Accepted and Agreed to:

INITIAL PURCHASER

JEFFERIES & COMPANY, INC.

 

By:  

 

Name:   Title:  

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

SCHEDULE II

PRICING TERM SHEET

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

SCHEDULE III

SUBSIDIARIES OF THE COMPANY

 

1. BRENNER’S ON THE BAYOU, INC., a Texas corporation

2. C.A. MUER CORPORATION, a Michigan corporation

3. CAPT. CRAB’S TAKE-AWAY OF 79TH STREET, INC., a Florida corporation

4. CHLN, INC., a Delaware corporation

5. CRAB HOUSE, INC., a Florida corporation

6. CRYO REALTY CORP., a Florida corporation

7. FSI DEVCO, INC., a Nevada corporation

8. HOSPITALITY HEADQUARTERS, INC., a Texas corporation

9. HOUSTON AQUARIUM, INC., a Texas corporation

10. INN AT THE BALLPARK CATERING, INC., a Texas corporation

11. LANDRY’S CRAB SHACK, INC., a Texas corporation

12. LANDRY’S DEVELOPMENT, INC, a Texas corporation

13. LANDRY’S DOWNTOWN AQUARIUM, INC., a Colorado corporation

14. LANDRY’S G.P., INC., a Delaware corporation

15. LANDRY’S LIMITED, INC., a Delaware corporation

16. LANDRY’S PESCE, INC., a Texas corporation

17. LANDRY’S SEAFOOD & STEAK HOUSE–CORPUS CHRISTI, INC., a Texas corporation

18. LANDRY’S SEAFOOD HOUSE – ALABAMA, INC., an Alabama corporation

19. LANDRY’S SEAFOOD HOUSE–ARLINGTON, INC., a Texas corporation

20. LANDRY’S SEAFOOD HOUSE– BILOXI, INC., a Mississippi corporation

21. LANDRY’S SEAFOOD HOUSE – COLORADO, INC., a Colorado corporation

22. LANDRY’S SEAFOOD HOUSE – FLORIDA, INC., a Florida corporation

23. LANDRY’S SEAFOOD HOUSE – LAFAYETTE, INC., a Louisiana corporation

24. LANDRY’S SEAFOOD HOUSE – MEMPHIS, INC., a Tennessee corporation

25. LANDRY’S SEAFOOD HOUSE – MINNESOTA, INC., a Minnesota corporation

26. LANDRY’S SEAFOOD HOUSE – MISSOURI, INC., a Missouri corporation

27. LANDRY’S SEAFOOD HOUSE – NEVADA, INC., a Nevada corporation

28. LANDRY’S SEAFOOD HOUSE – NEW MEXICO, INC., a New Mexico corporation

29. LANDRY’S SEAFOOD HOUSE – NEW ORLEANS, INC., a Louisiana corporation

30. LANDRY’S SEAFOOD HOUSE – NORTH CAROLINA, INC., a North Carolina corporation

31. LANDRY’S SEAFOOD HOUSE – OHIO, INC., an Ohio corporation

32. LANDRY’S SEAFOOD HOUSE – SAN LUIS, INC., a Texas corporation

33. LANDRY’S SEAFOOD HOUSE – SOUTH CAROLINA, INC., a South Carolina corporation

34. LANDRY’S SEAFOOD INN & OYSTER BAR – GALVESTON, INC., a Texas corporation

35. LANDRY’S SEAFOOD INN & OYSTER BAR – KEMAH, INC., a Texas corporation

36. LANDRY’S SEAFOOD INN & OYSTER BAR – SAN ANTONIO, INC., a Texas corporation

37. LANDRY’S SEAFOOD INN & OYSTER BAR – SUGAR CREEK, INC., a Texas corporation

38. LANDRY’S SEAFOOD INN & OYSTER BAR II, INC., a Texas corporation

39. LANDRY’S SEAFOOD INN & OYSTER BAR, INC., a Texas corporation

40. LANDRY’S SEAFOOD KEMAH, INC., a Texas corporation

41. LANDRY’S TRADEMARK, INC., a Delaware corporation

42. LCH ACQUISITION, INC., a Delaware corporation

43. LSRI HOLDINGS, INC., a Delaware corporation

44. MARINA ACQUISITION CORPORATION OF FLORIDA, INC., a Florida corporation

45. NASHVILLE AQUARIUM, INC., a Texas corporation

46. V & A MANHATTAN, INC., a Delaware corporation

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

47. RAINFOREST CAFE, INC., a Minnesota corporation

48. RAINFOREST CAFE, INC. – CHA CHA, Texas corporation

49. RAINFOREST CAFE, INC. – KANSAS, a Kansas corporation

50. RAINFOREST TRADEMARK, INC., a Delaware corporation

51. SALTGRASS, INC., a Texas corporation

52. SEAFOOD HOLDING SUPPLY, INC., a Delaware corporation

53. SUMMIT AIRCRAFT SERVICES, INC., a Delaware corporation

54. SUMMIT ONE NETWORK, INC., a Delaware corporation

55. SUMMIT SEAFOOD SUPPLY, INC., a Delaware corporation

56. SUMMIT SUPPLY, INC., a Delaware corporation

57. THE HOFBRAU, INC., a Texas corporation

58. T-REX CAFE – KANSAS CITY, INC., a Kansas corporation

59. T-REX CAFE – ORLANDO, INC., a Florida corporation

60. T-REX CAFE–RENO, INC., a Nevada corporation

61. T-REX CAFE, INC., a Delaware corporation

62. WEST END SEAFOOD, INC., a Texas corporation

63. WILLIE G’S GALVESTON, INC, a Texas corporation

64. WILLIE G’S POST OAK, INC., a Texas corporation

65. CHLN-MARYLAND, INC., a Maryland corporation

66. RAINFOREST CAFÉ, INC. – BALTIMORE COUNTY, Maryland corporation

67. FSI RESTAURANT DEVELOPMENT LIMITED, a Texas limited partnership

68. LANDRY’S MANAGEMENT, L.P., a Delaware limited partnership

69. WSI FISH LIMITED, a Texas limited partnership

70. LANDRY’S HARLOWS, INC, a Texas corporation

71. *LANDRY’S GAMING, INC., a Nevada corporation

72. *GOLDEN NUGGET, INC., a Nevada corporation

73. * LGE, INC., a Delaware corporation

74. *TEXAS GAMING LLC, a Delaware limited liability company

75. *GNLV, CORP., a Nevada corporation

76. *GNL, CORP., a Nevada corporation

77. *GOLDEN NUGGET EXPERIENCE, LLC, a Nevada limited liability company

78. *LCHLN, INC., a Delaware corporation

79. *ISLAND ENTERTAINMENT, INC., a Texas corporation

80. *ISLAND HOSPITALITY, INC., a Texas corporation

81. *NEVADA ACQUISITION CORP., a Delaware corporation

82. *YORKDALE RAINFOREST RESTAURANT, INC., a company organized under the laws of
Canada

83. STITCHING RAINFOREST CAFÉ, a company organized under the laws of the
Netherlands

84. *RAINFOREST CAFÉ CANADA HOLDINGS, INC., a company organized under the laws
of Canada

 

 

* Designates an Unrestricted Subsidiary

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

EXHIBIT A

FORM OF OPINIONS OF COMPANY COUNSEL

Based upon the foregoing, and subject to the qualifications set forth herein, we
are of the opinion that:

1. The Company is a corporation validly existing and in good standing under the
laws of the State of Delaware and is duly qualified to do business as a foreign
corporation in the State of Texas. Each Guarantor is a corporation or limited
partnership validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

2. The Company and each Guarantor organized under the laws of the State of
Delaware or Texas (the “Covered Guarantors”) (a) has the corporate or limited
partnership power and authority, as applicable, to execute, deliver and perform
each Transaction Document to which it is a party and to consummate the
transactions contemplated thereby, (b) has taken all corporate or limited
partnership action, as applicable, necessary to authorize the execution,
delivery and performance of each Transaction Document to which it is a party and
the transactions contemplated by the Transaction Documents, (c) has duly
executed and delivered each Transaction Document to which it is a party and
(d) owns, leases and operates its properties and assets and conducts its
business as described in the Offering Memorandum.

3. The execution and delivery by the Company and the Guarantors of each
Transaction Document to which it is a party does not, and the performance by
each of the Company and the Guarantors of its obligations thereunder, including
the issuance and sale of the Notes to the Initial Purchaser, and the
Transactions contemplated thereby, will not, (a) violate the certificate or
articles of incorporation, certificate or articles of formation, bylaws or
limited partnership agreement, as applicable, of the Company and the Covered
Guarantors, (b) violate any Applicable Law, (c) to our knowledge, violate any
order, writ, judgment, injunction, decree, determination or award binding upon
or affecting the Company and the Guarantors, (d) result in the breach of, or
constitute a default or require any payment to be made under, any agreement,
document or instrument, any indenture, mortgage, deed of trust, agreement or
instrument (i) identified as an exhibit to the Company’s Annual Report on Form
10-K for the year ended December 31, 2009 and (ii) listed on Schedule 11
attached hereto or (e) except for the Liens created under the Original
Transaction Documents2 and Permitted Liens, result in or require the creation or
imposition of any Lien upon or with respect to any property of the Company and
the Guarantors.

4. No Governmental Authorization (as defined below) and no notice to or filing
with, any United States federal or New York or Texas governmental or Delaware
corporate authority or regulatory body, is required for (a) the issuance and
sale by the Company of the Notes to the

 

 

1

Schedule will include all agreements on Schedule 4.17 of the Amended and
Restated Credit Agreement to the extent not filed with the SEC as an exhibit to
the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

2

“Original Transaction Documents” should be defined to include all transaction
documents from the November 30, 2009 transaction that included a grant of a
security interest or lien in any real or personal property.

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

Initial Purchaser, the execution, delivery or performance by the Company or the
Guarantors of any Transaction Document to which it is a party or for the
consummation of the transactions contemplated by the Transaction Documents
except such as have been obtained and such as may be required under state
securities or “Blue Sky” laws in connection with the purchase and resale of the
Notes by the Initial Purchaser, (b) the continuing perfection or maintenance of
the Liens in the Article 9 Collateral (hereinafter defined) created under the
Original Transaction Documents or (d) the exercise by the Collateral Agent of
its rights under the Original Transaction Documents and the Transaction
Documents or the remedies in respect of the Article 9 Collateral pursuant to the
Original Transaction Documents, except for (i) the filings referred to in
Paragraph 7, (ii) the recording of the Modifications to the Mortgages in the
real property records of the county in which the real property subject to such
Mortgages is located and (iii) Governmental Authorization not required to
consummate the transactions occurring on the date hereof but required to be
obtained or made after the date of this opinion letter to enable the Company and
the Guarantors to comply with requirements of Applicable Law, including those
required to maintain existence and good standing of the Company and the
Guarantors.

“Governmental Authorization” means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any governmental
authority pursuant to any Applicable Law.

5. Each Transaction Document is the legal, valid and binding obligation of each
of the Company and the Covered Guarantors, and other than with respect to the
Purchase Agreement, enforceable against the Company and the Covered Guarantors
in accordance with their terms. Assuming due authorization, execution and
delivery by each [Uncovered Party]3 of each Transaction Document to which it is
a party, each such Transaction Document is the legal, valid and binding
obligation of each Uncovered Party that is a party thereto, and other than with
respect to the Purchase Agreement, enforceable against such Uncovered Party in
accordance with their terms.

6. The security interest created in favor of the Collateral Agent pursuant to
the Security Agreement, the Trademark Security Agreement, the Copyright Security
Agreement and the Gaming Pledge Agreement (the “Article 9 Security Interest”) in
the Collateral described therein in which a security interest may be created
under Article 9 of the Uniform Commercial Code as in effect in the State of New
York (the “NYUCC”) (the “Article 9 Collateral”) will also secure the amounts due
under the Additional Notes (the “Additional Amounts”) and such Additional
Amounts shall be Secured Obligations (as defined in the Security Agreement, the
Trademark Security Agreement, the Copyright Security Agreement and the Gaming
Pledge Agreement).

7. Each of the financing statements indicating an Opinion Party as debtor, and
the Collateral Agent as secured party, and filed with the Secretary of the State
of Delaware or Texas, as applicable (the “Financing Statements”) will remain
effective to perfect the Article 9 Security Interest with respect to securing
the Additional Amounts with the same priority in that portion of the Article 9
Collateral in which a security interest may be perfected by filing a financing
statement under the Uniform Commercial Code as in effect in the State of
Delaware (the “Delaware UCC”) and the State of Texas, (the “Texas UCC”).

 

 

3

Definition will include all Guarantors incorporated in jurisdictions other than
Delaware and Texas, as well as other parties to the Transaction Documents,
including Initial Purchaser, Collateral Agent, Administrative Agent, etc.

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

8. The execution and delivery of the Transaction Documents does not in any way
adversely affect the creation or perfection of the Article 9 Security Interest
in the Article 9 Collateral that existed immediately prior to the execution and
delivery of the Transaction Documents.

9. Each of the Modifications to the Mortgages to be recorded by the applicable
County Clerks of the State of Texas is in proper form (i) to be accepted for
recording by the County Clerks of such Counties and (ii) upon such recording, to
provide notice to third parties of the mortgage liens (including the Additional
Amounts) on the interest of the Company or the Guarantor party to such Mortgage
in the Real Property Collateral. Each such Mortgage, as modified by the
Modification, constitute a fixture financing statement for purposes of the Texas
UCC.

10. Neither the Company nor any Guarantor is or will be as a result of the
Transactions, an “investment company” under the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated by the Commission
thereunder.

11. The issuance and sale by the Company of the Notes as contemplated by the
Purchase Agreement does not violate Regulation T, U and X of the Board of
Governors of the Federal Reserve System.

12. The authorized, issued and outstanding capital stock of the Company is as
set forth in the Pricing Disclosure Package under the caption “Capitalization.”

13. The Indenture is in sufficient form for qualification under the TIA.

14. The Notes and the Note Guarantees are in the form contemplated by the
Indenture. The execution, delivery and performance of the Private Exchange Notes
and the Private Exchange Guarantees have been duly and validly authorized by the
Company and the Covered Guarantors, and when executed and delivered by the
Company and the Guarantors in accordance with the terms of the Registration
Rights Agreement and the Indenture (assuming the due authorization, execution
and delivery of the Registration Rights Agreement and the Indenture by the
Trustee and due authentication and delivery of such guarantees by the Trustee in
accordance with the Indenture), will be legal, valid and binding obligations of
the Company and the Guarantors, entitled to the benefits of the Indenture, the
Collateral Agreements and the Registration Rights Agreement, and enforceable
against each of the Company and the Guarantors in accordance with their terms.

15. The statements in the Exchange Offer Registration Statement incorporated by
reference in the Pricing Disclosure Package under the caption “Description of
Exchange Notes” to the extent that such information constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly present in
all material respects such legal matters, documents and proceedings. The
statements under the caption and “Certain Material United States Federal Income
Tax Considerations,” in the Pricing Disclosure Package, insofar as such
statements summarize certain federal income and estate tax laws of the United
States, constitute a fair summary of the principal U.S. federal income and
estate tax consequences of an investment in the Notes.

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16. No registration under the Act of the Notes is required in connection with
the issuance and sale of the Notes to the Initial Purchaser as contemplated by
the Purchase Agreement and the Pricing Disclosure Package or in connection with
the initial resale of the Notes by the Initial Purchaser in accordance with
Section 6 of the Purchase Agreement, and the Indenture is not required to be
qualified under the TIA, in each case assuming (i) (A) that the purchasers who
buy the Notes in the initial resale thereof are qualified institutional buyers
as defined in Rule 144A promulgated under the Act or (B) that the offer or sale
of the Notes is made in an offshore transaction as defined in Regulation S,
(ii) the accuracy of such Initial Purchaser’s representations in Section 6 of
the Purchase Agreement and those of the Company contained in the Purchase
Agreement regarding the absence of a general solicitation in connection with the
sale of the Notes to the Initial Purchaser and the initial resale thereof and
(iii) the due performance by the Initial Purchaser of the agreements set forth
in Section 6 of the Purchase Agreement.

We have participated in conferences with officers of the Company,
representatives of the independent certified public accountants of the Company,
and representatives of the Initial Purchaser and its counsel, at which
conferences the contents of the Pricing Disclosure Package, any Company
Additional Written Communication and related matters were discussed and,
although we have not independently verified and are not passing upon and assume
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Pricing Disclosure Package, any Company Additional Written
Communication, on the basis of the foregoing, nothing has come to our attention
that causes us to believe that the Pricing Disclosure Package, any Company
Additional Written Communication as of its date contained, or on the Closing
Date contains, an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to the financial statements and
notes thereto or other financial data included in the Pricing Disclosure Package
and the Company Additional Written Communication).

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EXHIBIT B

FORM OF OPINIONS OF LOCAL COLORADO COUNSEL

1. CHLN, Inc. (“CHLN”) is duly qualified as a foreign corporation and is in good
standing under the laws of the State of Colorado.

2. Landry’s Downtown Aquarium, Inc. (“LDA”) is a corporation validly existing
and in good standing under the laws of the State of Colorado.

3. LDA has the requisite corporate power and authority to enter into the
Transaction Documents to which it is a party and to perform its obligations
thereunder.

4. The Transaction Documents to which LDA is a party have been duly authorized
by all requisite corporate action on the part of LDA, and have been duly
executed and delivered by LDA.

5. The LDA Deed of Trust, as modified by the LDA Modification, constitutes the
legal, valid and binding obligation of LDA, enforceable against LDA in
accordance with its terms.

6. The execution and delivery of LDA of the Transaction Documents to which it is
a party do not, and performance by LDA of its obligations thereunder will not
(a) violate its articles of incorporation, or its bylaws, (b) violate the
provisions of any United States Federal or State Colorado statute, rule or
regulation known to us to be applicable to LDA, or (c) violate any material
judgment or order of any United States Federal or State Colorado governmental
authority known to us and binding upon LDA.

7. Landry’s Seafood House – Colorado, Inc. (“LSHC”) is a corporation validly
existing and in good standing under the laws of the State of Colorado.

8. LSHC has the requisite corporate power and authority to enter into the
Transaction Documents to which it is a party and to perform its obligations
thereunder.

9. The Transaction Documents governed by Colorado law to which LSHC is a party
have been duly authorized by all requisite corporate action on the part of LSHC
and have been duly executed and delivered by LSHC.

10. The LSHC Deed of Trust, as modified by the LSHC Modification, constitutes
the legal, valid and binding obligation of LSHC, enforceable against LSHC in
accordance with its terms.

11. The execution and delivery by LSHC of the Transaction documents to which it
is a party do not, and performance by LSHC of its obligations thereunder will
not (a) violate its articles of incorporation, or its bylaws, (b) violate the
provisions of any United States Federal or State Colorado statute, rule or
regulation known to us to be applicable to LSHC, or (c) violate any material
judgment or order of any United States Federal or State Colorado governmental
authority known to us and binding upon LSHC.

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12. Each of the Deeds of Trust, as modified by the Modifications, creates valid
liens on and security interests in all right, title and interest of the
applicable Grantor in the Property described therein and will also secure the
amounts due under the Additional Notes (the “Additional Amounts”), to the extent
liens and security interests can be created under the UCC and the real property
laws of Colorado.

13. The Modifications are in proper form for filing and recording in the real
property records maintained by the Clerks and Recorders of Colorado Counties.

14. Upon recordation set forth in Schedule I hereto, (a) the liens created by
the Aquarium Deed of Trust, as modified by the Aquarium Modification, will
remain perfected in all right, title and interest of LDA in that portion of the
Aquarium Property consisting of real property located in Colorado, and will
secure the Additional Amounts, (b) the security interest created by the Aquarium
Deed of Trust will remain perfected in all right, title and interest of LDA in
that portion of the Aquarium Property consisting of fixtures located in
Colorado, and will secure the Additional Amounts, and (c) the security interests
created by the Aquarium Deed of Trust will remain perfected in all right, title
and interest of LDA in that portion of the Aquarium Property consisting of
personal property with respect to which a security interest can be perfected by
the filing of financing statements in Colorado under the UCC, and will secure
the Additional Amounts.

15. Upon recordation set forth in Schedule I hereto, (a) the liens created by
the Seafood House Deed of Trust will remain perfected in all right, title and
interest of LSHC in that portion of the Seafood House Property, consisting of
real property located in Colorado, and will secure the Additional Amounts,
(b) the security interests created by the Seafood House Deed of Trust will
remain perfected in all right, title and interest of LSHC in that portion of the
Seafood House Property consisting of fixtures located in Colorado, and will
secure the Additional Amounts, and (c) the security interests created by the
Seafood House Deed of Trust will remain perfected in all right, title and
interest of LSHC in that portion of the Seafood House Property consisting of
personal property with respect to which a security interest can be perfected by
the filing of financing statements in Colorado under the UCC, and will secure
the Additional Amounts.

16. Upon recordation set forth in Schedule I hereto, (a) the liens created by
the CHLN Deed of Trust will remain perfected in all right, title and interest of
CHLN in that portion of the CHLN Property consisting of real property located in
Colorado, and will secure the Additional Amounts, and (b) the security interests
created by the CHLN Deed of Trust, will remain perfected in all right, title and
interest of CHLN in that portion of the CHLN Property consisting of fixtures
located in Colorado, and will secure the Additional Amounts.

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17. The execution and delivery of the Transaction Documents does not in any way
adversely affect the perfection of the security interests created in favor of
the Collateral Agent pursuant to the Original Transaction Documents4 (the
“Article 9 Security Interest”) in the Collateral described in the Original
Transaction Documents in which a security interest may be created under Article
9 of the UCC (the “Article 9 Collateral”), that existed immediately prior to the
execution and delivery of the Transaction Documents.

18. No transfer tax, stamp tax or other fee, tax or governmental charge (other
than filing and recording fees imposed by law) was required to be paid in
Colorado in connection with the execution, delivery, filing or recording of the
Modifications.

19. No consent of or filing with any Colorado state governmental body, agency or
authority (other than the recordation and filing as set forth in Schedule I
hereto) is required in connection with the execution and delivery of the
Transaction Documents by the Grantors.

20. The Transaction Documents generally provide that they are to be governed by
the laws of the State of New York. We note that Colorado courts have applied the
“most significant relationship” approach of the Restatement (Second) of Conflict
of Laws for resolving conflict of laws questions in contract cases. See Wood
Brothers Homes, Inc. v. Walker Adjustment Bureau, 198 Colo. 444, 601 P.2d 1369
(1979); Budd v. American Excess Insurance Company, et al., 928 F.2d 344 (10th
Cir. 1991). Section 187 of the Restatement provides that the parties to a
contract may stipulate to their choice of law to govern the validity of a
contract and the rights created thereby and the laws of the state chosen will be
applied to those issues unless it is determined that the particular issue in
dispute is one that the parties could not have resolved by an explicit provision
in their agreement and that either: (a) the chosen state has no substantial
relationship to the parties or the transaction and there is no other reasonable
basis for the parties’ choice, or (b) that application of the law of the chosen
state would be contrary to a fundamental policy of a state which has a
materially greater interest in the issue than the chosen state, and that under
Section 188 of the Restatement would be the state of applicable law in the
absence of an effective choice of law by the parties. Although it is not free
from doubt, provided that (i) the State of New York has a substantial
relationship (as that term is used in Section 187 of the Restatement) and a
reasonable relation (as such term is used in Section 1-105 of the UCC) to the
parties and the Transaction and (ii) the application of New York law would not
be contrary to a fundamental policy of a state which has a materially greater
interest than the State of New York in the determination of particular issues,
under existing precedent the choice of law provisions contained in the
Transaction Documents should be given effect by the courts of the State of
Colorado and the federal courts of the United States of America applying
Colorado law. Because of the fundamentally factual nature of many of these
issues, the unpredictability of which public policy issues may be present in a
given situation, and the fact that our opinion is based solely upon our review
of the documents described above, we do not opine that any court would
necessarily hold that any choice of law provision is binding on the parties. We
further note that the substantive laws of Colorado should be applicable to the
Security Documents insofar as they relate to the issue of perfection and the
effect of perfection or non-perfection of liens on and security interests in
real property and fixtures and to the enforcement of the Security Documents, the
procedures under which they are foreclosed, the effect of foreclosure and other
matters related to the enforcement of remedies against property located in the
State of Colorado.

 

 

4

“Original Transaction Documents” should be defined to include all transaction
documents from the November 30, 2009 transaction that included a grant of a
security interest or lien in any personal property, including the Mortgages.

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EXHIBIT C

FORMS OF OPINIONS OF LOCAL MICHIGAN COUNSEL

(i) CA Muer Corporation (“CA Muer”) is a corporation duly organized and validly
existing under the laws of the State of Michigan.

2. CA Muer has the corporate power and authority to execute, deliver and perform
each Transaction Document to which it is a party and to consummate the
transactions contemplated thereby, and the Transaction Documents constitute
legal, valid and binding obligations of CA Muer, and other than with respect to
the Purchase Agreement, enforceable against CA Muer in accordance with their
terms.

3. CA Muer (a) has taken all corporate actions necessary to authorize the
execution, delivery and performance of each Transaction Document to which it is
a party and the transactions contemplated by the Transaction Documents and
(b) has duly executed and delivered each Transaction Document to which it is a
party.

4. The Modifications are in form satisfactory for recording in the Register of
Deeds of the applicable County, in Michigan where the real property subject to
the particular Mortgage is located and upon such recordation, the Mortgages as
modified by the Modifications shall constitutes a perfected security interest in
and a perfected lien upon the real property securing the amounts due under the
Additional Notes (the “Additional Amounts”), including such real property
constituting fixtures under the laws of the State of Michigan, or rights
described therein, in each case in favor of the Collateral Agent. Each such
Mortgage as modified by the Modification constitutes a Fixture Financing
Statement for purposes of the Michigan UCC.

5. No Governmental Authorization (as defined below) or consent, approval
authorization or order of any third party, and no notice to or filing with, any
Michigan governmental or Michigan corporate authority or regulatory body, is
required for (a) the due execution, delivery or performance by CA Muer of any
Transaction Document to which it is or is to be a party or for the consummation
of the transactions contemplated by the Transaction Documents, (b) the
continuing perfection or maintenance of the Liens in the Collateral (as defined
in the Original Transaction Documents) in which a security interest may be
created under Article 9 of the Uniform Commercial Code (the “Article 9
Collateral”) created under the Original Transaction Documents5 (including the
priority nature thereof required under the Original Transaction Documents) or
(c) the exercise by the Collateral Agent of its rights under the Original
Transaction Documents and the Transaction Documents or the remedies in respect
of the Article 9 Collateral pursuant to the Original Transaction Documents and
the Transaction Documents, except for (i) the filings referred to in paragraphs
6 and 7 below, (ii) the filing of the Modifications in the real property records
of the county in which the real property subject to such Mortgages as modified
by the Modifications is located and (iii) Governmental Authorization not
required to consummate the transactions occurring on the date hereof, but
required to be obtained or made after the date of this opinion letter to enable
CA Muer to comply with requirements of Applicable Law, including those required
to maintain existence and good standing of CA Muer.

 

 

5

“Original Transaction Documents” should be defined to include all transaction
documents from the November 30, 2009 transaction that included a grant of a
security interest or lien in any personal property, including the Mortgages.

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“Governmental Authorization” means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any governmental
authority pursuant to any Applicable Law.

6. The Financing Statements prepared by counsel to the Initial Purchaser listing
CA Muer (and “C.A. Muer Corporation.”) as debtor and filed with the Secretary of
the State of Michigan will remain effective to perfect the security interest
created in favor of the Collateral Agent pursuant to the Original Transaction
Documents (the “Article 9 Security Interest”) with respect to securing the
Additional Amounts with the same priority in that portion of the Article 9
Collateral in which a security interest may be perfected by filing a financing
statement under the Michigan UCC.

7. The Fixture Financing Statements prepared by counsel to the Initial Purchaser
listing CA Muer as debtor and filed with the applicable County Clerks in the
State of Michigan will remain effective to perfect the security interests with
respect to securing the Additional Amounts with the same priority in the
fixtures in which a security interest may be perfected by filing a fixture
financing statement under the Michigan UCC.

8. The execution and delivery of the Transaction Documents does not in any way
adversely affect the perfection of the Article 9 Security Interest in the
Article 9 Collateral that existed immediately prior to the execution and
delivery of the Transaction Documents.

9. The Transaction Documents generally provide that they are to be governed by
the laws of the State of New York. We note that Michigan courts have applied the
“most significant relationship” approach for resolving conflict of laws
questions in contract cases. See Chrysler Corp. v Skyline Indus Servs, 448 Mich
113, 528 NW 2d 698 (1995). Section 187 of the Restatement provides that the
parties to a contract may stipulate to their choice of law to govern the
validity of a contract and the rights created thereby and the laws of the state
chosen will be applied to those issues unless it is determined that the
particular issue in dispute is one that the parties could not have resolved by
an explicit provision in their agreement and that either: (a) the chosen state
has no substantial relationship to the parties or the transaction and there is
no other reasonable basis for the parties’ choice, or (b) that application of
the law of the chosen state would be contrary to fundamental policy of a state
which has a materially greater interest in the issue than the chosen state, and
that under Section 188 of the Restatement would be the state of applicable law
in the absence of an effective choice of law by the parties. Although it is not
free from doubt, provided that (i) the State of New York has a substantial
relationship (as that term is used in Section 187 of the Restatement) and a
reasonable relation (as such term is used in Section 1-105 of the UCC) to the
parties and the Transaction and (ii) the application of New York law would not
be contrary to a fundamental policy of a state which has a materially greater
interest than the State of New York in determination of particular issues, under
existing precedent the choice of law provisions contained in the Transaction
Documents should be given effect by the courts of the State of Michigan and the
federal courts of the United States of America applying Michigan law. Because of
the fundamentally factual nature of many of these issues, the unpredictability
of which public policy issues may be present in any given situation,

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and the fact that our opinion is based solely upon our review of the documents
described above, we do not opine that any court would necessarily hold that any
choice of law provision is binding on the parties. We further note that the
substantive laws of Michigan should be applicable to the Collateral Agreements
insofar as they relate to the issue of perfection and the effect of perfection
or non-perfection of liens on and security interests in real property and
fixtures and to the enforcement of the Collateral Agreements, the procedures
under which they are foreclosed, the effect of foreclosure and other matters
related to the enforcement of remedies against property located in the State of
Michigan .

10. The execution and delivery by CA Muer of the Transaction Documents to which
it is a party do not, and performance by CA Muer of its obligations thereunder
and the Transactions contemplated thereby will not violate (a) its articles of
incorporation, or bylaws, (b) violate the provisions of State of Michigan
statute, rule or regulation known to us to be applicable to CA Muer, or
(c) based on the Officer’s Certificate attached hereto as Exhibit A, violate any
judgment or order of any United States federal or State of Michigan governmental
authority known to us and binding upon CA Muer.

11. No transfer tax, stamp tax or other fee, tax or governmental charge (other
than filing and recording fees imposed by law) was or is required to be paid in
Michigan in connection with the execution, delivery, filing or recording of the
Modifications.

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EXHIBIT D

FORM OF OPINIONS OF LOCAL OREGON COUNSEL

1. The Modification to the Deed of Trust (“Modification”) is in form sufficient
to create in the Beneficiary’s favor a valid lien on the Mortgaged Property as
security for all obligations of the Grantor stated in the Deed of Trust, as
modified by the Modification to be so secured.

2. The Modification is in form sufficient to be recorded in the real property
records of Multnomah County, Oregon.

3. Recordation of the Modification in the real property records of Multnomah
County, Oregon in which the Mortgaged Property is located will constitute the
only recording or filing in the State of Oregon necessary (i) to give
constructive notice to third parties of the lien of the Deed of Trust as
modified by the Modification upon the Mortgaged Property and (ii) to perfect a
security interest in fixtures included in the Mortgaged Property, in each case,
which under the laws of the State of Oregon constitute an interest in fixtures
under the Uniform Commercial Code as enacted and in effect in the State of
Oregon, to the extent that the Grantor’s interest in the Mortgaged Property is
properly of record.

4. No transfer tax, stamp tax or other fee, tax or governmental charge (other
than filing and recording fees imposed by law) was or is required to be paid in
Oregon in connection with the execution, delivery, filing or recording of the
Modification.

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EXHIBIT E

FORM OF OPINIONS OF GENERAL COUNSEL

1. Each [Other Guarantor]6 has been duly formed or incorporated, as the case may
be, is validly existing as a corporation or limited partnership, as the case may
be, in good standing under the laws of the jurisdiction of its formation or
incorporation, has the power and authority to own, lease and operate its current
properties and conduct its business as described in the Pricing Disclosure
Package and is duly qualified to transact business as a foreign corporation or
limited partnership, as applicable, and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. All
of the outstanding shares of capital stock and other ownership interests, as
applicable, of each of the Company and the Guarantors has been duly and validly
authorized and issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar right and are owned directly or
indirectly by the Company, as applicable, free and clear of all security
interests, liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and the securities or “Blue
Sky” laws of certain domestic or foreign jurisdictions) or voting (other than
Permitted Liens) or, to my knowledge, any pending or threatened claim.

2. Each Other Guarantor (a) has the corporate or limited partnership power and
authority, as applicable, to execute, deliver and perform each Transaction
Document to which it is a party and to consummate the transactions contemplated
thereby, (b) has taken all corporate or limited partnership action, as
applicable, necessary to authorize the execution, delivery and performance of
each Transaction Document to which it is a party and the transactions
contemplated by the Transaction Documents and (c) has duly executed and
delivered each Transaction Document to which it is a party. Each Transaction
Document to which any Other Guarantor is a party has been duly authorized,
executed and delivered by such Other Guarantor and is the legal, valid and
binding obligation of such Other Guarantor, enforceable against such Other
Guarantor in accordance with its Terms.

3. No Governmental Authorization (as defined below) or consent, approval
authorization or order of any third party, and no notice to or filing with, any
United States federal or governmental or corporate authority or regulatory body
of the [Covered States]7, is required for (a) the due execution, delivery or
performance by the Other Guarantors of any Transaction Document to which it is
or is to be a party or for the consummation of the transactions contemplated by
the Transaction Documents, (b) the continuing perfection or maintenance of the

 

 

6

This definition should pick up all subsidiaries incorporated in jurisdictions
other than Delaware, Texas, Oregon, Michigan or Colorado; specifically, Florida,
Maryland, Nevada, Alabama, Mississippi, Louisiana, Tennessee, Minnesota,
Missouri, New Mexico, North Carolina, Ohio, South Carolina and Kansas

7

These states should include Florida, Maryland, Nevada, Alabama, Mississippi,
Louisiana, Tennessee, Minnesota, Missouri, New Mexico, North Carolina, Ohio,
South Carolina and Kansas

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Liens in the Collateral (as defined in the Original Transaction Documents8) in
which a security interest may be created under Article 9 of the Uniform
Commercial Code (the “Article 9 Collateral”) created under the Original
Transaction Documents (including the priority nature thereof required under the
Original Transaction Documents) or (c) the exercise by the Collateral Agent of
its rights under the Original Transaction Documents and the Transaction
Documents or the remedies in respect of the Article 9 Collateral pursuant to the
Original Transaction Documents, except for (i) the filings referred to in
Paragraph 6 below, (ii) the recording of Modifications to the Mortgages in the
real property records of the county in which the real property subject to such
Mortgages is located and (iii) Governmental Authorization not required to
consummate the transactions occurring on the date hereof but required to be
obtained or made after the date of this opinion letter to enable the Other
Guarantors to comply with requirements of Applicable Law, including those
required to maintain existence and good standing of the Other Guarantors.

“Governmental Authorization” means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any governmental
authority pursuant to any Applicable Law.

4. The execution and delivery by the Other Guarantors of each Transaction
Document to which it is a party does not, and the performance by each of the
Other Guarantors of its obligations thereunder and the Transactions contemplated
thereby, will not, (a) violate the certificate or articles of incorporation,
certificate or articles of formation, bylaws or limited partnership agreement,
as applicable, of the Other Guarantors, (b) violate any Applicable Law,
(c) violate any order, writ, judgment, injunction, decree, determination or
award binding upon or affecting the Other Guarantors, or (d) except for the
Liens created under the Original Transaction Documents and Permitted Liens,
result in or require the creation or imposition of any Lien upon or with respect
to any property of the Company and its Subsidiaries. After consummation of the
Offering and the transactions contemplated by the Transaction Documents, no
Default or Event of Default will exist under the Indenture or the Amended and
Restated Credit Agreement.

5. No consent, approval, authorization or other order of, or resignation or
filing with, any court or other governmental or regulatory authority or agency,
is required for the Company’s or any Guarantor’s execution, delivery and
performance of any Transaction Document to which the Company or such Guarantor,
as applicable, is a party, or consummation of the transactions contemplated by
the Transaction Documents, except as such others as have been obtained or made
by the Company and such Guarantor and are in full force and effect.

6. Each of the financing statements prepared by counsel to the Initial Purchaser
listing an Other Guarantor and reviewed by me (the “Financing Statements”) and
filed with the Secretary of State of the applicable Covered State will remain
effective to perfect the security interest created in favor of the Collateral
Agent pursuant to the Original Transaction Documents (the “Article 9 Security
Interest”) with respect to securing the Additional Amounts with the same
priority in that portion of the Article 9 Collateral in which a security
interest may be perfected by filing a financing statement under the Uniform
Commercial Code as in effect in the applicable Covered State.

 

 

8

“Original Transaction Documents” should be defined to include all transaction
documents from the November 30, 2009 transaction that included a grant of a
security interest or lien in any personal property, including the Mortgages.

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7. The execution and delivery of the Transaction Documents does not in any way
adversely affect the perfection of the Article 9 Security Interest in the
Article 9 Collateral that existed immediately prior to the execution and
delivery of the Transaction Documents.