Exhibit 10.33

 

 

OPTION AGREEMENT

 

by and among

 

CROWN LIMITED,

 

CROWN CCR GROUP INVESTMENTS ONE, LLC,

 

CROWN CCR GROUP INVESTMENTS TWO, LLC,

 

MILLENNIUM GAMING, INC.,

 

OCM HOLDCO, LLC

 

and

 

CANNERY CASINO RESORTS, LLC

 

Dated as of March 12, 2009

 

 

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TABLE OF CONTENTS

 

 

ARTICLE 1

 

 

 

 

 

Definitions

 

 

 

 

 

ARTICLE 2

 

 

 

 

 

Option

 

 

 

 

2.1.

Grant of Option

22

2.2.

Purchase Price Upon Exercise of the Option

22

2.3.

Exercise of the Option

24

2.4.

Sellers’ Closing Deliveries

24

2.5.

Buyers’ Closing Deliveries

25

2.6.

Intentionally Omitted

26

2.7.

Allocation of Purchase Price

26

 

 

 

 

ARTICLE 3

 

 

 

 

 

Closing

 

 

 

 

 

ARTICLE 4

 

 

 

 

 

Representations and Warranties Regarding Sellers

 

 

 

 

4.1.

Representations of Millennium

28

4.2.

Representations of HoldCo

28

4.3.

Representations of Each Seller

33

 

 

 

 

ARTICLE 5

 

 

 

 

 

Representations and Warranties Regarding the Companies

 

 

 

 

5.1.

Company Organization; Good Standing; CCR Authority and Enforceability

36

5.2.

Capitalization

37

5.3.

No Litigation

38

5.4.

Consents and Approvals

38

5.5.

No Violations

38

5.6.

Material Contracts

39

5.7.

Financial Information

40

5.8.

Liabilities

41

 

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5.9.

Labor Matters

41

5.10.

Employee Benefit Matters

42

5.11.

Taxes

44

5.12.

Governmental Authorizations

46

5.13.

Insurance

46

5.14.

Compliance with Laws

47

5.15.

Real Property

47

5.16.

Environmental Matters

49

5.17.

Intellectual Property

50

5.18.

Absence of Certain Changes

51

5.19.

Brokers and Finders

51

5.20.

Solvency

51

5.21.

Related Party Transactions

51

5.22.

Personal Property

52

5.23.

No Other Representations or Warranties

52

 

 

 

 

ARTICLE 6

 

 

 

 

 

Representations and Warranties of the Buyers and the Parent

 

 

 

 

6.1.

Buyer Organization and Good Standing

52

6.2.

Buyer Authority; Enforceability

52

6.3.

Consents and Approvals

53

6.4.

No Violations

53

6.5.

Funds Available

53

6.6.

Brokers and Finders

53

6.7.

Securities Act

53

6.8.

No Litigation

54

6.9.

Intentionally Omitted

54

6.10.

Solvency

54

6.11.

No Other Representations or Warranties

54

 

 

 

 

ARTICLE 7

 

 

 

 

 

Covenants of the Parties

 

 

 

 

7.1.

Conduct of the Companies

55

7.2.

Conduct of Blocker and AcquisitionCo.

58

 

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7.3.

No Control of Other Party’s Business

58

7.4.

Reasonable Best Efforts

58

7.5.

Updates to Disclosure Schedules

61

7.6.

Notifications to Buyers

62

7.7.

No Alternative Transactions

62

7.8.

Publicity

62

7.9.

Intentionally Omitted

63

7.10.

Tax Matters

63

7.11.

LandCo Disposition

70

7.12.

Excluded Opportunities

70

7.13.

Assistance and Records

71

7.14.

Guarantee

71

7.15.

Intentionally Omitted

72

7.16.

Intentionally Omitted

72

7.17.

Intentionally Omitted

72

7.18.

Intentionally Omitted

72

7.19.

No Assignment if Breach

72

7.20.

FIRPTA Certificates

73

7.21.

Repayment of Loan Obligations

73

7.22.

Activities of AcquisitionCo and Blocker

74

7.23.

Intentionally Omitted

74

7.24.

Amended Nevada Palace Lease; Subordination, Non-disturbance and Attornment
Agreement

74

7.25.

Termination of Affiliate Agreements; Release of Claims

75

7.26.

Intentionally Omitted

76

7.27.

Impact of New Gaming Taxes

76

7.28.

Changes in CCR Capital Structure

77

7.29.

Outside New CCR Equity

78

 

 

 

 

ARTICLE 8

 

 

 

 

 

Conditions to Closing

 

 

 

 

8.1.

Conditions to the Obligations of All Parties

78

8.2.

Conditions to the Obligations of the Buyers

79

 

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8.3.

Conditions to the Obligations of Sellers

80

 

 

 

 

ARTICLE 9

 

 

 

 

 

Termination

 

 

 

 

9.1.

This Agreement may be terminated and shall be of no further force and effect at
any time prior to the Closing

80

 

 

 

 

ARTICLE 10

 

 

 

 

 

Indemnification

 

 

 

 

10.1.

Survival

81

10.2.

Indemnification

82

10.3.

Limits on Indemnification

85

10.4.

Escrow

86

10.5.

Tax Benefit

87

10.6.

Intentionally Omitted

88

10.7.

Exclusive Remedy

88

10.8.

Adjustment of Purchase Price

89

 

 

 

 

ARTICLE 11

 

 

 

 

 

General

 

 

 

 

11.1.

Entire Agreement

89

11.2.

No Third Party Rights

89

11.3.

Counterparts

89

11.4.

Headings

89

11.5.

Applicable Law

89

11.6.

Enforcement

89

11.7.

Waiver of Jury Trial

90

11.8.

Waiver of Conditions

90

11.9.

Transaction Expenses

90

11.10.

Construction

91

11.11.

Severability

91

11.12.

Amendments

91

11.13.

Assignments

91

11.14.

Notices

91

11.15.

Further Assurances

93

 

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11.16.

Confidentiality

93

11.17.

Additional Rules of Construction

93

11.18.

Enforcement of this Agreement

94

11.19.

Knowledge

94

 

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EXHIBITS

 

Exhibit A

 

Unit Ownership

Exhibit B

 

Amended Nevada Palace Lease

Exhibit C

 

Escrow Agreement

Exhibit D

 

Payment Percentages

Exhibit E

 

[Intentionally Omitted]

Exhibit F

 

[Intentionally Omitted]

Exhibit G

 

Title Commitment Exceptions

Exhibit H

 

Form of Sale of Option Agreement

Exhibit I

 

Form of Opinion of Sellers’ Counsel

Exhibit J

 

[Intentionally Omitted]

Exhibit K

 

[Intentionally Omitted]

Exhibit L

 

Assignment/Sale Documentation

Exhibit M

 

Form of Cash Log

Exhibit N

 

Form of Releases

Exhibit O

 

Form of Non-Imputation Endorsement

Exhibit P

 

Form of Subordination, Non-disturbance and Attornment Agreement

 

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OPTION AGREEMENT

 

This OPTION AGREEMENT, dated as of March 12, 2009 (this “Agreement”), is by and
among (i) Crown Limited, an Australian company (the “Parent”), (ii) Crown CCR
Group Investments One, LLC (“Crown One”) and Crown CCR Group Investments Two,
LLC (“Crown Two” and, collectively with Crown One, the “Buyers” and each, a
“Buyer”), each a Delaware limited liability company and an indirect wholly owned
subsidiary of Parent, (iii) Millennium Gaming, Inc., a Nevada corporation
(“Millennium”), (iv) OCM HoldCo, LLC, a Delaware limited liability company
(“HoldCo” and, collectively with Millennium, the “Sellers” and each, a
“Seller”), and (v) Cannery Casino Resorts, LLC, a Nevada limited liability
company (“CCR”).  Capitalized terms used but not defined herein have the
respective meanings specified in Article 1.

 

RECITALS

 

WHEREAS, Millennium and OCM AcquisitionCo LLC, a Nevada limited liability
company (“AcquisitionCo”), own all of the issued and outstanding units (the “CCR
Units”) of CCR;

 

WHEREAS, OCM Blocker, LLC, a Delaware limited liability company (“Blocker”),
owns all of the issued and outstanding units of AcquisitionCo (the “Blocker
Units”), and AcquisitionCo owns 42% of the CCR Units (the “AcquisitionCo
Units”), as set forth on Exhibit A hereto;

 

WHEREAS, HoldCo owns all of the issued and outstanding Class A Units (the
“Blocker A Units”) of Blocker, which represent more than 99.99% of the capital
interest in Blocker (the “HoldCo Units”);

 

WHEREAS, HoldCo and Blocker are parties to an Option to Purchase dated
January 5, 2006, as corrected on March 17, 2006 (the “Blocker Option
Agreement”), whereby HoldCo has the option to purchase the Blocker Units (the
“Blocker Option”);

 

WHEREAS, GLCP Nevada LLC, a Delaware limited liability company (“GLCP”), owns
all of the issued and outstanding Class B Units of Blocker, which represent less
than 0.01% of the capital interest in Blocker (the “GLCP Units”);

 

WHEREAS, Millennium owns 58% of the CCR Units as set forth on Exhibit A hereto
(the “Millennium Units”);

 

WHEREAS, the parties hereto have entered into a Purchase Agreement dated as of
December 11, 2007, as amended thereafter (the “Original Purchase Agreement”),
pursuant to which, upon the terms and subject to the conditions set forth
therein, (i) Millennium agreed to sell to Crown One, and Crown One agreed to
purchase from Millennium, the Millennium Units, (ii) HoldCo agreed to sell to
Crown Two, and Crown Two agreed to purchase from HoldCo, the HoldCo Units, and
(iii) HoldCo agreed to sell to Crown One, and Crown One agreed to purchase from
HoldCo, all of HoldCo’s right, title, and interest in the Blocker Option
Agreement;

 

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WHEREAS, concurrently with the execution of the Original Purchase Agreement,
GLCP and Crown Two entered into the GLCP Purchase Agreement, pursuant to which,
upon the terms and subject to the conditions therein, GLCP agreed to sell to
Crown Two, and Crown Two agreed to purchase from GLCP, the GLCP Units; and

 

WHEREAS, as a condition and inducement to the parties’ willingness to enter into
this Agreement, the parties have entered into a Termination and Settlement
Agreement dated of even date herewith, pursuant to which the parties terminated
the Original Purchase Agreement;

 

WHEREAS, concurrently with the execution of this Agreement, Parent, the Buyers
and CCR have entered into a Preferred Purchase Agreement (the “Preferred
Purchase Agreement”), pursuant to which the Buyers have agreed to purchase
either (i) Series B Preferred Units of CCR (the “Series B Preferred Units”),
which are convertible, at the option of the Buyers, into Series A2 Preferred
Units of CCR (“Series A2 Preferred Units”) representing 24.5% of the outstanding
equity of CCR or (ii) Series A2 Preferred Units representing 4.1% of the
outstanding equity of CCR (the “4.1% Interest”);

 

WHEREAS, as a condition and inducement to Parent and the Buyers’ willingness to
enter into the Preferred Purchase Agreement, each of the Sellers desires to
grant to the Buyers exclusive options to acquire, upon the terms and subject to
the conditions herein, all of the Millennium Units, the Holdco Units and the
Blocker Option Agreement as set forth herein;

 

WHEREAS, if the options granted hereunder are exercised, then upon the
consummation of the transactions contemplated by this Agreement and by the
Preferred Purchase Agreement, the Buyers shall collectively own, directly or
indirectly, 100% of the issued and outstanding CCR Units.

 

NOW, THEREFORE, in consideration of the terms, conditions and other provisions
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

 

Definitions

 

As used in this Agreement, the following terms shall have the following
meanings:

 

1.1.         “AcquisitionCo” has the meaning set forth in the Recitals.

 

1.2.         “AcquisitionCo Units” has the meaning set forth in the Recitals.

 

1.3.         “Action” means any action, cause of action, complaint, petition,
suit, demand, notice, investigation, hearing, arbitration or administrative or
other proceeding, whether civil, criminal, administrative, or investigative, and
whether at law or in equity.

 

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1.4.         “Actually Realized” with respect to a Tax Benefit, shall mean the
time that any refund of Taxes is actually received or applied against other
Taxes due, or at the time of the filing of a Tax Return (including any Tax
Return relating to estimated Taxes) on which a loss, deduction or credit or
increase in basis is applied to reduce the amount of Taxes that would otherwise
be payable.

 

1.5.         “Administrative Agent” means Bank of America, N.A. in its capacity
as administrative agent under the Bank of America Facilities.

 

1.6.         “Affiliate” means, with respect to a specified Person, a Person
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified; provided,
that, for the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common
control with”), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by Contract, or otherwise; provided, however, that when used with
respect to the Parent or any Buyer, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”) shall require the ownership of securities or other interests having the
power to elect a majority of the Board of Directors or similar governing body of
such Person.

 

1.7.         “Affiliate Agreements” means, individually and collectively, the
Millennium Management Agreement and the Oaktree Purchase Agreement.

 

1.8.         “Agreement” has the meaning set forth in the Preamble.

 

1.9.         “Allocation Accounting Firm” has the meaning set forth in
Section 2.7.

 

1.10.       “Amended Nevada Palace Lease” means the Amended and Restated Ground
Lease for the land upon which the Cannery East Casino and Hotel is currently
located, in the form attached hereto as Exhibit B.

 

1.11.       “Assignment Documents” has the meaning set forth in Section 2.4(g).

 

1.12.       “Audited Financial Statements” has the meaning set forth in
Section 5.7.

 

1.13.       “Bank of America Facilities” means credit facilities of CCR pursuant
to (a) that certain First Lien Credit Agreement, dated as of May 18, 2007, by
and among CCR, WTA, each lender from time to time party thereto, Bank of
America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and
L/C Issuer and CIT Lending Services Corporation, Commerzbank AG, Los Angeles
Branch and Nevada State Bank as Co-Documentation Agents in the maximum

 

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aggregate outstanding amount of $745,000,000; and (b) that certain Second Lien
Credit Agreement, dated as of May 18, 2007, by and among CCR, WTA, the lenders
from time to time party thereto, and Bank of America as Administrative Agent and
Collateral Agent in the outstanding amount of $115,000,000.

 

1.14.       “Bank of America Repayment” has the meaning set forth in
Section 2.2(b).

 

1.15.       “Base Purchase Price” has the meaning set forth in Section 2.2(b).

 

1.16.       “Blocker” has the meaning set forth in the Recitals.

 

1.17.       “Blocker A Units” has the meaning set forth in the Recitals.

 

1.18.       “Blocker Buyer” has the meaning set forth in Section 7.10(d).

 

1.19.       “Blocker Option” has the meaning set forth in the Recitals.

 

1.20.       “Blocker Option Agreement” has the meaning set forth in the
Recitals.

 

1.21.       “Blocker Units” has the meaning set forth in the Recitals.

 

1.22.       “Business” means the gaming, racing, entertainment, hospitality and
related businesses and operations conducted by the Companies in Nevada and
Pennsylvania.

 

1.23.       “Business Day” means any day other than a Saturday or a Sunday or a
day on which banks located in New York, New York generally are authorized or
required by law or regulation to close.

 

1.24.       “Buyer” and “Buyers” have the meanings set forth in the Preamble.

 

1.25.       “Buyer Indemnified Parties” has the meaning set forth in
Section 10.2(a).

 

1.26.       “Buyer Loan Payment Amount” has the meaning set forth in
Section 2.2(b).

 

1.27.       “Buyer Requested Amount” has the meaning set forth in
Section 7.10(f).

 

1.28.       “Buyers Due Date” has the meaning set forth in Section 7.10(f).

 

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1.29.       “Cannery East” means the Eastside Cannery Casino and Hotel, which is
located on Boulder Highway in Las Vegas, Nevada.

 

1.30.       “Capital Expenditure” means any expenditure that is capitalized on a
balance sheet in accordance with GAAP.

 

1.31.       “Cash Collateral Account” means the “Cash Collateral Accounts”
established pursuant to the Bank of America Facilities.

 

1.32.       “Cash Collateral and Disbursement Agreement” means the Cash
Collateral and Disbursement Agreement, dated May 18, 2007, by and among Bank of
America, N.A., as Disbursement and Control Agent, Professional Associates
Construction Services, Inc., CCR, WTA and the guarantors under the Bank of
America Facilities.

 

1.33.       “Cash Log” shall mean the regularly generated consolidated
unrestricted cash log of the Companies, substantially in the form of Exhibit M
attached hereto.

 

1.34.       “CCR” has the meaning set forth in the Preamble.

 

1.35.       “CCR Units” has the meaning set forth in the Recitals.

 

1.36.       “CERCLA” means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as now or hereafter amended (42 U.S.C.
Section 9601 et seq.).

 

1.37.       “Closing” has the meaning set forth in Article III.

 

1.38.       “Closing Date” means the date on which the Closing occurs.

 

1.39.       “Closing Statement” has the meaning set forth in Section 2.3(c).

 

1.40.       “COBRA” has the meaning set forth in Section 5.10(g).

 

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

 

1.42.       “Companies” means, collectively, CCR and its Subsidiaries, other
than the Excluded HoldCo Subsidiaries; “Company” means, individually, any of CCR
or its Subsidiaries, other than the Excluded HoldCo Subsidiaries.

 

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1.43.       “Company Benefit Plans” has the meaning set forth in
Section 5.10(a).

 

1.44.       “Company Cash” means the cash amounts shown on the Cash Log in the
line item “Cash in Cage”.

 

1.45.       “Company Liens” has the meaning set forth in Section 7.21(b).

 

1.46.       “Conditional Exercise Notice” has the meaning set forth in
Section 2.3(b).

 

1.47.       “Confidentiality Agreement” has the meaning set forth in
Section 11.1.

 

1.48.       “Construction Reserve Account” means the “Construction Reserve
Account” established pursuant to the Cash Collateral and Disbursement Agreement.

 

1.49.       “Contract” means any agreement, lease, license, note, mortgage,
contract or other legally binding obligation, in each case, including all
modifications and amendments thereto.

 

1.50.       “Crown One” has the meaning set forth in the Preamble.

 

1.51.       “Crown Two” has the meaning set forth in the Preamble.

 

1.52.       “Damages” has the meaning set forth in Section 10.2(f).

 

1.53.       “Debt Facilities” means the Bank of America Facilities and the
Merrill Lynch Facilities or any successor or replacement facilities thereto or
any other facilities in respect of Indebtedness of the Companies or any of them,
other than debt between or among the Companies.

 

1.54.       “DOJ” has the meaning set forth in Section 7.4(b).

 

1.55.       “Effect” has the meaning set forth in the definition of “Material
Adverse Effect.”

 

1.56.       “Environmental Claim” means any Action by any Governmental Entity
alleging potential liability (including potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the environment, of, or
exposure to, any Hazardous Materials at any location, whether or not owned or
operated by the Companies, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.

 

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1.57.       “Environmental Laws” means any Law regulating, pertaining or
relating to health, industrial hygiene, pollution or the environment, including:
RCRA; the Clean Air Act, as now or hereafter amended (42 U.S.C. Section 7401 et
seq.); CERCLA; the Emergency Planning and Community Right-to-Know Act of 1986,
as now or hereafter amended (42 U.S.C. Section 11001 et seq.); the Federal
Hazardous Substances Act, as now or hereafter amended (15 U.S.C. Section 1261 et
seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as now or
hereafter amended (7 U.S.C.  Section 136 et seq.); the Federal Water Pollution
Control Act, as now or hereafter amended (33 U.S.C.  Section 1251 et seq.); the
Hazardous Materials Transportation Act, as now or hereafter amended (49 U.S.C. 
Section 1801 et seq.); the Occupational Safety and Health Act of 1970, as now or
hereafter amended (29 U.S.C.  Section 551 et seq.); the Toxic Substances Control
Act, as now or hereafter amended (15 U.S.C.  Section 2601 et seq.); Nev. Rev.
Stat. chs. 444, 445A, 445B, 459, 477, 590 and 618, each as now or hereafter
amended; and the regulations, rules and orders promulgated under each of them;
and all Laws regulating, pertaining or relating to one or more Hazardous
Materials or health, industrial hygiene, pollution or the environment, or
recordkeeping, notification, disclosure and reporting requirements regarding
Hazardous Materials, or relating to endangered or threatened species of fish,
wildlife and plants and the management or use of natural resources.

 

1.58.       “Environmental Permit” means any Governmental Authorization issued
by any Governmental Entity which relates to the environment or to public health
and safety or to worker health and safety as they may be affected by the
environment.

 

1.59.       “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.

 

1.60.       “ERISA Affiliate” means, with respect to any Person, any entity
(other than such Person) that, together with such Person, is required to be
treated as a single employer under Sections 414(b), (c), (m) or (o) of the Code.

 

1.61.       “Escrow Agent” shall have the meaning set forth in the Escrow
Agreement.

 

1.62.       “Escrow Agreement” means that certain Escrow Agreement by and among
the Parent, the Buyers, the Sellers and the Escrow Agent, substantially in the
form of Exhibit C attached hereto.

 

1.63.       “Escrow Period” has the meaning set forth in Section 10.4(b).

 

1.64.       “Excluded HoldCo Subsidiaries” means LandCo and NP Land, LLC, a
Nevada limited liability company.

 

1.65.       “Excluded Opportunity” means any gaming opportunity offered to any
of the Companies or their respective directors or officers, including

 

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Messrs. Wortman and Paulos, whether acquired by them before, on or after the
date of this Agreement, including the Rockingham Opportunity and the Tejon
Opportunity.

 

1.66.       “Exercise Date” means the date on which the Final Exercise Notice is
delivered to CCR and the Sellers.

 

1.67.       “Exercise Period” has the meaning set forth in Section 2.3(b).

 

1.68.       “Final Disclosure Schedules” has the meaning set forth in
Section 7.5(a).

 

1.69.       “Final Exercise Notice” has the meaning set forth in Section 2.3(b).

 

1.70.       “Financial Statements” has the meaning set forth in Section 5.7.

 

1.71.       “FIRPTA Certificate” has the meaning set forth in Section 7.20.

 

1.72.       “4.1% Interest” has the meaning set forth in the Recitals.

 

1.73.       “FTC” has the meaning set forth in Section 7.4(b).

 

1.74.       “Fundamental Representations” means (i) solely with respect to
Millennium, breaches of the representations and warranties set forth in
Section 4.1 (Millennium Representations), Section 4.3(a) (Sellers’ Good
Standing), Section 4.3(b) (Sellers’ Authority; Enforceability),
Section 4.3(f) (Sellers’ Brokers and Finders), (ii) solely with respect to
HoldCo, breaches of the representations and warranties set forth in Sections
4.2(a), (b), (c), (d) and (e) (Certain HoldCo Representations),
Section 4.2(f) (HoldCo Taxes), Section 4.3(a) (Sellers’ Good Standing),
Section 4.3(b) (Sellers’ Authority; Enforceability), Section 4.3(f) (Sellers’
Brokers and Finders), and (iii) jointly and severally with respect to the
Sellers, breaches of the representations and warranties set forth in Section 5.1
(Company Organization and Good Standing), Section 5.2 (Company Capitalization),
Section 5.11 (Taxes) and Section 5.19 (Company Brokers and Finders).

 

1.75.       “GAAP” means United States generally accepted accounting principles
in effect from time to time.

 

1.76.       “Gaming Approvals” has the meaning set forth in Section 7.4(a).

 

1.77.       “Gaming Authorities” means any Governmental Entity with regulatory
control, authority or jurisdiction over casino, pari-mutuel and lottery or other
gaming activities and operations, including the Nevada Gaming Commission,

 

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the Nevada State Gaming Control Board, the Clark County Liquor and Gaming
Licensing Board, the City of Las Vegas and the City of North Las Vegas, the
Pennsylvania Gaming Control Board and the Pennsylvania Harness Racing
Commission.

 

1.78.       “Gaming Laws” means all Laws pursuant to which any Gaming Authority
possesses regulatory, licensing or permit authority over, casino and
pari-mutuel, lottery or other gaming activities within the State of Nevada or
the Commonwealth of Pennsylvania, including the rules and regulations
established by any Gaming Authority.

 

1.79.       “Gaming Tax Amount” shall mean the daily local share assessment
accrued and unpaid through and including the day before Closing by WTA to North
Strabane Township and other local Governmental Entities in the Commonwealth of
Pennsylvania pursuant to Section 1403(c)(3) of the Pennsylvania Gaming Act and
on the basis of the normal operating reports generated by CCR in the ordinary
course of business, less any amount (the “Holdback Tax Amount”) pursuant to
which a claim may be made pursuant to the Holdback Agreement in respect thereof.

 

1.80.       “GLCP” has the meaning set forth in the Recitals.

 

1.81.       “GLCP Purchase Agreement” means that certain Purchase Agreement,
dated December 11, 2007, by and among the Parent, Crown Two and GLCP.

 

1.82.       “GLCP Purchase Price” means the purchase price that would have been
payable by Crown Two to GLCP for the GLCP Units pursuant to the GLCP Purchase
Agreement.

 

1.83.       “GLCP Units” has the meaning set forth in the Recitals.

 

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

 

1.85.       “Governmental Authorization” means any authorization, approval,
consent, finding of suitability, license, permit, franchise, registration,
exemption or similar right, approval or authorization from any Governmental
Entity (including any Gaming Authority).

 

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1.86.                                    “Governmental Entity” means any
federal, state or local government or any subdivision thereof, any
supranational, or any domestic or foreign federal, state or local court,
tribunal (including any arbitrator or arbitral tribunal), legislative,
executive, or regulatory authority, agency, department, commission,
instrumentality or body, including any Gaming Authority.

 

1.87.                                    “Hazardous Materials” means (a) any
petroleum, petroleum products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, urea formaldehyde foam, heavy metals,
polychlorinated biphenyls, lead or lead-based paints or materials, radon,
fungus, mold, mycotoxins or other substances that are known or suspected to have
an adverse effect on human health or the environment, (b) any waste, chemical,
pollutant, material or substance defined as toxic or hazardous or otherwise
regulated or governed under any Environmental Law or (c) anything that is a
“hazardous substance” pursuant to CERCLA or any similar Environmental Law,
anything that is a “solid waste” or “hazardous waste” pursuant to RCRA or any
similar Environmental Law or any “pesticide,” “pollutant,” “contaminant,” “toxic
chemical” or “noise” giving rise to any liability under any Environmental Law.

 

1.88.                                    “Holdback Agreement” means the Holdback
Agreement, dated November 14, 2006, by and between Magna and PA Meadows.

 

1.89.                                    “Holdback Tax Amount” has the meaning
set forth in the definition of “Gaming Tax Amount.”

 

1.90.                                    “HoldCo” has the meaning set forth in
the Preamble.

 

1.91.                                    “HoldCo Due Date” has the meaning set
forth in Section 7.10(f).

 

1.92.                                    “HoldCo Units” has the meaning set
forth in the Recitals.

 

1.93.                                    “Hot Asset Allocation” has the meaning
set forth in Section 2.7.

 

1.94.                                    “Hot Asset Allocation Notice of
Disagreement” has the meaning set forth in Section 2.7.

 

1.95.                                    “HSR Act” means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

 

1.96.                                    “HSR Notification” means the
notification and report forms contemplated to be filed under the HSR Act.

 

1.97.                                    “Income Tax” means any federal, state,
local, or foreign income tax based upon or measured by net income, including any
interest, penalty, or addition thereto, whether disputed or not.

 

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1.98.                                    “Indebtedness” means, without
duplication, any indebtedness for borrowed money, obligations evidenced by
notes, bonds, debentures or similar instruments, net obligations (positive or
negative) under any swap contract or hedging agreement and guarantees of any of
the foregoing.

 

1.99.                                    “Independent Accounting Firm” has the
meaning set forth in Section 7.10(f).

 

1.100.                              “Indemnification Cap” has the meaning set
forth in Section 10.3(c).

 

1.101.                              “Indemnified Party” has the meaning set
forth in Section 10.2(e).

 

1.102.                              “Indemnifying Party” has the meaning set
forth in Section 10.2(e).

 

1.103.                              “Indemnity Escrow Account” means the escrow
account maintained by the Escrow Agent to hold the Indemnity Escrow Amount
pursuant to the terms of the Escrow Agreement.

 

1.104.                              “Indemnity Escrow Amount” means the amount
deposited in the Indemnity Escrow Account pursuant to Section 2.2(b).

 

1.105.                              “Intellectual Property” means all of the
following owned or used by the Companies in connection with the Business:
(a) trademarks, service marks, trade names, logos, designs and symbols and all
goodwill associated therewith, and all registrations and applications pertaining
to the foregoing; (b) patents, patent applications and patentable inventions;
(c) trade secrets; (d) registered and material unregistered copyrights in all
works, including all Software; (e) confidential information, customer data and
database rights; and (f) Internet web sites, domain name registrations and all
of (a) through (e) above contained in such Internet web sites.

 

1.106.                              “Interim Financial Statements” has the
meaning set forth in Section 5.7.

 

1.107.                              “Investments” means, for purposes of the
Cash Log, US Treasury securities, certificates of deposit, commercial paper
rated at least A-1 by Standard & Poor’s or at least P-1 by Moody’s Investors
Service, Inc., bankers’ acceptances issued by financial institutions rated at
least first tier paper by a National Recognized Statistical Rating Organization,
repurchase agreements covering US Treasury securities, and money market funds
that comply with all provisions of Rule 2a-7 promulgated under the Investment
Company Act of 1940.

 

1.108.                              “Joint Instructions” has the meaning set
forth in Section 10.4(b).

 

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1.109.                              “LandCo” means OCM LandCo, LLC, a Delaware
limited liability company.

 

1.110.                              “LandCo Disposition” has the meaning set
forth in Section 7.11.

 

1.111.                              “Law” or “Laws” means any federal, state,
regional, local, municipal or other statute, law, code, ordinance, Order,
rule or regulation or any common law right or obligation, including the Gaming
Laws.

 

1.112.                              “Liabilities” means any and all
Indebtedness, losses, liabilities, lawsuits, claims, damages, expenses, demands,
fines, costs, royalties, proceedings, deficiencies or obligations (including
those arising out of any Action, such as any settlement or compromise thereof or
judgment or award therein), of any nature, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, and those
arising under any contract, agreement, arrangement, commitment, guarantee or
undertaking.

 

1.113.                              “Liens” means all liens, assessments,
governmental charges or levies, security interests, deeds of trust, pledges,
charges, conditional sales contracts, mortgages or encumbrances.

 

1.114.                              “Loan Payoff Amount” means the amount equal
to the aggregate amount of liabilities and Indebtedness owing under CCR’s then
outstanding Debt Facilities and any prepayment or other fees due to the lenders
thereof to fulfill the obligations under the Debt Facilities as of the Closing
Date.

 

1.115.                              “Magna” means Magna Entertainment Corp., a
Delaware corporation.

 

1.116.                              “March Pro Formas” means (i) that certain
Pro Forma Title Insurance Policy prepared in March 2009 and delivered to the
Buyers by First American Title Insurance Company for CCR Racing Management and
CCR Pennsylvania Racing, Inc., (ii) that certain Pro Forma Title Insurance
Policy prepared in March 2009 and delivered to the Buyers by Commonwealth Land
Title Insurance Policy for Nevada Palace, LLC and (iii) that certain Pro Forma
Title Insurance Policy prepared in March 2009 and delivered to the Buyers by
Commonwealth Land Title Insurance Policy for The Cannery Hotel and Casino, LLC.

 

1.117.                              “Material Adverse Effect” means (i) any
fact, change, development, circumstance, event, effect or occurrence (an
“Effect”) that, when considered either individually or in the aggregate with all
other Effects, is materially adverse to the business (excluding any future
development opportunities), properties, assets, liabilities, financial condition
or results of operations of the Companies, taken as a whole, (ii) any failure of
any Seller to have good and valid title to, and be able to deliver to the Buyers
at the Closing, free and clear of all Liens, the Millennium Units, the Holdco
Units, or the Blocker Option,

 

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as applicable, or any failure of AcquisitionCo to have good and valid title to
all of the AcquisitionCo Units, or (iii) the loss by any Subsidiary of CCR of
its non-restricted gaming license necessary to operate its gaming Business in
the State of Nevada, the loss by CCR of its finding of suitability as a holding
company of any Subsidiary holding such non-restricted gaming license, or the
loss of WTA’s Category I Slot Machine License to operate its gaming Business;
provided, however, that in no event shall any of the following, alone or in
combination, be deemed to constitute, nor shall any of the following be taken
into account in determining whether there has been, a Material Adverse Effect
under clause (i) above:  (A) an Effect in general business, economic, political,
legislative, social, regulatory or other conditions, whether locally, nationally
or internationally, or in the financial, banking or securities markets
(including changes to interest rates, currency rates or the value of the U.S.
Dollar relative to other currencies, consumer confidence, stock, bond and/or
debt prices and trends), or any acts of war, hostilities, military action,
sabotage or terrorism (whether or not declared or undeclared) or any escalation
or worsening of any such acts of war, hostility, military action, sabotage or
terrorism; (B) any Effect resulting from the announcement of this Agreement and
the transactions contemplated hereby, or the identity of the Parent, the Buyers
or any of their Affiliates as the acquiror of the Companies; (C) any failure to
meet projections, forecasts or revenue or earnings predictions for any period,
provided that the underlying causes of any such failure shall not be excluded;
(D) any changes in Law, GAAP or any accounting regulation (including any
proposal or adoption of any new Law or GAAP rule or any change in the
interpretation or enforcement of any existing Law or GAAP rule); (E) any Effect
in the travel, hospitality or gaming industries generally; or (F) any taking of
any action by any of the Companies or the Sellers specifically required by this
Agreement to be so taken; provided, however, that the Effects set forth in
clauses (A), (D) and (E) above may be taken into account to the extent such
Effects have a disproportionate impact on the Companies.

 

1.118.                              “Material Contract” has the meaning set
forth in Section 5.6.

 

1.119.                              “Meadows Property” means the Meadows
Racetrack located on Racetrack Road in North Strabane Township, Washington
County, Pennsylvania, which comprises approximately 153.03 acres.

 

1.120.                              “Meadows Purchase Agreement” means the Stock
Purchase Agreement, dated as of November 8, 2005, by and between Magna and PA
Meadows, LLC, as amended by the First Amendment to Stock Purchase Agreement
dated as of July 26, 2006.

 

1.121.                              “Merrill Lynch Facility” means the credit
facility of CCR established pursuant to that certain Amended and Restated Loan
Agreement, dated as of May 18, 2007, by and among CCR, WTA, Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as
administrative agent, and each of

 

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the lenders from time to time party thereto in the maximum outstanding amount of
$30,000,000.

 

1.122.                              “Millennium” has meaning set forth in the
Preamble.

 

1.123.                              “Millennium Management Agreement” means the
Casino Management Agreement, dated as of September 22, 2006, by and among CCR,
Rampart Resort Management, LLC, The Cannery Hotel and Casino, LLC, Nevada
Palace, LLC, and Millennium Management Group II, LLC.

 

1.124.                              “Millennium Units” has the meaning set forth
in the Recitals.

 

1.125.                              “Multiemployer Plan” has the meaning set
forth in Section 5.10(b).

 

1.126.                              “Negative Pledge Approval” means the
administrative approval of the Chairman of the Nevada Gaming Control Board with
respect to any restrictions on transfer or agreements not to encumber the equity
interests or securities of CCR contained in this Agreement, and in particular,
Section 7.1 hereof.

 

1.127.                              “New CCR Equity” has the meaning set forth
in Section 7.28.

 

1.128.                              “New Tax” has the meaning set forth in
Section 7.27(a).

 

1.129.                              “New Tax Deadline” means December 31, 2010;
provided, that, if the State of Nevada has approved the imposition of a New Tax,
or has formally announced that the State of Nevada will impose a New Tax, or a
vote on a referendum approving the imposition of a New Tax is passed, in each
case on or prior to December 31, 2010, the “New Tax Deadline” shall be extended
until the earlier of (A) the date of actual imposition by the State of Nevada of
such New Tax (substantially in the form it was formally approved (including by
way of a referendum) or formally announced on or prior to December 31, 2010) or
(B) the date on which it is not reasonably likely that such New Tax
(substantially in the form it was formally approved (including by way of a
referendum) or formally announced on or prior to December 31, 2010) will
actually be imposed by the State of Nevada (whether due to its withdrawal,
abandonment, failure of enactment, invalidation or otherwise).

 

1.130.                              “New Tax Impact” means the product of
(a) NGT Tax Amount and (b) ten (10).

 

1.131.                              “New Tax Payment” has the meaning set forth
in Section 7.27(a).

 

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1.132.                              “NGT Tax Amount” means the estimated
increased amount of aggregate taxes and levies imposed on the Companies on an
annual basis as a direct result of the New Tax, as such estimate is mutually
agreed upon by the Sellers and the Buyers or, if the Sellers and the Buyers
cannot come to such mutual agreement, as such estimate is determined by an
independent expert selected in accordance with Section 7.27(b).  For purposes of
determining the NGT Tax Amount, the Buyers and the Sellers or the independent
expert, as applicable, shall (i) decrease the NGT Tax Amount to the extent that
it is commercially practicable for the Companies and consistent with prudent
business practice for similarly situated companies, to pass along some or all of
such increased amount of aggregate taxes and levies onto the Companies’
customers and (ii) use forecasts adopted and used by the Managers of CCR in the
ordinary course of business for business planning purposes for the year in which
the New Tax is first imposed on the Companies or is scheduled to be imposed on
the Companies; provided, that, if imposition of the New Tax is “phased in” over
time, the forecasts to be used shall be (if such forecasts are available) for
the year in which the amount of the New Tax is scheduled to be the greatest (as
of the date the estimated increased amount of aggregate taxes and levies is
determined).

 

1.133.                              “Non-Income Taxes” means all Taxes other
than Income Taxes.

 

1.134.                              “Oaktree Purchase Agreement” means the First
Amendment and Restatement of Contribution and Unit Purchase Agreement, dated as
of September 23, 2005, by and among OCM InvestCo, LLC, OCM AcquisitionCo, LLC,
OCM LandCo, Mr. William Paulos, Mr. William Wortman, Millennium, CCR, MGIM, LLC,
WCW LandCo, LLC, and NP Land, LLC.

 

1.135.                              “Obligations” has the meaning set forth in
Section 7.14(a).

 

1.136.                              “Omitted Items” has the meaning set forth in
Section 7.5(a).

 

1.137.                              “Option” has the meaning set forth in
Section 2.1.

 

1.138.                              “Order” means any order, injunction,
judgment, decree, ruling, writ, or arbitration or judicial award.

 

1.139.                              “Original Purchase Agreement” has the
meaning set forth in the Recitals.

 

1.140.                              “Outside Equity Investor” has the meaning
set forth in Section 7.28(c).

 

1.141.                              “Outside New CCR Equity” has the meaning set
forth in Section 7.28(c).

 

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1.142.                              “Outside New CCR Equity Purchase Price” has
the meaning set forth in Section 7.28(c).

 

1.143.                              “Owned Real Property” has the meaning set
forth in Section 5.15(a).

 

1.144.                            “Outside New CCR Equity Option Agreement”
shall mean an option agreement providing to the Buyers an exclusive and
irrevocable option during the Exercise Period and so long as this Agreement is
not terminated to purchase all but not less than all of such Outside New CCR
Equity from the Outside Equity Investor, containing reasonable and customary
terms for the purchase of equity securities on an arms length basis, including
representations, warranties and indemnities ordinarily contained in a securities
purchase agreement for a transaction of that nature.

 

1.145.                              “PA Meadows” means PA Meadows, LLC, a
Delaware limited liability company.

 

1.146.                              “Parent” has the meaning set forth in the
Preamble.

 

1.147.                              “Payoff and Release of Liens” has the
meaning set forth in Section 7.21(b).

 

1.148.                              “Pennsylvania Act” means the Pennsylvania
Race Horse Development and Gaming Act, as amended, and the rules and regulations
of the Pennsylvania Gaming Control Board promulgated thereunder.

 

1.149.                              “Pennsylvania Gaming Fee” means the change
in ownership fee imposed on the Buyers pursuant to Section 1328 of the
Pennsylvania Act.

 

1.150.                              “Permitted Exceptions” means (i) any Liens
for Taxes not yet due and payable or that are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been established
in accordance with GAAP; (ii) mechanics’, warehousemens’, materialmens’,
contractors’, workmens’, repairmens’, carriers’ and other similar Liens that are
(a) inchoate or (b) being contested in good faith by appropriate proceedings or
with respect to which there remains a bona fide opportunity to contest and, in
either case, for which reserves have been established, where appropriate and
consistent with past practice; (iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return of money bonds and similar
obligations provided that such items do not appear on title; (iv) imperfections
of title that, individually or in the aggregate, do not materially and adversely
restrict or affect the value or the contemplated or current use and enjoyment of
any material property or assets of any of the Companies; (v) the title policy
and title commitment exceptions identified on Exhibit G attached hereto, and all
other exceptions, exclusions from coverage, or other title matters reflected

 

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in the March Pro Formas, provided that such title matters reflected in the
March Pro Formas shall be subject to all of the endorsements included in the
March Pro Formas; (vi) any state of facts shown or which should have been shown
on an existing ALTA survey covering any of the real property of the Companies
that has been delivered or made available to the Buyers; (vii) all presently
existing and future Liens of water rates, water meter charges, water frontage
charges and sewer Taxes, rents and charges, if any, provided that such items are
not due and payable; (viii) any other matter or thing affecting title to the
Real Property that the Buyers shall have expressly agreed in writing to waive;
(ix) Liens disclosed on Schedule 1.201 of the Sellers Disclosure Schedules;
(x) the dedication of approximately 2.242 acres of the Meadows Property to North
Strabane Township, as set forth in that certain Agreement of Dedication entered
into as of December 29, 2008, by and between North Strabane Township and CCR
Pennsylvania Racing, Inc., or (xi) any other Liens (excluding any Liens for
Indebtedness) that have been incurred or suffered in the ordinary course of
business consistent with past practice and are not, individually or in the
aggregate, material to the Companies.

 

1.151.                              “Person” means any individual, corporation
(including any non-profit corporation), general or limited partnership, limited
liability company, Governmental Entity, joint venture, estate, trust,
association, organization or other entity of any kind or nature.

 

1.152.                              “Personal Property” has the meaning set
forth in Section 5.22.

 

1.153.                              “Post-Closing Periods” has the meaning set
forth in Section 7.10(b).

 

1.154.                              “Pre-Closing Events” has the meaning set
forth in Section 7.5(a).

 

1.155.                              “Pre-Closing Periods” has the meaning set
forth in Section 7.10(b).

 

1.156.                              “Preferred Purchase Agreement” has the
meaning set forth in the Recitals.

 

1.157.                              “Property Adjustment Amount” has the meaning
set forth in Section 7.19(b).

 

1.158.                              “Purchase Price” has the meaning set forth
in Section 2.2(a).

 

1.159.                              “Rampart Amount” shall mean the “Base Rent”
and “Additional Rent” and that sum reasonably estimated by CCR to approximate
“Adjusted Operating Cash Flow” through and including the day before Closing,
each payable to the “Landlord” (as such terms are defined in the Rampart Lease),
accrued and unpaid under the Rampart Lease through and including the day before

 

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Closing on the basis of the normal operating reports generated by CCR in the
ordinary course of business.

 

1.160.                              “Rampart Lease” shall mean the Casino
Sublease Agreement, dated as of April 1, 2002, by and between Hotspur Casinos
Nevada, Inc. and Rampart Resort Management, LLC, as amended by the First
Amendment to Casino Sublease executed on January 5, 2006 (which First Amendment
erroneously recites that the date of the Casino Sublease Agreement is April 1,
2001).

 

1.161.                              “RCRA” means the Resource Conservation and
Recovery Act of 1976 now or hereafter amended (42 U.S.C. Section 5901 et seq.).

 

1.162.                              “Real Property Leases” has the meaning set
forth in Section 5.15(b).

 

1.163.                              “Related Party” means (i) any director,
officer, member or manager of any Seller, Blocker or AcquisitionCo or any
Affiliate thereof, (ii) any member of the immediate family of any of the
foregoing and (iii) any corporation, partnership, limited liability company or
other entity controlled by any of the foregoing, or any estate or trust for
which any of the foregoing is the settlor or beneficiary.

 

1.164.                              “Related Party Transactions” has the meaning
set forth in Section 5.21.

 

1.165.                              “Releases” has the meaning set forth in
Section 2.4(g).

 

1.166.                              “Releasor” means either the Sellers or the
Buyers.

 

1.167.                              “Remaining Accrued Liabilities” has the
meaning set forth in Section 2.2(b).

 

1.168.                              “Representatives” of any Person shall mean
such Person’s directors, managers, members, officers, employees, agents,
advisors, Affiliates and representatives (including attorneys, accountants,
consultants, financial advisors, financing sources and any representatives of
such advisors or financing sources).

 

1.169.                              “Restraint” has the meaning set forth in
Section 8.1(c).

 

1.170.                              “Rockingham Opportunity” has the meaning set
forth in Section 7.12.

 

1.171.                              “RSA” means the Racing Services Agreement,
dated as of July 26, 2006, by and among the RSA Operator, WTA and the other
parties thereto.

 

1.172.                              “RSA Operator” means MEC Pennsylvania Racing
Services, Inc., in such capacity pursuant to the RSA.

 

18

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1.173.                              “Section 1542” has the meaning set forth in
Section 7.25(d).

 

1.174.                              “Securities Act” has the meaning set forth
in Section 6.7.

 

1.175.                              “Security Arrangements” has the meaning set
forth in Section 7.27(c).

 

1.176.                              “Seller” and “Sellers” have the meaning set
forth in the Preamble.

 

1.177.                              “Seller Indemnified Parties” has the meaning
set forth in Section 10.2(d).

 

1.178.                              “Sellers Disclosure Schedules” has the
meaning set forth in Article 4.

 

1.179.                              “Sellers Due Date” has the meaning set forth
in Section 7.10(f).

 

1.180.                              “Sellers New CCR Equity” has the meaning set
forth in Section 7.28(b).

 

1.181.                              “Series A2 Preferred Units” has the meaning
set forth in the Recitals.

 

1.182.                              “Software” means any and all computer
programs, including any and all software implementation of algorithms, whether
in source code or object code.

 

1.183.                              “Stay Bonuses” has the meaning set forth in
Section 5.9(f).

 

1.184.                              “Stay Bonus Payoff Amount” has the meaning
set forth in Section 2.2(b).

 

1.185.                              “Straddle Period” has the meaning set forth
in Section 7.10(b).

 

1.186.                              “Subsidiary” means, with respect to any
Person, any corporation or other entity of which such Person has, directly or
indirectly, (i) ownership of securities or other interests having the power to
elect a majority of the Board of Directors or similar governing body of such
corporation or other entity, or (ii) the power to direct the business and
policies of that corporation or other entity.

 

1.187.                              “Supplemental Disclosure Schedules” has the
meaning set forth in Section 7.5(a).

 

1.188.                              “Survival Period” has the meaning set forth
in Section 10.1.

 

19

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1.189.                              “Tax Amount” means, with respect to any
period, an amount equal to (i) the lowest aggregate amount of distributions to
the Tax Recipients (based on pro rata distributions to such Tax Recipients) such
that each Tax Recipient receives an amount sufficient to equal (x) the amount of
taxable income allocated to such Tax Recipient in respect of such period (taking
into account any Code § 704(c) items and annualizing the estimated taxable
income (excluding extraordinary items, which shall be taken into account
separately) for distributions with respect to periods of less than a fiscal
year), multiplied by (y) the highest maximum combined marginal federal, state
and local income tax rates to which any Tax Recipient may be subject (taking
into account the deductibility of state income tax for federal income tax
purposes), plus (ii) an additional amount (distributed to Tax Recipients
pursuant to the operating agreement of CCR) such that, after giving effect to
distributions of such additional amount, each Tax Recipient will satisfy the
safe harbor for estimated tax payments based on prior year tax liability under
Code §§ 6654 or 6655 (and analogous state or local provisions) assuming that
each Tax Recipient’s only income was from CCR.

 

1.190.                              “Tax Authority” means any Governmental
Entity or any subdivision, agency, commission or authority thereof, or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax.

 

1.191.                              “Tax Benefit” means the sum of the amount by
which the actual Tax Liability (after giving effect to any alternative minimum
or similar Tax) of an Indemnified Party to the appropriate Tax Authority is
reduced by the payment of the Liability upon which the claim for indemnity (or
other claim) is based (including by or as a result of a deduction, entitlement
to refund, or credit) plus any interest (on an after-Tax basis) from such Tax
Authority relating to such Tax Liability and taking into account the Tax
treatment of the receipt of indemnification payments. Where a Tax Benefit may be
realized that may result in the reduction of a payment to the Indemnified Party,
the Indemnified Party will as promptly as practicable take or cause Indemnified
Party’s Affiliates to take such reasonable or appropriate steps (including the
filing of an amended Tax Return or Claim for refund) to obtain at the earliest
possible time any such reasonably available Tax Benefit.

 

1.192.                              “Tax Benefit Accountant” has the meaning set
forth in Section 10.6(b).

 

1.193.                              “Tax Benefit Dispute Notice” has the meaning
set forth in Section 10.6(a).

 

1.194.                              “Tax Benefit Report” has the meaning set
forth in Section 10.6(c).

 

1.195.                              “Tax Benefit Statement” has the meaning set
forth in Section 10.6(a).

 

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1.196.                              “Tax Proceeding” has the meaning set forth
in Section 7.10(h).

 

1.197.                              “Tax Recipient” means each direct or
indirect equityholder of CCR that is required to report and pay federal income
taxes with respect to taxable income of CCR or any of its Subsidiaries that is
directly or indirectly allocated to such Person, and each of his, her or its
successors and assigns.

 

1.198.                              “Tax Returns” means any report, return,
election, document, estimated tax filing, declaration or other filing required
to be provided to any Tax Authority or jurisdiction with respect to Taxes,
including any amendments thereto.

 

1.199.                              “Taxes” means all taxes, assessments,
charges, duties, fees, levies, imposts or other governmental charges, including
Income Taxes, all federal, state, local, municipal, county, foreign and other
franchise, profits, capital gains, capital stock, capital structure, transfer,
gross receipt, sales, use, transfer, service, occupation, ad valorem, property,
excise, severance, windfall profits, premium, stamp, license, payroll,
employment, social security, unemployment, disability, environmental (including
taxes under Code Section 59A), alternative minimum, add-on, value-added,
withholding and other taxes of any kind whatsoever (whether payable directly or
by withholding and whether or not requiring the filing of a Tax Return), and all
estimated taxes, deficiency assessments, additions to tax, and additional
amounts imposed by any governmental authority (domestic or foreign) with respect
to a Tax, and penalties and interest thereon.

 

1.200.                              “Tejon Opportunity” has the meaning set
forth in Section 7.12.

 

1.201.                              “Third Party Claims” has the meaning set
forth in Section 10.2(e).

 

1.202.                              “Threshold Amount” has the meaning set forth
in Section 10.3(a).

 

1.203.                              “Title Commitments” means those certain
Title Commitments issued by the Title Company as of September 1, 2007,
November 21, 2007 and November 21, 2007 (Commitment Nos. 410007114,
07-09-0081-DTL and 07-09-0077-DTL, respectively).

 

1.204.                              “Title Company” means Commonwealth Land
Title Insurance Company.

 

1.205.                              “WARN Act” has the meaning set forth in
Section 5.9(c).

 

1.206.                              “WTA” means Washington Trotting
Association, Inc., a Delaware corporation.

 

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1.207.                              “XpressBet Assessments” means the
assessments for pari-mutuel taxes by the Pennsylvania Department of Revenue with
respect to wagers on behalf of non-Pennsylvania residents processed by
XpressBet, Inc. (currently a wholly-owned subsidiary of Magna) against
XpressBet, WTA, and Mountain Laurel Racing, Inc., a Delaware corporation, which
assessments are currently being contested by an Affiliate of Magna.

 

ARTICLE 2

 

Option

 

2.1.                              Grant of Option.  (a) Millennium grants to
Crown One an exclusive and irrevocable option during the Exercise Period to
purchase all, but not less than all, of the Millennium Units; (b) HoldCo grants
to Crown Two an exclusive and irrevocable option during the Exercise Period to
purchase all, but not less than all, of the HoldCo Units; and (c) HoldCo grants
to Crown One an exclusive and irrevocable option during the Exercise Period to
purchase all of HoldCo’s right, title and interest in the Blocker Option
Agreement, in each case, in accordance with the terms of this Agreement (such
options are hereinafter collectively referred to as the “Option”).

 

2.2.                              Purchase Price Upon Exercise of the Option.

 

(A)                                  THE PURCHASE PRICE (THE “PURCHASE PRICE”)
PAYABLE UPON EXERCISE OF THE OPTION SHALL BE AN AMOUNT IN CASH EQUAL TO THE
FOLLOWING:

 

(I)                                     $1,414,700,000 (ONE BILLION FOUR HUNDRED
FOURTEEN MILLION SEVEN HUNDRED THOUSAND DOLLARS), LESS THE DOLLAR AMOUNT OF THE
GLCP PURCHASE PRICE (THE “BASE PURCHASE PRICE”);

 

(II)                               DECREASED BY THE REMAINING ACCRUED
LIABILITIES, IF ANY;

 

(III)          DECREASED BY THE PROPERTY ADJUSTMENT AMOUNT, IF APPLICABLE, IN
ACCORDANCE WITH SECTION 7.19(B); AND

 

(IV)                              INCREASED, IF APPLICABLE, IN ACCORDANCE WITH
SECTION 7.28(B).

 

(B)                                 CASH AMOUNTS.

 

(I)                                     AT THE CLOSING, CCR (A) SHALL DIRECT THE
RELEASE AND APPLICATION OF THE AMOUNTS IN THE CASH COLLATERAL ACCOUNT AND THE
CONSTRUCTION RESERVE ACCOUNT, IF ANY, TO MAKE A PAYMENT IN RESPECT OF THE BANK
OF AMERICA FACILITIES (SUCH AMOUNTS, THE “BANK OF AMERICA REPAYMENT”) AND
(B) MAY, BUT SHALL NOT BE OBLIGATED TO, MAKE PAYMENT(S) IN RESPECT OF ANY OF THE
DEBT FACILITIES (THE AGGREGATE AMOUNTS PAID BY CCR PURSUANT TO THIS CLAUSE (B),
IF ANY, AND THE BANK OF AMERICA REPAYMENT ARE COLLECTIVELY HEREINAFTER REFERRED
TO AS THE “COMPANY LOAN PAYMENT AMOUNT”).

 

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(II)                                  AT THE CLOSING, THE PURCHASE PRICE SHALL
BE PAID BY THE BUYERS TO OR FOR THE BENEFIT OF THE SELLERS AS FOLLOWS:

 

(A)                              $25,000,000 (TWENTY FIVE MILLION DOLLARS) (THE
“INDEMNITY ESCROW AMOUNT”) PAYABLE BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE US
FUNDS TO THE ESCROW AGENT TO BE HELD TO SATISFY SELLERS’ INDEMNIFICATION
OBLIGATIONS PURSUANT TO SECTION 7.10 AND ARTICLE 10 AND DISTRIBUTED PURSUANT TO
THE TERMS AND CONDITIONS OF THE ESCROW AGREEMENT AND THIS AGREEMENT;

 

(B)                                AN AGGREGATE AMOUNT (THE “BUYER LOAN PAYMENT
AMOUNT”) EQUAL TO THE LOAN PAYOFF AMOUNT, LESS THE COMPANY LOAN PAYMENT AMOUNT,
PAYABLE BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO THE LENDERS UNDER THE
DEBT FACILITIES;

 

(C)                                AN AMOUNT (THE “STAY BONUS PAYOFF AMOUNT”)
EQUAL TO THE AGGREGATE AMOUNT REQUIRED TO SATISFY IN FULL ALL STAY BONUSES
OUTSTANDING AS OF THE CLOSING DATE, IF ANY, PAYABLE BY WIRE TRANSFER IN
IMMEDIATELY AVAILABLE FUNDS TO AN ESCROW ACCOUNT AND TO BE HELD AND DISTRIBUTED
PURSUANT TO THE ESCROW AGREEMENT; AND

 

(D)                               AN AMOUNT TO EACH SELLER EQUAL TO THE PRODUCT
OF (I) THE PURCHASE PRICE, LESS THE INDEMNITY ESCROW AMOUNT, LESS THE BUYER LOAN
PAYMENT AMOUNT, LESS THE STAY BONUS PAYOFF AMOUNT, MULTIPLIED BY (II) THE
PURCHASE PRICE PERCENTAGE SET FORTH ON EXHIBIT D HERETO FOR EACH SELLER, BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO SUCH ACCOUNT OR ACCOUNTS DESIGNATED
IN WRITING AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE CLOSING DATE, BY SUCH
SELLER.

 

(III)          CCR AGREES THAT, AS OF THE SHIFT CHANGE CLOSEST IN TIME FOLLOWING
12:00 A.M. LOCAL TIME ON THE CLOSING DATE, COMPANY CASH SHALL EQUAL AT LEAST
$20,000,000 (TWENTY MILLION DOLLARS) (OR $18,500,000 (EIGHTEEN MILLION FIVE
HUNDRED THOUSAND DOLLARS) IF THE PURCHASE PRICE IS REDUCED BY THE PROPERTY
ADJUSTMENT AMOUNT), AND SUCH AMOUNT OF COMPANY CASH SHALL NOT BE APPLIED TO
REDUCE ANY REMAINING ACCRUED LIABILITIES AS OF THE CLOSING DATE, BUT SHALL BE
RETAINED BY CCR (OR THE APPLICABLE SUBSIDIARY THEREOF) THEREAFTER FOR THE
BENEFIT OF THE PARENT AND THE BUYERS IN THE OPERATION OF THE BUSINESS.

 

(IV)                              CCR AGREES THAT “REMAINING ACCRUED
LIABILITIES” SHALL BE EQUAL TO THE TOTAL OF THE RAMPART AMOUNT AND THE GAMING
TAX AMOUNT AS OF THE DATE IMMEDIATELY PRECEDING THE CLOSING DATE; PROVIDED THAT,
IN THE EVENT THAT THE CASH LOG AS OF SUCH DATE REFLECTS AMOUNTS IN THE LINE
ITEMS “CASH IN BANK” AND “INVESTMENTS” AND SUCH AMOUNTS

 

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HAVE NOT OTHERWISE BEEN APPLIED TO THE COMPANY LOAN PAYMENT AMOUNT, THEN THE
SELLERS MAY ELECT TO HAVE ALL OR ANY PORTION OF THE “CASH IN BANK” AND
“INVESTMENTS” AMOUNTS RETAINED BY CCR (OR THE APPLICABLE SUBSIDIARY THEREOF) ON
THE CLOSING DATE FOR THE BENEFIT OF THE PARENT AND THE BUYERS, IN WHICH EVENT,
FOR PURPOSES OF DETERMINING THE PURCHASE PRICE, THE REMAINING ACCRUED
LIABILITIES SHALL BE REDUCED BY THE AGGREGATE AMOUNT SO RETAINED BY CCR (OR THE
APPLICABLE SUBSIDIARY THEREOF).

 

(C)                                  CLOSING STATEMENT AND CASH LOG.  ON THE
CLOSING DATE, CCR SHALL DELIVER TO THE PARENT AND THE BUYERS (I) A CLOSING
STATEMENT CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF CCR (THE “CLOSING
STATEMENT”), SETTING FORTH A REASONABLY DETAILED CALCULATION OF THE COMPANY LOAN
PAYMENT AMOUNT, THE BUYER LOAN PAYMENT AMOUNT, THE STAY BONUS PAYOFF AMOUNT AND
THE REMAINING ACCRUED LIABILITIES, AND (II) THE CASH LOG AS OF SUCH DATE,
TOGETHER WITH BANK STATEMENTS OR OTHER REASONABLE SUPPORTING DOCUMENTATION IN
RESPECT OF THE LINE ITEMS “CASH IN BANK” AND “INVESTMENTS”.  IN CONNECTION WITH
THE PREPARATION OF THE CLOSING STATEMENT AND THE CASH LOG, CCR SHALL PERMIT
EMPLOYEES OF THE PARENT OR AN ENTITY IN THE GAMING BUSINESS RELATED TO THE
PARENT TO OBSERVE AND REVIEW THE DETERMINATION OF COMPANY CASH AND REMAINING
ACCRUED LIABILITIES, INCLUDING THE PREPARATION OF THE OPERATING REPORTS USED FOR
DETERMINING THE RAMPART AMOUNT AND THE GAMING TAX AMOUNT.

 

2.3.                              Exercise of the Option.

 

(A)                                  THE OPTION IS EXERCISABLE AT THE ELECTION
OF THE BUYERS IN THEIR SOLE AND ABSOLUTE DISCRETION AT ANY TIME DURING THE
PERIOD FOLLOWING THE DATE HEREOF AND PRIOR TO 12:01 A.M., LOCAL TIME, ON THE
FIRST DAY IMMEDIATELY FOLLOWING THE SECOND ANNIVERSARY OF THE DATE HEREOF (SUCH
PERIOD IS HEREINAFTER REFERRED TO AS THE “EXERCISE PERIOD”).  THE OPTION MAY
ONLY BE EXERCISED A SINGLE TIME DURING THE EXERCISE PERIOD.

 

(B)                                 IF THE BUYERS DESIRE TO ELECT TO EXERCISE
THE OPTION, THE BUYERS SHALL DELIVER A WRITTEN REVOCABLE NOTICE (THE
“CONDITIONAL EXERCISE NOTICE”) TO CCR AND THE SELLERS OF THE BUYERS’ INTENTION
TO EXERCISE THE OPTION.  IF, AFTER REVIEW OF THE SUPPLEMENTAL SELLERS DISCLOSURE
SCHEDULES, IF ANY, DELIVERED IN ACCORDANCE WITH SECTION 7.5, THE BUYERS ELECT TO
EXERCISE THE OPTION, THE BUYERS SHALL DELIVER IRREVOCABLE WRITTEN NOTICE (THE
“FINAL EXERCISE NOTICE”) TO CCR AND THE SELLERS WITHIN THIRTY (30) DAYS OF THE
DELIVERY OF THE SUPPLEMENTAL DISCLOSURE SCHEDULES BY CCR AND THE SELLERS IN
ACCORDANCE WITH SECTION 7.5, CONFIRMING THE BUYERS’ EXERCISE OF THE OPTION. 
SUBJECT TO SECTION 7.5(C), IF THE BUYERS DELIVER THE FINAL EXERCISE NOTICE, THE
CLOSING OF THE OPTION AND THE OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
SHALL OCCUR IN ACCORDANCE WITH ARTICLE 3.

 

(c)                                  Notwithstanding anything to the contrary
contained in this Agreement, the Option may not be exercised unless and until
the Buyers have obtained all Gaming Approvals.

 

2.4.                              Sellers’ Closing Deliveries.  At the Closing,
the Sellers shall deliver, or cause to be delivered, to the Buyers each of the
following (in addition to any other documents required to be delivered to the
Buyers by or on behalf of the Sellers pursuant to any other provisions of this
Agreement):

 

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(A)                                  A CERTIFICATE DULY EXECUTED BY EACH OF THE
SELLERS CERTIFYING TO THE SATISFACTION OF THE CONDITIONS IN SECTION 8.2(A) AND
SECTION 8.2(B);

 

(B)                                 THE CLOSING STATEMENT;

 

(C)                                  THE CASH LOG DATED AS OF THE CLOSING DATE,
AS CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF CCR;

 

(D)                                 THE RESIGNATIONS, EFFECTIVE IMMEDIATELY
FOLLOWING THE CLOSING, OF EACH MANAGER, DIRECTOR AND OFFICER OF EACH COMPANY;

 

(E)                                  THE PAYOFF AND RELEASE OF LIENS AS
CONTEMPLATED BY SECTION 7.21;

 

(F)                                    THE ASSIGNMENT DOCUMENTS EVIDENCING THE
ASSIGNMENT AND TRANSFER OF THE MILLENNIUM UNITS (AND ALL SELLERS NEW CCR EQUITY,
IF ANY, THEN DIRECTLY OR INDIRECTLY OWNED BY MILLENNIUM) AND THE HOLDCO UNITS
(AND ALL SELLERS NEW CCR EQUITY, IF ANY, THEN DIRECTLY OR INDIRECTLY OWNED BY
HOLDCO), EACH SUBSTANTIALLY IN THE RESPECTIVE FORMS AS ATTACHED HERETO AS
EXHIBIT L, THE SALE DOCUMENTS EVIDENCING THE SALE OF THE BLOCKER OPTION
AGREEMENT, SUBSTANTIALLY IN THE FORM AS ATTACHED HERETO AS EXHIBIT H, AND THE
ASSIGNMENT DOCUMENTS EVIDENCING THE ASSIGNMENT AND TRANSFER OF ANY UNITS OWNED
BY ANY OUTSIDE EQUITY INVESTOR (COLLECTIVELY, THE “ASSIGNMENT DOCUMENTS”);

 

(G)                                 THE RELEASES AS CONTEMPLATED BY SECTION 7.11
AND SECTION 7.12, SUBSTANTIALLY IN THE FORMS AS ATTACHED HERETO AS EXHIBIT N
(THE “RELEASES”);

 

(H)                                 THE FIRPTA CERTIFICATES REQUIRED BY
SECTION 7.20;

 

(I)                                     THE OPINIONS OF SELLERS’ COUNSELS, IN
SUBSTANTIALLY THE FORM SET FORTH IN EXHIBIT I ATTACHED HERETO, WITH SUCH FURTHER
CHANGES AS MAY BE REASONABLY SATISFACTORY TO THE BUYERS;

 

(J)                                     SUCH INSTRUMENTS AND DOCUMENTS,
INCLUDING AFFIDAVITS AND INDEMNITY AGREEMENTS, AS ARE REQUIRED TO CAUSE THE
TITLE COMPANY TO ISSUE FULL EQUITY TRANSFER NON-IMPUTATION ENDORSEMENTS IN THE
APPLICABLE FORMS ATTACHED HERETO AS EXHIBIT O FOR ALL OF THE COMPANIES’ TITLE
INSURANCE POLICIES, INCLUDING THE NEW TITLE INSURANCE POLICIES TO BE ISSUED AS
CONTEMPLATED BY THE TITLE COMMITMENTS;

 

(K)                                  THE ESCROW AGREEMENT (AND ANY ADDITIONAL
DOCUMENTS OR INSTRUCTIONS AS THE ESCROW AGENT MAY REASONABLY REQUIRE);

 

(L)                                     CERTIFICATES REPRESENTING THE MILLENNIUM
UNITS; AND

 

(M)                               THE BOOKS AND RECORDS OF THE COMPANIES,
BLOCKER AND ACQUISITIONCO, INCLUDING ANY CERTIFICATES WITH RESPECT TO ANY STOCK
OR UNITS OF THE COMPANIES, BLOCKER AND ACQUISITIONCO.

 

2.5.                              Buyers’ Closing Deliveries.  At the Closing,
the Buyers shall deliver or cause to be delivered, to the Sellers each of the
following (in addition to any other documents

 

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required to be delivered to the Sellers by or on behalf of the Buyers pursuant
to any other provisions of this Agreement):

 

(A)                                  AN AMOUNT EQUAL TO THE PURCHASE PRICE (AS
CALCULATED PURSUANT TO SECTION 2.2(A));

 

(B)                                 A CERTIFICATE DULY EXECUTED BY AN EXECUTIVE
OFFICER OF THE MANAGING MEMBER OF THE MANAGING MEMBER OF EACH OF THE BUYERS AND
DATED AS OF THE CLOSING DATE, CERTIFYING AS TO THE SATISFACTION OF THE
CONDITIONS IN SECTION 8.3(A) AND SECTION 8.3(B);

 

(C)                                  THE RELEASES;

 

(D)                                 THE ASSIGNMENT DOCUMENTS DULY EXECUTED BY
THE APPLICABLE BUYER;

 

(E)                                  EVIDENCE OF THE GAMING APPROVALS REASONABLY
SATISFACTORY TO CCR AND THE SELLERS; AND

 

(F)                                    THE ESCROW AGREEMENT (AND ANY ADDITIONAL
DOCUMENTS OR INSTRUCTIONS AS THE ESCROW AGENT MAY REASONABLY REQUIRE).

2.6.                              Intentionally Omitted.

 

2.7.                              Allocation of Purchase Price.  The Purchase
Price paid by the Buyers (including any adjustments thereto) shall be allocated
58% to the Millennium Units and 42% to the HoldCo Units and Blocker Option
Agreement.  With respect to that portion of the Purchase Price (including any
adjustments thereto) allocated to the HoldCo Units and Blocker Option Agreement,
the parties are not agreeing to a further allocation between the HoldCo Units
and Blocker Option Agreement, and no inference is to be drawn from the
respective amounts paid by the Buyers.  With respect to that portion of the
Purchase Price (including any adjustments thereto) allocated to the Millennium
Units, such amount shall be allocated among Millennium’s interest in the various
assets of the Company as provided in Treasury Regulations Section §1.755-1
taking into account that pursuant to Section 7.10(a) of this Agreement there
will be an election under Section 754 of the Code in effect for the Company
taxable year that includes the Closing Date that will require an adjustment to
the basis of Company assets under Section 743(b) of the Code to be made;
provided, however, that the Buyers and Millennium shall agree upon the amounts
allocated to Millennium’s interest in Company unrealized receivables and
inventory items, as described in Sections 751(c) and (d) of the Code and shall
file all Tax Returns consistently with the amount allocated to Millennium’s
interest in such Company unrealized receivables and inventory items.  Within
thirty (30) days after the Closing Date, Millennium shall propose and deliver to
the Buyers a preliminary allocation of the Purchase Price paid for the
Millennium Units that is allocated to Millennium’s interest in Company
unrealized receivables and inventory items (the “Hot Asset Allocation”).  The
Buyers shall have ten (10) Business Days after delivery of the Hot Asset
Allocation to give written notice to Millennium of its disagreement with the Hot
Asset Allocation (with such notice so timely delivered referred to herein as a
“Hot Asset Allocation Notice of Disagreement”).  Any Hot Asset Allocation Notice
of Disagreement shall specify in reasonable detail the basis and amount of any
disagreement.  The Hot Asset Allocation shall become final if the Buyers do not
deliver to Millennium a valid Hot Asset Allocation Notice of Disagreement within
the allotted time period.  During the thirty

 

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(30) days immediately following delivery of the Hot Asset Allocation Notice of
Disagreement, the Buyers and Millennium shall seek in good faith to resolve in
writing any differences which they may have with respect to any matter specified
in the Hot Asset Allocation Notice of Disagreement.  Within ten (10) Business
Days after the end of such thirty (30) day period, or such longer period as may
be mutually agreed in writing, the Buyers, on the one hand, and Millennium, on
the other hand, shall submit for review and resolution by an independent
accounting firm jointly selected by the Buyers and Millennium (the “Allocation
Accounting Firm”) any and all matters which remain in dispute and relate solely
to matters included in the Hot Asset Allocation Notice of Disagreement.  The
Allocation Accounting Firm shall be directed to make a final determination
within thirty (30) days of the deadline for submissions as set forth in the
preceding sentence with respect to the proper allocation of the disputed items
which determination shall be final, conclusive and binding on the parties.  If
the Buyers and Millennium are unable to agree on an independent accounting firm,
then each shall pick an independent accounting firm and the two accounting firms
shall choose the accounting firm to serve as the “Allocation Accounting Firm”
hereunder.  The fees and disbursements of the Allocation Accounting Firm shall
be shared equally by the Buyers, on the one hand, and Millennium, on the other
hand.  Each of the Buyers and Millennium agrees that it will not take any
position with any Tax Authority or on any Tax Returns that is contrary to the
final Hot Asset Allocation.

 

ARTICLE 3

 

Closing

 

The closing of the sale and purchase of the Millennium Units and the HoldCo
Units pursuant to this Option and the other transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Munger, Tolles &
Olson LLP, Los Angeles, California at 10:00 a.m. local time (or such other time,
place and date as the Buyers and the Sellers may mutually agree) as soon as
practicable, but no later than two (2) Business Days after the first date on
which all the conditions to Closing (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the fulfillment or
waiver of those conditions) shall have been satisfied or waived.

 

ARTICLE 4

 

Representations and Warranties Regarding Sellers

 

Except as set forth in the corresponding sections of the disclosure schedules
delivered by the Sellers to the Buyers concurrently with the execution and
delivery of this Agreement (the “Sellers Disclosure Schedules”) (provided that a
listing of an item in one section of the Sellers Disclosure Schedules shall be
deemed to be a listing in each section of the Sellers Disclosure Schedules to
which such item relates only to the extent that it is reasonably apparent from a
reading of such disclosure that it also qualifies or applies to another
section), the parties referenced below make the following representations. 
Except for the representations and warranties in Sections 4.3(a), 4.3(b),
4.3(e)(i),  and 4.3(e)(iv) (the “Sellers Execution Reps”), the making of the
following representations and warranties on the date of this Agreement is solely

 

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for informational purposes only and is not intended and does not create any
liability for the Sellers for any misrepresentation or misstatements on such
date.

 

4.1.                              Representations of Millennium.  Millennium
hereby represents and warrants to the Parent and the Buyers as follows: 
Millennium is the owner of all right, title and interest (record and beneficial)
in and to the number and type of CCR Units set forth opposite its name on
Exhibit A, free and clear of any Liens.  The delivery to Crown One of the
Millennium Units hereunder will transfer to Crown One good and valid title to
all the Millennium Units, free and clear of any Liens (other than Liens created
by Crown One).  Other than the Millennium Units listed opposite Millennium’s
name on Exhibit A, Millennium owns no right, title or interest (record or
beneficial) to any other CCR Units or any other equity interests of CCR or right
of any kind to have any such equity interests issued.  No Person has any
agreement or option or any right or privilege (whether pre-emptive or
contractual) capable of becoming an agreement or option for the acquisition of
the Millennium Units.  Except as provided in this Agreement, Millennium and, to
the knowledge of Millennium, each other member, partner or other owner of CCR
owns no right, title or interest (record or beneficial) to any other equity
interests of CCR or right of any kind to have any such equity interests.

 

4.2.                              Representations of HoldCo.  HoldCo hereby
represents and warrants to the Parent and the Buyers as follows:

 

(A)                                  HOLDCO IS THE OWNER OF ALL RIGHT, TITLE AND
INTEREST (RECORD AND BENEFICIAL) IN AND TO THE NUMBER OF BLOCKER A UNITS SET
FORTH OPPOSITE ITS NAME ON EXHIBIT A TO THIS AGREEMENT, FREE AND CLEAR OF ANY
LIENS.  THE DELIVERY TO CROWN TWO OF THE HOLDCO UNITS HEREUNDER WILL TRANSFER TO
CROWN TWO GOOD AND VALID TITLE TO ALL THE HOLDCO UNITS, FREE AND CLEAR OF ANY
LIENS (OTHER THAN LIENS CREATED BY CROWN TWO).  OTHER THAN THE HOLDCO UNITS
LISTED OPPOSITE HOLDCO’S NAME ON EXHIBIT A, HOLDCO OWNS NO RIGHT, TITLE OR
INTEREST (RECORD OR BENEFICIAL) TO ANY OTHER BLOCKER A UNITS OR ANY OTHER EQUITY
INTERESTS OF BLOCKER OR RIGHT OF ANY KIND TO HAVE ANY SUCH EQUITY INTERESTS
ISSUED.  OTHER THAN AS SET FORTH IN THE BLOCKER OPTION AGREEMENT, NO PERSON HAS
ANY AGREEMENT OR OPTION OR ANY RIGHT OR PRIVILEGE (WHETHER PRE-EMPTIVE OR
CONTRACTUAL) CAPABLE OF BECOMING AN AGREEMENT OR OPTION FOR THE ACQUISITION OF
THE HOLDCO UNITS.  EXCEPT AS PROVIDED IN THIS AGREEMENT, EACH OF ACQUISITIONCO,
BLOCKER AND HOLDCO AND, TO THE KNOWLEDGE OF HOLDCO, EACH OTHER MEMBER, PARTNER
OR OTHER OWNER OF CCR, ACQUISITIONCO OR BLOCKER OWNS NO RIGHT, TITLE OR INTEREST
(RECORD OR BENEFICIAL) TO ANY OTHER EQUITY INTERESTS OF CCR, ACQUISITIONCO OR
BLOCKER, AS THE CASE MAY BE, OR RIGHT OF ANY KIND TO HAVE ANY SUCH EQUITY
INTERESTS.

 

(B)                                 BLOCKER IS THE OWNER OF ALL RIGHT, TITLE AND
INTEREST (RECORD AND BENEFICIAL) IN AND TO THE NUMBER OF CLASS A UNITS IN
ACQUISITIONCO SET FORTH OPPOSITE BLOCKER’S NAME ON EXHIBIT A TO THIS AGREEMENT,
FREE AND CLEAR OF ANY LIENS.  OTHER THAN THE BLOCKER UNITS LISTED OPPOSITE
BLOCKER’S NAME ON EXHIBIT A, BLOCKER OWNS NO RIGHT, TITLE OR INTEREST (RECORD OR
BENEFICIAL) TO ANY OTHER CLASS A UNITS IN ACQUISITIONCO OR ANY OTHER EQUITY
INTERESTS OF ACQUISITIONCO OR RIGHT OF ANY KIND TO HAVE ANY SUCH EQUITY
INTERESTS ISSUED.  EXCEPT PURSUANT TO THE BLOCKER OPTION AGREEMENT, NO PERSON
HAS ANY AGREEMENT OR OPTION OR ANY RIGHT OR PRIVILEGE (WHETHER PRE-EMPTIVE OR
CONTRACTUAL) CAPABLE OF BECOMING AN AGREEMENT OR OPTION FOR THE ACQUISITION OF
THE BLOCKER UNITS.

 

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(C)                                  ACQUISITIONCO IS THE OWNER OF ALL RIGHT,
TITLE AND INTEREST (RECORD AND BENEFICIAL) IN AND TO THE NUMBER AND TYPE OF CCR
UNITS SET FORTH OPPOSITE ITS NAME ON EXHIBIT A TO THIS AGREEMENT, FREE AND CLEAR
OF ANY LIENS.  OTHER THAN THE ACQUISITIONCO UNITS LISTED OPPOSITE
ACQUISITIONCO’S NAME ON EXHIBIT A, ACQUISITIONCO OWNS NO RIGHT, TITLE OR
INTEREST (RECORD OR BENEFICIAL) TO ANY OTHER CCR UNITS OR ANY OTHER EQUITY
INTERESTS OF CCR OR RIGHT OF ANY KIND TO HAVE ANY SUCH EQUITY INTERESTS ISSUED. 
NO PERSON HAS ANY AGREEMENT OR OPTION OR ANY RIGHT OR PRIVILEGE (WHETHER
PRE-EMPTIVE OR CONTRACTUAL) CAPABLE OF BECOMING AN AGREEMENT OR OPTION FOR THE
ACQUISITION OF THE ACQUISITIONCO UNITS.

 

(D)                                 NEITHER BLOCKER NOR ACQUISITIONCO HAS ANY
SUBSIDIARIES OR OWN ANY STOCK OF, OR ANY EQUITY PARTICIPATION IN, ANY PERSON,
EXCEPT AS SET FORTH ON EXHIBIT A TO THIS AGREEMENT.  THE EQUITY INTERESTS OF
EACH OF BLOCKER AND ACQUISITIONCO AS SET FORTH ON EXHIBIT A CONSTITUTE ALL OF
THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF EACH OF BLOCKER AND
ACQUISITIONCO, RESPECTIVELY.  ALL OF THE ISSUED AND OUTSTANDING EQUITY INTERESTS
OF EACH OF BLOCKER AND ACQUISITIONCO HAVE BEEN DULY AUTHORIZED AND ARE VALIDLY
ISSUED, FULLY PAID (IF APPLICABLE) AND NONASSESSABLE AND NONE OF THEM HAS BEEN
ISSUED IN VIOLATION OF PREEMPTIVE OR SIMILAR RIGHTS.  THERE ARE NO DECLARED OR
ACCRUED BUT UNPAID DIVIDENDS OR DISTRIBUTIONS WITH REGARD TO ANY ISSUED AND
OUTSTANDING EQUITY INTERESTS OF BLOCKER OR ACQUISITIONCO.  THERE ARE NO EQUITY
INTERESTS IN BLOCKER OR ACQUISITIONCO RESERVED FOR ISSUANCE OR SUBJECT TO
PREEMPTIVE RIGHTS OR ANY OUTSTANDING SUBSCRIPTIONS, OPTIONS, WARRANTS, CALLS,
RIGHTS, AGREEMENTS, OBLIGATIONS, CONVERTIBLE, EXERCISABLE OR EXCHANGEABLE
SECURITIES, OR OTHER COMMITMENTS, CONTINGENT OR OTHERWISE, RELATING TO
MEMBERSHIP INTERESTS OF, OR OTHER EQUITY OR VOTING INTERESTS IN, BLOCKER OR
ACQUISITIONCO.  THERE ARE NO OUTSTANDING OR AUTHORIZED MEMBERSHIP INTERESTS,
STOCK APPRECIATION, PHANTOM STOCK, PROFIT PARTICIPATION, OR SIMILAR RIGHTS FOR
WHICH BLOCKER OR ACQUISITIONCO HAS ANY LIABILITY, AND THERE ARE NO ISSUED AND
OUTSTANDING BONDS, INDENTURES, NOTES OR OTHER INDEBTEDNESS HAVING THE RIGHT TO
VOTE (OR CONVERTIBLE INTO, EXCHANGEABLE OR EXERCISABLE FOR, OR EVIDENCING THE
RIGHT TO SUBSCRIBE FOR OR ACQUIRE SECURITIES THAT HAVE THE RIGHT TO VOTE) ON ANY
MATTERS ON WHICH OWNERS OR MEMBERS OF BLOCKER OR ACQUISITIONCO MAY VOTE. THERE
ARE NO SHAREHOLDER AGREEMENTS, PROXIES, VOTING TRUSTS OR OTHER AGREEMENTS OR
UNDERSTANDINGS TO WHICH BLOCKER OR ACQUISITIONCO IS A PARTY OR BY WHICH BLOCKER
OR ACQUISITIONCO IS BOUND RELATING TO THE VOTING OR REGISTRATION OF ANY EQUITY
INTERESTS OF BLOCKER OR ACQUISITIONCO OR PREEMPTIVE RIGHTS WITH RESPECT THERETO.

 

(E)                                  NEITHER ACQUISITIONCO NOR BLOCKER HAS
CONDUCTED ANY BUSINESS OR OPERATIONS SINCE ITS DATE OF FORMATION OTHER THAN
ACTIONS TAKEN IN CONNECTION WITH HOLDING THE BLOCKER UNITS, THE ACQUISITIONCO
UNITS, AND INTERESTS IN THE EXCLUDED HOLDCO SUBSIDIARIES, AND NEITHER
ACQUISITIONCO NOR BLOCKER HAS ANY LIABILITIES, OTHER THAN STATUTORY OBLIGATIONS
OR OBLIGATIONS UNDER THEIR RESPECTIVE GOVERNING DOCUMENTS AS IN EFFECT ON THE
DATE HEREOF, ACCURATE AND COMPLETE COPIES OF WHICH HAVE BEEN PROVIDED OR MADE
AVAILABLE TO THE BUYERS.

 

(F)                                    EACH OF ACQUISITIONCO AND BLOCKER HAS
DULY FILED WITH THE APPROPRIATE TAX AUTHORITY ALL TAX RETURNS REQUIRED TO BE
FILED (OR HAS TIMELY AND PROPERLY FILED VALID EXTENSIONS OF TIME WITH RESPECT TO
THE FILING THEREOF), AND EACH SUCH TAX RETURN WAS COMPLETE AND ACCURATE IN ALL
MATERIAL RESPECTS.

 

(I)                               ACQUISITIONCO AND BLOCKER HAVE TIMELY PAID ALL
TAXES DUE WITH RESPECT TO EACH SUCH ENTITY, EXCEPT WITH RESPECT TO TAXES THAT
ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR

 

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WHICH ADEQUATE RESERVES (IN ACCORDANCE WITH GAAP) HAVE BEEN MAINTAINED.  ALL
TAXES THAT ACQUISITIONCO AND BLOCKER HAVE BEEN REQUIRED TO COLLECT OR WITHHOLD
HAVE BEEN DULY COLLECTED OR WITHHELD, AND HAVE BEEN, TO THE EXTENT REQUIRED WHEN
DUE, DULY PAID TO THE PROPER TAX AUTHORITY AND EACH COMPANY HAS COMPLIED WITH
ALL MATERIAL INFORMATION REPORTING AND RECORD KEEPING REQUIREMENTS RELATED TO
WITHHOLDING.

 

(II)           NO DEFICIENCIES FOR TAXES OF ACQUISITIONCO OR BLOCKER HAVE BEEN
CLAIMED, PROPOSED OR ASSESSED BY ANY TAX AUTHORITY IN WRITING.  THERE ARE NO
PENDING OR, TO THE KNOWLEDGE OF HOLDCO, THREATENED AUDITS, SUITS, PROCEEDINGS,
ACTIONS OR CLAIMS FOR OR RELATING TO ANY LIABILITY IN RESPECT OF TAXES OF
ACQUISITIONCO OR BLOCKER.  SCHEDULE 4.2(F) OF THE SELLERS DISCLOSURE SCHEDULES
CONTAINS A LIST OF ALL MATERIAL TAX RETURNS OF ACQUISITIONCO AND BLOCKER THAT
HAVE BEEN AUDITED OR ARE CURRENTLY UNDER AUDIT AND DESCRIBES ANY DEFICIENCIES OR
OTHER AMOUNTS THAT HAVE BEEN PAID OR ARE CURRENTLY BEING CONTESTED. THERE ARE NO
PENDING CLAIMS FOR REFUND OF ANY TAX OF EITHER ACQUISITIONCO OR BLOCKER.

 

(III)          THERE ARE NO LIENS FOR TAXES (OTHER THAN PERMITTED EXCEPTIONS)
UPON THE ASSETS OF ACQUISITIONCO OR BLOCKER.

 

(IV)          NONE OF THE ASSETS OF ACQUISITIONCO OR BLOCKER (I) IS PROPERTY
THAT IS REQUIRED TO BE TREATED AS BEING OWNED BY ANY OTHER PERSON OR (II) IS
TREATED AS TAX-EXEMPT BOND FINANCED PROPERTY OR TAX-EXEMPT USE PROPERTY WITHIN
THE MEANING OF SECTION 168 OF THE CODE OR COMPARABLE PROVISION OF STATE OR LOCAL
TAX LAW.

 

(V)           NEITHER ACQUISITIONCO NOR BLOCKER IS A PARTY TO OR BOUND BY ANY
TAX SHARING, TAX INDEMNITY OR TAX ALLOCATION AGREEMENT OR OTHER SIMILAR
ARRANGEMENT WITH ANY OTHER PARTY.

 

(VI)          AT ALL TIMES SINCE ITS FORMATION, BLOCKER HAS BEEN CLASSIFIED FOR
U.S. FEDERAL INCOME TAX PURPOSES AS A CORPORATION.  AT ALL TIMES SINCE ITS
FORMATION, ACQUISITIONCO HAS BEEN CLASSIFIED FOR U.S. FEDERAL INCOME TAX
PURPOSES AS AN ENTITY DISREGARDED AS SEPARATE FROM ITS OWNER WITHIN THE MEANING
OF TREASURY REGULATION SECTION 301.7701-2(C)(2)(I).

 

(VII)         BLOCKER AND ACQUISITIONCO HAVE MADE AVAILABLE TO THE BUYERS
ACCURATE AND CORRECT COPIES OF ALL FILED INCOME TAX RETURNS AND OTHER MATERIAL
TAX RETURNS OF BLOCKER AND ACQUISITIONCO FOR EACH OF THE TAXABLE YEARS SINCE
THEIR FORMATION.

 

(VIII)        NO TAX AUTHORITY IN A JURISDICTION IN WHICH ANY OF ACQUISITIONCO
OR BLOCKER DOES NOT FILE TAX RETURNS HAS CLAIMED IN WRITING THAT

 

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ACQUISITIONCO OR BLOCKER IS OR MAY BE REQUIRED TO FILE TAX RETURNS IN, OR IS OR
MAY BE SUBJECT TO TAX BY, THAT JURISDICTION.

 

(IX)           THERE ARE NO OUTSTANDING WAIVERS, EXTENSIONS OR COMPARABLE
CONSENTS REGARDING THE APPLICATION OF THE STATUTE OF LIMITATIONS WITH RESPECT TO
ANY TAX OR TAX RETURN OF ACQUISITIONCO OR BLOCKER.

 

(X)            NEITHER ACQUISITIONCO NOR BLOCKER HAS DISTRIBUTED THE STOCK OF
ANOTHER ENTITY OR HAD ITS STOCK DISTRIBUTED BY ANOTHER ENTITY IN A TRANSACTION
THAT WAS PURPORTED OR INTENDED TO BE GOVERNED IN WHOLE OR IN PART BY SECTIONS
355 OR 361 OF THE CODE.

 

(XI)           NEITHER ACQUISITIONCO NOR BLOCKER IS THE SUBJECT OF OR BOUND BY
ANY PRIVATE LETTER RULING, TECHNICAL ADVICE MEMORANDUM OR SIMILAR RULING,
MEMORANDUM OF AGREEMENT WITH ANY TAX AUTHORITY.

 

(XII)          NEITHER ACQUISITIONCO NOR BLOCKER WILL BE REQUIRED TO INCLUDE ANY
ITEM OF INCOME IN, OR EXCLUDE ANY ITEM OF DEDUCTION FROM, TAXABLE INCOME FOR ANY
TAXABLE PERIOD (OR PORTION THEREOF) ENDING AFTER THE CLOSING DATE AS A RESULT OF
ANY (I) CHANGE IN METHOD OF ACCOUNTING UNDER SECTION 481 OF THE CODE (OR ANY
CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW) FOR A
TAXABLE PERIOD ENDING ON OR PRIOR TO THE CLOSING DATE; (II) “CLOSING AGREEMENT”
AS DESCRIBED IN SECTION 7121 OF THE CODE (OR ANY CORRESPONDING OR SIMILAR
PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW) EXECUTED ON OR PRIOR TO THE
CLOSING DATE; (III) DEFERRED INTERCOMPANY GAIN OR EXCESS LOSS ACCOUNT DESCRIBED
IN TREASURY REGULATIONS UNDER SECTION 1502 OF THE CODE (OR ANY CORRESPONDING OR
SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW); (IV) INSTALLMENT SALE OR
OPEN TRANSACTION DISPOSITION MADE ON OR PRIOR TO THE CLOSING DATE; OR
(V) PREPAID AMOUNT RECEIVED ON OR PRIOR TO THE CLOSING DATE.

 

(XIII)         NEITHER ACQUISITIONCO NOR BLOCKER (A) HAS EVER BEEN A MEMBER OF
AN AFFILIATED (WITHIN THE MEANING OF SECTION 1504 OF THE CODE), COMBINED OR
UNITARY GROUP OF CORPORATIONS  FILING A CONSOLIDATED, COMBINED OR UNITARY TAX
RETURN; (B) IS A SUCCESSOR TO ANY OTHER ENTITY FOR TAX PURPOSES BY WAY OF
MERGER, LIQUIDATION OR OTHER TRANSACTION; (C) IS A PARTY TO ANY TAX SHARING OR
INDEMNIFICATION AGREEMENT OR ARRANGEMENT WITH ANY PERSON OR ENTITY PURSUANT TO
WHICH IT WOULD HAVE AN OBLIGATION WITH RESPECT TO TAXES OF ANOTHER PERSON OR
ENTITY FOLLOWING THE CLOSING; OR (D) HAS LIABILITY FOR THE TAXES OF ANY PERSON
AS A TRANSFEREE OR SUCCESSOR OR UNDER TREASURY REGULATION § 1.1502-6 (OR ANY
COMPARABLE PROVISION OF STATE, LOCAL OR FOREIGN LAW), BY CONTRACT OR OTHERWISE.

 

(XIV)        NEITHER ACQUISITIONCO NOR BLOCKER HAS PARTICIPATED OR ENGAGED IN
ANY TRANSACTION THAT GAVE RISE TO (X) A REGISTRATION OBLIGATION UNDER

 

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SECTION 6111 OF THE CODE OR THE TREASURY REGULATIONS THEREUNDER, (Y) A LIST
MAINTENANCE OBLIGATION UNDER SECTION 6112 OF THE CODE OR THE TREASURY
REGULATIONS THEREUNDER, OR (Z) A DISCLOSURE OBLIGATION AS A “REPORTABLE
TRANSACTION” UNDER SECTION 6011 OF THE CODE AND THE TREASURY REGULATIONS
THEREUNDER (OR IN EACH OF CLAUSES (X), (Y) OR (Z) ANY CORRESPONDING OR SIMILAR
PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW).

 

(XV)         ACQUISITIONCO AND BLOCKER ARE NOT AND HAVE NOT BEEN WITHIN THE MOST
RECENT FIVE YEARS A “UNITED STATES REAL PROPERTY HOLDING CORPORATION” AS DEFINED
IN SECTION 897 OF THE CODE.

 

(G)                                 THE BLOCKER OPTION AGREEMENT IS CURRENTLY IN
EFFECT, HAS CONTINUOUSLY BEEN IN EFFECT SINCE ITS EXECUTION JANUARY 5, 2006 AND
CORRECTION MARCH 17, 2006, AND HAS NOT BEEN MODIFIED OR AMENDED SINCE MARCH 17,
2006. ACCURATE AND COMPLETE COPIES OF THE BLOCKER OPTION AGREEMENT (I) AS
EXECUTED JANUARY 5, 2006 AND (II) AS AMENDED MARCH 17, 2006, HAVE BEEN MADE
AVAILABLE TO THE BUYERS.  THE BLOCKER OPTION AGREEMENT IS A LEGALLY VALID AND
BINDING AGREEMENT OF HOLDCO AND BLOCKER, ENFORCEABLE BY EACH PARTY THERETO
AGAINST THE OTHER, SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, MORATORIUM AND
SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS AND REMEDIES GENERALLY AND TO GENERAL
PRINCIPLES OF EQUITY. NOTWITHSTANDING THE FOREGOING, NO REPRESENTATIONS OR
WARRANTIES ARE MADE WITH RESPECT TO THE TAX EFFECT OR CONSEQUENCES OF THE
BLOCKER OPTION AGREEMENT (INCLUDING ITS EXERCISE).  HOLDCO HAS THE FULL POWER
AND LEGAL RIGHT TO SELL ITS RIGHTS UNDER THE BLOCKER OPTION AGREEMENT TO CROWN
ONE, AND SUCH SALE SHALL BE RECORDED ON THE BOOKS OF BLOCKER UPON THE SURRENDER
OF THE BLOCKER OPTION AGREEMENT AT THE CLOSING, PROPERLY ENDORSED TO CROWN ONE,
TO BLOCKER AT ITS PRINCIPAL OFFICES.  UPON THE EXECUTION AND DELIVERY OF THE
SALE AGREEMENT EVIDENCING THE SALE OF THE BLOCKER OPTION AGREEMENT FROM HOLDCO
TO CROWN ONE, ATTACHED HERETO AS EXHIBIT H, CROWN ONE SHALL HAVE ALL OF THE
RIGHTS, POWERS AND OBLIGATIONS OF HOLDCO UNDER THE BLOCKER OPTION AGREEMENT.

 

(H)                                 ORGANIZATION AND GOOD STANDING.  EACH OF
BLOCKER AND ACQUISITIONCO (I) IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION, (II) HAS ALL
REQUISITE POWER AND AUTHORITY TO OWN, OPERATE AND LEASE ITS PROPERTIES AND TO
CARRY ON ITS BUSINESS AS NOW CONDUCTED AND (III) IS QUALIFIED TO TRANSACT
BUSINESS AND IN GOOD STANDING IN EACH STATE OR JURISDICTION IN WHICH THE
OWNERSHIP OF ITS PROPERTY OR CONDUCT OF ITS BUSINESS REQUIRES SUCH
QUALIFICATION, EXCEPT WHERE THE FAILURE TO SO QUALIFY OR BE IN GOOD STANDING ARE
NOT REASONABLY LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS
PERFORMANCE OF THIS AGREEMENT.

 

(I)                                     CONSENTS AND APPROVALS.  EXCEPT FOR HSR
NOTIFICATIONS, THE GAMING APPROVALS AND THE NEGATIVE PLEDGE APPROVAL, NO
NOTICES, REPORTS, REGISTRATIONS OR OTHER FILINGS ARE REQUIRED TO BE MADE BY
BLOCKER OR ACQUISITIONCO WITH, NOR ARE ANY CONSENTS, APPROVALS OR GOVERNMENTAL
AUTHORIZATIONS REQUIRED TO BE OBTAINED BY BLOCKER OR ACQUISITIONCO FROM ANY
GOVERNMENTAL ENTITY, IN CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE
OF THIS AGREEMENT OR THE ESCROW AGREEMENT BY HOLDCO, EXCEPT FOR WHERE THE
FAILURE TO MAKE SUCH NOTICES, REPORTS, REGISTRATIONS OR OTHER FILINGS OR TO
OBTAIN SUCH CONSENTS, APPROVAL OR GOVERNMENTAL AUTHORIZATIONS, INDIVIDUALLY OR
IN THE AGGREGATE WITH OTHER SUCH FAILURES, ARE NOT REASONABLY LIKELY TO PROHIBIT
OR MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF THIS AGREEMENT.

 

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(J)                                     NO LITIGATION.  THERE ARE NO ACTIONS
PENDING OR, TO THE KNOWLEDGE OF HOLDCO, THREATENED, AGAINST EITHER BLOCKER OR
ACQUISITIONCO OR ANY OF THEIR RESPECTIVE PROPERTIES OR ASSETS, NOR IS THERE ANY
ORDER OUTSTANDING AGAINST BLOCKER OR ACQUISITIONCO OR ANY OF THEIR RESPECTIVE
PROPERTIES OR ASSETS, OTHER THAN ACTIONS OR ORDERS, AS APPLICABLE, THAT,
INDIVIDUALLY OR IN THE AGGREGATE, ARE NOT REASONABLY LIKELY TO PROHIBIT OR
MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF THIS AGREEMENT.

 

(K)                                  NO VIOLATIONS.  THE EXECUTION AND DELIVERY
BY HOLDCO OF THIS AGREEMENT DOES NOT, AND THE CONSUMMATION BY HOLDCO OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY WILL NOT:

 

(I)                                     VIOLATE, BREACH, CONFLICT WITH OR
CONTRAVENE ANY PROVISION OF THE GOVERNING DOCUMENTS OF BLOCKER OR ACQUISITIONCO;

 

(II)                                  VIOLATE, BREACH, CONFLICT WITH, OR
CONSTITUTE OR RESULT IN A DEFAULT, ACCELERATION, TERMINATION OR MODIFICATION OF
THE TERMS OF, OR ENTITLE ANY PARTY TO DECLARE SUCH A DEFAULT, OR GIVE RISE TO
ANY RIGHT TO ACCELERATE, TERMINATE, CANCEL, AMEND OR MODIFY THE TERMS OF OR
UNDER, OR THE RIGHTS OR OBLIGATIONS OF BLOCKER OR ACQUISITIONCO UNDER (IN EACH
CASE WITH OR WITHOUT NOTICE OR LAPSE OF TIME OR BOTH), ANY PROVISION OF  ANY
MATERIAL CONTRACT TO WHICH BLOCKER OR ACQUISITIONCO IS A PARTY OR BY WHICH ANY
OF ITS PROPERTIES OR ASSETS ARE BOUND, IN EACH CASE OTHER THAN (A) AS SET FORTH
ON SCHEDULE 4.2(K) OF THE SELLERS DISCLOSURE SCHEDULES OR (B) AS WOULD NOT
PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF THIS AGREEMENT;

 

(III)                               RESULT IN THE CREATION OR IMPOSITION OF ANY
LIENS WITH RESPECT TO ANY OF THE BLOCKER UNITS OR ACQUISITIONCO UNITS, IN EACH
CASE, OTHER THAN (A) AS SET FORTH ON SCHEDULE 4.2(K) OF THE SELLERS DISCLOSURE
SCHEDULES, OR (B) AS WOULD NOT PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS
PERFORMANCE OF THIS AGREEMENT; OR

 

(IV)                              ASSUMING ALL NOTICES, REPORTS, REGISTRATIONS,
FILINGS, CONSENTS, APPROVALS AND OTHER GOVERNMENTAL AUTHORIZATIONS CONTEMPLATED
BY SECTION 4.2(I) HAVING BEEN MADE OR OBTAINED, AS APPLICABLE, VIOLATE, BREACH,
CONTRAVENE OR CONFLICT WITH ANY LAW OR ORDER OF ANY GOVERNMENTAL ENTITY
APPLICABLE TO BLOCKER OR ACQUISITIONCO, OTHER THAN SUCH VIOLATIONS THAT WOULD
NOT PREVENT OR MATERIALLY DELAY THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

4.3.                              Representations of Each Seller.  Each Seller,
severally and not jointly, hereby represents and warrants to the Parent and the
Buyers as follows in respect of such Seller:

 

(A)                                  ORGANIZATION AND GOOD STANDING.  THE SELLER
(I) IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF
THE JURISDICTION OF ITS ORGANIZATION, (II) HAS ALL REQUISITE POWER AND AUTHORITY
TO OWN, OPERATE AND LEASE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS

 

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AS NOW CONDUCTED AND (III) IS QUALIFIED TO TRANSACT BUSINESS AND IN GOOD
STANDING IN EACH STATE OR JURISDICTION IN WHICH THE OWNERSHIP OF ITS PROPERTY OR
CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION, EXCEPT FOR FAILURES TO SO
QUALIFY OR BE IN GOOD STANDING THAT, INDIVIDUALLY OR IN THE AGGREGATE, ARE NOT
MATERIAL TO ITS ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER OR UNDER THE ESCROW
AGREEMENT AND ARE NOT REASONABLY LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR
DELAY ITS PERFORMANCE OF THIS AGREEMENT OR THE ESCROW AGREEMENT.

 

(B)                                 SELLER AUTHORITY; ENFORCEABILITY.  THE
SELLER HAS THE POWER AND AUTHORITY TO EXECUTE, DELIVER, AND PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE ESCROW AGREEMENT AND TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THE EXECUTION, DELIVERY, AND
PERFORMANCE OF THIS AGREEMENT AND THE ESCROW AGREEMENT AND THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, HAVE BEEN DULY AND VALIDLY
AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF THE SELLER, AND NO OTHER
COMPANY ACTION ON THE PART OF THE SELLER OR ANY OF ITS MEMBERS OR SHAREHOLDERS
IS NECESSARY TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AND THE ESCROW AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY.  THIS AGREEMENT AND THE ESCROW AGREEMENT, WHEN
DULY EXECUTED BY THE OTHER PARTIES HERETO AND THERETO, WILL CONSTITUTE LEGALLY
VALID AND BINDING OBLIGATIONS OF SUCH SELLER ENFORCEABLE AGAINST IT IN
ACCORDANCE WITH THEIR RESPECTIVE TERMS, SUBJECT TO APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM AND SIMILAR LAWS AFFECTING CREDITORS’
RIGHTS AND REMEDIES GENERALLY AND TO GENERAL PRINCIPLES OF EQUITY.

 

(C)                                  CONSENTS AND APPROVALS.  EXCEPT FOR HSR
NOTIFICATIONS, THE GAMING APPROVALS AND THE NEGATIVE PLEDGE APPROVAL, NO
NOTICES, REPORTS, REGISTRATIONS OR OTHER FILINGS ARE REQUIRED TO BE MADE BY THE
SELLER WITH, NOR ARE ANY CONSENTS, APPROVALS OR GOVERNMENTAL AUTHORIZATIONS
REQUIRED TO BE OBTAINED BY THE SELLER FROM, ANY GOVERNMENTAL ENTITY, IN
CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE BY SUCH SELLER OF THIS
AGREEMENT OR THE ESCROW AGREEMENT, EXCEPT WHERE THE FAILURE TO MAKE SUCH
NOTICES, REPORTS, REGISTRATIONS OR OTHER FILINGS, OR TO OBTAIN SUCH CONSENTS,
APPROVALS OR GOVERNMENTAL AUTHORIZATIONS, INDIVIDUALLY OR IN THE AGGREGATE, ARE
NOT MATERIAL TO THE SELLER’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT OR THE ESCROW AGREEMENT AND ARE NOT REASONABLY LIKELY TO PROHIBIT OR
MATERIALLY RESTRICT OR DELAY THE PERFORMANCE BY THE SELLER OF THIS AGREEMENT OR
THE ESCROW AGREEMENT.

 

(D)                                 NO LITIGATION.  THERE ARE NO ACTIONS PENDING
OR, TO THE KNOWLEDGE OF THE SELLER, THREATENED, AGAINST SUCH SELLER OR ANY OF
ITS RESPECTIVE PROPERTIES OR ASSETS, OTHER THAN ACTIONS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, ARE NOT MATERIAL TO ITS ABILITY TO PERFORM ITS OBLIGATIONS
HEREUNDER OR UNDER THE ESCROW AGREEMENT AND ARE NOT REASONABLY LIKELY TO
PROHIBIT OR MATERIALLY RESTRICT OR DELAY THE PERFORMANCE OF THIS AGREEMENT OR
THE ESCROW AGREEMENT.  SELLER IS NOT SUBJECT TO ANY ORDER, OTHER THAN ORDERS
THAT, INDIVIDUALLY OR IN THE AGGREGATE, ARE NOT MATERIAL TO ITS ABILITY TO
PERFORM ITS OBLIGATIONS HEREUNDER OR UNDER THE ESCROW AGREEMENT AND ARE NOT
REASONABLY LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY THE PERFORMANCE BY
SELLER OF THIS AGREEMENT THE ESCROW AGREEMENT.

 

(E)                                  NO VIOLATIONS.  THE EXECUTION AND DELIVERY
OF THIS AGREEMENT AND THE ESCROW AGREEMENT BY THE SELLER DOES NOT, AND THE
CONSUMMATION BY THE SELLER OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
WILL NOT:

 

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(I)                                     VIOLATE, BREACH, CONFLICT WITH OR
CONTRAVENE ANY PROVISION OF THE GOVERNING DOCUMENTS OF THE SELLER;

 

(II)                                  VIOLATE, BREACH, CONFLICT WITH, OR
CONSTITUTE OR RESULT IN A DEFAULT, ACCELERATION, TERMINATION OR MODIFICATION OF
THE TERMS OF, OR ENTITLE ANY PARTY TO DECLARE SUCH A DEFAULT, OR GIVE RISE TO
ANY RIGHT TO ACCELERATE, TERMINATE, CANCEL, AMEND OR MODIFY THE TERMS OF OR
UNDER, OR THE RIGHTS OR OBLIGATIONS OF THE SELLER UNDER (IN EACH CASE WITH OR
WITHOUT NOTICE OR LAPSE OF TIME OR BOTH), ANY PROVISION OF  ANY MATERIAL
CONTRACT TO WHICH THE SELLER IS A PARTY OR BY WHICH ANY OF ITS PROPERTIES OR
ASSETS ARE BOUND, IN EACH CASE OTHER THAN (A) AS SET FORTH ON SCHEDULE 4.3(E) OF
THE SELLERS DISCLOSURE SCHEDULES AND (B) FOR ANY SUCH MATTERS THAT, INDIVIDUALLY
OR IN THE AGGREGATE, ARE NOT MATERIAL TO THE ABILITY OF THE SELLER TO PERFORM
ITS MATERIAL OBLIGATIONS HEREUNDER OR UNDER THE ESCROW AGREEMENT AND ARE NOT
REASONABLY LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF
THIS AGREEMENT OR THE ESCROW AGREEMENT;

 

(III)                               RESULT IN THE CREATION OR IMPOSITION OF ANY
LIENS WITH RESPECT TO ANY OF THE MILLENNIUM UNITS OR HOLDCO UNITS, IN EACH CASE,
OTHER THAN (A) AS SET FORTH ON SCHEDULE 4.3(E) OF THE SELLERS DISCLOSURE
SCHEDULES AND (B) FOR ANY SUCH MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE,
ARE NOT MATERIAL TO THE ABILITY OF THE SELLER TO PERFORM ITS MATERIAL
OBLIGATIONS HEREUNDER OR UNDER THE ESCROW AGREEMENT AND ARE NOT REASONABLY
LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF THIS
AGREEMENT OR THE ESCROW AGREEMENT;

 

(IV)                              ASSUMING ALL NOTICES, REPORTS, REGISTRATIONS,
FILINGS, CONSENTS, APPROVALS AND OTHER GOVERNMENTAL AUTHORIZATIONS CONTEMPLATED
BY SECTION 4.3 (C) HAVING BEEN MADE OR OBTAINED, AS APPLICABLE, VIOLATE, BREACH,
CONTRAVENE OR CONFLICT WITH ANY LAW OR ORDER OF ANY GOVERNMENTAL ENTITY
APPLICABLE TO THE SELLER, OTHER THAN SUCH VIOLATIONS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, ARE NOT MATERIAL TO THE ABILITY OF THE SELLER TO PERFORM ITS
MATERIAL OBLIGATIONS HEREUNDER OR UNDER THE ESCROW AGREEMENT AND ARE NOT
REASONABLY LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY ITS PERFORMANCE OF
THIS AGREEMENT OR THE ESCROW AGREEMENT; OR

 

(V)                                 ASSUMING ALL NOTICES, REPORTS,
REGISTRATIONS, FILINGS, CONSENTS, APPROVALS AND OTHER GOVERNMENTAL
AUTHORIZATIONS CONTEMPLATED BY SECTION 4.3(C) HAVING BEEN MADE OR OBTAINED, AS
APPLICABLE, VIOLATE, BREACH, CONTRAVENE OR CONFLICT WITH OR RESULT IN THE
CANCELLATION, MODIFICATION, REVOCATION OR SUSPENSION OF, ANY GOVERNMENTAL
AUTHORIZATION REQUIRED FOR SELLER TO LAWFULLY CONDUCT AND OPERATE ITS BUSINESS
IN THE MANNER IT CURRENTLY CONDUCTS AND OPERATES SUCH BUSINESS OR TO PERMIT IT
TO OWN, LEASE, OPERATE AND USE ITS ASSETS AND PROPERTIES IN THE MANNER IT
CURRENTLY OWNS, LEASES, OPERATES AND USES

 

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THEM, OTHER THAN (A) ANY VIOLATIONS, CONTRAVENTIONS OR CONFLICTS WITH, OR
CANCELLATIONS, MODIFICATIONS, REVOCATIONS OR SUSPENSIONS OF ANY SUCH
AUTHORIZATION THAT ARE SET FORTH ON SCHEDULE 4.3(E) OF THE SELLERS DISCLOSURE
SCHEDULES OR (B) ANY VIOLATIONS, CONTRAVENTIONS OR CONFLICTS WITH, OR
CANCELLATIONS, MODIFICATIONS, REVOCATIONS OR SUSPENSIONS OF SUCH GOVERNMENTAL
AUTHORIZATION THAT, INDIVIDUALLY OR IN THE AGGREGATE, ARE NOT MATERIAL TO THE
ABILITY OF THE SELLER TO PERFORM ITS MATERIAL OBLIGATIONS HEREUNDER OR THE
ESCROW AGREEMENT AND ARE NOT REASONABLY LIKELY TO PROHIBIT OR MATERIALLY
RESTRICT OR DELAY ITS PERFORMANCE OF THIS AGREEMENT OR THE ESCROW AGREEMENT.

 

(F)                                    BROKERS AND FINDERS.  EXCEPT FOR DEUTSCHE
BANK SECURITIES INC. AND MERCANTI SECURITIES, LLC WHOSE FEES SHALL BE PAID BY
THE SELLERS, NO AGENT, BROKER, INVESTMENT BANKER, INTERMEDIARY, FINDER, OR FIRM
ACTING ON BEHALF OF THE SELLER IS OR WILL BE ENTITLED TO ANY BROKER’S OR
FINDER’S FEE OR ANY OTHER COMMISSION OR SIMILAR FEE, DIRECTLY OR INDIRECTLY,
FROM SUCH SELLER IN CONNECTION WITH THIS AGREEMENT OR THE ESCROW AGREEMENT OR
UPON CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

ARTICLE 5

 

Representations and Warranties Regarding the Companies

 

Except as set forth in the corresponding sections of the Sellers Disclosure
Schedules (provided that a listing of an item in one section of the Sellers
Disclosure Schedules shall be deemed to be a listing in each section of the
Sellers Disclosure Schedules to which such item relates only to the extent that
it is reasonably apparent from a reading of such disclosure that it also
qualifies or applies to another section), each of the Sellers and CCR, jointly
and severally, hereby represent and warrant to the Parent and the Buyers as
follows. Except for the representations and warranties in the first sentence of
Section 5.1(a), Section 5.1(b), Section 5.5(a), and Section 5.5(d) (the “Company
Execution Reps”), the making of the following representations and warranties on
the date of this Agreement is not intended and does not create any liability for
the Sellers for any misrepresentation or misstatements on such date. The making
of these representations and warranties on the date of this Agreement is solely
for informational purposes and is not intended and does not create any liability
for the Sellers or CCR for any misrepresentation or misstatements on such date.

 

5.1.                              Company Organization; Good Standing; CCR
Authority and Enforceability.

 

(A)                                  EACH COMPANY (A) IS DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION OF
ORGANIZATION, (B) HAS ALL REQUISITE POWER AND AUTHORITY TO OWN, OPERATE AND
LEASE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW CONDUCTED, AND (C) IS
DULY QUALIFIED OR LICENSED TO TRANSACT BUSINESS AND IS IN GOOD STANDING IN EACH
STATE OR JURISDICTION IN WHICH THE OWNERSHIP, OPERATION OR LEASING OF ITS
PROPERTY OR CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION OR LICENSE,
EXCEPT WHERE THE FAILURE TO SO QUALIFY OR BE LICENSED WOULD NOT HAVE A

 

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MATERIAL ADVERSE EFFECT.  ACCURATE AND COMPLETE COPIES OF ALL OF THE
ORGANIZATIONAL DOCUMENTS OF EACH OF THE COMPANIES HAVE BEEN PROVIDED TO THE
BUYERS.

 

(B)                                 CCR HAS THE POWER AND AUTHORITY TO EXECUTE,
DELIVER, AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT THE ESCROW AGREEMENT,
AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THE
EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT THE ESCROW AGREEMENT, AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, HAVE BEEN
DULY AND VALIDLY AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF CCR, AND NO
OTHER COMPANY ACTION ON THE PART OF CCR OR ANY OF ITS MEMBERS OR SHAREHOLDERS IS
NECESSARY TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT
AND THE ESCROW AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY.  THIS AGREEMENT AND THE ESCROW AGREEMENT, WHEN DULY EXECUTED
BY THE OTHER PARTIES HERETO AND THERETO, WILL CONSTITUTE LEGALLY VALID AND
BINDING OBLIGATIONS OF CCR ENFORCEABLE AGAINST IT IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS, SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM AND SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS AND REMEDIES GENERALLY
AND TO GENERAL PRINCIPLES OF EQUITY.

 

5.2.                              Capitalization.

 

(A)                                  EXHIBIT A TO THIS AGREEMENT CONTAINS A
COMPLETE AND ACCURATE DESCRIPTION OF THE OWNERSHIP STRUCTURE OF THE COMPANIES
(INCLUDING THE IDENTITY AND PERCENTAGE OWNERSHIP OF EACH COMPANY AND EACH OTHER
MEMBER, PARTNER OR OTHER OWNER).  THE COMPANIES DO NOT HAVE ANY OTHER
SUBSIDIARIES OR OWN ANY STOCK OF, OR ANY EQUITY PARTICIPATION IN, ANY PERSON,
EXCEPT AS SET FORTH ON EXHIBIT A TO THIS AGREEMENT.  EACH COMPANY AND EACH OTHER
MEMBER, PARTNER OR OTHER OWNER, AS APPLICABLE, IS THE OWNER OF ALL RIGHT, TITLE
AND INTEREST (RECORD AND BENEFICIAL) IN AND TO THE ISSUED AND OUTSTANDING EQUITY
INTERESTS OF THE COMPANIES AS SET FORTH ON EXHIBIT A TO THIS AGREEMENT, FREE AND
CLEAR OF ALL LIENS, OTHER THAN PERMITTED EXCEPTIONS.  NO COMPANY AND NO OTHER
MEMBER, PARTNER OR OTHER OWNER, AS APPLICABLE, OWNS ANY RIGHT, TITLE OR INTEREST
(RECORD OR BENEFICIAL) TO ANY OTHER EQUITY INTERESTS OF THE COMPANIES.  THE
EQUITY INTERESTS OF EACH COMPANY AS SET FORTH ON EXHIBIT A TO THIS AGREEMENT
CONSTITUTE ALL OF THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF SUCH COMPANY. 
ALL OF THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF EACH COMPANY HAVE BEEN
DULY AUTHORIZED AND ARE VALIDLY ISSUED, FULLY PAID (IF APPLICABLE) AND
NONASSESSABLE (IF APPLICABLE) AND NONE OF THEM HAS BEEN ISSUED IN VIOLATION OF
PREEMPTIVE OR SIMILAR RIGHTS.  THERE ARE NO DECLARED OR ACCRUED BUT UNPAID
DIVIDENDS OR DISTRIBUTIONS WITH REGARD TO ANY ISSUED AND OUTSTANDING EQUITY
INTERESTS OF ANY COMPANY, OTHER THAN DISTRIBUTIONS BY CCR TO THE SELLERS FOR
PAYMENT OF TAXES IN ACCORDANCE WITH THE GOVERNING DOCUMENTS OF CCR.

 

(B)                                 THERE ARE NO EQUITY INTERESTS IN ANY COMPANY
RESERVED FOR ISSUANCE OR SUBJECT TO PREEMPTIVE RIGHTS OR ANY OUTSTANDING
SUBSCRIPTIONS, OPTIONS, WARRANTS, CALLS, RIGHTS, AGREEMENTS, OBLIGATIONS,
CONVERTIBLE, EXERCISABLE OR EXCHANGEABLE SECURITIES, OR OTHER COMMITMENTS,
CONTINGENT OR OTHERWISE, RELATING TO EQUITY INTERESTS IN ANY OF THE COMPANIES. 
THERE ARE NO OUTSTANDING OR AUTHORIZED MEMBERSHIP INTERESTS, STOCK APPRECIATION,
PHANTOM STOCK, PROFIT PARTICIPATION, OR SIMILAR RIGHTS FOR WHICH ANY COMPANY HAS
ANY LIABILITY, AND THERE ARE NO ISSUED AND OUTSTANDING BONDS, INDENTURES, NOTES
OR OTHER INDEBTEDNESS HAVING THE RIGHT TO VOTE (OR CONVERTIBLE INTO,
EXCHANGEABLE OR EXERCISABLE FOR, OR CREATING THE RIGHT TO SUBSCRIBE FOR OR
ACQUIRE SECURITIES THAT HAVE THE RIGHT TO VOTE) ON ANY MATTERS ON WHICH OWNERS
OR MEMBERS OF ANY COMPANY MAY VOTE. THERE ARE NO SHAREHOLDER AGREEMENTS,
PROXIES, VOTING TRUSTS OR OTHER AGREEMENTS OR UNDERSTANDINGS TO WHICH ANY
COMPANY IS A PARTY OR BY WHICH ANY COMPANY IS

 

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BOUND RELATING TO THE VOTING OR REGISTRATION OF ANY EQUITY INTERESTS OF A
COMPANY OR PREEMPTIVE RIGHTS WITH RESPECT THERETO.

 

5.3.                              No Litigation.  There is no material Action
pending or, to the knowledge of the Sellers, threatened, against any of the
Companies or any of their respective properties, assets or rights, nor is there
any material Order to which any of the Companies or any of their properties,
assets or rights is subject.

 

5.4.                              Consents and Approvals.  Except for (a) the
HSR Notification, (b) the Gaming Approvals and (c) such filings as may be
required in connection with the Taxes described in Section 7.10, no notices,
reports, registrations or other filings are required to be made by any of the
Companies with, nor are any consents, approvals or Governmental Authorizations
required to be obtained by any of the Companies from, any Governmental Entity,
in connection with the execution or delivery of this Agreement or the Escrow
Agreement by the Sellers and the consummation of the transactions contemplated
hereby or thereby, except where the failure to make such notices, reports,
registrations or other filings or to obtain such consents, approvals or
Governmental Authorizations are not material to the ability of CCR to observe or
perform its obligations hereunder or are not reasonably likely to prohibit or
materially restrict or delay the consummation of the transactions contemplated
hereby.

 

5.5.                              No Violations.  The execution and delivery of
this Agreement and the Escrow Agreement by the Sellers and CCR does not, and the
consummation by the Sellers and CCR of the transactions contemplated hereby and
thereby will not:

 

(A)                                  VIOLATE, BREACH, CONFLICT WITH OR
CONTRAVENE ANY PROVISION OF THE GOVERNING DOCUMENTS OF ANY COMPANY;

 

(B)                                 VIOLATE, BREACH, CONFLICT WITH, OR
CONSTITUTE OR RESULT IN A DEFAULT, ACCELERATION, TERMINATION OR MODIFICATION OF
THE TERMS OF, OR ENTITLE ANY PARTY TO DECLARE SUCH A DEFAULT, OR GIVE RISE TO
ANY RIGHT TO ACCELERATE, TERMINATE, CANCEL, AMEND OR MODIFY THE MATERIAL TERMS
OF OR UNDER, OR THE MATERIAL RIGHTS OR MATERIAL OBLIGATIONS OF ANY OF THE
COMPANIES UNDER (IN EACH CASE WITH OR WITHOUT NOTICE OR LAPSE OF TIME OR BOTH)
OR REQUIRE THE CONSENT OR APPROVAL OF ANY OTHER CONTRACTING PERSON UNDER, ANY
MATERIAL CONTRACT TO WHICH ANY COMPANY IS A PARTY;

 

(C)                                  RESULT IN THE CREATION OR IMPOSITION OF ANY
LIENS WITH RESPECT TO ANY OF THE ASSETS OR PROPERTIES OF ANY COMPANY, IN EACH
CASE, OTHER THAN (I) PERMITTED EXCEPTIONS AND (II) AS SET FORTH ON SCHEDULE
5.5(C) OF THE SELLERS DISCLOSURE SCHEDULES;

 

(D)                                 ASSUMING ALL NOTICES, REPORTS,
REGISTRATIONS, FILINGS, CONSENTS, APPROVALS AND OTHER GOVERNMENTAL
AUTHORIZATIONS CONTEMPLATED BY SECTION 5.4 HAVING BEEN MADE OR OBTAINED, AS
APPLICABLE, VIOLATE, BREACH, CONTRAVENE OR CONFLICT WITH ANY LAW OR ORDER OF ANY
GOVERNMENTAL ENTITY APPLICABLE TO ANY COMPANY, OTHER THAN SUCH VIOLATIONS THAT
WOULD BE IMMATERIAL OR ARE NOT REASONABLY LIKELY TO PROHIBIT OR MATERIALLY
RESTRICT OR DELAY THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
CCR’S ABILITY TO PERFORM ITS MATERIAL OBLIGATIONS HEREUNDER; OR

 

(E)                                  ASSUMING ALL NOTICES, REPORTS,
REGISTRATIONS, FILINGS, CONSENTS, APPROVALS AND OTHER GOVERNMENTAL
AUTHORIZATIONS CONTEMPLATED BY SECTION 5.4 HAVING BEEN MADE OR OBTAINED, AS
APPLICABLE, VIOLATE, BREACH, CONTRAVENE OR CONFLICT WITH OR RESULT IN THE
CANCELLATION,

 

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MODIFICATION, REVOCATION OR SUSPENSION OF, ANY GOVERNMENTAL AUTHORIZATION
REQUIRED FOR ANY COMPANY TO LAWFULLY CONDUCT AND OPERATE ITS BUSINESSES IN THE
MANNER IT CURRENTLY CONDUCTS AND OPERATES SUCH BUSINESSES OR TO PERMIT IT TO
OWN, LEASE, OPERATE AND USE ITS PROPERTIES AND ASSETS MATERIALLY IN THE MANNER
IT CURRENTLY OWNS, LEASES, OPERATES AND USES THEM, OTHER THAN (X) ANY
VIOLATIONS, CONTRAVENTIONS OR CONFLICTS WITH, OR CANCELLATIONS, MODIFICATIONS,
REVOCATIONS OR SUSPENSIONS OF ANY SUCH GOVERNMENTAL AUTHORIZATION AS SET FORTH
ON SCHEDULE 5.5(E) OF THE SELLERS DISCLOSURE SCHEDULES AND (Y) ANY VIOLATIONS,
CONTRAVENTIONS OR CONFLICTS WITH, OR CANCELLATIONS, MODIFICATIONS, REVOCATIONS
OR SUSPENSIONS OF ANY SUCH GOVERNMENTAL AUTHORIZATION THAT ARE NOT REASONABLY
LIKELY TO PROHIBIT OR MATERIALLY RESTRICT OR DELAY THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR CCR’S ABILITY TO PERFORM ITS MATERIAL
OBLIGATIONS HEREUNDER.

 

5.6.                              Material Contracts.  Schedule 5.6 of the
Sellers Disclosure Schedules lists the following Contracts to which any Company
is a party (the “Material Contracts” and, each, a “Material Contract”):

 

(A)                                  ANY CONTRACT (OTHER THAN ANY GOVERNING
DOCUMENT OF SUCH COMPANY) THAT CONTAINS RESTRICTIONS WITH RESPECT TO THE PAYMENT
OF DIVIDENDS OR DISTRIBUTIONS IN RESPECT OF MEMBERSHIP INTERESTS OR OTHER EQUITY
INTERESTS OF SUCH COMPANY;

 

(B)                                 ANY CONTRACT, THE PERFORMANCE OF WHICH
EXTENDS OVER A PERIOD OF MORE THAN ONE YEAR FROM THE DATE HEREOF OR WHICH CANNOT
BE TERMINATED BY SUCH COMPANY ON THIRTY (30) DAYS NOTICE OR LESS WITHOUT
PENALTY, AND WHICH BY ITS EXPRESS TERMS WILL INVOLVE EXPENDITURES OR RECEIPTS BY
SUCH COMPANY (WHETHER ACTUAL OR CONTINGENT), IN EXCESS OF $1,000,000 PER YEAR;

 

(C)                                  ANY CONTRACT THAT ESTABLISHES A
PARTNERSHIP, JOINT VENTURE OR SIMILAR ARRANGEMENT, AND ANY CONTRACT RELATED TO
THE CONSTRUCTION OR DEVELOPMENT OF ANY MATERIAL PROPERTIES OR ASSETS AND WHICH
BY ITS EXPRESS TERMS WILL INVOLVE EXPENDITURES OR RECEIPTS BY ANY OF THE
COMPANIES (WHETHER ACTUAL OR CONTINGENT) IN EXCESS OF $1,000,000;

 

(D)                                 ANY CONTRACT UNDER WHICH SUCH COMPANY HAS
CREATED, INCURRED, ASSUMED OR GUARANTEED ANY INDEBTEDNESS OR ANY CAPITALIZED
LEASE OBLIGATION, IN EXCESS OF $1,000,000 OR UNDER WHICH SUCH COMPANY HAS
IMPOSED A MATERIAL LIEN ON ANY OF ITS ASSETS, TANGIBLE OR INTANGIBLE, EXCEPT FOR
PERMITTED EXCEPTIONS;

 

(E)                                  ANY CONTRACT THAT RESTRAINS OR LIMITS THE
ABILITY OF SUCH COMPANY TO COMPETE IN THE BUSINESS OR TO OPERATE IN ANY BUSINESS
EQUIVALENT TO THE BUSINESS IN ANY GEOGRAPHIC TERRITORY OR INDUSTRY;

 

(F)                                    ANY CONTRACT WITH ANY SELLERS OR ANY OF
THEIR RESPECTIVE AFFILIATES OR RELATED PARTIES;

 

(G)                                 ANY CONTRACT FOR THE EMPLOYMENT,
COMPENSATION, CONSULTING, RETIREMENT, SEVERANCE OR SIMILAR ARRANGEMENT OF ANY
CURRENT EMPLOYEE OR CONSULTANT PROVIDING FOR AGGREGATE ANNUAL PAYMENTS OR
BENEFITS IN EXCESS OF $250,000;

 

(H)                                 ANY CONTRACT THAT OBLIGATES SUCH COMPANY TO
PURCHASE, SELL, LEASE OR SUBLEASE ANY REAL PROPERTY OF SUCH COMPANY, INCLUDING
OPTIONS, PURCHASE AGREEMENTS, PUTS, CALLS, RIGHTS OF FIRST OFFER, RIGHTS OF
FIRST REFUSAL OR SIMILAR OBLIGATIONS;

 

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(I)            ANY CONTRACT, THE PERFORMANCE OF WHICH EXTENDS OVER A PERIOD OF
MORE THAN ONE YEAR, PURSUANT TO WHICH ANY OTHER PERSON OPERATES, LEASES,
CONTROLS, MANAGES OR HOLDS ANY PROPERTIES OR ASSETS OF SUCH COMPANY, OR PURSUANT
TO WHICH SUCH COMPANY IS OBLIGATED TO OPERATE, LEASE, CONTROL, MANAGE OR HOLD
ANY PROPERTIES OR ASSETS OF ANY OTHER PERSON, IN EACH CASE WHERE THE
CONSIDERATION FOR SUCH OPERATION, LEASING, CONTROL, MANAGEMENT OR HOLDING IS IN
EXCESS OF $500,000 PER YEAR;

 

(J)            ANY CONTRACT FOR THE LEASE OF REAL OR PERSONAL PROPERTY TO OR
FROM ANY PERSON, OTHER THAN, IN THE CASE OF PERSONAL PROPERTY, (I) CONTRACTS IN
THE ORDINARY COURSE OF BUSINESS OR (II) CONTRACTS PROVIDING FOR ANNUAL PAYMENTS
LESS THAN $500,000;

 

(K)           ANY WRITTEN CONTRACT PROVIDING FOR A LICENSE OF ANY MATERIAL
INTELLECTUAL PROPERTY USED BY ANY OF THE COMPANIES (OTHER THAN GENERALLY
AVAILABLE OR OFF-THE SHELF SOFTWARE);

 

(L)            ANY CONTRACT CONTAINING A MOST-FAVORED NATIONS, BEST CUSTOMER
PRICING OR SIMILAR PROVISION, AND ANY CONTRACT WITH CUSTOMERS OR SUPPLIERS FOR
THE SHARING OF FEES, THE REBATING OF CHARGES OR SIMILAR ARRANGEMENTS; AND

 

(M)          ANY CONTRACT UNDER WHICH SUCH COMPANY HAS ADVANCED OR LOANED ANY
AMOUNT TO ANY OF ITS DIRECTORS, STATUTORY MANAGERS, OFFICERS AND EMPLOYEES.

 

Accurate and complete copies of all Material Contracts have been delivered or
made available to the Buyers or the Parent. Except as listed on Schedule 5.6 of
the Sellers Disclosure Schedules:  (i) each such Material Contract is valid,
existing and in full force and effect with respect to each Company party
thereto, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and to general principles of equity; and (ii) neither any Company party thereto,
nor, to the knowledge of the Sellers, any other party to such Contract, is in
material breach of or in material default under such Material Contract and, to
the knowledge of any Seller, no event has occurred that with the lapse of time
or the giving of notice or both would constitute a material breach thereof or a
material default thereunder.

 

5.7.          Financial Information.  Attached to Schedule 5.7 of the Sellers
Disclosure Schedules are (a) audited consolidated balance sheets for the
Companies as of December 31, 2006 and 2007 and audited consolidated statements
of operations for the fiscal years ended December 31, 2006, 2007 and 2008 (such
financial statements, including the footnotes contained therein, the “Audited
Financial Statements”), and the reports thereon of Piercy Bowler Taylor & Kern,
independent certified public accountants, and (b) an unaudited consolidated
balance sheet for the Companies as of September 30, 2008 and an unaudited
consolidated statement of operations for the year ended September 30, 2008 (such
financial statements, including the footnotes contained therein, are referred to
as the “Interim Financial Statements”, and, together with the Audited Financial
Statements, the “Financial Statements”).  The Financial Statements have been
prepared in accordance with GAAP consistently applied throughout the periods
covered by each such statement, are consistent with the books and records of the
Companies, and fairly present, in all material respects, the consolidated
financial condition of the Companies as of the respective dates and the results
of operations and cash flows of the Companies for the respective periods then
ended, as applicable.

 

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5.8.          Liabilities.  The Companies have no Liabilities of any kind,
character or nature whatsoever, contingent or otherwise required by GAAP to be
set forth on a consolidated balance sheet or in the notes thereto, other than
(i) Liabilities set forth or reserved against in the Financial Statements,
(ii) Liabilities which have arisen since the date of the Financial Statements in
the ordinary course of business consistent with past practice, (iii) Liabilities
under the Holdback Agreement, and (iv) Liabilities disclosed on Schedule 5.8 of
the Sellers Disclosure Schedules.

 

5.9.          Labor Matters.

 

(A)           WITH RESPECT TO THE COMPANIES: (I) THERE ARE NO TRADE UNIONS,
COUNCIL OF TRADE UNIONS, EMPLOYEE BARGAINING AGENCIES OR AFFILIATED BARGAINING
AGENTS REPRESENTING, PURPORTING TO REPRESENT OR, TO THE KNOWLEDGE OF THE
SELLERS, ATTEMPTING TO REPRESENT ANY EMPLOYEES OF ANY OF THE COMPANIES BY WAY OF
CERTIFICATION, INTERIM CERTIFICATION, VOLUNTARY RECOGNITION, OR SUCCESSION
RIGHTS, OR HAVE APPLIED OR, TO THE KNOWLEDGE OF THE SELLERS, THREATENED TO
APPLY, TO BE CERTIFIED AS THE BARGAINING AGENT OF ANY EMPLOYEES OF ANY OF THE
COMPANIES; (II) TO THE KNOWLEDGE OF THE SELLERS, THERE HAS BEEN NO SUCH ATTEMPT
SINCE JANUARY 1, 2005, AND THERE ARE NO THREATENED OR PENDING UNION ORGANIZING
ACTIVITIES INVOLVING ANY EMPLOYEES OF ANY OF THE COMPANIES; (III) NO COMPANY IS
A PARTY TO ANY LABOR CONTRACT OR COLLECTIVE BARGAINING AGREEMENT WITH ANY LABOR
UNION OR LABOR ORGANIZATION WITH RESPECT TO EMPLOYEES OF ANY OF THE COMPANIES;
(IV) NO COMPANY IS CURRENTLY NEGOTIATING ANY LABOR OR COLLECTIVE BARGAINING
AGREEMENT IN RESPECT OF EMPLOYEES OF ANY OF THE COMPANIES; (V) NO COMPANY HAS
BREACHED OR OTHERWISE FAILED TO COMPLY IN ANY MATERIAL RESPECT WITH THE
PROVISIONS OF ANY COLLECTIVE BARGAINING OR UNION CONTRACT; AND (VI) SINCE
JANUARY 1, 2005, THERE HAS NOT OCCURRED OR, TO THE KNOWLEDGE OF THE SELLERS,
BEEN THREATENED, ANY STRIKE, SLOWDOWN, PICKETING, WORK STOPPAGE, LOCKOUT,
CONCERTED REFUSAL TO WORK OVERTIME, CLAIM OF UNFAIR LABOR PRACTICE OR OTHER
SIMILAR LABOR ACTIVITY AGAINST ANY OF THE COMPANIES THAT WOULD MATERIALLY
DISRUPT THE CONDUCT OF THE BUSINESS.

 

(B)           THE COMPANIES ARE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL
LAWS RESPECTING EMPLOYMENT AND EMPLOYMENT PRACTICES, INCLUDING ALL LAWS
RESPECTING TERMS AND CONDITIONS OF EMPLOYMENT, HEALTH AND SAFETY, WAGES AND
HOURS, IMMIGRATION, EMPLOYMENT DISCRIMINATION, DISABILITY RIGHTS OR BENEFITS,
EQUAL OPPORTUNITY, PLANT CLOSURES AND LAYOFFS, AFFIRMATION ACTION, WORKERS’
COMPENSATION, LABOR RELATIONS AND UNEMPLOYMENT INSURANCE, AND THERE ARE NO
MATERIAL ACTIONS, PENDING OR, TO THE KNOWLEDGE OF THE SELLERS, THREATENED
AGAINST ANY COMPANY, BY OR ON BEHALF OF ANY CURRENT OR FORMER EMPLOYEE OR ANY
CLASS OF THE FOREGOING, RELATING TO ANY OF THE FOREGOING APPLICABLE LAWS AND
REGULATIONS, OR ALLEGING BREACH OF ANY EXPRESS OR IMPLIED CONTRACT OF
EMPLOYMENT, WRONGFUL TERMINATION OF EMPLOYMENT, OR ALLEGING ANY OTHER
DISCRIMINATORY, WRONGFUL OR TORTIOUS CONDUCT IN CONNECTION WITH THE EMPLOYMENT
RELATIONSHIP.  FROM JANUARY 1, 2005 TO THE DATE OF THIS AGREEMENT, NO COMPANY
HAS RECEIVED ANY WRITTEN NOTICE OF THE INTENT OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION, THE NATIONAL LABOR RELATIONS BOARD, THE DEPARTMENT OF
LABOR OR ANY OTHER GOVERNMENTAL ENTITY RESPONSIBLE FOR THE ENFORCEMENT OF LABOR
OR EMPLOYMENT LAWS TO CONDUCT AN INVESTIGATION WITH RESPECT TO ANY COMPANY, AND
NO SUCH INVESTIGATION IS IN PROGRESS.

 

(C)           THE COMPANIES ARE AND HAVE BEEN IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH ALL NOTICE AND OTHER REQUIREMENTS UNDER THE WORKERS’ ADJUSTMENT
AND RETRAINING NOTIFICATION ACT (THE “WARN ACT”) AND ANY SIMILAR FOREIGN, STATE
OR LOCAL LAWS RELATING TO PLANT CLOSINGS AND

 

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LAYOFFS.  SCHEDULE 5.9(C) OF THE SELLERS DISCLOSURE SCHEDULES SETS FORTH A TRUE
AND COMPLETE LIST OF THE NAMES AND SITES OF EMPLOYMENT OR FACILITIES OF THOSE
EMPLOYEES WHO SUFFERED AN “EMPLOYMENT LOSS” (AS DEFINED IN THE WARN ACT) AT ANY
SITE OF EMPLOYMENT OR FACILITY OF ANY COMPANY DURING THE NINETY (90)-DAY PERIOD
PRIOR TO THE DATE OF THIS AGREEMENT.

 

(D)           TO THE KNOWLEDGE OF THE SELLERS, THE COMPANIES HAVE, SINCE
JANUARY 1, 2005, PROPERLY CLASSIFIED, UNDER APPLICABLE LAW, EACH OF ITS
EMPLOYEES AS EMPLOYEES, AND EACH OF ITS INDEPENDENT CONTRACTORS AS INDEPENDENT
CONTRACTORS, AND HAVE TREATED EACH PERSON CLASSIFIED BY IT AS AN EMPLOYEE OR
INDEPENDENT CONTRACTOR CONSISTENTLY WITH SUCH STATUS.  THERE IS NO PROCEEDING
PENDING OR, TO THE KNOWLEDGE OF THE SELLERS, THREATENED AGAINST ANY COMPANY
CHALLENGING THE CLASSIFICATION OF ANY PERSON AS AN EMPLOYEE OR AN INDEPENDENT
CONTRACTOR, INCLUDING ANY CLAIM FOR UNPAID BENEFITS, FOR OR ON BEHALF OF, ANY
SUCH PERSON.

 

(E)           TO THE KNOWLEDGE OF THE SELLERS, NO EMPLOYEE OF ANY COMPANY IS IN
ANY MATERIAL RESPECT IN VIOLATION OF ANY TERM OF ANY EMPLOYMENT AGREEMENT,
NONDISCLOSURE AGREEMENT, COMMON LAW NONDISCLOSURE OBLIGATION, NONCOMPETITION
AGREEMENT, RESTRICTIVE COVENANT OR OTHER OBLIGATION TO A FORMER EMPLOYER OF ANY
SUCH EMPLOYEE RELATING (I) TO THE RIGHT OF ANY SUCH EMPLOYEE TO BE EMPLOYED BY
ANY COMPANY OR (II) TO THE KNOWLEDGE OR USE OF TRADE SECRETS OR PROPRIETARY
INFORMATION.

 

(F)            SUBJECT TO SECTION 7.1(B), SCHEDULE 5.9(F) OF THE SELLERS
DISCLOSURE SCHEDULES SETS FORTH BONUSES THAT WOULD BE DUE IMMEDIATELY AFTER THE
CLOSING DATE TO THE INDIVIDUALS LISTED ON IT IF SUCH INDIVIDUAL PERFORMED HIS OR
HER OBLIGATIONS PURSUANT TO THE DOCUMENTS GOVERNING SUCH BONUSES (THE “STAY
BONUSES”).

 

5.10.        Employee Benefit Matters.

 

(A)           “COMPANY BENEFIT PLANS” MEANS ALL EMPLOYEE BENEFIT AND
COMPENSATION PLANS, PROGRAMS, AGREEMENTS AND ARRANGEMENTS, INCLUDING ALL
“EMPLOYEE BENEFIT PLANS” (WITHIN THE MEANING OF SECTION 3(3) OF ERISA), ALL
EMPLOYMENT OR CONSULTING AGREEMENTS, ALL RETIREMENT, PROFIT SHARING, SAVINGS,
PENSION, DEFERRED COMPENSATION, CHANGE IN CONTROL AND RETENTION PLANS, ALL
HEALTH, MEDICAL, VISION, DENTAL, SEVERANCE, INSURANCE, DISABILITY AND OTHER
EMPLOYEE WELFARE PLANS AND ALL INCENTIVE, BONUS, STOCK OPTION OR OTHER
EQUITY-BASED COMPENSATION, STOCK PURCHASE, VACATION, FRINGE BENEFIT AND OTHER
PLANS IN EACH CASE, WHETHER ORAL OR WRITTEN, FUNDED OR UNFUNDED, OR INSURED OR
SELF-INSURED, THAT ARE MAINTAINED, SPONSORED, CONTRIBUTED TO OR REQUIRED TO BE
CONTRIBUTED TO, BY ANY OF THE COMPANIES OR BY ANY ERISA AFFILIATE OF THE
COMPANIES OR TO WHICH ANY OF THE COMPANIES OR ANY ERISA AFFILIATE OF ANY OF THE
COMPANIES HAS OR MAY HAVE HAD ANY MATERIAL LIABILITY (CONTINGENT OR OTHERWISE),
IN EACH CASE FOR OR TO ANY CURRENT OR FORMER EMPLOYEES, DIRECTORS, OFFICERS OR
CONSULTANTS OF ANY OF THE COMPANIES.  SCHEDULE 5.10(A) OF THE SELLERS DISCLOSURE
SCHEDULE LISTS ALL COMPANY BENEFIT PLANS THAT CURRENTLY ARE MAINTAINED,
SPONSORED, CONTRIBUTED TO, OR REQUIRED TO BE CONTRIBUTED TO, BY ANY OF THE
COMPANIES OR BY ANY ERISA AFFILIATE OF THE COMPANIES, OR IN WHICH ANY OF THE
COMPANIES PARTICIPATES OR ITS FUTURE PARTICIPATION HAS BEEN ANNOUNCED.

 

(B)           WITH RESPECT TO THE COMPANIES:  (I) NO COMPANY OR ANY ERISA
AFFILIATE OF SUCH COMPANY SPONSORS, MAINTAINS OR CONTRIBUTES TO, OR HAS AT ANY
TIME SPONSORED, MAINTAINED OR CONTRIBUTED TO, OR HAS PARTICIPATED IN OR ITS
FUTURE PARTICIPATION HAS BEEN ANNOUNCED IN, ANY

 

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MULTI-EMPLOYER PLAN AS DEFINED IN SECTION 3(37) OF ERISA (A “MULTIEMPLOYER
PLAN”) OR ANY PENSION PLAN SUBJECT TO TITLE IV OF ERISA; (II) NO COMPANY OR ANY
ERISA AFFILIATE OF SUCH COMPANY HAS WITHDRAWN OR PARTIALLY WITHDRAWN FROM ANY
MULTIEMPLOYER PLAN WITH RESPECT TO WHICH THERE IS ANY OUTSTANDING LIABILITY AS
OF THE DATE OF THIS AGREEMENT; (III) TO THE KNOWLEDGE OF THE SELLERS, NO EVENT
HAS OCCURRED OR CIRCUMSTANCE EXISTS, INCLUDING THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THAT PRESENTS A RISK OF THE OCCURRENCE OF ANY WITHDRAWAL FROM,
OR THE TERMINATION, REORGANIZATION, OR INSOLVENCY OF, ANY MULTIEMPLOYER PLAN
THAT COULD RESULT IN ANY LIABILITY OF THE COMPANIES OR THE BUYERS TO A
MULTIEMPLOYER PLAN THAT WOULD HAVE A MATERIAL ADVERSE EFFECT; AND (IV) NO
COMPANY HAS RECEIVED NOTICE FROM ANY MULTIEMPLOYER PLAN THAT IT IS IN
REORGANIZATION OR IS INSOLVENT, THAT INCREASED CONTRIBUTIONS MAY BE REQUIRED TO
AVOID A REDUCTION IN PLAN BENEFITS OR THE IMPOSITION OF ANY EXCISE TAX, OR THAT
SUCH PLAN INTENDS TO TERMINATE OR HAS TERMINATED.

 

(C)           WITH RESPECT TO EACH COMPANY BENEFIT PLAN, THE SELLERS HAVE MADE
AVAILABLE THE BUYERS COPIES OF (I) ALL PLAN DOCUMENTS (INCLUDING ALL AMENDMENTS
AND ATTACHMENTS THERETO); (II) ALL RELATED TRUST AGREEMENTS, INSURANCE CONTRACTS
AND OTHER FUNDING ARRANGEMENTS AND ALL AMENDMENTS THERETO, AS IN EFFECT AS OF
THE DATE HEREOF; (III) THE TWO MOST RECENT ANNUAL INFORMATION FILINGS
(FORM 5500) AND ANNUAL REPORTS; (IV) THE MOST RECENT DETERMINATION LETTER OR
OPINION LETTER FROM THE INTERNAL REVENUE SERVICE; AND (V) THE MOST RECENT
SUMMARY PLAN DESCRIPTIONS, AS APPLICABLE.

 

(D)           AS TO EACH OF THE COMPANY BENEFIT PLANS, EACH OF THE COMPANIES HAS
COMPLIED, IN ALL MATERIAL RESPECTS, WITH ALL APPLICABLE LAWS IN THE
ADMINISTRATION THEREOF, INCLUDING THE PROVISIONS OF ERISA AND THE CODE, AND EACH
COMPANY BENEFIT PLAN COMPLIES IN ALL MATERIAL RESPECTS WITH ITS TERMS AND ALL
APPLICABLE LAWS.  ALL MATERIAL CONTRIBUTIONS REQUIRED TO BE MADE UNDER THE TERMS
OF EACH COMPANY BENEFIT PLAN HAVE BEEN TIMELY MADE OR, IF NOT YET DUE, HAVE BEEN
PROPERLY REFLECTED OR INCORPORATED BY REFERENCE IN THE FINANCIAL STATEMENTS. 
EACH COMPANY BENEFIT PLAN WHICH IS INTENDED TO QUALIFY UNDER SECTION 401(A),
SECTION 401(K), SECTION 401(M) OR SECTION 4975(E)(7) OF THE CODE AND EACH TRUST
ESTABLISHED WITH ANY COMPANY BENEFIT PLAN WHICH IS INTENDED TO QUALIFY UNDER
SECTION 501(A) OF THE CODE HAS RECEIVED A FAVORABLE DETERMINATION LETTER OR
OPINION LETTER, AS APPLICABLE, FROM THE INTERNAL REVENUE SERVICE AS TO ITS
QUALIFIED STATUS, AND TO THE KNOWLEDGE OF THE SELLERS, NO FACT OR EVENT HAS
OCCURRED THAT WOULD REASONABLY BE EXPECTED TO AFFECT ADVERSELY THE QUALIFIED
STATUS OF ANY SUCH COMPANY BENEFIT PLAN.

 

(E)           THERE HAS BEEN NO PROHIBITED TRANSACTION (WITHIN THE MEANING OF
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) WITH RESPECT TO ANY COMPANY
BENEFIT PLAN, OTHER THAN A TRANSACTION THAT IS EXEMPT UNDER A STATUTORY OR
ADMINISTRATIVE EXEMPTION, WITH RESPECT TO ANY COMPANY BENEFIT PLAN THAT IS
SUBJECT TO ERISA OR THE CODE THAT WOULD REASONABLY BE EXPECTED TO RESULT IN
LIABILITY TO ANY OF THE COMPANIES.  WITH RESPECT TO EACH COMPANY BENEFIT PLAN,
ALL TAX, ANNUAL REPORTING AND OTHER GOVERNMENTAL FILINGS REQUIRED BY ERISA AND
THE CODE HAVE BEEN TIMELY FILED WITH THE APPROPRIATE GOVERNMENTAL ENTITY AND, TO
THE KNOWLEDGE OF THE SELLERS, ALL NOTICES AND DISCLOSURES HAVE BEEN TIMELY
PROVIDED TO PARTICIPANTS.

 

(F)            NO JUDICIAL ACTION, SUIT, OR CLAIM OR LEGAL, ADMINISTRATIVE OR
ARBITRATION PROCEEDING, INVESTIGATION OR REVIEW HAS BEEN BROUGHT, OR, TO THE
KNOWLEDGE OF THE SELLERS, IS THREATENED, AGAINST OR WITH RESPECT TO ANY COMPANY
BENEFIT PLAN, INCLUDING ANY AUDIT OR INQUIRY

 

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BY THE INTERNAL REVENUE SERVICE OR THE UNITED STATES DEPARTMENT OF LABOR (OTHER
THAN ROUTINE BENEFITS CLAIMS).

 

(G)           EXCEPT AS REQUIRED BY LAW, NO COMPANY BENEFIT PLAN PROVIDES ANY
MEDICAL, DISABILITY OR LIFE INSURANCE BENEFITS FOR RETIREES OR ANY SUCH
POST-EMPLOYMENT BENEFITS TO ANY PERSON, EXCEPT FOR CONTINUATION OBLIGATIONS
UNDER THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985, AS AMENDED
FROM TIME TO TIME, AND THE REGULATIONS (INCLUDING THE PROPOSED REGULATIONS)
THEREUNDER (“COBRA”).

 

(H)           NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT NOR THE
CONSUMMATION OR PERFORMANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY (EITHER
ALONE OR IN CONJUNCTION WITH ANY OTHER EVENT, INCLUDING A TERMINATION OF
EMPLOYMENT) WILL (I) RESULT IN ANY PAYMENT (INCLUDING ANY BONUS, SEVERANCE,
UNEMPLOYMENT COMPENSATION, DEFERRED COMPENSATION, FORGIVENESS OF INDEBTEDNESS OR
GOLDEN PARACHUTE PAYMENT) BECOMING DUE TO ANY CURRENT OR FORMER EMPLOYEE,
OFFICER, DIRECTOR OR CONSULTANT UNDER ANY COMPANY BENEFIT PLAN; (II) INCREASE IN
ANY BENEFIT OTHERWISE PAYABLE UNDER ANY COMPANY BENEFIT PLAN; (III) RESULT IN
THE ACCELERATION OR CREATION OF ANY RIGHTS OF ANY PERSON TO BENEFITS UNDER ANY
COMPANY BENEFIT PLAN (INCLUDING THE ACCELERATION OF THE VESTING OR
EXERCISABILITY OF ANY STOCK OPTIONS OR RESTRICTED STOCK OR THE ACCELERATION OR
CREATION OF ANY RIGHTS UNDER ANY COMPANY BENEFIT PLAN); (IV) RESULT IN ANY
OBLIGATION TO FUND ANY TRUST OR OTHER ARRANGEMENT WITH RESPECT TO COMPENSATION
OR BENEFITS UNDER A COMPANY BENEFIT PLAN; OR (V) RESULT IN ANY PAYMENT OR
BENEFIT THAT WILL FAIL TO BE DEDUCTIBLE UNDER SECTION 280G OF THE CODE.

 

5.11.        Taxes.

 

(A)           EACH COMPANY HAS DULY FILED WITH THE APPROPRIATE TAX AUTHORITY ALL
INCOME TAX RETURNS AND ALL OTHER MATERIAL TAX RETURNS THAT IT WAS REQUIRED TO
FILE (OR HAS TIMELY AND PROPERLY FILED VALID EXTENSIONS OF TIME WITH RESPECT TO
THE FILING THEREOF), AND EACH SUCH TAX RETURN WAS COMPLETE AND ACCURATE IN ALL
MATERIAL RESPECTS.

 

(B)           EACH COMPANY HAS TIMELY PAID ALL TAXES DUE AND OWING BY IT, EXCEPT
WITH RESPECT TO TAXES THAT ARE BEING CONTESTED IN GOOD FAITH AND HAVE BEEN
ADEQUATELY PROVIDED FOR IN THE INTERIM FINANCIAL STATEMENTS IN ACCORDANCE WITH
GAAP. ALL TAXES THAT THE COMPANIES HAVE BEEN REQUIRED TO COLLECT OR WITHHOLD
HAVE BEEN DULY COLLECTED OR WITHHELD AND, TO THE EXTENT REQUIRED WHEN DUE, HAVE
BEEN DULY PAID TO THE PROPER TAX AUTHORITY AND EACH COMPANY HAS COMPLIED WITH
ALL MATERIAL INFORMATION REPORTING AND RECORD KEEPING REQUIREMENTS RELATED TO
WITHHOLDING.

 

(C)           NO MATERIAL DEFICIENCIES FOR TAXES OF THE COMPANIES HAVE BEEN
CLAIMED, PROPOSED OR ASSESSED BY ANY TAX AUTHORITY IN WRITING.  THERE ARE NO
PENDING OR, TO THE KNOWLEDGE OF THE SELLERS AND CCR, THREATENED MATERIAL AUDITS,
SUITS, PROCEEDINGS, ACTIONS OR CLAIMS FOR OR RELATING TO ANY LIABILITY IN
RESPECT OF TAXES OF THE COMPANIES.  SCHEDULE 5.11 OF THE SELLERS DISCLOSURE
SCHEDULES CONTAINS A LIST OF ALL MATERIAL TAX RETURNS OF THE COMPANIES THAT HAVE
BEEN AUDITED OR ARE CURRENTLY UNDER AUDIT AND DESCRIBES ANY DEFICIENCIES OR
OTHER AMOUNTS THAT WERE PAID OR ARE CURRENTLY BEING CONTESTED. THERE ARE NO
PENDING CLAIMS FOR REFUND OF ANY TAX OF ANY OF THE COMPANIES.

 

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(D)           THERE ARE NO LIENS FOR TAXES (OTHER THAN PERMITTED EXCEPTIONS)
UPON THE ASSETS OF THE COMPANIES.

 

(E)           AT ALL TIMES SINCE THEIR FORMATION, EACH COMPANY HAS BEEN
CLASSIFIED FOR U.S. FEDERAL INCOME TAX PURPOSES EITHER AS A PARTNERSHIP OR AS AN
ENTITY DISREGARDED AS SEPARATE FROM ITS OWNER WITHIN THE MEANING OF TREASURY
REGULATION SECTION 301.7701-2(C)(2)(I) EXCEPT FOR THOSE SUBSIDIARIES SET FORTH
ON SCHEDULE 5.11 OF THE SELLERS DISCLOSURE SCHEDULES HERETO, WHICH HAVE BEEN
CLASSIFIED AS CORPORATIONS FOR SUCH PURPOSES.

 

(F)            EACH OF THE COMPANIES HAS MADE AVAILABLE TO THE BUYERS TRUE AND
CORRECT COPIES OF THE TAX RETURNS LISTED ON SCHEDULE 5.11 OF THE SELLERS
DISCLOSURE SCHEDULES.

 

(G)           NO TAX AUTHORITY IN A JURISDICTION IN WHICH ANY OF THE COMPANIES
DOES NOT FILE TAX RETURNS HAS CLAIMED IN WRITING THAT ANY COMPANY IS OR MAY BE
REQUIRED TO FILE TAX RETURNS IN, OR IS OR MAY BE SUBJECT TO TAX BY, THAT
JURISDICTION.

 

(H)           THERE ARE NO OUTSTANDING WAIVERS, EXTENSIONS OR COMPARABLE
CONSENTS REGARDING THE APPLICATION OF THE STATUTE OF LIMITATIONS WITH RESPECT TO
ANY TAX OR TAX RETURN OF ANY COMPANY.

 

(I)            NONE OF THE COMPANIES HAS DISTRIBUTED THE STOCK OF ANOTHER ENTITY
OR HAD ITS STOCK DISTRIBUTED BY ANOTHER ENTITY IN A TRANSACTION THAT WAS
PURPORTED OR INTENDED TO BE GOVERNED IN WHOLE OR IN PART BY SECTIONS 355 OR 361
OF THE CODE.

 

(J)            NONE OF THE COMPANIES IS THE SUBJECT OF OR BOUND BY ANY PRIVATE
LETTER RULING, TECHNICAL ADVICE MEMORANDUM OR SIMILAR RULING, MEMORANDUM OR
AGREEMENT WITH ANY TAX AUTHORITY.

 

(K)           NONE OF THE COMPANIES WILL BE REQUIRED TO INCLUDE ANY ITEM OF
INCOME IN, OR EXCLUDE ANY ITEM OF DEDUCTION FROM, TAXABLE INCOME FOR ANY TAXABLE
PERIOD (OR PORTION THEREOF) ENDING AFTER THE CLOSING DATE AS A RESULT OF ANY
(I) CHANGE IN METHOD OF ACCOUNTING UNDER SECTION 481 OF THE CODE (OR ANY
CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW) FOR A
TAXABLE PERIOD ENDING ON OR PRIOR TO THE CLOSING DATE; (II) “CLOSING AGREEMENT”
AS DESCRIBED IN SECTION 7121 OF THE CODE (OR ANY CORRESPONDING OR SIMILAR
PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW) EXECUTED ON OR PRIOR TO THE
CLOSING DATE; (III) DEFERRED INTERCOMPANY GAIN OR EXCESS LOSS ACCOUNT DESCRIBED
IN TREASURY REGULATIONS UNDER SECTION 1502 OF THE CODE (OR ANY CORRESPONDING OR
SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN TAX LAW); (IV) INSTALLMENT SALE OR
OPEN TRANSACTION DISPOSITION MADE ON OR PRIOR TO THE CLOSING DATE; OR
(V) PREPAID AMOUNT RECEIVED ON OR PRIOR TO THE CLOSING DATE.

 

(L)            NONE OF THE COMPANIES (A) HAS EVER BEEN A MEMBER OF AN AFFILIATED
(WITHIN THE MEANING OF SECTION 1504 OF THE CODE), COMBINED OR UNITARY GROUP OF
CORPORATIONS  FILING A CONSOLIDATED, COMBINED OR UNITARY TAX RETURN; (B) IS A
SUCCESSOR TO ANY OTHER ENTITY FOR TAX PURPOSES BY WAY OF MERGER, LIQUIDATION OR
OTHER TRANSACTION; (C)  IS A PARTY TO ANY TAX SHARING OR INDEMNIFICATION
AGREEMENT OR ARRANGEMENT WITH ANY PERSON OR ENTITY (OTHER THAN CCR OR ANY OF ITS
SUBSIDIARIES) PURSUANT TO WHICH IT WOULD HAVE AN OBLIGATION WITH RESPECT TO
TAXES OF ANOTHER PERSON OR ENTITY FOLLOWING THE CLOSING; OR (D) HAS LIABILITY
FOR THE TAXES OF ANY PERSON (OTHER THAN

 

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CCR OR ANY OF ITS SUBSIDIARIES) AS A TRANSFEREE OR SUCCESSOR OR UNDER TREASURY
REGULATION § 1.1502-6 (OR ANY COMPARABLE PROVISION OF STATE, LOCAL OR FOREIGN
LAW), BY CONTRACT OR OTHERWISE.

 

(M)          NONE OF MOUNTAIN LAUREL RACING, INC., WASHINGTON TROTTING
ASSOCIATION, INC., CCR PENNSYLVANIA RACING, INC., CCR PENNSYLVANIA FOOD
SERVICE, INC. OR ANY OTHER COMPANY THAT IS OR WAS A “C” CORPORATION FOR U.S.
FEDERAL INCOME TAXATION PURPOSES (I) WAS A MEMBER OF BLOCKER’S AFFILIATED GROUP
WITHIN THE MEANING OF SECTION 1504(A) OF THE CODE (DETERMINED WITHOUT REGARD TO
SECTION 1504(B) OF THE CODE) AT ANY TIME PRIOR TO THE TIME CCR ACQUIRED,
DIRECTLY OR INDIRECTLY, THE STOCK OF SUCH CORPORATION, OR (II) HAS REDUCED (OR
BEEN REQUIRED TO REDUCE) THE ADJUSTED BASIS OF ITS PROPERTY UNDER
SECTION 732(F) OF THE CODE.

 

(N)           NONE OF THE COMPANIES HAS PARTICIPATED OR ENGAGED IN ANY
TRANSACTION THAT GAVE RISE TO (X) A REGISTRATION OBLIGATION UNDER SECTION 6111
OF THE CODE OR THE TREASURY REGULATIONS THEREUNDER, (Y) A LIST MAINTENANCE
OBLIGATION UNDER SECTION 6112 OF THE CODE OR THE TREASURY REGULATIONS
THEREUNDER, OR (Z) A DISCLOSURE OBLIGATION AS A “REPORTABLE TRANSACTION” UNDER
SECTION 6011 OF THE CODE AND THE TREASURY REGULATIONS THEREUNDER (OR IN EACH OF
CLAUSES (X), (Y) OR (Z) ANY CORRESPONDING OR SIMILAR PROVISION OF STATE, LOCAL
OR FOREIGN TAX LAW).

 

(O)           NONE OF THE COMPANIES IS OR HAS BEEN WITHIN THE MOST RECENT FIVE
YEARS A “UNITED STATES REAL PROPERTY HOLDING CORPORATION” AS DEFINED IN
SECTION 897 OF THE CODE.

 

5.12.        Governmental Authorizations.  The Companies have obtained and
maintain in full force and effect all material Governmental Authorizations
required to substantially conduct the Business of the Companies as it is
presently being conducted, and for the lawful ownership, leasing, use and
operation of their respective properties and assets, in each case, except for
such Governmental Authorizations the failure to have, obtain or maintain are not
material to the ability of CCR to perform its obligations hereunder or are not
reasonably likely to prohibit or materially restrict or delay the consummation
of the transactions contemplated hereby.  There has occurred no material
violation of or default under any such Governmental Authorization.  None of the
Sellers or the Companies has received a currently effective written notice, or
has knowledge of any other notice, indicating that any such Governmental
Authorizations will be revoked or will not be renewed or will only be renewed in
a manner that would prohibit or materially restrict the Companies from
conducting their material operations in the ordinary course of business
consistent with past practice.

 

5.13.        Insurance.

 

(A)           SCHEDULE 5.13 OF THE SELLERS DISCLOSURE SCHEDULES LISTS ALL
MATERIAL INSURANCE POLICIES OF THE COMPANIES THAT COVER THE COMPANIES, ANY OF
THEIR ASSETS, OR ANY OF THEIR DIRECTORS, STATUTORY MANAGERS OR OFFICERS (IN
THEIR CAPACITIES AS SUCH).  COPIES OF (I) ALL POLICIES OR INSURANCE BINDERS WITH
RESPECT TO SUCH POLICIES AND (II) A SUMMARY OF THE COMPANIES’ LOSS EXPERIENCE
UNDER SUCH POLICIES OR THE PREDECESSOR POLICIES HAVE BEEN MADE AVAILABLE TO THE
BUYERS.

 

(B)           NO WRITTEN NOTICE OF CANCELLATION OR TERMINATION OR ANY OTHER
NOTICE OR INDICATION OF INTENT TO CANCEL OR NOT TO RENEW ANY INSURANCE POLICY OF
ANY COMPANY HAS BEEN RECEIVED WITH RESPECT TO ANY SUCH POLICY, AND EACH SUCH
POLICY IS LEGALLY VALID, BINDING,

 

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ENFORCEABLE AND IN FULL FORCE AND EFFECT.  EACH COMPANY HAS PAID ALL PREMIUMS
DUE, AND HAS OTHERWISE PERFORMED ALL OF ITS RESPECTIVE MATERIAL OBLIGATIONS
UNDER EACH SUCH POLICY AS AND WHEN DUE, EXCEPT TO THE EXTENT THAT THE FAILURE TO
DULY PAY THE PREMIUMS OR PERFORM SUCH OBLIGATIONS IS NOT REASONABLY EXPECTED TO
RESULT IN THE LOSS OF COVERAGE UNDER SUCH POLICIES.

 

(C)           DURING THE PAST FIVE YEARS, TO THE KNOWLEDGE OF ANY SELLER, NO
COMPANY HAS BEEN DENIED INSURANCE FOR ANY REASON WITH RESPECT TO ANY INSURANCE
POLICY FOR WHICH IT APPLIED. NO COMPANY IS IN BREACH OR DEFAULT UNDER ANY POLICY
LISTED ON SCHEDULE 5.13, AND TO THE KNOWLEDGE OF THE SELLERS, NO EVENT HAS
OCCURRED WHICH, WITH NOTICE OR THE LAPSE OF TIME OR BOTH, WOULD CONSTITUTE SUCH
A BREACH OR DEFAULT OR PERMIT TERMINATION, REVOCATION, MODIFICATION OR
ACCELERATION, UNDER SUCH POLICY; AND TO THE KNOWLEDGE OF ANY SELLER, NO COMPANY
HAS RECEIVED ANY NOTICE FROM THE INSURER DISCLAIMING COVERAGE OR RESERVING
RIGHTS WITH RESPECT TO A PARTICULAR CLAIM OR SUCH POLICY IN GENERAL OR OTHERWISE
INDICATING THAT THE INSURER IS NOT WILLING OR ABLE TO PERFORM ITS OBLIGATIONS
THEREUNDER OR THAT THE INSURER DISPUTES OR INTENDS TO DISPUTE THE VALIDITY OF
ITS OBLIGATIONS UNDER ANY SUCH POLICY.  AS OF THE DATE HEREOF, NO POLICY LIMITS
FOR ANY COMPANY HAVE BEEN EXHAUSTED OR MATERIALLY REDUCED.

 

(d)           The proceeds under each insurance policy for any Company have not
been assigned or mortgaged in favor of a third party, except in connection with
the Debt Facilities.

 

5.14.        Compliance with Laws.

 

(A)           EXCEPT FOR MATTERS THAT ARE THE SUBJECT OF THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN SECTION 5.5, SECTION 5.9, SECTION 5.10, SECTION 5.11,
SECTION 5.12, SECTION 5.15 AND SECTION 5.16, WHICH ARE CONTROLLED BY SUCH
SECTIONS WITHOUT DUPLICATION IN THIS SECTION  5.14, EACH OF THE COMPANIES IS IN
COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL LAWS AND ORDERS APPLICABLE TO THE
BUSINESS.

 

(B)           TO THE KNOWLEDGE OF THE SELLERS, NONE OF THE SELLERS OR ANY
COMPANY, NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, MANAGERS OR AGENTS,
HAS MADE ANY CONTRIBUTION OR GIFT USING FUNDS OF ANY COMPANY, WHICH CONTRIBUTION
OR GIFT IS IN MATERIAL VIOLATION OF ANY APPLICABLE LAW.  NONE OF THE SELLERS OR
ANY COMPANY, NOR, TO THE KNOWLEDGE OF THE SELLERS, ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, MANAGERS OR AGENTS, HAS (I) MADE ANY BRIBE, REBATE, PAYOFF,
INFLUENCE PAYMENT, KICKBACK OR OTHER PAYMENT TO ANY PERSON, PRIVATE OR PUBLIC,
REGARDLESS OF FORM, WHETHER IN MONEY, PROPERTY OR SERVICES, IN EACH CASE WHICH
IS IN MATERIAL VIOLATION OF ANY APPLICABLE LAW, OR (II) ESTABLISHED OR
MAINTAINED ANY UNLAWFUL FUND OR ASSET OF ANY COMPANY FUNDS OR OTHER PROPERTIES.

 

5.15.        Real Property.

 

(A)           AS OF THE DATE HEREOF, THE COMPANIES OWN IN FEE SIMPLE THE REAL
PROPERTIES LISTED ON  SCHEDULE 5.15(A) OF THE SELLERS DISCLOSURE SCHEDULES (THE
“OWNED REAL PROPERTY”). WITH RESPECT TO EACH OWNED REAL PROPERTY, (I) THE
COMPANIES HAVE GOOD AND MARKETABLE TITLE TO SUCH OWNED REAL PROPERTY, FREE AND
CLEAR OF ALL LIENS, TENANCIES, OR RESTRICTIVE COVENANTS, OTHER THAN PERMITTED
EXCEPTIONS, AND (II) THERE ARE NO OUTSTANDING OPTIONS OR RIGHTS OF FIRST REFUSAL
IN FAVOR OF ANY OTHER PARTY TO PURCHASE SUCH OWNED REAL PROPERTY OR ANY PORTION
THEREOF OR INTEREST THEREIN.  AS OF THE DATE HEREOF, NONE OF THE COMPANIES HAS
RECEIVED NOTICE OF ANY PENDING, AND TO

 

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THE KNOWLEDGE OF THE COMPANIES THERE IS NO THREATENED, CONDEMNATION PROCEEDING
WITH RESPECT TO ANY OF THE OWNED REAL PROPERTIES.

 

(B)           SCHEDULE 5.15(B) OF THE SELLERS DISCLOSURE SCHEDULES LISTS ALL
LEASES, SUBLEASES AND OTHER MATERIAL AGREEMENTS, INCLUDING ALL AMENDMENTS,
ASSIGNMENTS AND MODIFICATIONS THERETO, UNDER WHICH THE COMPANIES USE OR OCCUPY
OR HAVE THE RIGHT TO USE OR OCCUPY ANY REAL PROPERTY (THE “REAL PROPERTY
LEASES”). EACH REAL PROPERTY LEASE IS VALID, BINDING AND IN FULL FORCE AND
EFFECT AND ALL RENT AND OTHER SUMS AND CHARGES PAYABLE BY THE COMPANIES AS
TENANTS THEREUNDER ARE CURRENT AND, TO THE KNOWLEDGE OF THE SELLERS, NO
TERMINATION EVENT (OTHER THAN EXPIRATIONS IN THE ORDINARY COURSE) OR CONDITION
OR UNCURED DEFAULT (OR EVENT WHICH WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT) OF A MATERIAL NATURE ON THE PART OF THE APPLICABLE COMPANY
OR THE LANDLORD THEREUNDER, EXISTS UNDER ANY REAL PROPERTY LEASE. THE COMPANIES
HAVE A GOOD AND VALID LEASEHOLD INTEREST IN EACH PARCEL OF REAL PROPERTY WHICH
IS SUBJECT TO A REAL PROPERTY LEASE FREE AND CLEAR OF ALL LIENS, SUBTENANCIES,
OR RESTRICTIVE COVENANTS,  OTHER THAN PERMITTED EXCEPTIONS OR THOSE IMPOSED BY
THE APPLICABLE REAL PROPERTY LEASES. AS OF THE DATE HEREOF, NONE OF THE
COMPANIES HAVE RECEIVED NOTICE OF ANY PENDING, AND TO THE KNOWLEDGE OF THE
COMPANIES THERE IS NO THREATENED, CONDEMNATION PROCEEDINGS WITH RESPECT TO ANY
PROPERTY LEASED PURSUANT TO ANY OF THE REAL PROPERTY LEASES.

 

(C)           INTENTIONALLY OMITTED.

 

(D)           INTENTIONALLY OMITTED.

 

(E)           EXCEPT AS SET FORTH ON SCHEDULE 5.15(D) OF THE SELLERS DISCLOSURE
SCHEDULES AND THE PERMITTED EXCEPTIONS:

 

(I)         NO PARTIES OTHER THAN THE COMPANIES HAVE A RIGHT TO OCCUPY, USE OR
OWN ANY OWNED REAL PROPERTY OR REAL PROPERTY SUBJECT TO A REAL PROPERTY LEASE;

 

(II)        THE OWNED REAL PROPERTY AND REAL PROPERTY SUBJECT TO A REAL PROPERTY
LEASE IS USED ONLY FOR THE CURRENT OPERATION OF THE BUSINESS OF THE COMPANIES
(SUBJECT TO THE PERMITTED EXCEPTIONS), AND INCLUDES ALL REAL PROPERTY NECESSARY
FOR THE BUSINESS OF THE COMPANIES AS CURRENTLY CONDUCTED;

 

(III)       ALL OWNED REAL PROPERTY AND ALL REAL PROPERTY SUBJECT TO A REAL
PROPERTY LEASE OF THE COMPANIES IS, IN ALL MATERIAL RESPECTS, IN GOOD OPERATING
CONDITION AND REPAIR AND REGULARLY MAINTAINED IN ACCORDANCE WITH THE COMPANIES’
PAST PRACTICE AND CONSISTENT WITH THE STANDARDS THAT WOULD BE APPLIED BY A
REASONABLE PRUDENT OWNER OF SIMILAR PROPERTIES, AND, TO THE SELLERS’ KNOWLEDGE,
THERE IS NO STRUCTURAL, ELECTRICAL, MECHANICAL, PLUMBING, AIR CONDITIONING OR
HEATING DEFECT OR OTHER DEFECT IN THE BUILDING SYSTEMS (OTHER THAN ANY DEFECTS
THAT WILL BE REPAIRED OR REPLACED IN THE ORDINARY COURSE OF BUSINESS WITH NORMAL
OR ROUTINE CAPITAL EXPENDITURES FOR MAINTENANCE) IN THE IMPROVEMENTS LOCATED ON
THE OWNED REAL

 

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PROPERTY OR REAL PROPERTY SUBJECT TO A REAL PROPERTY LEASE EXCEPT FOR DEFECTS
WHICH, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT (A) ON THE OWNED REAL PROPERTY OR REAL PROPERTY SUBJECT TO A REAL
PROPERTY LEASE OR (B) ON THE VALUE, USE OR OCCUPANCY OF THE REAL PROPERTY OR
IMPROVEMENTS;

 

(IV)          THE OWNED REAL PROPERTY AND TO THE SELLERS’ KNOWLEDGE, REAL
PROPERTY SUBJECT TO A REAL PROPERTY LEASE, IS IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH ALL APPLICABLE LAWS; AND

 

(V)           THE COMPANIES HAVE NOT RECEIVED ANY NOTICE OF MATERIAL VIOLATION
OF ANY LAW GOVERNING THE USE OR OCCUPANCY OF THE OWNED REAL PROPERTY OR REAL
PROPERTY SUBJECT TO A REAL PROPERTY LEASE.

 

5.16.        Environmental Matters.

 

(A)           THE COMPANIES ARE IN MATERIAL COMPLIANCE WITH ALL APPLICABLE
ENVIRONMENTAL LAWS.  TO THE KNOWLEDGE OF THE SELLERS, THE COMPANIES HAVE
COMPLIED AND ARE IN MATERIAL COMPLIANCE WITH ALL ENVIRONMENTAL PERMITS REQUIRED
TO CONDUCT THE BUSINESS AS IT IS PRESENTLY BEING CONDUCTED AND HAS BEEN
CONDUCTED DURING THE COMPANIES’ OWNERSHIP OR OPERATION OF THE BUSINESS, AND TO
THE KNOWLEDGE OF THE SELLERS, THE COMPANIES HAVE NOT RECEIVED ANY NOTICE THAT
REMAINS UNRESOLVED THAT: (I) ANY SUCH EXISTING ENVIRONMENTAL PERMITS WILL BE
REVOKED; OR (II) ANY PENDING APPLICATION FOR ANY NEW ENVIRONMENTAL PERMIT OR
RENEWAL OF ANY EXISTING ENVIRONMENTAL PERMITS WILL BE DENIED.

 

(B)           THE COMPANIES HAVE NOT RECEIVED ANY WRITTEN NOTICE, OR TO THE
KNOWLEDGE OF SELLERS ANY OTHER NOTICE, THAT REMAINS UNRESOLVED OF ANY ACTUAL,
ALLEGED OR POTENTIAL MATERIAL NONCOMPLIANCE WITH, LIABILITIES UNDER, OR CLAIMED
MATERIAL VIOLATION OF, ANY ENVIRONMENTAL LAWS AND, TO THE KNOWLEDGE OF THE
SELLERS, THERE IS NO EVENT OR CONDITION WHICH WOULD REASONABLY BE EXPECTED TO
CAUSE MATERIAL NONCOMPLIANCE WITH, LIABILITIES UNDER, OR MATERIAL VIOLATION OF,
ANY ENVIRONMENTAL LAWS.

 

(C)           THERE ARE NO UNDERGROUND STORAGE TANKS, SURFACE IMPOUNDMENT OR
OTHER DISPOSAL AREA, OR ANY WASTE MANAGEMENT UNIT DEDICATED TO THE DISPOSAL,
TREATMENT OR LONG-TERM (GREATER THAN NINETY (90) DAYS) STORAGE OF HAZARDOUS
MATERIALS LOCATED AT OR ON THE OWNED REAL PROPERTY OR, TO THE KNOWLEDGE OF THE
SELLERS, PROPERTY SUBJECT TO THE REAL PROPERTY LEASES.  TO THE KNOWLEDGE OF THE
SELLERS, THERE HAS BEEN NO SPILL, RELEASE, DISCHARGE, DISPOSAL OR ARRANGEMENT
FOR DISPOSAL OF ANY HAZARDOUS MATERIALS ON OR UNDER ANY OWNED REAL PROPERTY OR
PROPERTY SUBJECT TO THE REAL PROPERTY LEASES OR UNDER ANY OTHER PROPERTY OWNED,
LEASED OR OCCUPIED BY ANY OF THE COMPANIES OR THEIR PREDECESSORS IN VIOLATION OF
ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL PERMIT, OR OTHERWISE REQUIRING REMEDIAL
ACTION UNDER ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL PERMIT.

 

(D)           TO THE KNOWLEDGE OF THE SELLERS, THERE IS NO SITE TO WHICH THE
COMPANIES HAVE TRANSPORTED OR ARRANGED FOR THE TRANSPORT OF ANY HAZARDOUS
MATERIALS WHICH ARE OR HAVE RECEIVED WRITTEN NOTICE TO BE, THE SUBJECT OF ANY
ENVIRONMENTAL CLAIM.

 

(E)           NONE OF THE COMPANIES IS CURRENTLY SUBJECT TO ANY ORDER RELATING
TO, COMPLIANCE WITH, LIABILITY UNDER, ANY ENVIRONMENTAL LAW, ENVIRONMENTAL
PERMIT, OR THE

 

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INVESTIGATION, SAMPLING, MONITORING, TREATMENT, REMEDIATION, REMOVAL OR CLEANUP
OF ANY HAZARDOUS MATERIALS.

 

(F)            COPIES OF ALL MATERIAL OR OTHERWISE RELEVANT (WITH RESPECT TO
CURRENT KNOWN MATTERS, FACILITIES OR OPERATIONS) NON-PRIVILEGED ENVIRONMENTAL
SITE ASSESSMENT REPORTS, AUDITS OR COMPLIANCE REPORTS, OR OTHER WRITTEN REPORTS
RELATING TO THE ENVIRONMENTAL CONDITION OF ANY CURRENT OR FORMER OPERATIONS OF
ANY COMPANY, AND WHICH ARE IN THE POSSESSION OR CONTROL OF ANY OF THE SELLERS OR
ANY COMPANY, HAVE BEEN MADE AVAILABLE TO THE BUYERS AND WITH RESPECT TO FORMER
FACILITIES OR OPERATIONS OF ANY COMPANY, TO THE EXTENT KNOWN TO THE SELLERS OR
CCR TO EXIST.

 

(G)           THERE IS NO ENVIRONMENTAL CLAIM PENDING OR THREATENED AGAINST ANY
OF THE COMPANIES OR AGAINST ANY PERSON OR ENTITY WHOSE LIABILITY FOR ANY
ENVIRONMENTAL CLAIM ANY OF THE COMPANIES HAS RETAINED OR ASSUMED EITHER
CONTRACTUALLY OR BY OPERATION OF LAW.

 

(H)           EXCEPT AS SET FORTH IN SCHEDULE 5.16(D), THERE IS NO ASBESTOS
CONTAINED IN OR FORMING PART OF ANY BUILDING, BUILDING COMPONENT, STRUCTURE OR
OFFICE SPACE OWNED, LEASED, OPERATED OR USED BY THE COMPANIES, AND NO
POLYCHLORINATED BIPHENYLS (PCBS) OR PCB-CONTAINING ITEMS ARE USED OR STORED BY
THE COMPANIES, OR TO THE KNOWLEDGE OF THE SELLERS OR CCR BY ANY OTHER PERSON, AT
ANY PROPERTY OWNED, LEASED, OPERATED OR USED BY THE COMPANIES.

 

(I)            NEITHER THE SELLERS NOR ANY OF THE COMPANIES ARE REQUIRED BY
VIRTUE OF THE TRANSACTIONS SET FORTH HEREIN AND CONTEMPLATED HEREBY, OR AS A
CONDITION TO THE EFFECTIVENESS OF ANY TRANSACTIONS CONTEMPLATED HEREBY, (1) TO
PERFORM A SITE ASSESSMENT FOR HAZARDOUS MATERIALS, (2) TO REMOVE OR REMEDIATE
HAZARDOUS MATERIALS, (3) TO RECEIVE APPROVAL FROM ANY GOVERNMENTAL ENTITY, OTHER
THAN WITH RESPECT TO THE TRANSFER OF ANY GOVERNMENTAL AUTHORIZATION RELATED TO
THE NORMAL OPERATION OF THE BUSINESS, OR (4) TO RECORD OR DELIVER TO ANY PERSON
ANY DISCLOSURE DOCUMENT OR STATEMENT PERTAINING TO ENVIRONMENTAL MATTERS.

 

5.17.        Intellectual Property.

 

(A)           EACH COMPANY OWNS OR HAS A VALID LICENSE OR OTHER RIGHT TO USE,
FREE AND CLEAR OF ALL MATERIAL LIENS (SUBJECT TO PERMITTED EXCEPTIONS), ALL OF
THE INTELLECTUAL PROPERTY USED BY IT IN THE CONDUCT OF THE BUSINESS AS PRESENTLY
CONDUCTED.

 

(B)           SCHEDULE 5.17(B) OF THE SELLERS DISCLOSURE SCHEDULES SETS FORTH,
FOR ALL INTELLECTUAL PROPERTY OWNED BY EACH OF THE COMPANIES, A COMPLETE AND
ACCURATE LIST OF ALL U.S. AND FOREIGN: (I) PATENTS AND PATENT APPLICATIONS;
(II) TRADEMARK AND SERVICE MARK REGISTRATIONS (INCLUDING DOMAIN NAME
REGISTRATIONS) AND TRADEMARK AND SERVICE MARK APPLICATIONS; AND (III) COPYRIGHT
REGISTRATIONS AND COPYRIGHT APPLICATIONS.

 

(C)           TO THE KNOWLEDGE OF THE SELLERS, ALL RIGHTS TO INTELLECTUAL
PROPERTY OWNED BY OR USED BY THE COMPANIES ARE VALID AND SUBSISTING.

 

(D)           TO THE KNOWLEDGE OF THE SELLERS, THE CONDUCT OF THE BUSINESS DOES
NOT INFRINGE UPON OR VIOLATE ANY INTELLECTUAL PROPERTY RIGHT OWNED OR CONTROLLED
BY ANY THIRD PARTY IN ANY MATERIAL MANNER.  NO ACTIONS ARE PENDING AND NO
WRITTEN DEMAND OR NOTICE HAS BEEN RECEIVED BY ANY COMPANY OR THE SELLERS
ALLEGING ANY SUCH INFRINGEMENT AND, TO THE KNOWLEDGE OF THE SELLERS, NO SUCH
CLAIM HAS BEEN VERBALLY THREATENED.

 

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(E)           NO ACTION BY THE COMPANIES IS PENDING ALLEGING INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY OWNED BY THE COMPANIES AND TO THE KNOWLEDGE OF THE SELLERS
AND THE COMPANIES, NO THIRD PARTY IS INFRINGING ANY OF THE INTELLECTUAL PROPERTY
OWNED BY THE COMPANIES.

 

(F)            THE COMPANIES ARE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH
THE  WEBSITE PRIVACY POLICY AND OTHER WRITTEN PRIVACY POLICIES OF THE COMPANIES.

 

5.18.        Absence of Certain Changes.  Since the date that is six (6) months
prior to the date of receipt of the Conditional Exercise Notice through the date
of delivery of the Supplemental Disclosure Schedules in accordance with
Section 7.5, (i) there has not occurred any Effect that would reasonably be
expected to have a Material Adverse Effect, and (ii) no Company has taken any of
the actions specified in clause (a), (c), (d), (f), (g), (h), (i), (k), (l),
(n), (o), (p) or (t) of Section 7.1, or authorized or agreed to take any of the
actions specified in the foregoing clauses.

 

5.19.        Brokers and Finders.  No agent, broker, investment banker,
intermediary, finder or firm acting on behalf of the Companies will be entitled
to any broker’s or finder’s fee or any other commission or similar fee, directly
or indirectly, from any of the Companies or in connection with the execution of
this Agreement or the Escrow Agreement or upon consummation of the transactions
contemplated hereby or thereby except as set forth in Section 4.2(f).

 

5.20.        Solvency.  The Companies are not in the hands of a receiver and
have not committed any act of bankruptcy or insolvency or any acts which are
reasonably likely to result in bankruptcy or insolvency.

 

5.21.        Related Party Transactions.

 

(A)           THERE IS NO INDEBTEDNESS BETWEEN ANY COMPANY, ON THE ONE HAND, AND
ANY SELLER, ANY AFFILIATE OF ANY SELLER, OR ANY RELATED PARTY, ON THE OTHER HAND
(OTHER THAN SOLELY WITH ANOTHER COMPANY).

 

(B)           NO SELLER, NO AFFILIATE OF ANY SELLER, AND NO RELATED PARTY OWNS,
IN WHOLE OR IN PART, OR PROVIDES OR CAUSES TO BE PROVIDED TO ANY COMPANY, ANY
ASSETS, SERVICES OR FACILITIES OF ANY COMPANY (OTHER THAN SOLELY FROM ANOTHER
COMPANY).

 

(C)           NO COMPANY PROVIDES OR CAUSES TO BE PROVIDED ANY ASSETS, SERVICES,
OR FACILITIES TO ANY SELLER, TO ANY AFFILIATE OF ANY SELLER, OR TO ANY RELATED
PARTY (OTHER THAN SOLELY TO ANOTHER COMPANY).

 

(D)           NO COMPANY BENEFICIALLY OWNS, DIRECTLY OR INDIRECTLY, ANY
INVESTMENT IN OR ISSUED BY ANY SELLER, ANY AFFILIATE OF ANY SELLER, OR ANY
RELATED PARTY (OTHER THAN SOLELY IN ANOTHER COMPANY).

 

(E)           NO COMPANY MADE ANY PAYMENT TO ANY SELLER OR ITS AFFILIATES OR ANY
RELATED PARTY SINCE THE DATE OF THE INTERIM FINANCIAL STATEMENTS (OTHER THAN
PURSUANT TO EXISTING CONTRACTUAL OR TAX SHARING ARRANGEMENTS DISCLOSED ON
SCHEDULE 5.21 OF THE SELLERS DISCLOSURE SCHEDULE, REAL PROPERTY LEASES, OR
COMPENSATION TO EMPLOYEES OF THE COMPANIES).

 

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Such transactions described in each of (a) through (e) collectively and with
regard to the parentheticals contained therein or exceptions set forth on the
Sellers Disclosure Schedules, the “Related Party Transactions”.

 

5.22.        Personal Property.  The Companies have good and valid title to, or
an adequate leasehold interest in, or other legal right to, all material
tangible Personal Property necessary to conduct its Business as presently
conducted free and clear of all Liens, other than Permitted Exceptions. For the
purposes of this Section 5.22, “Personal Property” means all tangible assets,
including furniture, fixtures and equipment owned or leased by any of the
Companies on the date of this Agreement.

 

5.23.        No Other Representations or Warranties.  Except for the
representations and warranties made by the Sellers in this Article 5, neither
the Sellers nor any other person makes any representation or warranty with
respect to the Companies or their respective business, operations, assets,
liabilities, condition (financial or otherwise) or prospects, notwithstanding
the delivery or disclosure to the Parent, the Buyers or any of their Affiliates
or Representatives of any documentation, forecasts or other information with
respect to any one or more of the foregoing.  Specifically, without limitation,
the Sellers make no representation or warranty with respect to any projection,
estimates or budgets delivered to or made available to the Parent, the Buyers or
their Representatives of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition (or any
component thereof) of the Companies.

 

ARTICLE 6

 

Representations and Warranties of the Buyers and the Parent

 

Each of the Buyers and the Parent, jointly and severally, hereby represent and
warrant to each Seller as follows:

 

6.1.          Buyer Organization and Good Standing.  Each of the Buyers and the
Parent (a) is a limited liability company or corporation, as applicable, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (except where such concepts are not
applicable), (b) has all requisite power and authority to own, operate and lease
its properties and assets and to carry on its business as now conducted and
(c) is duly qualified to transact business and in good standing in each state or
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for failures to so qualify or be in
good standing that, individually or in the aggregate, are not material to its
ability to perform its obligations hereunder and are not reasonably likely to
prohibit or materially restrict or delay the performance of this Agreement by
either of the Buyers or the Parent.

 

6.2.          Buyer Authority; Enforceability.  Each of the Buyers and the
Parent has the requisite power and authority to execute, deliver and perform
their obligations under this Agreement and the Escrow Agreement, and to
consummate the transactions contemplated hereby and thereby.  The execution,
delivery and performance of this Agreement and the Escrow Agreement and the
consummation of the transactions contemplated hereby and thereby have

 

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been duly and validly authorized by all necessary action on the part of the
Buyers or the Parent, as applicable.  This Agreement and the Escrow Agreement,
when executed by the other parties hereto and thereto, will constitute legally
valid and binding obligations of the Buyers or the Parent, as applicable,
enforceable against it in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and to general principles of equity.

 

6.3.          Consents and Approvals.  Except for (a) the HSR Notification,
(b) the Gaming Approvals, and (c) such filings as may be required in connection
with the Taxes described in Section 7.10, no notices, reports, registrations or
other filings are required to be made by the Buyers or the Parent with, nor are
any consents, approvals or authorizations required to be obtained by the Buyers
or the Parent from, any Governmental Entity in connection with the execution,
delivery and performance of this Agreement or, at the time of their execution,
the Escrow Agreement, by the Buyers or the Parent, in each case except for those
the failure of which to make or obtain, individually or in the aggregate, are
not material to its ability to perform the Buyers’ or the Parent’s obligations
hereunder and are not reasonably likely to prohibit or materially restrict or
delay the performance of this Agreement by either of the Buyers or the Parent.

 

6.4.          No Violations.  The execution and delivery of this Agreement and
the Escrow Agreement by the Parent or any Buyer do not, and the consummation by
the Parent or any Buyer of the transactions contemplated hereby or thereby will
not, conflict with or result in a breach of or constitute a default (with or
without notice or lapse of time or both) under (a) any provision of the
Governing Documents of the Buyers or the Parent, (b) any agreement, instrument,
permit, franchise, license, judgment or order, applicable to the Buyers or the
Parent or its properties or assets, other than such conflicts, violations,
defaults, terminations, cancellations or accelerations which, individually or in
the aggregate, are not material to its ability to perform its obligations
hereunder and are not reasonably likely to prohibit or materially restrict or
delay the performance of this Agreement by either of the Buyers or the Parent.

 

6.5.          Funds Available.  The Buyers or the Parent will have available at
the Closing, all the funds necessary to pay the Purchase Price to the Sellers.
The Buyers’ ability to consummate the transactions contemplated hereby is not
contingent upon their or the Parent’s ability to obtain financing.

 

6.6.          Brokers and Finders.  Neither the Buyers nor the Parent has
retained any agent, broker, investment banker, intermediary, finder, or firm
acting on behalf of the Buyers or the Parent in connection with this Agreement
or the transactions contemplated hereby.  The Buyers and the Parent have not
incurred, and shall not incur, directly or indirectly, any liability for any
broker’s or finder’s fees or any other commission or similar fee in connection
with this Agreement or any transaction contemplated hereby.

 

6.7.          Securities Act.  The Buyers are acquiring the Millennium Units and
the HoldCo Units, as applicable, for their own account and not with a view to
their distribution within the meaning of Section 2(11) of the Securities Act of
1933, as amended (the “Securities Act”), in any manner that would be in
violation of the Securities Act.  Neither of the Buyers has, directly or
indirectly, offered the Millennium Units, the HoldCo Units or the CCR Units to

 

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anyone or solicited any offer to buy the Millennium Units, the HoldCo Units or
the CCR Units from anyone, so as to bring the offer and sale of the Millennium
Units, the HoldCo Units or the CCR Units within the registration requirements of
the Securities Act.  Neither of the Buyers will sell, convey, transfer or offer
for sale any of the Millennium Units, the HoldCo Units or the CCR Units except
upon compliance with the Securities Act and any applicable state securities or
“blue sky” laws or pursuant to any exemption therefrom.

 

6.8.          No Litigation.  As of the date hereof, there are no claims,
actions or proceedings pending or, to the knowledge of the Buyers or the Parent,
threatened, against any of the Buyers or any of its assets, other than claims,
actions or proceedings that, individually or in the aggregate, are not material
to its ability to perform its obligations hereunder and are not reasonably
likely to prohibit or materially restrict or delay the performance of this
Agreement by the Buyers.  Neither any Buyer nor the Parent nor any of their
respective Subsidiaries or Affiliates is a party to or subject to the provisions
of any Order of any Governmental Entity including any Gaming Authority, which
individually or in the aggregate would reasonably be expected to prohibit or
materially restrict or delay the performance of this Agreement by the Buyers or
the Parent.

 

6.9.          Intentionally Omitted.

 

6.10.        Solvency.  Neither any Buyer nor the Parent is entering into the
transactions contemplated by this Agreement with the actual intent to hinder,
delay or defraud either present or future creditors of the Companies.  Assuming
that the representations and warranties of the Sellers contained in this
Agreement are true and correct in all material respects, at and immediately
after the Closing, and after giving effect the transactions contemplated by this
Agreement, the Companies will be solvent (in that both the fair value of its
assets will not be less than the sum of its debts and that the present fair
saleable value of its assets will not be less than the amount required to pay
its probable liabilities or its debts as they become absolute and matured);
(b) will have adequate capital and liquidity with which to engage in its
business; and (c) will not have incurred and does not plan to incur debts beyond
its ability to pay as they become absolute and matured.

 

6.11.        No Other Representations or Warranties.  Except for the
representations and warranties expressly made by the Buyers and the Parent in
this Article 6 or in the Escrow Agreement, neither the Parent nor the Buyers
make any other representation or warranty in connection with the transactions
contemplated hereby.  Each of the Buyers and the Parent acknowledge that the
Sellers, the Companies and their respective Affiliates and Representatives have
not made and do not make any representations or warranties as to any matter
whatsoever except as expressly set forth in this Agreement and specifically (but
without limiting the generality of the foregoing) that the Sellers, the
Companies and their respective Affiliates and Representatives have not made and
do not make any representations with respect to (i) any projections, estimates
or budgets delivered to or made available to the Parent or the Buyers (or their
respective Affiliates or Representatives) of future revenues, results of
operations (or any components thereof), cash flows or financial condition (or
any components thereof) of the Companies or (ii) the future business and
operations of the Companies.  Except for the representations and warranties
expressly made by the Sellers in Article 4, Article 5 or in the Escrow
Agreement, none of the Sellers or any Affiliates or any of their Representatives
will have

 

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or be subject to any liability to the Buyers, the Parent or any other person
resulting from the distribution to the Buyers, the Parent or their
Representatives or the Buyers’ use of, any such information, including any
memoranda or materials distributed on behalf of the Sellers relating to the
Companies or other publications or data room information provided to the Buyers,
the Parent or their Representatives, or any other document or information in any
form provided to the Buyers, the Parent or their representatives in connection
with the sale of the Companies and the transactions contemplated hereby.

 

ARTICLE 7

 

Covenants of the Parties

 

7.1.          Conduct of the Companies.  Except for matters (x) set forth on
Schedule 7.1 of the Sellers Disclosure Schedules or as otherwise specifically
provided in this Agreement, or (y) consented to in writing by the Buyers (which
consent shall not be unreasonably withheld, conditioned or delayed), from the
Exercise Date until the Closing Date, each of the Sellers and CCR shall, and
shall cause each of the other Companies to, conduct business in the ordinary
course consistent with past practice, make capital expenditures  consistent with
past practice, and use all commercially reasonable efforts to maintain and
preserve intact their business organizations, including the services of their
key employees on terms and conditions substantially comparable to those
currently in effect and the goodwill of any Governmental Authorities, customers,
distributors, suppliers and other Persons with which the Companies have material
business relationships.  Without limiting the generality of the foregoing, and
except for matters set forth on Schedule 7.1 of the Sellers Disclosure
Schedules, or as otherwise specifically provided in this Agreement, without the
prior written consent of the Buyers (which consent shall not be unreasonably
withheld, conditioned or delayed), from the Exercise Date until the Closing
Date, each of the Sellers and CCR shall not, and shall not permit any of the
other Companies to:

 

(A)           PROPOSE OR ADOPT ANY CHANGE IN THE GOVERNING DOCUMENTS OF THE
COMPANIES, OTHER THAN IN THE GOVERNING DOCUMENTS OF THE EXCLUDED HOLDCO
SUBSIDIARIES;

 

(B)           APPROVE, AUTHORIZE, ADOPT, ENTER INTO, ANNOUNCE OR COMMUNICATE TO
EMPLOYEES ANY NEW, MODIFIED, AMENDED OR SUPPLEMENTAL BENEFIT PLAN OR ANY
EMPLOYMENT AGREEMENT WITH ANY EXECUTIVE LEVEL EMPLOYEE, OR GRANT ANY INCREASE IN
WAGES, SALARY, BONUS OR OTHER COMPENSATION REMUNERATION OR BENEFITS, EXCEPT
(I) AS REQUIRED BY APPLICABLE LAW, (II) AS REQUIRED BY THE TERMS OF ANY EXISTING
BENEFIT PLAN OR EMPLOYMENT AGREEMENT, (III) IN CONNECTION WITH THE PERIODIC
PERFORMANCE REVIEWS OR ROUTINE PROMOTIONS OF EMPLOYEES OR REVIEWS OF APPROPRIATE
SALARY LEVELS FOR A JOB CLASSIFICATION IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICES AND POLICIES OF THE COMPANIES, (IV) ANNUAL
BONUSES AND SALARY INCREASES CONSISTENT WITH PAST PRACTICE, (V) SIGNING BONUSES
NOT TO EXCEED $50,000 INDIVIDUALLY, (VI) ENTRY INTO AGREEMENTS WITH EMPLOYEES
FOR THE STAY BONUSES PROVIDED THE AMOUNT OF THE AGGREGATE OF ALL STAY BONUSES
DOES NOT EXCEED THE STAY BONUS PAYOFF AMOUNT, (VII) ANNUAL RENEWALS OF EXISTING
HEALTH CARE PLANS SO LONG AS THE RENEWAL IS IN THE ORDINARY COURSE OF BUSINESS,
OR (VIII) PURSUANT TO ANY COLLECTIVE BARGAINING AGREEMENT ENTERED INTO IN
ACCORDANCE WITH CLAUSE (J) BELOW;

 

(C)           SELL, LEASE OR OTHERWISE DISPOSE OF ANY MATERIAL ASSETS, INCLUDING
BY MERGER, CONSOLIDATION, ASSET SALE OR OTHER BUSINESS COMBINATION, OTHER THAN
(I) ASSETS OF THE

 

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EXCLUDED HOLDCO SUBSIDIARIES AND ASSETS OF THE EXCLUDED OPPORTUNITIES, OR
(II) SALES OF EQUIPMENT AND OTHER NON-CURRENT ASSETS IN AN AMOUNT NOT TO EXCEED
$250,000 IN THE ORDINARY COURSE OF BUSINESS;

 

(D)           REDEEM, REPURCHASE, DEFEASE, CANCEL OR OTHERWISE ACQUIRE ANY
INDEBTEDNESS OF ANY COMPANY (EXCEPT FOR LETTERS OF CREDIT AND SURETY BONDS
REQUIRED IN THE COURSE OF BUSINESS), OR COMMIT TO DO ANY OF THE FOREGOING (OTHER
THAN AT STATED MATURITY AND ANY REQUIRED AMORTIZATION PAYMENTS AND MANDATORY
PREPAYMENTS, IN EACH CASE, IN ACCORDANCE WITH THE TERMS OF THE INSTRUMENT
GOVERNING SUCH INDEBTEDNESS AS IN EFFECT ON THE DATE HEREOF OR AS MODIFIED WITH
THE PRIOR WRITTEN CONSENT OF THE BUYERS), PROVIDED THAT, NOTWITHSTANDING THE
ABOVE, THE COMPANIES MAY INCUR, REPAY, PREPAY, AMEND OR MODIFY ANY INDEBTEDNESS
AS SET FORTH ON SCHEDULE 5.6 OF THE SELLERS DISCLOSURE SCHEDULES;

 

(E)           INCUR, CREATE, ASSUME OR OTHERWISE BECOME LIABLE FOR ANY
INDEBTEDNESS (INCLUDING THE ISSUANCE OF ANY DEBT SECURITY) OR ASSUME, GUARANTEE
OR ENDORSE, ENTER INTO ANY “KEEP WELL” ARRANGEMENT OR OTHERWISE BECOME
RESPONSIBLE FOR, WHETHER DIRECTLY, CONTINGENTLY OR OTHERWISE, THE OBLIGATIONS OF
ANY OTHER PERSON, PROVIDED THAT, NOTWITHSTANDING THE ABOVE, THE COMPANIES MAY
INCUR, REPAY, PREPAY, AMEND OR MODIFY ANY INDEBTEDNESS AS SET FORTH ON SCHEDULE
5.6 OF THE SELLERS DISCLOSURE SCHEDULES;

 

(F)            FAIL TO PAY ALL OF THE PAYABLES OF THE COMPANIES AND COLLECT ALL
OF THE RECEIVABLES OF THE COMPANIES IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE;

 

(G)           MAKE ANY ACQUISITIONS OF ANY EQUITY INTERESTS, BUSINESS OR ASSETS
OF ANY OTHER PERSON, OR MAKE ANY LOANS, ADVANCES OR CAPITAL CONTRIBUTIONS TO, OR
INVESTMENTS IN, ANY OTHER PERSON, WITH AN AGGREGATE VALUE IN EXCESS OF $500,000
AFTER THE DATE HEREOF, EXCEPT (I) LOANS, ADVANCES, CAPITAL CONTRIBUTIONS OR
INVESTMENTS SOLELY AMONG THE COMPANIES OR (II) WITH RESPECT TO THE EXCLUDED
OPPORTUNITIES;

 

(H)           AUTHORIZE ANY CAPITAL EXPENDITURES IN EXCESS OF $5,000,000 EXCEPT
FOR (I) EXPENDITURES MADE IN RESPONSE TO ANY EMERGENCY, OR (II) AS SET FORTH ON
SCHEDULE 7.1 OF THE SELLERS DISCLOSURE SCHEDULE;

 

(I)            PLEDGE OR OTHERWISE ENCUMBER ANY MEMBERSHIP INTERESTS, SHARES OF
CAPITAL STOCK, OR ANY OTHER DEBT, OWNERSHIP OR EQUITY INTERESTS OR SECURITIES OF
ANY OF THE COMPANIES, OR CREATE OR ASSUME ANY LIEN THEREUPON;

 

(J)            ENTER INTO ANY COLLECTIVE BARGAINING AGREEMENT, THE TERM
(INCLUDING ANY RENEWAL TERM) OF WHICH EXTENDS BEYOND DECEMBER 31, 2010, OR WHICH
DOES NOT PROVIDE FOR EMPLOYMENT TERMS AND CONDITIONS THAT ARE THE SAME IN ALL
MATERIAL RESPECTS OVER THE ENTIRE TERM OF SUCH COLLECTIVE BARGAINING AGREEMENT;

 

(K)           MORTGAGE, PLEDGE OR OTHERWISE ENCUMBER ANY OF THE COMPANIES’
ASSETS, TANGIBLE OR INTANGIBLE, HAVING A VALUE IN EXCESS OF $5,000,000 OR CREATE
OR ASSUME ANY LIEN THEREUPON (OTHER THAN PERMITTED EXCEPTIONS), IN EACH CASE,
WHICH ARE NOT PREPAYABLE OR ABLE TO BE RELEASED WITHOUT PREMIUM OR PENALTY ON OR
BEFORE THE CLOSING DATE, EXCEPT IN CONNECTION WITH INDEBTEDNESS (INCLUDING
FACILITIES PROVIDING FOR INDEBTEDNESS) WHICH IS PERMITTED BY SECTION 7.1(D) OR
SECTION 7.1(E);

 

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(L)            (I) SPLIT, COMBINE OR RECLASSIFY OR OTHERWISE CHANGE OR EXCHANGE
ANY SECURITIES OR EQUITY INTERESTS OF THE COMPANIES OR AMEND THE TERMS OF ANY
SECURITIES OR EQUITY INTERESTS OF THE COMPANIES, (II) DECLARE, SET ASIDE OR PAY
ANY DIVIDEND OR OTHER DISTRIBUTION (WHETHER IN CASH, STOCK OR PROPERTY OR ANY
COMBINATION THEREOF) IN RESPECT OF SECURITIES OR EQUITY INTERESTS OF THE
COMPANIES OTHER THAN (A) A DIVIDEND OR DISTRIBUTION BY A WHOLLY OWNED SUBSIDIARY
OF A COMPANY TO SUCH COMPANY OR (B) A TAX AMOUNT TO A TAX RECIPIENT (PROVIDED,
THAT, FOR THE AVOIDANCE OF DOUBT, ANY AMOUNTS UNDER CLAUSE (B) TO BE PAID ON OR
BEFORE THE CLOSING DATE SHALL BE EXCLUDED FROM THE CALCULATION OF COMPANY CASH),
OR (III) REDEEM, REPURCHASE OR OTHERWISE ACQUIRE OR OFFER TO REDEEM, REPURCHASE,
OR OTHERWISE ACQUIRE, ANY SECURITIES OR EQUITY INTERESTS OF THE COMPANIES;

 

(M)          ENTER INTO, MODIFY OR AMEND ANY MATERIAL CONTRACT, EXCEPT IN THE
ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE, MATERIAL CONTRACTS
THAT (I) DO NOT PROVIDE FOR ANNUAL EXPENDITURES BY ANY OF THE COMPANIES IN
EXCESS OF $1,000,000, (II) ARE TERMINABLE BY THE COMPANY PARTY THERETO ON THIRTY
(30) DAYS NOTICE OR LESS OR (III) ARE RELATED TO THE EXCLUDED OPPORTUNITIES;
PROVIDED, THAT, FOR THE PURPOSE OF CLARITY, THE PARTIES ACKNOWLEDGE AND AGREE
THAT RENEWALS OF MATERIAL CONTRACTS ON SUBSTANTIALLY THE SAME TERMS SHALL BE
DEEMED TO BE IN THE ORDINARY COURSE OF BUSINESS;

 

(N)           ENTER INTO, MODIFY OR AMEND ANY RELATED PARTY TRANSACTION;

 

(O)           CLOSE OR SHUTDOWN ANY CASINO, HOTEL, RACETRACK OR OTHER FACILITY
OF THE COMPANIES EXCEPT FOR SUCH CLOSURE OR SHUTDOWNS WHICH ARE (I) REQUIRED BY
ACTION, ORDER, WRIT, INJUNCTION, JUDGMENT OR DECREE OR OTHERWISE REQUIRED BY
LAW; OR (II) DUE TO ACTS OF GOD OR OTHER FORCE MAJEURE EVENTS;

 

(P)           FAIL TO MAINTAIN, REPAIR AND KEEP IN GOOD OPERATING CONDITION (AND
COMMIT APPROPRIATE CAPITAL EXPENDITURES FOR SUCH PURPOSES) ALL CASINO, HOTEL,
RACETRACK AND OTHER FACILITIES OF THE COMPANIES IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICE;

 

(Q)           OTHER THAN IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE AND WITH RESPECT TO THE LITIGATION SET FORTH IN SCHEDULE 7.1(O) OF THE
SELLERS DISCLOSURE SCHEDULES, SETTLE OR COMPROMISE ANY LITIGATION, OR RELEASE,
DISMISS OR OTHERWISE DISPOSE OF ANY CLAIM OR ARBITRATION OTHER THAN SETTLEMENTS
OR COMPROMISES OF LITIGATION, CLAIMS OR ARBITRATION, THAT INVOLVE THE PAYMENT OF
MONETARY DAMAGES NOT IN EXCESS OF $1,000,000 INDIVIDUALLY OR $5,000,000 IN THE
AGGREGATE BY THE COMPANIES AND DO NOT INVOLVE ANY MATERIAL INJUNCTIVE OR OTHER
NON-MONETARY RELIEF OR IMPOSE MATERIAL RESTRICTIONS ON THE BUSINESS OR
OPERATIONS OF THE COMPANIES;

 

(R)            WRITE UP OR WRITE DOWN THE VALUE OF ANY ASSET OR MAKE ANY
MATERIAL CHANGE IN FINANCIAL ACCOUNTING METHODS OR MATERIAL METHOD OF TAX
ACCOUNTING, PRINCIPLES OR PRACTICES MATERIALLY AFFECTING THE REPORTED
CONSOLIDATED ASSETS, LIABILITIES OR RESULTS OF OPERATIONS OF THE COMPANIES,
EXCEPT INSOFAR AS MAY HAVE BEEN REQUIRED BY A CHANGE IN OR INTERPRETATION OF
GAAP OR LAW;

 

(S)           (I) MAKE, AMEND OR REVOKE ANY MATERIAL TAX ELECTION, (II) SETTLE
OR COMPROMISE ANY MATERIAL TAX LIABILITY, CLAIM OR ASSESSMENT, OR AGREE TO ANY
ADJUSTMENT OF ANY MATERIAL TAX ATTRIBUTE, (III) FILE ANY AMENDED MATERIAL TAX
RETURN, (IV) ENTER INTO ANY MATERIAL

 

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“CLOSING AGREEMENT” WITHIN THE MEANING OF SECTION 7121 OF THE CODE (OR ANY
MATERIAL COMPARABLE AGREEMENT UNDER STATE, LOCAL OR FOREIGN LAW), (V) SURRENDER
ANY RIGHT TO CLAIM A MATERIAL TAX REFUND, (VI) CONSENT TO WAIVE ANY STATUTE OF
LIMITATIONS WITH RESPECT TO MATERIAL TAXES;

 

(T)            ADOPT A PLAN OF COMPLETE OR PARTIAL LIQUIDATION, DISSOLUTION,
MERGER, CONSOLIDATION, RESTRUCTURING, RECAPITALIZATION OR OTHER REORGANIZATION
OF ANY OF THE COMPANIES OR APPROVE, AUTHORIZE OR ENTER INTO ANY AGREEMENT OR
UNDERSTANDING, OR LETTER OF INTENT OR AGREEMENT IN PRINCIPLE WITH RESPECT
THERETO, OTHER THAN WITH RESPECT TO THE EXCLUDED HOLDCO SUBSIDIARIES;

 

(U)           FAIL TO EXERCISE COMMERCIALLY REASONABLE EFFORTS TO KEEP IN FORCE
INSURANCE POLICIES OR REPLACEMENT OR REVISED PROVISIONS PROVIDING INSURANCE
COVERAGE WITH RESPECT TO ANY CASINOS AND ANY RELATED ASSETS AND ANY OTHER
MATERIAL ASSETS, OPERATIONS AND ACTIVITIES (INCLUDING CONSTRUCTION ACTIVITIES)
OF THE COMPANIES AS IS CURRENTLY IN EFFECT, OTHER THAN IMMATERIAL VARIATIONS IN
POLICIES IN THE ORDINARY COURSE CONSISTENT WITH PAST PRACTICE; OR

 

(V)           FAIL TO KEEP AND MAINTAIN AT LEAST SUCH INSURANCE AS MAY BE
REQUIRED BY THE DEBT FACILITIES; OR

 

(W)          AUTHORIZE, AGREE OR COMMIT TO DO ANY OF THE FOREGOING.

 

7.2.          Conduct of Blocker and AcquisitionCo.

Except for matters (x) set forth on Schedule 7.2 of the Sellers Disclosure
Schedules or as otherwise specifically provided in this Agreement, or
(y) consented to in writing by the Buyers (which consent shall not be
unreasonably withheld, conditioned or delayed), from the Exercise Date until the
Closing Date, HoldCo shall not cause, authorize or agree to cause Blocker or
AcquisitionCo to take any actions or incur any Liabilities that would make the
representations and warranties set forth in Section 4.2(e) to become untrue or
incorrect.

 

7.3.          No Control of Other Party’s Business.  Nothing contained in this
Agreement is intended to give the Parent or any Buyer, directly or indirectly,
the right to control or direct the operations of the Companies or the Excluded
HoldCo Subsidiaries prior to the Closing Date, and nothing contained in this
Agreement is intended to give CCR or the Sellers, directly or indirectly, the
right to control or direct any Buyer’s or its Subsidiaries’ operations in each
case, in a manner prohibited by applicable Law (including Gaming Laws and
antitrust Laws).

 

7.4.          Reasonable Best Efforts.

 

(A)           SUBJECT TO THE TERMS OF THIS AGREEMENT AND APPLICABLE LAW
(INCLUDING GAMING LAWS AND ANTITRUST LAWS), FOLLOWING THE EXERCISE DATE, EACH
PARTY WILL USE ITS REASONABLE BEST EFFORTS TO TAKE, OR CAUSE TO BE TAKEN, ALL
APPROPRIATE ACTIONS, TO FILE, OR CAUSE TO BE FILED, ALL DOCUMENTS AND TO DO, OR
CAUSE TO BE DONE, ALL THINGS NECESSARY, PROPER OR ADVISABLE TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING PREPARING AND FILING AS
PROMPTLY AS REASONABLY PRACTICABLE ALL DOCUMENTATION TO EFFECT ALL GOVERNMENTAL
AUTHORIZATIONS, INCLUDING ALL NECESSARY FILINGS, CONSENTS, WAIVERS, APPROVALS,
AUTHORIZATIONS, PERMITS OR ORDERS FROM ALL GOVERNMENTAL ENTITIES (INCLUDING
GAMING AUTHORITIES) OR OTHER PERSONS, INCLUDING ANY LICENSES, PERMITS,
APPROVALS, AUTHORIZATIONS, REGISTRATIONS, FINDINGS OF SUITABILITY, FRANCHISES,
ENTITLEMENTS, WAIVERS AND EXEMPTIONS ISSUED BY ANY GAMING AUTHORITY REQUIRED TO
PERMIT THE

 

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PARTIES HERETO TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
NECESSARY TO PERMIT THE BUYERS TO OWN AND OPERATE THE COMPANIES (COLLECTIVELY,
“GAMING APPROVALS”), PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE COMPANIES BE
REQUIRED TO PAY, PRIOR TO THE CLOSING, ANY FEE, PENALTY OR OTHER CONSIDERATION
TO OBTAIN ANY CONSENT, APPROVAL OR WAIVER REQUIRED FOR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN DE MINIMIS AMOUNTS.  IN
FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, EACH PARTY HERETO AGREES TO
MAKE AN APPROPRIATE FILING, IF REQUIRED, OF ANY HSR NOTIFICATION WITH RESPECT TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WITHIN ONE (1) BUSINESS DAY
FOLLOWING THE EXERCISE DATE AND TO SUPPLY AS PROMPTLY AS REASONABLE PRACTICABLE
ANY ADDITIONAL INFORMATION AND DOCUMENTARY MATERIAL THAT MAY BE REQUESTED
PURSUANT TO THE HSR ACT AND USE ITS REASONABLE BEST EFFORTS TO TAKE OR CAUSE TO
BE TAKEN ALL OTHER ACTIONS NECESSARY, PROPER OR ADVISABLE CONSISTENT WITH THIS
SECTION 7.4 TO CAUSE THE EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING
PERIODS, OR RECEIPT OF REQUIRED AUTHORIZATIONS, AS APPLICABLE, UNDER THE HSR
ACT.  THE FILING FEES WITH RESPECT TO THE HSR FILINGS SHALL BE BORNE 100% BY THE
BUYERS.  WITHOUT LIMITING THE FOREGOING, THE PARTIES SHALL REQUEST AND SHALL USE
THEIR RESPECTIVE REASONABLE BEST EFFORTS TO OBTAIN EARLY TERMINATION OF THE
WAITING PERIOD UNDER THE HSR ACT AS PROMPTLY AS REASONABLY PRACTICABLE.

 

(B)           FOLLOWING THE EFFECTIVE DATE, EACH OF THE PARENT AND THE BUYERS,
ON THE ONE HAND, AND THE SELLERS AND CCR, ON THE OTHER HAND, SHALL, IN
CONNECTION WITH THE EFFORTS REFERENCED IN SECTION 7.4(A) TO OBTAIN ALL REQUISITE
APPROVALS AND AUTHORIZATIONS FOR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, USE ITS REASONABLE BEST EFFORTS TO (I) COOPERATE IN ALL RESPECTS WITH
EACH OTHER IN CONNECTION WITH ANY FILING OR SUBMISSION AND IN CONNECTION WITH
ANY INVESTIGATION OR OTHER INQUIRY, INCLUDING ANY PROCEEDING INITIATED BY A
PRIVATE PARTY; (II) KEEP THE OTHER PARTY REASONABLY INFORMED OF ANY
COMMUNICATION RECEIVED BY SUCH PARTY FROM, OR GIVEN BY SUCH PARTY TO, THE
FEDERAL TRADE COMMISSION (THE “FTC”), THE ANTITRUST DIVISION OF THE DEPARTMENT
OF JUSTICE (THE “DOJ”), OR ANY OTHER GOVERNMENTAL ENTITY AND OF ANY
COMMUNICATION RECEIVED OR GIVEN IN CONNECTION WITH ANY PROCEEDING BY A PRIVATE
PARTY, IN EACH CASE REGARDING ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY; AND
(III) PERMIT THE OTHER PARTY TO REVIEW ANY COMMUNICATION GIVEN BY IT TO, AND
CONSULT WITH EACH OTHER IN ADVANCE OF ANY MEETING OR CONFERENCE WITH, THE FTC,
THE DOJ, OR ANY OTHER GOVERNMENTAL ENTITY OR, IN CONNECTION WITH ANY PROCEEDING
BY A PRIVATE PARTY, WITH ANY OTHER PERSON, AND TO THE EXTENT PERMITTED BY THE
FTC, THE DOJ, OR SUCH OTHER APPLICABLE GOVERNMENTAL ENTITY OR OTHER PERSON, GIVE
THE OTHER PARTY THE OPPORTUNITY TO ATTEND AND PARTICIPATE IN SUCH MEETINGS AND
CONFERENCES.

 

(C)           IN FURTHERANCE AND NOT IN LIMITATION OF THE COVENANTS OF THE
PARTIES CONTAINED IN SECTION 7.4(A) AND SECTION 7.4(B), IF ANY OBJECTIONS ARE
ASSERTED WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY UNDER ANY LAW OR
IF ANY SUIT IS INSTITUTED (OR THREATENED TO BE INSTITUTED) BY THE FTC, THE DOJ,
OR ANY OTHER APPLICABLE GOVERNMENTAL ENTITY OR ANY PRIVATE PARTY CHALLENGING ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY AS VIOLATIVE OF ANY MATERIAL LAW OR
WHICH WOULD OTHERWISE PREVENT, MATERIALLY IMPEDE OR MATERIALLY DELAY THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, EACH OF THE PARTIES SHALL
USE ITS REASONABLE BEST EFFORTS TO RESOLVE ANY SUCH OBJECTIONS OR SUITS SO AS TO
PERMIT CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AS
PROMPTLY AS REASONABLY PRACTICABLE.

 

(D)           IN THE EVENT THAT ANY ADMINISTRATIVE OR JUDICIAL ACTION OR
PROCEEDING IS INSTITUTED (OR THREATENED TO BE INSTITUTED) BY A GOVERNMENTAL
ENTITY OR PRIVATE PARTY CHALLENGING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, EACH OF THE PARTIES SHALL COOPERATE IN ALL RESPECTS

 

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WITH EACH OTHER AND USE ITS RESPECTIVE REASONABLE BEST EFFORTS TO CONTEST AND
RESIST ANY SUCH ACTION OR PROCEEDING AND TO HAVE VACATED, LIFTED, REVERSED OR
OVERTURNED ANY DECREE, JUDGMENT, INJUNCTION OR OTHER ORDER, WHETHER TEMPORARY,
PRELIMINARY OR PERMANENT, THAT IS IN EFFECT AND THAT PROHIBITS OR MATERIALLY
RESTRICTS OR DELAYS CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

(E)           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, EACH OF THE
SELLERS AND CCR SHALL, AND SHALL CAUSE ITS RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES AND SUBSIDIARIES TO, USE THEIR RESPECTIVE REASONABLE BEST EFFORTS IN
WORKING WITH THE PARENT, THE BUYERS AND THEIR COUNSEL TO OBTAIN THE GAMING
APPROVALS; PROVIDED THAT NOTHING CONTAINED HEREIN SHALL REQUIRE ANY EXPENDITURE
BY THE COMPANIES (OTHER THAN ANY EXPENDITURES RELATING TO COUNSEL FEES OF SUCH
PARTIES).

 

(F)            THE SELLERS AGREE TO USE THEIR REASONABLE BEST EFFORTS TO
(I) CONTINUE TO CAUSE CCR AND THE OTHER COMPANIES TO MAINTAIN ANY LICENSES
REQUIRED UNDER APPLICABLE GAMING LAWS WITH RESPECT TO THE OPERATION OF THE
BUSINESS, INCLUDING OBTAINING OR RENEWING ALL OTHER LICENSES, PERMITS,
APPROVALS, AUTHORIZATIONS, REGISTRATIONS, FINDINGS OF SUITABILITY, ENTITLEMENTS,
WAIVERS AND EXEMPTIONS ISSUED IN CONNECTION WITH SUCH LICENSES AND NECESSARY TO
CONTINUE TO OPERATE THE BUSINESS AND (II) PURSUING ANY RENEWAL APPLICATION
PROCESS APPLICABLE TO SUCH LICENSES, INCLUDING ANY FOLLOW-UP SUBMISSIONS AND
REQUESTS.  .

 

(G)           BETWEEN THE EXERCISE DATE AND THE CLOSING DATE, THE SELLERS AND
CCR SHALL, AND SHALL CAUSE EACH OF THE OTHER COMPANIES AND THEIR RESPECTIVE
DIRECTORS, MANAGERS, MEMBERS, OFFICERS, EMPLOYEES AND AGENTS TO, AFFORD THE
EMPLOYEES, AUTHORIZED AGENTS AND REPRESENTATIVES OF THE PARENT AND THE BUYERS
ACCESS, DURING NORMAL BUSINESS HOURS, TO THE OFFICES, PERSONNEL, PREMISES,
PROPERTIES, CONTRACTS, BOOKS AND RECORDS, AND OTHER DOCUMENTS AND FINANCIAL,
OPERATING, CONSTRUCTION STATUS AND OTHER DATA OF THE COMPANIES AS THE BUYERS MAY
REASONABLY REQUEST; PROVIDED THAT THE BUYERS SHALL NOT ENGAGE IN ANY
ENVIRONMENTAL TESTING WITH RESPECT TO ANY OF THE COMPANIES’ OWNED REAL PROPERTY
OR PROPERTY SUBJECT TO REAL PROPERTY LEASES WITHOUT THE PRIOR WRITTEN CONSENT OF
THE SELLERS, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR CONDITIONED. 
THE FOREGOING SHALL NOT REQUIRE THE SELLERS OR ANY COMPANY TO PERMIT ANY
INSPECTION, OR TO DISCLOSE ANY INFORMATION, TO THE EXTENT THAT IN THEIR
REASONABLE JUDGMENT IS REASONABLY LIKELY TO RESULT IN WAIVER OF ANY
ATTORNEY-CLIENT PRIVILEGE OR THE DISCLOSURE OF ANY TRADE SECRETS OF THIRD
PARTIES OR VIOLATE ANY OF THEIR OBLIGATIONS WITH RESPECT TO CONFIDENTIALITY IF
THE SELLERS OR SUCH COMPANY, AS THE CASE MAY BE, SHALL HAVE USED REASONABLE
EFFORTS TO OBTAIN THE CONSENT OF SUCH THIRD PARTY TO SUCH INSPECTION OR
DISCLOSURE AND HAVE USED REASONABLE EFFORTS TO IMPLEMENT REQUISITE PROCEDURES TO
ENABLE ACCESS TO SUCH INFORMATION WITHOUT VIOLATING SUCH OBLIGATIONS.  NO
INVESTIGATION BY THE PARTIES OR THEIR RESPECTIVE REPRESENTATIVES SHALL AFFECT
THE REPRESENTATIONS OR WARRANTIES OF THE OTHER SET FORTH HEREIN, AND DISCLOSURE
OF ANY REPORT TO THE SELLERS SHALL NOT EFFECT THE KNOWLEDGE OF THE SELLERS IF
THEY WERE NOT AWARE OF THE FACTS DESCRIBED IN SUCH REPORT.

 

(H)           FROM THE EXERCISE DATE UNTIL THE CLOSING DATE, IF ANY COUNTERPARTY
TO ANY MATERIAL CONTRACT SPECIFIED IN SCHEDULE 7.4(H) (THE “SPECIFIED MATERIAL
CONTRACTS”) NOTIFIES ANY SELLER OR ANY COMPANY PARTY THERETO, CLAIMING A BREACH,
A DEFAULT, OR THE RIGHT TO DECLARE A DEFAULT, UNDER SUCH SPECIFIED MATERIAL
CONTRACT AS A RESULT OF THE FAILURE BY SUCH SELLER OR SUCH COMPANY TO OBTAIN THE
CONSENT OR APPROVAL OF SUCH COUNTERPARTY TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE SELLERS AND CCR SHALL, OR SHALL CAUSE THE APPLICABLE
COMPANY TO, RESOLVE

 

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SUCH CLAIM AS PROMPTLY AS REASONABLY PRACTICABLE BY MUTUAL AGREEMENT WITH SUCH
COUNTERPARTY THAT NO SUCH CONSENT OR APPROVAL WAS REQUIRED OR TO OBTAIN
APPROPRIATE CONSENTS, AMENDMENTS OR WAIVERS UNDER SUCH SPECIFIED MATERIAL
CONTRACT TO RESOLVE SUCH CLAIM.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, CCR SHALL, OR SHALL CAUSE THE APPLICABLE COMPANY TO, PAY ANY
FEES, COSTS AND EXPENSES PAYABLE OR INCURRED IN CONNECTION WITH RESOLVING SUCH
CLAIM OR OBTAINING SUCH CONSENT, AMENDMENT OR WAIVER (INCLUDING ALL CONSENT FEES
REQUIRED BY THE APPLICABLE COUNTERPARTY TO SUCH SPECIFIED MATERIAL CONTRACT),
AND EACH OF THE SELLERS AND CCR SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE
BUYER INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL DAMAGES (WITHOUT
DUPLICATION) INCURRED BY ANY OF THEM ARISING OUT OF, RELATING TO OR IN
CONNECTION WITH ANY CLAIM BY A COUNTERPARTY FOR BREACH OF ANY SUCH SPECIFIED
MATERIAL CONTRACT DUE TO THE FAILURE TO HAVE OBTAINED THE CONSENT OR APPROVAL OF
ANY COUNTERPARTY TO THE EXECUTION AND/OR DELIVERY OF THIS AGREEMENT, OR ANY
ACTION TAKEN BY ANY SELLER OR CCR PURSUANT TO THIS SECTION 7.4(H).  NEITHER ANY
BUYER NOR THE PARENT SHALL BE ENTITLED TO ASSERT A BREACH OF ANY REPRESENTATION,
WARRANTY OR COVENANT MADE BY THE SELLERS OR CCR IN THIS AGREEMENT DUE TO A CLAIM
BY ANY COUNTERPARTY TO ANY SPECIFIED MATERIAL CONTRACT AS A RESULT OF THE
FAILURE BY ANY SELLER OR ANY COMPANY TO OBTAIN THE CONSENT OR APPROVAL OF SUCH
COUNTERPARTY TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT.

 

7.5.          Updates to Disclosure Schedules.

 

(A)           IF THE BUYERS DELIVER THE CONDITIONAL EXERCISE NOTICE PURSUANT TO
SECTION 2.3, WITHIN TWENTY (20) BUSINESS DAYS OF DELIVERY OF THE CONDITIONAL
EXERCISE NOTICE, THE SELLERS SHALL DELIVER TO THE BUYERS IN WRITING SUPPLEMENTAL
DISCLOSURE SCHEDULES (THE “SUPPLEMENTAL DISCLOSURE SCHEDULES”). THE SUPPLEMENTAL
DISCLOSURE SCHEDULES SHALL REPLACE THE ORIGINAL SCHEDULES, WITH THE INTENTION OF
THE PARTIES THAT NO LIABILITY SHALL ATTACH TO SELLERS OR CCR AS A RESULT OF ANY
CHANGES TO THE SELLERS DISCLOSURE SCHEDULES REFLECTED IN THE SUPPLEMENTAL
DISCLOSURE SCHEDULES, EXCEPT WITH RESPECT TO THE COMPANY EXECUTION REPS.

 

(B)           IN THE EVENT THAT THE SELLERS OR CCR BECOME AWARE (I) OF FACTS OR
CIRCUMSTANCES THAT SHOULD HAVE BEEN INCLUDED ON THE SUPPLEMENTAL SELLERS
DISCLOSURE SCHEDULES IN ORDER FOR THE SELLERS’ AND/OR CCR’S REPRESENTATIONS AND
WARRANTIES TO BE TRUE AND ACCURATE AS OF THE DATE OF THE DELIVERY OF THE
SUPPLEMENTAL DISCLOSURE SCHEDULES BUT WERE NOT SO INCLUDED (“OMITTED ITEMS”)
AND/OR (II) THAT ANY REPRESENTATION AND WARRANTY THAT WAS TRUE AND ACCURATE AS
OF THE DATE OF THE DELIVERY OF THE SUPPLEMENTAL DISCLOSURE SCHEDULES BECOMES
UNTRUE OR INACCURATE DUE TO EVENTS OCCURRING OR CIRCUMSTANCES ARISING FROM THE
DATE OF THE DELIVERY OF THE SUPPLEMENTAL DISCLOSURE SCHEDULES (“PRE-CLOSING
EVENTS”), THE SELLERS AND CCR MAY DELIVER TO THE BUYERS IN WRITING SUPPLEMENTAL
DISCLOSURE SCHEDULES SETTING FORTH THE ADDITIONS OR CHANGES TO THE SUPPLEMENTAL
DISCLOSURE SCHEDULES THAT ARE REQUIRED TO REFLECT SUCH OMITTED ITEMS AND/OR
PRE-CLOSING EVENTS (THE “FINAL DISCLOSURE SCHEDULES”).  THE SUPPLEMENTAL
DISCLOSURE SCHEDULES, AS SUPPLEMENTED BY THE FINAL DISCLOSURE SCHEDULES, SHALL
BE DEEMED TO MODIFY THE APPLICABLE REPRESENTATION AND WARRANTY SET FORTH IN THIS
AGREEMENT FOR PURPOSES OF DETERMINING WHETHER THE CONDITION SET FORTH IN
SECTION 8.2(A) SHALL HAVE BEEN SATISFIED AS OF THE CLOSING DATE AND SHALL BE
DEEMED TO CURE BREACHES OF REPRESENTATIONS AND WARRANTIES AS DESCRIBED IN THE
SUPPLEMENTAL DISCLOSURE SCHEDULES FOR PURPOSES OF INDEMNIFICATION BY THE SELLERS
PURSUANT TO THIS AGREEMENT, INCLUDING IN ACCORDANCE WITH SECTION 7.10 AND
ARTICLE 10.

 

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(C)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, AFTER THE FINAL SELLERS DISCLOSURE SCHEDULES ARE DELIVERED IN ACCORDANCE
WITH THIS SECTION 7.5, THE BUYERS MAY RESCIND THE FINAL EXERCISE NOTICE WITHIN
FIVE (5) BUSINESS DAYS OF THE DELIVERY OF THE FINAL DISCLOSURE SCHEDULES AND
SUCH FINAL EXERCISE NOTICE SHALL BE VOID AND OF NO FORCE OR EFFECT AND THE
BUYERS SHALL HAVE NO FURTHER OBLIGATIONS UNDER THIS AGREEMENT.

 

7.6.                              Notifications to Buyers.  From the Exercise
Date until the Closing Date, the Parent and the Buyers, on the one hand, and the
Sellers and CCR, on the other hand, shall promptly notify each other of (i) any
Actions commenced or, to the knowledge of such party, threatened, against the
Sellers, Blocker, AcquisitionCo or any Company or any of their respective
Affiliates or directors, managers, members, officers, directors, employees or
agents in their capacity as such or, to the extent that such Actions relate to
the consummation of the transactions contemplated by this Agreement, the Parent
or the Buyers or any of their Affiliates or directors, managers, members,
officers, directors, employees or agents in their capacity as such and (ii) the
occurrence or non-occurrence of any fact or event that, in either case, would be
reasonably likely to cause any condition set forth in Article 8 not to be
satisfied; provided, that no such notification, nor the obligation to make such
notification, shall affect the representations, warranties, covenants or
indemnification obligations of any Party or the conditions to the obligations of
any Party, or cure any breach by any Party of this Agreement, or limit or
otherwise affect the termination rights, indemnification rights or other
remedies available under this Agreement to the Party receiving such notice.

 

7.7.                              No Alternative Transactions.  Until the
expiration of the Exercise Period, the parties agree that none of the Sellers,
Blocker, AcquisitionCo or the Companies shall and each of the Sellers and the
Companies shall require its respective Representatives not to, directly or
indirectly, (i) initiate, solicit, encourage or otherwise facilitate any
inquiry, proposal, offer or discussion with any party (other than the Parent or
the Buyers) concerning any merger, reorganization, consolidation,
recapitalization, business combination, liquidation, dissolution, share
exchange, sale of stock, sale or license of material assets or similar business
transaction involving any of the Companies, (ii) furnish any non-public
information concerning the business, properties or assets of any of the
Companies to any party (other than the Parent or the Buyers) in connection with
any such transaction, or (iii) engage in discussions or negotiations with any
party (other than with the Parent or the Buyers) with respect to, or consummate,
any such transaction, or (iv) enter into, approve, agree to, recommend or
consummate any such transaction.

 

7.8.                              Publicity.  Any press release or release of
other information to the press or any other Person with respect to the subject
matter of this Agreement shall be mutually approved by the Buyers and the
Sellers, except as may be required by (i) any Gaming Law or other applicable
Law, Authorization, court process or (ii) obligations pursuant to any listing
agreement with or rules of any securities exchange or interdealer quotation
service in the United States or Australia; provided, however, the disclosing
party shall use commercially reasonable efforts to provide prior notice to and
consult with the non-disclosing party.  The Buyers and the Parent acknowledge
that HoldCo has filing obligations under the Securities Exchange Act of 1934, as
amended, and shall file a Current Report on Form 8-K after the signing of this
Agreement.

 

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7.9.                              Intentionally Omitted.

 

7.10.                        Tax Matters.

 

(A)                                  SECTION 754 ELECTION.  THE SELLERS SHALL
CAUSE CCR TO ATTACH A PROPERLY COMPLETED ELECTION STATEMENT TO CCR’S U.S. TAX
RETURNS WITH RESPECT TO INCOME TAXES FOR ITS TAXABLE YEAR THAT WILL END ON THE
CLOSING DATE PURSUANT TO SECTION 754 OF THE CODE AND ANY SIMILAR PROVISIONS OF
APPLICABLE STATE AND LOCAL LAW EFFECTIVE FOR THE TAX PERIOD OF CCR THAT INCLUDES
THE CLOSING DATE.

 

(B)                                 TAX INDEMNIFICATION.

 

(i)                                     After the Closing Date, HoldCo shall
indemnify, defend and hold harmless the Buyer Indemnified Parties from and
against and in respect of all Damages (without duplication) incurred or paid by
any of the Buyer Indemnified Parties arising out of, relating to or resulting
from (a) Taxes imposed on Blocker or AcquisitionCo for taxable periods ending on
or before the Closing Date (“Pre-Closing Periods”) and, with respect to any
period that begins on or before and that ends after the Closing Date (in each
case, a “Straddle Period”), the portion of such Straddle Period deemed to end on
and include the Closing Date; (b) Taxes imposed on Blocker or AcquisitionCo as a
result of the LandCo Disposition; (c) any breach of or inaccuracy in any
representation or warranty contained in Section 4.2(f) (without regard to any
“materiality” modifier); (d) Taxes imposed on any of Blocker or AcquisitionCo
under Treasury Regulations Section 1.1502-6 (and all corresponding provisions of
state, local, or foreign Law) as a result of being a member of any consolidated,
unitary, combined or similar group for any Pre-Closing Period or portion of any
Straddle Period deemed to end on and include the Closing Date; and (e) the
breach or nonperformance of any covenant or agreement on the part of HoldCo or
Blocker or AcquisitionCo with respect to Taxes set forth in this Section 7.10.
Any cash left in Blocker or AcquisitionCo at Closing shall be credited against
any HoldCo indemnification obligation arising under this Section 7.10.

 

(ii)                                  After the Closing Date, the Sellers shall
jointly and severally indemnify, defend and hold harmless the Buyer Indemnified
Parties from and against and in respect of all Damages (without duplication) 
incurred or paid by any of the Buyer Indemnified Parties arising out of,
relating to or resulting from (a) Taxes imposed on any of the Companies for
Pre-Closing Periods (including the XpressBet Assessments) and, with respect to
any Straddle Period, the portion of such Straddle Period deemed to end on and
include the Closing Date; (b) any breach of or inaccuracy in any representation
or warranty contained in Section 5.11 (without regard to any “materiality”
modifier); (c) Taxes imposed on any of the Companies under Treasury Regulations
Section 1.1502-6 (and all corresponding provisions of state, local or foreign
Law) as a result of being a member of any consolidated, unitary, combined or
similar group for any Pre-Closing Period or portion of any Straddle Period
deemed to end on and include the Closing Date; and (d) the breach or
nonperformance of any covenant or agreement on the part of Seller with respect
to Taxes set forth in this Section 7.10 or Section 7.1(s).  Notwithstanding the
foregoing, the Sellers shall not be obligated to indemnify the Buyer Indemnified
Parties for Damages attributable to Non-Income Taxes (but not including Damages
attributable to the XpressBet Assessments) until such time as Buyer Indemnified
Parties’ Damages attributable to Non-Income Taxes (but not including Damages
attributable to the XpressBet Assessments) exceed $500,000.

 

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(iii)                               After the Closing Date, the Parent and the
Buyers shall jointly and severally indemnify, defend and hold harmless the
Seller Indemnified Parties from and against and in respect of all Damages
(without duplication) incurred or paid by any of the Seller Indemnified Parties
arising out of, relating to or resulting from (a) Taxes imposed on Blocker
AcquisitionCo, or any of the Companies for taxable periods beginning after the
Closing Date (“Post-Closing Periods”) and, with respect to any Straddle Period,
that portion of such Straddle Period deemed to begin immediately after the
Closing Date; and (b) the breach or nonperformance of any covenant or agreement
on the part of Buyers or Parent with respect to Taxes contained in this
Section 7.10 or Section 7.1(s).  Notwithstanding the foregoing, the Parent and
the Buyers shall not be obligated to indemnify the Seller Indemnified Parties
for Damages attributable to Non-Income Taxes until such time as Seller
Indemnified Parties’ Damages attributable to Non-Income Taxes exceed $500,000.

 

(C)                                  ALLOCATION OF STRADDLE PERIOD TAXES.  IN
ORDER TO APPORTION APPROPRIATELY ANY TAXES RELATING TO A STRADDLE PERIOD, THE
PARTIES SHALL, TO THE EXTENT PERMITTED OR REQUIRED UNDER APPLICABLE LAW, TREAT
THE CLOSING DATE AS THE LAST DAY OF THE TAXABLE YEAR OR PERIOD OF EACH RELEVANT
ENTITY FOR ALL TAX PURPOSES.  IN ANY CASE WHERE APPLICABLE LAW DOES NOT PERMIT
THE PARTIES TO TREAT THE CLOSING DATE AS THE LAST DAY OF THE TAXABLE YEAR OR
PERIOD, THE PORTION OF ANY TAXES THAT ARE ALLOCABLE TO THE PORTION OF THE
STRADDLE PERIOD ENDING ON THE CLOSING DATE SHALL BE AS FOLLOWS:

 

(i)                                     Taxes that are imposed on a periodic
basis and not based on income or receipts (e.g., property taxes), shall be equal
to the product of such Taxes attributable to the entire Taxable period and a
fraction, the numerator of which is the total number of days in such period that
elapsed through the Closing Date and the denominator of which is the number of
days in such Taxable period; provided, however, that, if the amount of periodic
Taxes imposed for such Taxable period reflects different rates of Tax imposed
for different periods within such Taxable period, the formula described in the
preceding clause shall be applied separately with respect to each such period
within the Taxable period; and

 

(ii)                                  Taxes (other than those described in
clause (i)) shall be computed as if such Taxable period ended on and included
the Closing Date.

 

(D)                                 BLOCKER BUYER.  BUYERS AGREE THAT THE
PURCHASER OF THE HOLDCO UNITS WILL BE SUBJECT TO U.S. FEDERAL INCOME TAXATION AS
A UNITED STATES “C” CORPORATION (“BLOCKER BUYER”) AND THAT BLOCKER WILL JOIN THE
FEDERAL CONSOLIDATED GROUP OF WHICH BLOCKER BUYER IS A MEMBER AFTER THE CLOSING
DATE, SUCH THAT BLOCKER’S FEDERAL TAXABLE YEAR WILL CLOSE AS OF THE CLOSING
DATE.

 

(E)                                  EXTRAORDINARY TRANSACTIONS.

 

(i)                                     Notwithstanding anything to the contrary
in this Agreement, Parent, Buyers and Blocker Buyer jointly and severally agree
to indemnify and hold harmless Seller Indemnified Parties for any Damages
attributable to Taxes resulting from any transaction engaged in by Parent,
Buyers, Blocker Buyer, Blocker, AcquisitionCo or any Company not in the ordinary
course of business, other than payment of the Company Loan Payment Amount paid
by CCR at the Closing pursuant to Section 2.2(b)(i) of this Agreement and any
repayment, or contribution to any of Blocker, AcqusitionCo or the Companies of
the Blocker Note (as such term is defined in Schedule 4.2(e)), occurring on or
after the Closing Date after Buyers’ and

 

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Blocker Buyer’s purchase of the Millennium Units, the HoldCo Units and the
Blocker Option Agreement, including any Tax resulting from the exercise of the
Blocker Option Agreement.

 

(ii)                                  Notwithstanding anything to the contrary
in this Agreement, Parent, Buyers, Blocker Buyer, Blocker, AcquisitionCo, each
Company, and Sellers agree to allocate all transactions not in the ordinary
course of business, other than payment of the Company Loan Payment Amount paid
by CCR at the Closing pursuant to Section 2.2(b)(i) of this Agreement and any
repayment, or contribution to any of Blocker, AcqusitionCo or the Companies of
the Blocker Note (as such term is defined in Schedule 4.2(e)), occurring on or
after the Closing Date after Buyers’ and Blocker Buyer’s purchase of the
Millennium Units, the HoldCo Units, and the Blocker Option Agreement to a
Post-Closing Period or, with respect to a Straddle Period, that portion of such
Straddle Period deemed to begin immediately after the Closing Date, as
applicable, and to report such transactions on Buyers’ or Blocker Buyer’s
federal Income Tax Return, as applicable, to the extent permitted by Treas. Reg.
§1.1502-76(b)(1)(ii)(B) or similar principles.

 

(F)                                    RETURNS.  (I)  AFTER THE CLOSING DATE,
HOLDCO SHALL, AT ITS OWN EXPENSE, PREPARE OR CAUSE TO BE PREPARED AND TIMELY
FILE OR CAUSE TO BE TIMELY FILED ALL TAX RETURNS FOR BLOCKER AND ACQUISITIONCO
FOR ALL PRE-CLOSING PERIODS, AND SHALL PAY ALL TAXES DUE FOR THE TAXABLE PERIODS
COVERED BY SUCH TAX RETURNS.  HOLDCO SHALL PROVIDE BUYERS WITH A COPY OF SUCH
TAX RETURNS AT LEAST THIRTY (30) DAYS PRIOR TO THE DUE DATE FOR FILING SUCH TAX
RETURNS (AFTER TAKING INTO ACCOUNT ANY APPLICABLE EXTENSIONS OR WAIVERS) (THE
“HOLDCO DUE DATE”). BUYERS SHALL PROVIDE HOLDCO WITH ITS COMMENTS, IF ANY, TO
SUCH TAX RETURNS AT LEAST TWENTY (20) DAYS PRIOR TO THE HOLDCO DUE DATE.  IF THE
BUYERS OBJECT IN GOOD FAITH TO ANY ITEM REFLECTED ON SUCH A TAX RETURN, HOLDCO
AND BUYERS SHALL ATTEMPT TO RESOLVE THE DISAGREEMENT IN GOOD FAITH.  IF THE
PARTIES ARE UNABLE TO RESOLVE THE DISAGREEMENT, THE DISPUTE SHALL BE REFERRED TO
AN INDEPENDENT ACCOUNTING FIRM JOINTLY SELECTED BY THE BUYERS AND THE SELLERS
OR, IF THE BUYERS AND THE SELLERS ARE UNABLE TO AGREE ON SUCH ACCOUNTING FIRM
WITHIN FIFTEEN (15) DAYS, AN INDEPENDENT ACCOUNTING FIRM JOINTLY SELECTED WITHIN
TEN (10) DAYS BY THE BUYERS’ ACCOUNTING FIRM AND AN ACCOUNTING FIRM IDENTIFIED
BY THE SELLERS (SUCH FIRM, THE “INDEPENDENT ACCOUNTING FIRM”), WHICH SHALL
RESOLVE THE DISPUTE NO LATER THAN THREE (3) DAYS PRIOR TO THE HOLDCO DUE DATE
AND WHOSE DETERMINATION SHALL BE BINDING ON THE PARTIES. THE FEES AND EXPENSES
OF THE INDEPENDENT ACCOUNTING FIRM SHALL BE BORNE EQUALLY BY HOLDCO, ON THE ONE
HAND, AND THE BUYERS, ON THE OTHER HAND. IF THE DISPUTE HAS NOT BEEN RESOLVED OR
THE INDEPENDENT ACCOUNTING FIRM HAS NOT MADE ITS DETERMINATION THREE (3) DAYS
PRIOR TO THE HOLDCO DUE DATE, SUCH TAX RETURN SHALL BE FILED AS ORIGINALLY
PROPOSED BY HOLDCO, REFLECTING ANY ITEMS PREVIOUSLY OBJECTED TO BY THE BUYERS
AND AGREED TO BY HOLDCO.  WHEN THE AMOUNT OF TAXES DUE IN RESPECT OF SUCH TAX
RETURN IS FINALLY DETERMINED BY THE INDEPENDENT ACCOUNTING FIRM, A SETTLEMENT
PAYMENT SHALL BE MADE FROM HOLDCO TO THE BUYERS IN AN AMOUNT EQUAL TO THE
EXCESS, IF ANY, OF (I) THE AMOUNT FINALLY DETERMINED TO BE DUE OVER (II) THE
AMOUNT OF TAXES ACTUALLY PAID BY HOLDCO PURSUANT TO THIS SECTION 7.10(F)(I) WITH
RESPECT TO SUCH TAXABLE PERIOD, OR FROM THE BUYERS TO HOLDCO IN AN AMOUNT EQUAL
TO THE EXCESS, IF ANY, OF (I) THE AMOUNT OF TAXES ACTUALLY PAID BY HOLDCO
PURSUANT TO THIS SECTION 7.10(F)(I) WITH RESPECT TO SUCH TAXABLE PERIOD OVER
(II) THE AMOUNT FINALLY DETERMINED TO BE DUE.

 

(ii)                                  After the Closing Date, the Sellers shall,
at Sellers’ own expense, prepare or cause to be prepared and timely file or
cause to be timely filed all Tax Returns for the Companies for all Pre-Closing
Periods, and shall pay all Taxes due for the taxable periods

 

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covered by such Tax Returns.  The Sellers shall provide Buyers with a copy of
such Tax Returns at least thirty (30) days prior to the due date for filing such
Tax Returns (after taking into account any applicable extensions or waivers)
(the “Sellers Due Date”). Buyers shall provide the Sellers with its comments, if
any, to such Tax Returns at least twenty (20) days prior to the Sellers Due
Date.  If the Buyers object in good faith to any item reflected on such a Tax
Return, the Sellers and Buyers shall attempt to resolve the disagreement in good
faith.  If the parties are unable to resolve the disagreement, the dispute shall
be referred to the Independent Accounting Firm, which shall resolve the dispute
no later than 3 days prior to the Sellers Due Date and whose determination shall
be binding on the parties The fees and expenses of the Independent Accounting
Firm shall be borne equally by the Sellers, on the one hand, and the Buyers, on
the other hand. If the dispute has not been resolved or the Independent
Accounting Firm has not made its determination three (3) days prior to the
Sellers Due Date, such Tax Return shall be filed as originally proposed by the
Sellers, reflecting any items previously objected to by the Buyers and agreed to
by Sellers.  When the amount of Taxes due in respect of such Tax Return is
finally determined by the Independent Accounting Firm, a settlement payment
shall be made from the Sellers to the Buyers in an amount equal to the excess,
if any, of (i) the amount finally determined to be due over (ii) the amount of
Taxes actually paid by the Sellers pursuant to this Section 7.10(f)(ii) with
respect to such taxable period, or from the Buyers to the Sellers in an amount
equal to the excess, if any, of (i) the amount of Taxes actually paid by HoldCo
pursuant to this Section 7.10(f)(ii) with respect to such taxable period over
(ii) the amount finally determined to be due.

 

(iii)                               The Buyers shall, at their own expense,
prepare or cause to be prepared and timely file or cause to be timely filed all
Tax Returns for Blocker, AcquisitionCo, and the Companies for all Straddle
Periods.  The Buyers shall provide HoldCo or the Sellers, as applicable, with a
copy of such Tax Returns at least thirty (30) days prior to the due date for
filing such Tax Returns (after taking into account any applicable extensions or
waivers) (the “Buyers Due Date”).  HoldCo or the Sellers, as applicable, shall
provide the Buyers with comments to such Returns, if any, at least twenty (20)
days prior to the Buyers Due Date.  HoldCo and the Sellers, as the case may be,
shall pay to the Buyers all Taxes for which Holdco or the Sellers are liable
pursuant to Section 7.10 hereof with respect to any such Tax Return promptly
upon the written request of the Buyers (the “Buyer Requested Amount”), setting
forth in detail the computation of the amount owed.  If HoldCo or the Sellers,
as applicable, objects in good faith to any item reflected on such a Tax Return,
HoldCo or the Sellers, as applicable, and Buyers shall attempt to resolve the
disagreement in good faith.  If the parties are unable to resolve the
disagreement, the dispute shall be referred to the Independent Accounting Firm,
which shall resolve the dispute no later than three (3) days prior to the Buyers
Due Date and whose determination shall be binding on the parties.  The fees and
expenses of the Independent Accounting Firm shall be borne equally by HoldCo or
the Sellers, as applicable, on the one hand, and the Buyers, on the other hand. 
If the dispute has not been resolved or the Independent Accounting Firm has not
made its determination three (3) days prior to the Buyers Due Date, such Tax
Return shall be filed as originally proposed by the Buyers, reflecting any items
previously objected to by HoldCo or the Sellers, as the case may be and agreed
to by the Buyers, and HoldCo or the Sellers, as applicable, shall pay to the
Buyers the Buyer Requested Amount.  When the amount due to the Buyers from
HoldCo or the Sellers, as applicable, in respect of such Tax Return is finally
determined by the Independent Accounting Firm, a settlement payment shall be
made from HoldCo or the Sellers, as applicable, to the Buyers in an amount equal
to the

 

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excess, if any, of (i) the amount finally determined to be due over (ii) the
Buyer Requested Amount, or from the Buyers to HoldCo or the Sellers, as
applicable, in an amount equal to the excess, if any, of (i) the Buyer Requested
Amount over (ii) the amount finally determined to be due.

 

(iv)                              All Tax Returns described in this
Section 7.10(f) shall be prepared in accordance with past custom and practice of
Blocker, AcquisitionCo, and the Companies, as applicable, in preparing their Tax
Returns, except to the extent otherwise required by applicable Law. 
Notwithstanding the foregoing, Section 7.10(j) shall exclusively govern the
filing of Transfer Tax Returns and payment of Transfer Taxes.

 

(G)                                 REFUNDS AND TAX BENEFITS. ANY TAX REFUNDS
THAT ARE RECEIVED BY BUYERS, ACQUISITIONCO, BLOCKER OR ANY COMPANY, AND ANY
AMOUNTS CREDITED AGAINST TAXES WHICH BUYERS, ACQUISITIONCO, BLOCKER OR ANY
COMPANY ACTUALLY REALIZES, THAT RELATE TO PRE-CLOSING PERIODS, OR, WITH RESPECT
TO ANY STRADDLE PERIOD, TO THE PORTION OF SUCH STRADDLE PERIOD DEEMED TO END ON
AND INCLUDE THE CLOSING DATE AND WHICH RELATES SOLELY TO BLOCKER, ACQUISITIONCO
OR THE COMPANIES (AND NOT BUYERS OR ANY OF THEIR AFFILIATES), SHALL BE FOR THE
ACCOUNT OF SELLERS, AND BUYERS SHALL PAY OVER TO SELLERS ANY SUCH REFUND OR THE
AMOUNT OF ANY SUCH CREDIT, NET OF ANY TAXES OR EXPENSES INCURRED BY BUYERS,
ACQUISITIONCO, BLOCKER OR ANY COMPANY RELATING TO SUCH TAX REFUND OR CREDIT,
WITHIN 10 BUSINESS DAYS AFTER RECEIPT OR ENTITLEMENT THERETO.  NOTWITHSTANDING
THE FOREGOING, ANY TAX REFUNDS OR CREDITS THAT ARE RECEIVED BY BUYERS,
ACQUISITIONCO, BLOCKER OR ANY COMPANY THAT ARE ATTRIBUTABLE TO THE OPERATIONS OR
ACTIVITIES OF ACQUISITIONCO, BLOCKER, OR ANY COMPANY (I) IN ANY POST-CLOSING
PERIOD OR IN THAT PORTION OF ANY STRADDLE PERIOD DEEMED TO BEGIN IMMEDIATELY
AFTER THE CLOSING DATE, OR (II) IN ANY PRE-CLOSING PERIOD OR IN THAT PORTION OF
A STRADDLE PERIOD DEEMED TO END ON AND INCLUDE THE CLOSING DATE TO THE EXTENT
SUCH REFUND RELATES OR IS ATTRIBUTABLE TO THE CARRYBACK OF ANY CREDIT, LOSS,
DEDUCTION OR OTHER TAX ITEM ARISING IN OR ATTRIBUTABLE TO ANY POST-CLOSING
PERIOD OR IN THAT PORTION OF ANY STRADDLE PERIOD DEEMED TO BEGIN IMMEDIATELY
AFTER THE CLOSING DATE SHALL BE FOR THE ACCOUNT OF THE BUYERS. IN ADDITION,
REFUNDS OF TAXES PAID BY BUYERS PURSUANT TO SECTION 7.10(E)(I) SHALL BE FOR THE
ACCOUNT OF BUYERS.

 

(H)                                 TAX PROCEEDINGS.

 

(i)                                     If any third party shall notify any of
the Buyer Indemnified Parties of any audit, litigation, request for payment or
other proceeding with respect to Taxes or other payments that may give rise to
indemnity under this Section 7.10 (each, a “Tax Proceeding”), such Buyer
Indemnified Party shall promptly (and in any event within fifteen (15) Business
Days after receiving notice of the Tax Proceeding) notify HoldCo or the Sellers,
as applicable, thereof in writing; provided, however, that failure to give such
timely notification shall not affect the indemnification provided under this
Section 7.10, except to the extent HoldCo or the Sellers, as applicable,  shall
have been actually and materially prejudiced as a result of such failure.

 

(ii)                                  To the extent that any Tax Proceeding
involves a claim for Taxes of, or payments relating to, Blocker, AcquisitionCo
or the Companies for any Pre-Closing Period, HoldCo or the Sellers, as the case
may be, shall at their own expense control the conduct of such Tax Proceeding. 
HoldCo or the Sellers, as applicable, shall (i) consult in good faith with the
Buyer Indemnified Parties before taking any significant action in connection
with the Tax Proceeding that may materially adversely affect the Buyer
Indemnified Parties, (ii) consult in

 

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good faith with the Buyer Indemnified Parties and offer the Buyer Indemnified
Parties a reasonable opportunity to comment before submitting any written
materials prepared or furnished in connection with the Tax Proceeding
(including, to the extent practicable, any documents furnished to the applicable
Tax Authority in connection with any discovery request) to the extent such
materials concern matters in the Tax Proceeding that may materially adversely
affect the Buyer Indemnified Parties, (iii) conduct the Tax Proceeding
diligently and in good faith, (iv) not pay, discharge, settle, compromise,
litigate, or otherwise dispose (collectively, “dispose”) of any item subject to
such Tax Proceeding to the extent such item may materially adversely affect the
Buyer Indemnified Parties without obtaining the prior written consent of the
Buyer Indemnified Parties; which consent shall not be unreasonably withheld,
conditioned or delayed, and (v) if applicable, pay the Buyer Indemnified Parties
their allocable share, as provided for in this section, of the amount of Taxes
or payments due pursuant to such disposition within five (5) Business Days of
the due date of the payment of such amount.

 

(iii)                               To the extent that any Tax Proceeding
involves Taxes of Blocker, AcquisitionCo or the Companies for any Straddle
Periods or Post-Closing Periods, the Buyer Indemnified Parties shall at their
own expense control the conduct of such Tax Proceeding. The Buyer Indemnified
Parties shall (i) consult in good faith with HoldCo or the Sellers, as
applicable, before taking any significant action in connection with the Tax
Proceeding that may materially adversely affect the Seller Indemnified Parties,
(ii) consult in good faith with HoldCo or the Sellers, as applicable, and offer
HoldCo or the Sellers, as applicable, a reasonable opportunity to comment before
submitting any written materials prepared or furnished in connection with the
Tax Proceeding (including, to the extent practicable, any documents furnished to
the applicable Tax Authority in connection with any discovery request) to the
extent such materials concern matters in the Tax Proceeding that may materially
adversely affect the Seller Indemnified Parties, (iii) conduct the Tax
Proceeding diligently and in good faith, (iv) use reasonable best efforts to
provide HoldCo and Sellers, as applicable, with an opportunity to attend at
their own expense, as an observer, settlement discussions and other conferences
and meetings relating thereto to the extent such item may materially adversely
affect the Seller Indemnified Parties, and (v) not pay, discharge, settle,
compromise, litigate, or otherwise dispose (collectively, “dispose”) of any item
subject to such Tax Proceeding to the extent such item may materially adversely
affect the Seller Indemnified Parties without obtaining the prior written
consent of HoldCo or the Sellers, as applicable, which consent shall not be
unreasonably withheld, conditioned or delayed. HoldCo or the Sellers, as
applicable, shall pay the Buyer Indemnified Parties their allocable share, as
provided for in this section, of the amount of Taxes or payments due pursuant to
such disposition within five (5) Business Days of the due date of the payment of
such amount.

 

(I)                                     TAX SHARING AGREEMENTS.  ALL TAX SHARING
AGREEMENTS OR SIMILAR AGREEMENTS WITH RESPECT TO OR INVOLVING BLOCKER,
ACQUISITIONCO OR THE COMPANIES SHALL BE TERMINATED AS OF THE CLOSING DATE AND,
AFTER THE CLOSING DATE, NONE OF BLOCKER, ACQUISITIONCO  OR THE COMPANIES SHALL
BE BOUND THEREBY OR HAVE ANY LIABILITY THEREUNDER.

 

(J)                                     TRANSFER TAXES.  EXCEPT WITH RESPECT TO
THE PENNSYLVANIA GAMING FEE, ALL TRANSFER, DOCUMENTARY, SALES, USE, STAMP,
REGISTRATION AND OTHER SUCH TAXES AND FEES (INCLUDING ANY PENALTIES AND
INTEREST) INCURRED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT SHALL BE PAID 50% BY THE BUYERS, ON THE ONE HAND, AND 50% BY THE
SELLERS, ON THE

 

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OTHER HAND.  IF THE PENNSYLVANIA GAMING FEE SHALL BECOME DUE AS A RESULT OF THE
SALE FROM THE SELLERS TO THE BUYERS OF WTA, SUCH FEE SHALL BE SPLIT EQUALLY
BETWEEN THE SELLERS, ON THE ONE HAND, AND THE BUYERS, ON THE OTHER HAND.  THE
BUYERS WILL, AT THEIR OWN EXPENSE, FILE ALL NECESSARY TAX RETURNS AND OTHER
DOCUMENTATION WITH RESPECT TO ALL SUCH TRANSFER, DOCUMENTARY, SALES, USE, STAMP,
REGISTRATION AND OTHER TAXES AND FEES, AND, IF REQUIRED BY APPLICABLE LAW, THE
SELLERS WILL JOIN IN THE EXECUTION OF ANY SUCH TAX RETURNS AND OTHER
DOCUMENTATION.  THE SELLERS SHALL PAY TO THE BUYERS, NO LATER THAN FIVE (5) DAYS
BEFORE THE DUE DATE OF ANY TAXES DESCRIBED IN THIS SECTION 7.10(J), SELLERS’
SHARE OF SUCH TAXES, AND THE BUYER SHALL PAY THE FULL AMOUNT OF SUCH TAXES OWED
TO THE APPROPRIATE TAX AUTHORITY.

 

(K)                                  CERTAIN AMENDED RETURNS.  THE BUYERS,
ACQUISITIONCO AND BLOCKER SHALL NOT AMEND, OR CAUSE TO BE AMENDED, ANY MATERIAL
TAX RETURN WITH RESPECT TO INCOME TAXES THAT INCLUDES THE PERIOD THAT INCLUDES
THE LANDCO DISPOSITION WITHOUT THE APPROVAL OF HOLDCO, IF SUCH AMENDMENT WOULD
GIVE RISE TO AN INDEMNIFICATION OBLIGATION ON THE PART OF HOLDCO PURSUANT TO
SECTION 7.10(C)(I) OF THIS AGREEMENT, WHICH APPROVAL SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED.

 

(L)                                     COOPERATION.  THE BUYERS AND BLOCKER AND
ACQUISITIONCO ON THE ONE HAND, AND HOLDCO AND THE SELLERS ON THE OTHER HAND,
SHALL COOPERATE FULLY, AS AND TO THE EXTENT REASONABLY REQUESTED BY THE OTHER
PARTY, IN CONNECTION WITH THE FILING OF TAX RETURNS PURSUANT TO THIS
SECTION 7.10 AND ANY TAX PROCEEDING SUBJECT TO SECTION 7.10(H) AND SHALL PROVIDE
PROMPT NOTICE TO THE OTHER PARTY OF ANY NOTICE RECEIVED FROM ANY TAX AUTHORITY
THAT COULD REASONABLY AFFECT THE TAX LIABILITY OF SUCH OTHER PARTY.  SUCH
COOPERATION SHALL INCLUDE THE RETENTION AND (UPON THE OTHER PARTY’S REQUEST) THE
PROVISION OF RECORDS AND INFORMATION THAT ARE REASONABLY RELEVANT TO ANY SUCH
TAX PROCEEDING  AND FILING OF RETURNS AND MAKING EMPLOYEES AVAILABLE ON A
MUTUALLY CONVENIENT BASIS TO PROVIDE ADDITIONAL INFORMATION AND EXPLANATION OF
ANY MATERIAL PROVIDED HEREUNDER. THE BUYERS, BLOCKER, ACQUISITIONCO, HOLDCO, AND
THE SELLERS SHALL EACH PRESERVE AND KEEP ALL BOOKS AND RECORDS WITH RESPECT TO
TAXES AND TAX RETURNS OF BLOCKER, ACQUISITIONCO, AND THE COMPANIES IN SUCH
PARTY’S POSSESSION AS OF THE CLOSING DATE, OR AS LATER COME INTO SUCH PARTY’S
POSSESSION, UNTIL THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS AND
SHALL GIVE REASONABLE WRITTEN NOTICE TO THE OTHER PARTY PRIOR TO TRANSFERRING,
DESTROYING OR DISCARDING ANY SUCH INFORMATION, RETURNS, BOOKS, RECORDS OR
DOCUMENTS AND, IF THE OTHER PARTY SO REQUESTS, ALLOW THE OTHER PARTY TO TAKE
POSSESSION OF SUCH INFORMATION, RETURNS, BOOKS, RECORDS OR DOCUMENTS.  THE PARTY
REQUESTING ASSISTANCE HEREUNDER SHALL REIMBURSE THE OTHER FOR REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN PROVIDING SUCH ASSISTANCE.  THE
BUYERS AND BLOCKER AND ACQUISITIONCO ON THE ONE HAND, AND HOLDCO AND THE SELLERS
ON THE OTHER HAND, FURTHER AGREE, UPON REQUEST, TO USE THEIR REASONABLE EFFORTS
TO OBTAIN ANY CERTIFICATE OR OTHER DOCUMENT FROM ANY TAX AUTHORITY OR ANY OTHER
PERSON AS MAY BE NECESSARY TO MITIGATE, REDUCE OR ELIMINATE ANY TAX THAT COULD
BE IMPOSED (INCLUDING WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT).

 

(M)                               EXCEPT FOR MATTERS SET FORTH ON SCHEDULE 7.10
OF THE SELLERS DISCLOSURE SCHEDULES OR AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE BUYERS (WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED), EACH OF BLOCKER AND
ACQUISITIONCO FROM THE DATE HEREOF UNTIL THE CLOSING DATE SHALL NOT: (I) MAKE,
AMEND OR REVOKE ANY MATERIAL TAX ELECTION, (II) SETTLE OR COMPROMISE ANY
MATERIAL TAX LIABILITY, CLAIM OR ASSESSMENT, OR AGREE TO ANY ADJUSTMENT OF ANY
MATERIAL TAX ATTRIBUTE, (III) FILE ANY AMENDED MATERIAL TAX RETURN, (IV) ENTER
INTO ANY MATERIAL “CLOSING AGREEMENT” WITHIN THE

 

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MEANING OF SECTION 7121 OF THE CODE (OR ANY MATERIAL COMPARABLE AGREEMENT UNDER
STATE, LOCAL OR FOREIGN LAW), (V) SURRENDER ANY RIGHT TO CLAIM A MATERIAL TAX
REFUND, (VI) CONSENT TO WAIVE ANY STATUTE OF LIMITATIONS WITH RESPECT TO
MATERIAL TAXES.

 

(N)                                 SURVIVAL.  THE INDEMNIFICATION OBLIGATIONS
PURSUANT TO THIS SECTION 7.10 SHALL SURVIVE THE CLOSING UNTIL NINETY (90) DAYS
FOLLOWING THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS (INCLUDING ANY
EXTENSIONS THEREOF) RELEVANT TO EACH PARTICULAR ITEM PROVIDED THAT IF NOTICE OF
INDEMNIFICATION UNDER SECTION 7.10 IS PROVIDED TO THE INDEMNIFYING PARTY, AS
APPLICABLE, PRIOR TO ANY SUCH EXPIRATION DATE, ANY OBLIGATION TO INDEMNIFY FOR
ANY CLAIM DESCRIBED IN SUCH NOTICE SHALL CONTINUE INDEFINITELY UNTIL SUCH CLAIM
IS FINALLY RESOLVED.  FOR THE AVOIDANCE OF DOUBT, NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, THE REPRESENTATIONS SET FORTH IN
SECTION 4.2(F) AND SECTION 5.11 OF THIS AGREEMENT SHALL SURVIVE UNTIL 90 DAYS
AFTER THE EXPIRATION OF THE APPLICABLE STATUTES OF LIMITATION.

 

(O)                                 EXCLUSIVITY.  EXCEPT AS OTHERWISE PROVIDED
IN ARTICLE 10, ALL ISSUES RELATING TO TAX MATTERS ASSOCIATED WITH BLOCKER,
ACQUISITIONCO, AND THE COMPANIES SHALL BE GOVERNED EXCLUSIVELY BY THE PROVISIONS
OF THIS SECTION 7.10.  PRINCIPLES EQUIVALENT TO SECTION 10.3(D) AND (E) SHALL
APPLY FOR PURPOSES OF THIS SECTION 7.10.

 

7.11.                        LandCo Disposition.  Following the Exercise Date
and prior to the Closing, HoldCo shall cause (i) all of the equity interests in
LandCo or (ii) all of the assets and liabilities of LandCo, to be sold or
otherwise transferred to a third party that will be unaffiliated with CCR after
the Closing; provided, Bill Wortman and any entities that he controls or is
affiliated with shall not be considered an Affiliate of the Companies after the
Closing.  In the event that the assets and liabilities of LandCo are sold or
otherwise transferred, then HoldCo shall cause LandCo to either be liquidated or
otherwise removed as a direct or indirect subsidiary of Blocker and
AcquisitionCo.  The agreements and arrangements relating to the sale or transfer
of such interests, or assets and liabilities, shall include a full and
unconditional release and indemnification of each of the Companies, which shall
survive the Closing, for any and all Liabilities of, or arising in connection
with or related to, LandCo including all Liabilities of the Companies under the
existing Nevada Palace lease, but excluding any Liabilities arising after the
Closing under the Amended Nevada Palace Lease.  The transactions described in
the previous two sentences shall be referred to as the “LandCo Disposition.”

 

7.12.                        Excluded Opportunities.  The Buyers acknowledge
that neither any Buyer nor its Affiliates nor the Companies has any right, title
or interest to the gaming opportunity at Rockingham Park in New Hampshire (the
“Rockingham Opportunity”), the gaming opportunity at Tejon Ranch in California
(the “Tejon Opportunity”), any other Excluded Opportunity or the agreement set
forth on Schedule 7.12 of the Sellers Disclosure Schedules.  The agreements and
arrangements relating to the transfer of the assets, liabilities, contracts and
agreements related to each Excluded Opportunity shall include a full and
unconditional release and indemnification of each of the Companies, which shall
survive the Closing, for any and all Liabilities of, or arising in connection
with or related to, the Excluded Opportunities.  Any moneys received by the
Companies on or prior to the Closing Date with respect to receivables related to
the Rockingham Opportunity may be included in the Company Loan Amount and/or
applied to repay any of the Debt Facilities or may reduce the amount of the
Remaining Accrued Liabilities.  The Parent and the Buyers acknowledge and agree
that nothing contained herein shall (i) prevent CCR or the

 

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Companies from developing the Excluded Opportunities or incurring costs and
expenses with respect to such development prior to the Closing, so long as CCR
and the Companies do not retain any obligations or Liabilities with respect to
such Excluded Opportunities following the Closing or (ii) obligate HoldCo or any
Affiliate of Oaktree Capital Management (other than Millennium and the
Companies) to present any gaming opportunities to CCR, Parent or the Buyers.

 

7.13.                        Assistance and Records.  If the Closing occurs, the
Buyers shall retain, and cause each Company to retain, all books and records
relating to the conduct of the Business prior to the Closing Date for a period
of at least six years from the date hereof.  The Sellers and their
Representatives shall have the right during business hours, upon reasonable
notice to the Buyers, to inspect and make copies of any such records in order to
prepare its financial statements, Tax returns and other documents and reports
that the Sellers or any of their Affiliates are required to file with
Governmental Entities or any stock exchange on which their securities may be
listed, all at the sole cost and expense of the Seller(s) requesting such
records.

 

7.14.                        Guarantee.

 

(A)                                  THE PARENT ABSOLUTELY, UNCONDITIONALLY AND
IRREVOCABLY GUARANTEES TO THE SELLERS THE DUE AND PUNCTUAL OBSERVANCE,
PERFORMANCE AND DISCHARGE OF ALL OF THE COVENANTS, AGREEMENTS, OBLIGATIONS AND
LIABILITIES OF THE BUYERS PURSUANT TO THIS AGREEMENT, WHETHER FIXED, CONTINGENT,
NOW EXISTING OR HEREAFTER ARISING, CREATED, ASSUMED, INCURRED OR ACQUIRED FROM
THE EXERCISE DATE THROUGH THE CLOSING DATE (THE “OBLIGATIONS”).

 

(B)                                 THE PARENT AGREES THAT THE OBLIGATIONS OF
THE PARENT HEREUNDER SHALL NOT BE RELEASED OR DISCHARGED, IN WHOLE OR IN PART,
OR OTHERWISE AFFECTED BY (I) THE FAILURE OF THE SELLERS TO ASSERT ANY CLAIM OR
DEMAND OR TO ENFORCE ANY RIGHT OR REMEDY AGAINST THE ANY OF BUYERS, (II) ANY
CHANGE IN THE TIME, PLACE OR MANNER OF PAYMENT OF ANY OF THE OBLIGATIONS OR ANY
RESCISSION, WAIVER, COMPROMISE, CONSOLIDATION OR OTHER AMENDMENT OR MODIFICATION
OF ANY OF THE TERMS OF PROVISIONS OF THIS AGREEMENT, (III) ANY CHANGE IN THE
CORPORATE EXISTENCE, STRUCTURE OR OWNERSHIP OF ANY OF THE BUYERS, (IV) ANY
INSOLVENCY, BANKRUPTCY, REORGANIZATION OR OTHER SIMILAR PROCEEDING AFFECTING ANY
OF THE BUYERS, (V) ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT,
(VI) THE EXISTENCE OF ANY CLAIM, SET-OFF OR OTHER RIGHTS WHICH THE PARENT MAY
HAVE AT ANY TIME AGAINST THE SELLERS OR ANY OF THE BUYERS, WHETHER IN CONNECTION
WITH THE OBLIGATIONS OR OTHERWISE, AND (VII) ANY OTHER ACT OR OMISSION WHICH
MIGHT IN ANY MANNER OR TO ANY EXTENT VARY THE RISK OF THE PARENT OR OTHERWISE
OPERATE AS A RELEASE OR DISCHARGE OF THE PARENT, ALL OF WHICH MAY BE DONE
WITHOUT NOTICE TO THE PARENT.  THE SELLERS SHALL NOT BE BOUND OR OBLIGED TO
EXHAUST THEIR RECOURSE AGAINST THE BUYERS OR PURSUE ANY OTHER REMEDY WHATSOEVER
BEFORE BEING ENTITLED TO DEMAND THE SATISFACTION OF THE OBLIGATIONS BY THE
PARENT HEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARENT HEREBY
EXPRESSLY WAIVES ANY AND ALL RIGHTS OR DEFENSES ARISING BY REASON OF ANY LAW
WHICH WOULD OTHERWISE REQUIRE ANY ELECTION OF REMEDIES BY THE SELLERS.  THE
PARENT ACKNOWLEDGES THAT IT WILL RECEIVE SUBSTANTIALLY DIRECT AND INDIRECT
BENEFITS FROM THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THAT THE
WAIVERS SET FORTH HEREIN ARE KNOWINGLY MADE IN CONTEMPLATION OF SUCH BENEFITS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE PARENT’S OBLIGATIONS UNDER
THIS GUARANTEE SHALL BE SUBJECT TO ANY AND ALL CLAIMS, DEFENSES, SETOFFS OR
OTHER RIGHTS OF OR AVAILABLE TO THE BUYERS.

 

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(C)                                  THIS GUARANTEE SHALL REMAIN IN FULL FORCE
AND EFFECT AND SHALL BE BINDING ON THE PARENT, ITS SUCCESSORS AND ASSIGNS UNTIL
ALL OF THE OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID, OBSERVED, PERFORMED OR
SATISFIED IN FULL.

 

7.15.                        Intentionally Omitted.

 

7.16.                        Intentionally Omitted.

 

7.17.                        Intentionally Omitted.

 

7.18.                        Intentionally Omitted.

 

7.19.                        No Assignment if Breach.

 

(A)                                  FOLLOWING THE EXERCISE DATE, THE SELLERS
AGREE TO USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ALL CONSENTS LISTED ON
SCHEDULE 7.19 OF THE SELLERS DISCLOSURE SCHEDULES.  NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, THIS AGREEMENT SHALL NOT CONSTITUTE
AN AGREEMENT TO EFFECT A CHANGE IN, OR TRANSFER, ASSIGN OR ASSUME, ANY CONTRACT,
IF THE ATTEMPTED CHANGE IN, OR TRANSFER, ASSIGNMENT OR ASSUMPTION OF THE SAME,
AS A RESULT OF THE ABSENCE OF THE CONSENT OR AUTHORIZATION OF A THIRD PARTY,
WOULD CONSTITUTE A BREACH OR DEFAULT UNDER ANY CONTRACT, WOULD VIOLATE ANY LAW
OR WOULD MATERIALLY INCREASE THE OBLIGATIONS OF THE BUYERS OR THE SELLERS WITH
RESPECT THERETO.  IF ANY SUCH CONSENT OR AUTHORIZATION IS NOT OBTAINED, THEN THE
BUYERS AND THE SELLERS SHALL ENTER INTO SUCH COOPERATIVE ARRANGEMENTS AS MAY BE
REASONABLY ACCEPTABLE TO THE BUYERS AND THE SELLERS, BUT WHICH SHALL NOT, IN ANY
EVENT, RESULT IN A BREACH OR DEFAULT UNDER ANY CONTRACT, VIOLATE ANY LAW OR
MATERIALLY INCREASE THE OBLIGATIONS OF THE BUYERS OR THE SELLERS WITH RESPECT
THERETO.

 

(B)                                 IN THE EVENT THAT THE CONSENT FOR THE
CONTRACT IDENTIFIED ON SCHEDULE 7.19(B) OF THE SELLERS DISCLOSURE SCHEDULES IS
NOT OBTAINED FROM THE RELEVANT THIRD PARTY PRIOR TO CLOSING THEN THE PURCHASE
PRICE SHALL BE REDUCED BY $25,000,000 (TWENTY-FIVE MILLION DOLLARS) (THE
“PROPERTY ADJUSTMENT AMOUNT”); PROVIDED, THAT UPON ANY SUCH REDUCTION, ANY
RIGHTS AND INTERESTS IN SUCH CONTRACT AND THE OPERATIONS LOCATED AT THE PREMISES
THAT ARE THE SUBJECT OF SUCH CONTRACT (IF ANY) SHALL BE RETAINED BY THE SELLERS
OR AN AFFILIATE THEREOF; PROVIDED, FURTHER, THAT ANY TERMINATION PAYMENT PAID OR
PAYABLE WITH RESPECT TO SUCH CONTRACT SHALL BE FOR THE ACCOUNT OF THE SELLERS.

 

COMMENCING AS SOON AS PRACTICABLE FOLLOWING THE EXERCISE DATE AND CONTINUING
UNTIL THE EARLIER TO OCCUR OF CLOSING OR THE RECEIPT OF THE “CONSENT AND
ESTOPPEL CERTIFICATES” AND “NDAS” (AS DEFINED BELOW), THE SELLERS SHALL USE
COMMERCIALLY REASONABLE EFFORTS (A) TO CAUSE THE SUBLANDLORD AND PRIME LANDLORD
TO EXECUTE AND DELIVER ANY CONSENTS OF THE SUBLANDLORD AND THE PRIME LANDLORD
REQUIRED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS
WELL AS ESTOPPEL CERTIFICATES FROM THE SUBLANDLORD AND PRIME LANDLORD
(COLLECTIVELY, THE “CONSENT AND ESTOPPEL CERTIFICATES”), AND (B) IF THERE ARE
ANY FEEHOLD OR LEASEHOLD MORTGAGE(S) OR DEED(S) OF TRUST ENCUMBERING THE
INTEREST(S) OF THE SUBLANDLORD OR THE PRIME LANDLORD IN THE PREMISES DESCRIBED
BY THE CONTRACT IDENTIFIED ON SCHEDULE 7.19(B), TO OBTAIN FULLY EXECUTED
NONDISTURBANCE AGREEMENTS FROM THE MORTGAGEES OR BENEFICIARIES THEREOF (THE
“NDAS”), IN EACH CASE IN FORM AND SUBSTANCE ACCEPTABLE TO THE BUYERS, SUCH
ACCEPTANCE NOT TO BE UNREASONABLY CONDITIONED, WITHHELD OR DELAYED.  THE BUYERS
SHALL REASONABLY COOPERATE IN THE SELLERS’ EFFORTS TO OBTAIN SUCH

 

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CONSENT AND ESTOPPEL CERTIFICATES AND NDAS, AND SUCH COOPERATION SHALL INCLUDE
(X) PROVIDING SUCH INFORMATION REGARDING THE BUYERS OR PARENT AND THEIR
RESPECTIVE PERSONNEL, PLANS FOR THE PREMISES DESCRIBED BY THE CONTRACT
IDENTIFIED ON SCHEDULE 7.19(B) OR CASINO OPERATIONS AS REASONABLY REQUESTED BY
PRIME LANDLORD OR SUBLANDLORD AND (Y) EXECUTING ANY AMENDMENTS TO THE CONTRACT
IDENTIFIED ON SCHEDULE 7.19(B) OR OTHER DOCUMENTS OR AGREEMENTS THAT ARE NOT
MATERIALLY ADVERSE TO THE SUBLANDLORD OR TO THE BUYERS OR THEIR AFFILIATES.  IN
THE EVENT THE CONSENT AND ESTOPPEL CERTIFICATES (AND THE NDAS, IF APPLICABLE)
ARE DELIVERED TO THE BUYERS PRIOR TO CLOSING, THE PURCHASE PRICE SHALL NOT BE
REDUCED BY THE PROPERTY ADJUSTMENT AMOUNT.

 

7.20.                        FIRPTA Certificates.

 

(A)                                  AT THE CLOSING, THE BUYERS SHALL HAVE
RECEIVED FROM HOLDCO A DULY EXECUTED CERTIFICATE (“FIRPTA CERTIFICATE”) THAT
COMPLIES WITH THE REQUIREMENTS OF EITHER SECTION 1445(B)(2) OR
SECTION 1445(B)(3) OF THE CODE AND THE TREASURY REGULATIONS PROMULGATED
THEREUNDER; NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IF HOLDCO FAILS TO
DELIVER A FIRPTA CERTIFICATE, THE PARTIES SHALL PROCEED WITH THE CLOSING AND THE
BUYERS SHALL BE ENTITLED TO WITHHOLD THE AMOUNT REQUIRED TO BE WITHHELD PURSUANT
TO SECTION 1445 OF THE CODE FROM THE PURCHASE PRICE.

 

(B)                                 AT THE CLOSING, THE BUYERS SHALL HAVE
RECEIVED FROM MILLENNIUM A DULY EXECUTED FIRPTA CERTIFICATE THAT COMPLIES WITH
THE REQUIREMENTS OF EITHER SECTION 1445(B)(2) OR SECTION 1445(E)(5) OF THE CODE
AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER; NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN, IF MILLENNIUM FAILS TO DELIVER A FIRPTA CERTIFICATE, THE
PARTIES SHALL PROCEED WITH THE CLOSING AND THE BUYERS SHALL BE ENTITLED TO
WITHHOLD THE AMOUNT REQUIRED TO BE WITHHELD PURSUANT TO SECTION 1445 OF THE CODE
FROM THE PURCHASE PRICE.

 

7.21.                        Repayment of Loan Obligations.

 

(A)                                  IF THE OPTION IS EXERCISED, THE SELLERS
SHALL DELIVER TO THE BUYERS, NOT LESS THAN FIVE (5) BUSINESS DAYS PRIOR TO THE
CLOSING DATE, A STATEMENT WHICH SHALL SET FORTH A REASONABLY DETAILED GOOD FAITH
ESTIMATE, AS OF THE CLOSING DATE, OF THE CALCULATION OF THE LOAN PAYOFF AMOUNT.

 

(B)                                 IF THE OPTION IS EXERCISED, AT OR PRIOR TO
THE CLOSING, IN CONNECTION WITH THE FOREGOING AND WITH RESPECT TO ANY
ENCUMBRANCES ON ANY ASSETS OF THE COMPANIES THAT IN WHOLE OR IN PART WERE
SECURITY FOR THE DEBT FACILITIES (THE “COMPANY LIENS”), EACH OF THE SELLERS AND
CCR SHALL, AND SHALL CAUSE EACH OF THE OTHER COMPANIES TO, NEGOTIATE AND ENTER
INTO APPROPRIATE AGREEMENTS WITH THE LENDERS UNDER THE DEBT FACILITIES TO OBTAIN
AS OF THE CLOSING EVIDENCE OF THE REPAYMENT OF THE LOAN PAYOFF AMOUNT AND THE
RELEASE OF ALL COMPANY LIENS (THE “PAYOFF AND RELEASE OF LIENS”).  TO THE EXTENT
APPLICABLE, SUCH PAYOFF AND RELEASE OF LIENS SHALL INCLUDE (I) PAYOFF LETTERS
AND OTHER WRITTEN DOCUMENTATION EVIDENCING THE RELEASE, AS OF THE CLOSING DATE
AND AFTER GIVING EFFECT TO THE PAYMENTS CONTEMPLATED BY SUCH PAYOFF LETTERS
PURSUANT TO THIS SECTION 7.21(B), OF THE COMPANIES FROM ANY AND ALL OBLIGATIONS
AND LIENS UNDER OR IN CONNECTION WITH ANY INDEBTEDNESS UNDER THE DEBT
FACILITIES, INCLUDING THE RELEASE OF ALL LIENS UPON OR IN ANY OF THE RESPECTIVE
PROPERTIES AND ASSETS OF, AND ANY GUARANTEES BY, ANY OF THE COMPANIES ARISING
UNDER OR IN CONNECTION WITH THE DEBT FACILITIES; AND (II) THE DELIVERY OF
UNIFORM COMMERCIAL CODE AMENDMENTS OR COLLATERAL CHANGE STATEMENTS (IN EACH CASE
TERMINATING UNIFORM COMMERCIAL CODE

 

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FINANCING STATEMENTS OF RECORD), DISCHARGES OR OTHER APPROPRIATE TERMINATION
STATEMENTS, RECORDINGS AND OTHER ACTIONS IN CONNECTION WITH THE PAYOFF AND
RELEASE OF LIENS.

 

(C)                                  IF THE OPTION IS EXERCISED, AT THE BUYERS’
REQUEST, THE SELLERS AND THE COMPANIES SHALL USE COMMERCIALLY REASONABLE EFFORTS
(AT BUYERS’ EXPENSE) TO COOPERATE WITH THE BUYERS TO ENABLE THE COMPANIES TO
REFINANCE THE DEBT FACILITIES AT THE CLOSING; PROVIDED THAT THERE SHALL BE NO
ADVERSE CONSEQUENCE TO SELLERS OR THE COMPANIES THEREFROM; AND, PROVIDED
FURTHER, THAT THE SELLERS AND THE COMPANIES SHALL NOT (1) HAVE ANY LIABILITY OR
OBLIGATION ARISING FROM SUCH REFINANCING, EXCEPT ANY LIABILITY OR OBLIGATION OF
THE COMPANIES (AND NOT SELLERS) ARISING ON OR AFTER THE CLOSING; (2) BE REQUIRED
TO TAKE ANY ACTION THAT WOULD INTERFERE WITH THE ONGOING OPERATIONS OF THE
COMPANIES, CONFLICT WITH OR VIOLATE ANY OF THE SELLERS’ OR THE COMPANIES’
ORGANIZATIONAL DOCUMENTS, LAWS OR AGREEMENTS, REQUIRE THE APPROVAL OF ANY GAMING
AUTHORITIES, CAUSE ANY REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT TO BE
BREACHED OR ANY CONDITION TO CLOSING IN ARTICLE 8 TO FAIL TO BE SATISFIED OR
OTHERWISE CAUSE A BREACH OF THIS AGREEMENT; (3) EXECUTE OR DELIVER ANY
AGREEMENTS OR DOCUMENTS IN CONNECTION WITH SUCH REFINANCING OR BECOME SUBJECT TO
ANY LIEN OR SECURITY INTEREST THEREUNDER, EXCEPT BY OR WITH RESPECT TO THE
COMPANIES IF NO APPROVAL OR CONSENT OF ANY GAMING AUTHORITY IS REQUIRED AND IF
EFFECTIVE ONLY ON OR AFTER THE CLOSING; OR (4) BE REQUIRED TO PAY ANY FEES OR
EXPENSES IN CONNECTION THEREWITH, INCLUDING COMMITMENT FEES.  THE SELLERS, THE
COMPANIES AND THE BUYERS AGREE TO NEGOTIATE IN GOOD FAITH TO AMEND THE
PROVISIONS RELATED TO THE FLOW OF FUNDS TO EFFECTUATE SUCH REFINANCING, IF
APPROPRIATE AND WITHOUT ANY ADVERSE CONSEQUENCE TO THE SELLERS OR THE
COMPANIES.  THE PARENT AND THE BUYERS SHALL JOINTLY AND SEVERALLY INDEMNIFY,
DEFEND, SAVE AND HOLD HARMLESS THE SELLER INDEMNIFIED PARTIES FROM AND AGAINST
ANY AND ALL DAMAGES (WITHOUT DUPLICATION) ARISING OUT OF, RELATING TO, RESULTING
FROM OR IN CONNECTION WITH SUCH REFINANCING.

 

(D)                                 IF THE OPTION IS EXERCISED, AT OR PRIOR TO
THE CLOSING, HOLDCO SHALL CAUSE THE BLOCKER NOTE TO BE ELIMINATED BY CAUSING
BLOCKER TO REPAY THE BLOCKER NOTE (AS SUCH TERM IS DEFINED IN SCHEDULE 4.2(E))
OR BY CONTRIBUTING THE BLOCKER NOTE TO THE CAPITAL OF BLOCKER.

 

7.22.                        Activities of AcquisitionCo and Blocker.  During
the time period between the Exercise Date and the Closing Date, neither
AcquisitionCo nor Blocker shall conduct any business or operations, other than
actions taken in connection with holding the AcquisitionCo Units, the CCR Units
and interests in the Excluded HoldCo Subsidiaries, and shall not incur any
Liabilities, other than statutory obligations or obligations under their
respective Governing Documents as in effect on the date hereof.

 

7.23.                        Intentionally Omitted.

 

7.24.                        Amended Nevada Palace Lease; Subordination,
Non-disturbance and Attornment Agreement.  If the Option is exercised, on or
before the Closing Date, the Sellers and CCR shall cause the following to be
fully executed and delivered by all parties so that each of the same is valid
and binding and in full force and effect as of the Closing Date: (i) the Amended
Nevada Palace Lease, and (ii) the Subordination, Non-disturbance and Attornment
Agreement in the form attached hereto as Exhibit P from Nevada State Bank (or
its successor, and any other person or entity that as of Closing has a deed of
trust or other lien on or security interest in the land described in the Amended
Nevada Palace Lease) in favor of the Lessee under the Amended

 

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Nevada Palace Lease (but only in the event that such deeds of trust, other liens
on or security interests in the land described in the Amended Nevada Palace
Lease remain outstanding).

 

7.25.                        Termination of Affiliate Agreements; Release of
Claims.

 

(A)                                  IF THE OPTION IS EXERCISED, (I) EACH OF THE
SELLERS SHALL, AND SHALL CAUSE EACH OF THE APPLICABLE COMPANIES TO, TERMINATE
THE MILLENNIUM MANAGEMENT AGREEMENT EFFECTIVE AT THE CLOSING, AND (II) EACH OF
THE SELLERS SHALL CAUSE THE OAKTREE PURCHASE AGREEMENT TO BE TERMINATED WITH
RESPECT TO ANY AND ALL OF THE RIGHTS AND OBLIGATIONS OF EACH OF THE COMPANIES
THEREUNDER.

 

(B)                                 IF THE OPTION IS EXERCISED, EACH OF THE
SELLERS, ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES AND ALL PERSONS
ENTITLED TO ASSERT ON EACH SUCH SELLER’S BEHALF, IRREVOCABLY AND UNCONDITIONALLY
RELEASES AND FOREVER DISCHARGES EACH OF THE COMPANIES FROM ANY AND ALL CLAIMS,
CHARGES, COMPLAINTS, DEMANDS, PROCEEDINGS, CAUSES OF ACTION, ORDERS,
OBLIGATIONS, CONTRACTS, AGREEMENTS, DEBTS AND LIABILITIES WHATSOEVER, WHETHER
KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, CONTINGENT OR ACTUAL, BOTH AT LAW
AND IN EQUITY, WHICH EACH SUCH SELLER NOW HAS, HAS EVER HAD OR MAY HEREAFTER
CLAIM TO HAVE AGAINST THE RESPECTIVE COMPANIES ARISING CONTEMPORANEOUSLY WITH OR
PRIOR TO THE DATE HEREOF, ON ACCOUNT OF, OR ARISING OUT OF, OR RELATING IN ANY
WAY TO, ANY MATTER, CAUSE, TRANSACTION OR EVENT OCCURRING CONTEMPORANEOUSLY WITH
OR PRIOR TO THE CLOSING DATE PURSUANT TO ANY AFFILIATE AGREEMENT OR IN RESPECT
OF SUCH SELLER’S INTEREST IN ANY OF THE COMPANIES; PROVIDED, NOTHING CONTAINED
IN THIS SECTION 7.25(B) SHALL OPERATE TO RELEASE ANY AGREEMENTS, INDEMNITIES,
LIABILITIES, COVENANTS OR OTHER OBLIGATIONS BETWEEN THE SELLERS.

 

(C)                                  FROM AND AFTER THE CLOSING, EACH OF THE
BUYERS, ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES AND ALL PERSONS
ENTITLED TO ASSERT ON EACH SUCH BUYER’S BEHALF, IRREVOCABLY AND UNCONDITIONALLY
RELEASES AND FOREVER DISCHARGES EACH OF THE SELLERS FROM ANY AND ALL CLAIMS,
CHARGES, COMPLAINTS, DEMANDS, PROCEEDINGS, CAUSES OF ACTION, ORDERS,
OBLIGATIONS, CONTRACTS, AGREEMENTS, DEBTS AND LIABILITIES WHATSOEVER, WHETHER
KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, CONTINGENT OR ACTUAL, BOTH AT LAW
AND IN EQUITY, WHICH ANY COMPANY NOW HAS, HAS EVER HAD OR MAY HEREAFTER CLAIM TO
HAVE AGAINST ANY OF THE SELLERS ARISING CONTEMPORANEOUSLY WITH OR PRIOR TO THE
DATE HEREOF, ON ACCOUNT OF, OR ARISING OUT OF, OR RELATING IN ANY WAY TO, ANY
MATTER, CAUSE, TRANSACTION OR EVENT OCCURRING CONTEMPORANEOUSLY WITH OR PRIOR TO
THE CLOSING DATE PURSUANT TO ANY AFFILIATE AGREEMENT (OTHER THAN ANY CLAIM FOR
FRAUD OR BREACH OF CONTRACT); PROVIDED THAT, NOTHING CONTAINED IN THIS
SECTION 7.24(C) SHALL OPERATE TO RELEASE ANY AGREEMENTS, INDEMNITIES,
LIABILITIES, COVENANTS OR OTHER OBLIGATIONS OF ANY SELLER OR ANY OTHER PERSON
ARISING UNDER THIS AGREEMENT OR THE ESCROW AGREEMENT.

 

(D)                                 EACH RELEASOR EXPRESSLY WAIVES ALL RIGHTS
AFFORDED BY SECTION 1542 OF THE CIVIL CODE OF CALIFORNIA (“SECTION 1542”) OR ANY
STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT IN ANY JURISDICTION WITH
RESPECT TO THE COMPANIES.  SECTION 1542 STATES AS FOLLOWS:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

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Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release, each Releasor expressly waives and
relinquishes any rights and benefits that it may have under Section 1542.  Each
Releasor understands and agrees that this release is intended to include all
claims, if any, which such Releasor may have and which such Releasor does not
know or suspect to exist in its favor against any of the Companies or any of the
Sellers, as the case may be, and that this release extinguishes those claims.

 

Each Releasor represents and warrants that it has been advised by its attorney
of the effect and import of the provisions of Section 1542, and that such
Releasor has not assigned or otherwise transferred or subrogated any interest in
any claims, demands or causes of action that are the subject of this release.

 

7.26.                        Intentionally Omitted.

 

7.27.                        Impact of New Gaming Taxes

.

(A)                                  IF, AT ANY TIME PRIOR TO THE CLOSING, THE
STATE OF NEVADA IMPOSES A NEW, ADDITIONAL OR INCREASED STATEWIDE TAX OR LEVY ON
OR PRIOR TO THE NEW TAX DEADLINE THAT INCREASES THE AGGREGATE TAXES AND LEVIES
PAYABLE BY THE COMPANIES (A “NEW TAX”), AND IF THE OPTION IS EXERCISED, THE
SELLERS AND THE BUYERS AGREE THAT, SUBJECT TO THE TERMS AND CONDITIONS OF THIS
SECTION 7.27, THE SELLERS SHALL PAY TO THE BUYERS A ONE-TIME AMOUNT IN CASH
EQUAL TO THE LESSER OF (I) 50% OF THE NEW TAX IMPACT WITH RESPECT TO SUCH NEW
TAX AND (II) $25 MILLION (THE “NEW TAX PAYMENT”).

 

(B)                                 IF A NEW TAX PAYMENT IS DUE IN ACCORDANCE
WITH SECTION 7.27(A), THE BUYERS SHALL PROMPTLY NOTIFY THE SELLERS BY WRITTEN
NOTICE.  DURING THE 45 DAYS IMMEDIATELY FOLLOWING DELIVERY OF SUCH NOTICE BY THE
BUYERS, THE BUYERS AND THE SELLERS SHALL SEEK IN GOOD FAITH TO AGREE UPON THE
NGT TAX AMOUNT.  IF THE BUYERS AND THE SELLERS FAIL TO AGREE UPON THE NGT TAX
AMOUNT WITHIN SUCH 45-DAY PERIOD, OR SUCH LONGER PERIOD AS THE BUYERS AND THE
SELLERS MAY MUTUALLY AGREE, THE BUYERS AND THE SELLERS SHALL EACH SUBMIT A
WRITTEN DETERMINATION OF THE NGT TAX AMOUNT, INCLUDING A REASONABLY DETAILED
DESCRIPTION OF THE ASSUMPTIONS AND CALCULATIONS USED IN ARRIVING AT SUCH
DETERMINATION, TO AN INDEPENDENT ACCOUNTING FIRM JOINTLY SELECTED BY THE SELLERS
AND THE BUYERS TO ACT AS AN INDEPENDENT EXPERT; PROVIDED, THAT, IF THE BUYERS
AND THE SELLERS ARE UNABLE TO AGREE ON AN INDEPENDENT ACCOUNTING FIRM, THEN EACH
OF THE BUYERS AND THE SELLERS SHALL PICK AN INDEPENDENT ACCOUNTING FIRM AND THE
TWO ACCOUNTING FIRMS SHALL CHOOSE A THIRD INDEPENDENT ACCOUNTING FIRM TO SERVE
AS THE INDEPENDENT EXPERT.  THE INDEPENDENT EXPERT SHALL BE DIRECTED TO MAKE A
FINAL DETERMINATION OF THE NGT TAX AMOUNT WITHIN 45 DAYS FOLLOWING ITS SELECTION
AS THE INDEPENDENT EXPERT.  FOR PURPOSES OF ITS DETERMINATION OF THE NGT TAX
AMOUNT, THE INDEPENDENT EXPERT MAY ONLY SELECT A VALUE EQUAL TO ONE OF, OR
BETWEEN, THE TWO VALUES SUBMITTED BY THE SELLERS, ON THE ONE HAND, AND THE
BUYERS, ON THE OTHER HAND. THE BUYERS AND THE SELLERS AGREE TO COOPERATE WITH
THE INDEPENDENT EXPERT DURING THE COURSE OF ITS DETERMINATION AND PROMPTLY
PROVIDE ANY INFORMATION REASONABLY REQUESTED BY THE INDEPENDENT EXPERT FOR ITS
DETERMINATION, INCLUDING INFORMATION REGARDING THE ASSUMPTIONS AND CALCULATIONS
UNDERLYING THE WRITTEN DETERMINATIONS SUBMITTED BY THE BUYERS AND THE SELLERS
AND INFORMATION REGARDING THE COMPANIES (INCLUDING FORECASTS ADOPTED AND USED BY
THE MANAGERS OF CCR IN THE ORDINARY COURSE OF BUSINESS FOR BUSINESS PLANNING
PURPOSES).  THE INDEPENDENT EXPERT’S DETERMINATION OF THE NGT TAX AMOUNT SHALL
BE FINAL, CONCLUSIVE AND BINDING ON THE

 

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SELLERS AND THE BUYERS.  WITHIN 30 DAYS OF THE FINAL DETERMINATION OF THE NGT
TAX AMOUNT PURSUANT TO THIS SECTION 7.27(B), THE SELLERS AGREE TO PAY TO THE
BUYERS THE NEW TAX PAYMENT.  THE FEES AND COSTS OF THE INDEPENDENT EXPERT SHALL
BE SHARED EQUALLY BY THE BUYERS, ON THE ONE HAND, AND THE SELLERS, ON THE OTHER
HAND.

 

(C)                                  AT THE CLOSING, SOLELY TO SUPPORT THE
SELLERS’ POTENTIAL OBLIGATION TO MAKE THE NEW TAX PAYMENT PURSUANT TO THE TERMS
AND CONDITIONS OF THIS SECTION 7.27, THE BUYERS AND THE SELLERS AGREE TO:
(X) ENTER IN A MUTUALLY AGREEABLE ESCROW ARRANGEMENT INVOLVING THE DEPOSIT INTO
ESCROW BY THE SELLERS OF $25 MILLION (IT BEING AGREED AND ACKNOWLEDGED THAT
ESCROW ARRANGEMENTS WITH TERMS SUBSTANTIALLY CONSISTENT WITH THOSE SET FORTH IN
THE ESCROW AGREEMENT SHALL BE MUTUALLY AGREEABLE AMONG THE PARTIES) OR A LETTER
OF CREDIT FROM A NATIONALLY RECOGNIZED COMMERCIAL BANK FOR THE BENEFIT OF THE
ESCROW AGENT IN THE STATED AMOUNT OF $25 MILLION, OR (Y) PROVIDE OTHER CREDIT
SUPPORT REASONABLY ACCEPTABLE TO THE BUYERS ((X) AND (Y) COLLECTIVELY, THE
“SECURITY ARRANGEMENTS”).  UPON THE EARLIER OF (I) THE PAYMENT BY THE SELLERS OF
THE NEW TAX PAYMENT PURSUANT TO THIS SECTION 7.27, AND (II) THE OCCURRENCE OF
THE NEW TAX DEADLINE (IF NO NEW TAX PAYMENT IS DUE IN ACCORDANCE WITH
SECTION 7.27(A)), THE SECURITY ARRANGEMENTS SHALL TERMINATE, ALL REMAINING CASH
AMOUNTS RELATED TO SUCH SECURITY ARRANGEMENTS, IF ANY, SHALL BE PROMPTLY
RETURNED TO THE SELLERS AND ALL INSTRUMENTS (INCLUDING ANY LETTERS OF CREDIT OR
OTHER INSTRUMENTS OF CREDIT SUPPORT) RELATED TO SUCH SECURITY ARRANGEMENTS SHALL
BE PROMPTLY RETURNED TO THE SELLERS FOR CANCELLATION.

 

(D)                                 ANY AND ALL PAYMENTS MADE BY THE SELLERS TO
THE BUYERS PURSUANT TO THIS SECTION 7.27 SHALL BE TREATED FOR ALL TAX PURPOSES
AS AN ADJUSTMENT TO THE PURCHASE PRICE.

 

7.28.                        Changes in CCR Capital Structure.  The parties
understand and acknowledge that the purpose and intent of the Option is that,
upon exercise thereof and consummation of the transactions contemplated hereby,
the Buyers will own, either directly or indirectly, one hundred percent (100%)
of the outstanding equity capital of CCR.  Accordingly, in the event that CCR
issues any units or other equity securities (“New CCR Equity”) after the date
hereof, the Sellers and CCR agree that any such New CCR Equity shall be issued
either for cash or as valued under the operating agreement of CCR and further
agree as follows:

 

(A)                                  IN THE EVENT THAT SUCH NEW CCR EQUITY IS
PURCHASED BY THE BUYERS (OTHER THAN IN CONNECTION WITH THE PURCHASE OF THE
SERIES B PREFERRED UNITS OR SERIES A2 PREFERRED UNITS PURSUANT TO THE PREFERRED
PURCHASE AGREEMENT), THEN THE PURCHASE PRICE SHALL REMAIN UNCHANGED.

 

(B)                                 IN THE EVENT THAT SUCH NEW CCR EQUITY IS
PURCHASED, DIRECTLY OR INDIRECTLY, BY THE SELLERS (“SELLERS NEW CCR EQUITY”),
THEN THE PURCHASE PRICE SHALL BE INCREASED ON A DOLLAR FOR DOLLAR BASIS BY THE
AMOUNT OF EQUITY CONTRIBUTED, DIRECTLY OR INDIRECTLY, BY THE SELLERS IN RESPECT
OF SUCH SELLERS NEW CCR EQUITY AND THIS OPTION SHALL REPRESENT, IN ADDITION TO
AN OPTION TO PURCHASE THE MILLENNIUM UNITS AND THE HOLDCO UNITS, AN EXCLUSIVE
AND IRREVOCABLE OPTION DURING THE EXERCISE PERIOD TO PURCHASE ALL BUT NOT LESS
THAN ALL OF SUCH SELLERS NEW CCR EQUITY FROM THE SELLERS, DIRECTLY OR
INDIRECTLY, AS THEIR RESPECTIVE INTERESTS MAY APPEAR, IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT.

 

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(C)                                  IN THE EVENT THAT SUCH NEW CCR EQUITY IS
PURCHASED BY A PARTY (AN “OUTSIDE EQUITY INVESTOR”) OTHER THAN THE BUYERS OR THE
SELLERS (“OUTSIDE NEW CCR EQUITY”), THEN:

 

(I)            THE OUTSIDE EQUITY INVESTOR SHALL ENTER INTO AN OUTSIDE NEW CCR
EQUITY OPTION AGREEMENT WITH THE BUYERS PROVIDING FOR THE PURCHASE BY THE BUYERS
OF THE OUTSIDE NEW CCR EQUITY OWNED BY SUCH OUTSIDE EQUITY INVESTOR FOR A DOLLAR
AMOUNT (THE “OUTSIDE NEW CCR EQUITY PURCHASE PRICE”) EQUAL TO THE DOLLAR AMOUNT
OF EQUITY CONTRIBUTED BY SUCH OUTSIDE EQUITY INVESTOR IN RESPECT OF SUCH OUTSIDE
NEW CCR EQUITY; AND

 

(II)           THE PURCHASE BY THE BUYERS OF THE OUTSIDE NEW CCR EQUITY PURSUANT
TO THE OUTSIDE NEW CCR EQUITY OPTION AGREEMENT SHALL OCCUR CONTEMPORANEOUSLY
WITH, AND SHALL BE A CONDITION TO, THE CLOSING UNDER THIS AGREEMENT.

 

7.29.                        Outside New CCR Equity.  CCR shall not, and the
Sellers shall cause CCR not to, sell any Outside New CCR Equity unless the
Outside Equity Investor enters into, simultaneous with the purchase of such
Outside New CCR Equity, an Outside New CCR Equity Option Agreement with the
Buyers reflecting the terms set forth in this Agreement with respect thereto.

 

ARTICLE 8

 

Conditions to Closing

 

8.1.                              Conditions to the Obligations of All Parties. 
The obligations of each party hereto to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or waiver, at or prior to
the Closing, of each of the following conditions.

 

(A)                                  HSR ACT.  ANY APPLICABLE WAITING PERIOD
(AND ANY EXTENSION THEREOF) UNDER THE HSR ACT APPLICABLE TO THE PURCHASE OF THE
CCR UNITS SHALL HAVE EXPIRED OR BEEN TERMINATED.

 

(B)                                 REGULATORY APPROVAL.  ANY AND ALL GAMING
APPROVALS REQUIRED TO BE OBTAINED PRIOR TO THE CLOSING TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT.

 

(C)                                  NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. 
NO TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION OR OTHER
JUDGMENT OR ORDER ISSUED BY ANY GOVERNMENTAL ENTITY (OTHER THAN A FAILURE TO
OBTAIN ANY GAMING APPROVAL) (EACH, A “RESTRAINT”) SHALL BE IN EFFECT WHICH
PROHIBITS, RESTRAINS OR RENDERS ILLEGAL THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT; PROVIDED, THAT PRIOR TO ASSERTING THIS
CONDITION, THE PARTY ASSERTING THIS CONDITION (I) SHALL HAVE USED ITS REASONABLE
BEST EFFORTS (IN THE MANNER CONTEMPLATED BY SECTION 7.4) TO PREVENT THE ENTRY OF
ANY SUCH RESTRAINT AND TO APPEAL AS PROMPTLY AS PRACTICABLE ANY JUDGMENT THAT
MAY BE ENTERED AND (II) SUCH PARTY’S FAILURE TO FULFILL OR CAUSE TO BE FULFILLED
IN ANY MANNER ANY OBLIGATION UNDER THIS AGREEMENT SHALL NOT HAVE MEANINGFULLY
CONTRIBUTED TO SUCH RESTRAINT.

 

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8.2.                              Conditions to the Obligations of the Buyers. 
The obligation of the Buyers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF THE SELLERS CONTAINED IN THIS AGREEMENT, SHALL
BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR SUCH REPRESENTATIONS
AND WARRANTIES AS ARE QUALIFIED BY MATERIALITY OR MATERIAL ADVERSE EFFECT, WHICH
REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT IN ALL RESPECTS), AS OF
THE DATE OF THE DELIVERY OF THE SUPPLEMENTAL SELLERS DISCLOSURE SCHEDULES (OR
THE FINAL DISCLOSURE SCHEDULES, IF APPLICABLE) IN ACCORDANCE WITH SECTION 7.5
AND AS OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF THE CLOSING DATE (OTHER
THAN SUCH REPRESENTATIONS AND WARRANTIES THAT ARE EXPRESSLY MADE AS OF AN
EARLIER DATE WHICH NEED ONLY BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS OR
TRUE AND CORRECT, AS THE CASE MAY BE, AS OF SUCH EARLIER DATE), EXCEPT WHERE THE
FAILURE OF SUCH REPRESENTATIONS AND WARRANTIES TO BE IN COMPLIANCE WITH THE
STANDARD SET FORTH ABOVE WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  THE BUYERS
SHALL HAVE RECEIVED A CERTIFICATE FROM CCR, SIGNED BY A MANAGER OF CCR WITH
RESPECT TO THE REPRESENTATIONS AND WARRANTIES IN ARTICLE 5 AND FROM THE SELLERS
WITH RESPECT TO THEIR RESPECTIVE REPRESENTATIONS AND WARRANTIES IN ARTICLE 4 OF
THE SELLERS, CERTIFYING AS TO THE MATTERS SET FORTH IN THIS SECTION 8.2(A).

 

(B)                                 COVENANTS.  THE SELLERS SHALL HAVE PERFORMED
IN ALL MATERIAL RESPECTS ALL OBLIGATIONS REQUIRED TO BE PERFORMED BY THE SELLERS
UNDER THIS AGREEMENT AND THE ESCROW AGREEMENT AT OR PRIOR TO THE CLOSING DATE. 
THE BUYERS SHALL HAVE RECEIVED A CERTIFICATE, SIGNED BY AN EXECUTIVE OFFICER OF
EACH OF THE SELLERS AND CCR, CERTIFYING AS TO THE MATTERS SET FORTH IN THIS
SECTION 8.2(B).

 

(C)                                  NO LITIGATION.  THERE SHALL BE NO BONA FIDE
ACTIONS PENDING AGAINST OR AFFECTING ANY OF THE SELLERS, BLOCKER, ACQUISITIONCO
OR THE COMPANIES OR ANY OF THEIR RESPECTIVE PROPERTIES, ASSETS OR RIGHTS THAT
(I) WOULD, IF DETERMINED ADVERSELY, HAVE A MATERIAL ADVERSE EFFECT, 
(II) CHALLENGES THE OWNERSHIP BY THE SELLERS AND THEIR ABILITY TO SELL TO THE
BUYERS, AND FOR THE BUYERS TO HAVE AND HOLD THE RIGHT, TITLE AND INTEREST IN THE
MILLENNIUM UNITS, THE HOLDCO UNITS OR THE BLOCKER OPTION, AS APPLICABLE, OR
(III) ARE REASONABLY LIKELY TO SUCCEED AND WOULD, IF DETERMINED ADVERSELY,
PREVENT THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(D)                                 MATERIAL ADVERSE EFFECT.  SINCE THE EXERCISE
DATE, THERE SHALL NOT HAVE BEEN ANY EFFECT THAT WOULD, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.

 

(E)                                  CLOSING DELIVERIES.  THE BUYERS SHALL HAVE
RECEIVED THE AMENDED NEVADA PALACE LEASE, THE ASSIGNMENT DOCUMENTS, THE PAYOFF
AND RELEASE OF LIENS AND THE RELEASES, IN EACH CASE EXECUTED BY THE APPROPRIATE
COUNTERPARTIES.

 

(F)                                    EXCLUDED ASSETS.  EACH OF (I) THE
EXCLUDED HOLDCO SUBSIDIARIES SHALL HAVE BEEN SOLD OR TRANSFERRED TO A THIRD
PARTY OR DISSOLVED IN ACCORDANCE WITH SECTION 7.11, AND (II) THE TRANSFER OF THE
EXCLUDED OPPORTUNITIES AND THE AGREEMENT SET FORTH IN SECTION 7.12 OF THE
SELLERS DISCLOSURE SCHEDULE SHALL HAVE BEEN COMPLETED IN ACCORDANCE WITH
SECTION 7.12.

 

(G)                                 GLCP CLOSING.  THE CLOSING OF THE PURCHASE
BY CROWN TWO OF THE GLCP UNITS FROM GLCP SHALL HAVE SIMULTANEOUSLY OCCURRED.

 

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(H)                                 OWNERSHIP. IMMEDIATELY FOLLOWING THE
CLOSING, THE BUYERS COLLECTIVELY SHALL OWN, DIRECTLY OR INDIRECTLY, 100% OF THE
ISSUED AND OUTSTANDING CCR UNITS.

 

8.3.                              Conditions to the Obligations of Sellers.  The
obligation of the Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF  THE BUYERS CONTAINED IN THIS AGREEMENT SHALL
BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR SUCH REPRESENTATIONS
AND WARRANTIES AS ARE QUALIFIED BY MATERIALITY, WHICH REPRESENTATIONS AND
WARRANTIES SHALL BE TRUE AND CORRECT IN ALL RESPECTS), AS OF THE CLOSING DATE AS
THOUGH MADE ON AND AS OF THE CLOSING DATE (OTHER THAN SUCH REPRESENTATIONS AND
WARRANTIES THAT ARE EXPRESSLY MADE AS OF AN EARLIER DATE WHICH NEED ONLY BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS OR TRUE AND CORRECT, AS THE CASE MAY BE, AS
OF SUCH EARLIER DATE), EXCEPT WHERE THE FAILURE OF SUCH REPRESENTATIONS AND
WARRANTIES TO BE IN COMPLIANCE WITH THE STANDARD SET FORTH ABOVE WOULD NOT
MATERIALLY AFFECT ITS ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER AND WOULD NOT
PROHIBIT OR MATERIALLY RESTRICT THE PERFORMANCE OF THIS AGREEMENT BY THE
BUYERS.  THE SELLERS SHALL HAVE RECEIVED A CERTIFICATE, SIGNED BY AN EXECUTIVE
OFFICER OF EACH OF THE BUYERS, CERTIFYING AS TO THE MATTERS SET FORTH IN THIS
SECTION 8.3(A).

 

(B)                                 COVENANTS.  EACH BUYER SHALL HAVE PERFORMED
IN ALL MATERIAL RESPECTS ALL OBLIGATIONS REQUIRED TO BE PERFORMED BY SUCH BUYER
UNDER THIS AGREEMENT AND THE ESCROW AGREEMENT AT OR PRIOR TO THE CLOSING DATE. 
THE SELLERS SHALL HAVE RECEIVED A CERTIFICATE, SIGNED BY AN EXECUTIVE OFFICER OF
THE MANAGING MEMBER OF THE MANAGING MEMBER OF EACH OF THE BUYERS, CERTIFYING AS
TO THE MATTERS SET FORTH IN THIS SECTION 8.3(B).

 

(C)                                  NEVADA PALACE LEASE.  THE BUYERS SHALL HAVE
DELIVERED A FULLY EXECUTED COPY OF THE AMENDED NEVADA PALACE LEASE.

 

(D)                                 RECEIPT OF PURCHASE PRICE.  THE SELLERS
SHALL HAVE RECEIVED FROM THE BUYERS THE PAYMENT OF THE PURCHASE PRICE REQUIRED
BY SECTION 2.2 HEREOF.

 

ARTICLE 9

 

Termination

 

9.1.                              This Agreement may be terminated and shall be
of no further force and effect at any time prior to the Closing

 

(A)                                  IMMEDIATELY, WITHOUT ACTION OF THE PARTIES,

 

(I)                                     UPON THE TERMINATION OF THE PREFERRED
PURCHASE AGREEMENT OR THE CLOSING OF THE PURCHASE THEREUNDER BY THE BUYERS OF
THE 4.1% INTEREST; OR

 

(II)                                  IF THE OPTION HAS NOT BEEN EXERCISED PRIOR
TO THE EXPIRATION OF THE EXERCISE PERIOD; OR

 

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(B)                                 BY THE MUTUAL WRITTEN CONSENT OF THE
SELLERS, ON THE ONE HAND, AND THE BUYERS, ON THE OTHER HAND;

 

(C)                                  BY EITHER THE SELLERS OR THE BUYERS, IF:

 

(I)            IF THE CLOSING SHALL NOT HAVE OCCURRED BY THE SIXTIETH (60TH) DAY
AFTER THE DELIVERY OF THE FINAL EXERCISE NOTICE, PROVIDED THAT IN ORDER FOR A
PARTY TO SEEK TO TERMINATE THIS AGREEMENT PURSUANT TO THIS SECTION 9.1(C)(I), IT
MUST NOT BE IN MATERIAL BREACH OF ITS COVENANTS AND AGREEMENTS UNDER THIS
AGREEMENT SUCH THAT THE CONDITIONS SET FORTH IN SECTIONS 8.2(A) OR 8.2(B) OR
SECTIONS 8.3(A) OR 8.3(B), AS APPLICABLE, ARE INCAPABLE OF BEING SATISFIED; OR

 

(II)           ANY RESTRAINT HAVING THE EFFECT SET FORTH IN SECTION 8.1(C) SHALL
BE IN EFFECT AND SHALL HAVE BECOME FINAL AND NONAPPEALABLE; PROVIDED, THAT THE
RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO THIS SECTION 9.1(C)(II) SHALL NOT
BE AVAILABLE TO A PARTY UNLESS  (I) SUCH PARTY SHALL HAVE USED ITS REASONABLE
BEST EFFORTS (IN THE MANNER CONTEMPLATED BY SECTION 7.4) TO PREVENT THE ENTRY OF
ANY SUCH RESTRAINT AND TO APPEAL AS PROMPTLY AS PRACTICABLE ANY JUDGMENT THAT
MAY BE ENTERED AND (II) SUCH PARTY’S FAILURE TO FULFILL OR CAUSE TO BE FULFILLED
IN ANY MANNER ANY OBLIGATION UNDER THIS AGREEMENT SHALL NOT HAVE MEANINGFULLY
CONTRIBUTED TO SUCH RESTRAINT; OR

 

(III)          ANY APPLICABLE GAMING AUTHORITY SHALL HAVE CONCLUSIVELY
DETERMINED NOT TO GRANT ANY GAMING APPROVAL, THE RECEIPT OF WHICH IS NECESSARY
TO SATISFY THE CONDITION SET FORTH IN SECTION 8.1(B); PROVIDED THAT IN ORDER FOR
A PARTY TO SEEK TO TERMINATE THIS AGREEMENT PURSUANT TO THIS
SECTION 9.1(C)(III), IT MUST HAVE COMPLIED IN ALL MATERIAL RESPECTS WITH ITS
OBLIGATIONS UNDER SECTION 7.4.

 

ARTICLE 10

 

Indemnification

 

10.1.                        Survival.  If the Closing occurs, the
representations and warranties contained in this Agreement shall survive for a
period of two (2) years after the Closing Date (the “Survival Period”);
provided, that (a) the representations and warranties contained in Section 5.10
(Employee Benefit Matters), and Section 5.16 (Environmental Matters) shall
survive until the expiration of 90 days after the applicable statutes of
limitations, and (b) the representations and warranties contained in Section 4.1
(Millennium Representations), Sections 4.2(a), (b), (c), (d) and (e) (Certain
HoldCo Representations), Section 4.3(a) (Sellers’ Good Standing),
Section 4.3(b) (Sellers’ Authority; Enforceability), Section 5.1 (Company
Organization and Good Standing), Section 5.2 (Company Capitalization),
Section 6.1 (Buyer Organization and Good Standing) and Section 6.2 (Buyer
Authority; Enforceability) shall survive in perpetuity with respect to the
matters addressed in such Sections.  The covenants and agreements contained in

 

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this Agreement shall survive the Closing Date.  If written notice of a claim has
been given in accordance with Section 10.2(e) prior to the expiration of the
applicable representations, warranties, covenants or agreements, then the
applicable representations, warranties, covenants or agreements shall survive as
to such claim, until such claim has been finally resolved.  Notwithstanding
anything to the contrary contained in this Agreement, it is the explicit intent
of each party hereto that no party hereto is making any representations or
warranties whatsoever, express or implied, to any other party hereto except
those representations and warranties contained in Article 4, Article 5 and
Article 6 or Section 11.15.

 

10.2.        Indemnification

.

(A)           BY SELLERS.  FROM AND AFTER THE CLOSING, THE SELLERS SHALL
INDEMNIFY, DEFEND, SAVE AND HOLD HARMLESS THE BUYERS AND THE PARENT AND THEIR
AFFILIATES (INCLUDING THE COMPANIES), SUCCESSORS AND ASSIGNS AND EACH OF THE
FOREGOING’S RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, MEMBERS, EMPLOYEES AND
AGENTS (COLLECTIVELY, THE “BUYER INDEMNIFIED PARTIES”), FROM AND AGAINST ANY AND
ALL DAMAGES (WITHOUT DUPLICATION) ARISING OUT OF, RELATING TO, RESULTING FROM OR
IN CONNECTION WITH:

 

(I)            THE BREACH OR FAILURE TO BE TRUE AND CORRECT OF ANY
REPRESENTATION OR WARRANTY MADE BY ANY OF THE SELLERS OR CCR UNDER ARTICLE 5 OF
THIS AGREEMENT (SUBJECT TO SECTION 7.5(B) WITH RESPECT TO ANY BREACH OF ANY
REPRESENTATION OR WARRANTY FOR PRE-CLOSING EVENTS, IT BEING AGREED THAT FOR
PURPOSES OF SUCH RIGHT TO INDEMNIFICATION, SUCH REPRESENTATIONS AND WARRANTIES
SHALL BE DEEMED NOT TO BE QUALIFIED BY ANY REFERENCES THEREIN TO KNOWLEDGE OR
MATERIALITY GENERALLY OR TO WHETHER OR NOT ANY BREACH WOULD RESULT OR COULD BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND ANY SUCH QUALIFICATION
SHALL IN ALL RESPECTS BE DISREGARDED);

 

(II)           THE BREACH OF OR FAILURE TO PERFORM ANY COVENANT OR AGREEMENT
MADE OR TO BE PERFORMED BY ANY OF THE SELLERS OR CCR CONTAINED IN THIS
AGREEMENT, THE ESCROW AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR
THEREBY;

 

(III)          THE EXCLUDED HOLDCO SUBSIDIARIES; AND

 

(IV)          THE EXCLUDED OPPORTUNITIES AND THE AGREEMENTS AND ARRANGEMENTS
RELATED THERETO.

 

(B)           BY MILLENNIUM. FROM AND AFTER THE CLOSING, MILLENNIUM SHALL
INDEMNIFY, DEFEND, SAVE AND HOLD HARMLESS, THE BUYER INDEMNIFIED PARTIES, FROM
AND AGAINST ANY AND ALL DAMAGES (WITHOUT DUPLICATION) ARISING OUT OF, RELATING
TO, RESULTING FROM OR IN CONNECTION WITH THE BREACH OF ANY REPRESENTATION OR
WARRANTY MADE BY MILLENNIUM UNDER SECTION 4.1 OR SECTION 4.3 OF THIS AGREEMENT
(SUBJECT TO SECTION 7.5(B) WITH RESPECT TO ANY BREACH OF ANY REPRESENTATION OR
WARRANTY FOR PRE-CLOSING EVENTS, IT BEING AGREED THAT FOR PURPOSES OF SUCH RIGHT
TO INDEMNIFICATION, SUCH REPRESENTATIONS AND WARRANTIES SHALL BE DEEMED NOT TO
BE QUALIFIED BY ANY REFERENCES THEREIN TO KNOWLEDGE OR MATERIALITY GENERALLY OR
TO WHETHER OR NOT ANY BREACH WOULD

 

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RESULT OR COULD BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND ANY SUCH
QUALIFICATION SHALL IN ALL RESPECTS BE DISREGARDED).

 

(C)           BY HOLDCO. FROM AND AFTER THE CLOSING, HOLDCO SHALL INDEMNIFY,
DEFEND, SAVE AND HOLD HARMLESS, THE BUYER INDEMNIFIED PARTIES, FROM AND AGAINST
ANY AND ALL DAMAGES (WITHOUT DUPLICATION) ARISING OUT OF, RELATING TO, RESULTING
FROM OR IN CONNECTION WITH THE BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY
HOLDCO UNDER SECTION 4.2 OR SECTION 4.3 OF THIS AGREEMENT (SUBJECT TO
SECTION 7.5(B) WITH RESPECT TO ANY BREACH OF ANY REPRESENTATION OR WARRANTY FOR
PRE-CLOSING EVENTS, IT BEING AGREED THAT FOR PURPOSES OF SUCH RIGHT TO
INDEMNIFICATION, SUCH REPRESENTATIONS AND WARRANTIES SHALL BE DEEMED NOT TO BE
QUALIFIED BY ANY REFERENCES THEREIN TO KNOWLEDGE OR MATERIALITY GENERALLY OR TO
WHETHER OR NOT ANY BREACH WOULD RESULT OR COULD BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT, AND ANY SUCH QUALIFICATION SHALL IN ALL RESPECTS BE
DISREGARDED); AND

 

(D)           BY PARENT AND BUYERS.  FROM AND AFTER THE CLOSING, THE PARENT AND
THE BUYERS SHALL JOINTLY AND SEVERALLY INDEMNIFY, DEFEND, SAVE AND HOLD HARMLESS
THE SELLERS AND THEIR RESPECTIVE AFFILIATES, SUCCESSORS AND ASSIGNS AND EACH OF
THE FOREGOING’S RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, MEMBERS, EMPLOYEES AND
AGENTS (COLLECTIVELY, THE “SELLER INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND
ALL DAMAGES (WITHOUT DUPLICATION) ARISING OUT OF, RESULTING FROM OR IN
CONNECTION WITH:

 

(I)                                     THE BREACH OR FAILURE TO BE TRUE AND
CORRECT OF ANY REPRESENTATION OR WARRANTY MADE BY THE BUYERS AND THE PARENT IN
ARTICLE 6 OF THIS AGREEMENT (IT BEING AGREED THAT FOR PURPOSES OF SUCH RIGHT TO
INDEMNIFICATION, SUCH REPRESENTATIONS AND WARRANTIES SHALL BE DEEMED NOT TO BE
QUALIFIED BY ANY REFERENCES THEREIN TO KNOWLEDGE OR MATERIALITY GENERALLY, AND
ANY SUCH QUALIFICATION SHALL IN ALL RESPECTS BE DISREGARDED); AND

 

(II)                                  THE BREACH OF OR FAILURE TO PERFORM ANY
COVENANT OR AGREEMENT BY ANY BUYER OR THE PARENT CONTAINED IN THIS AGREEMENT,
THE ESCROW AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR THEREBY.

 

(E)           PROCEDURE.  ANY PARTY SEEKING INDEMNIFICATION UNDER THIS
SECTION 10.2 (BUT NOT, FOR THE AVOIDANCE OF DOUBT, UNDER SECTION 7.10,
SECTION 7.4(H) OR SECTION 7.21(C)) (AN “INDEMNIFIED PARTY”) SHALL GIVE THE PARTY
FROM WHOM INDEMNIFICATION IS BEING SOUGHT (AN “INDEMNIFYING PARTY”) NOTICE OF
ANY MATTER WHICH SUCH INDEMNIFIED PARTY HAS DETERMINED HAS GIVEN OR COULD GIVE
RISE TO A RIGHT OF INDEMNIFICATION UNDER THIS AGREEMENT AS SOON AS PRACTICABLE
AFTER SUCH INDEMNIFIED PARTY BECOMES AWARE OF ANY FACT, CONDITION OR EVENT WHICH
MAY GIVE RISE TO DAMAGES FOR WHICH INDEMNIFICATION MAY BE SOUGHT UNDER THIS
SECTION 10.2, AND SUCH NOTICE SHALL STATE THE NATURE AND BASIS OF THE CLAIM, THE
AMOUNT THEREOF TO THE EXTENT KNOWN AND A REFERENCE TO THE PROVISIONS OF THIS
AGREEMENT IN RESPECT OF WHICH SUCH RIGHT OF INDEMNIFICATION IS CLAIMED OR
ARISES; PROVIDED, THAT THE FAILURE TO GIVE NOTICE AS SOON AS PRACTICABLE SHALL
NOT RELEASE THE INDEMNIFYING PARTY FROM ANY OF ITS OBLIGATIONS EXCEPT TO THE
EXTENT THE INDEMNIFYING PARTY IS MATERIALLY PREJUDICED THEREBY.  THE LIABILITY
OF AN INDEMNIFYING PARTY UNDER THIS SECTION 10.2 WITH RESPECT TO DAMAGES ARISING
FROM CLAIMS OF ANY THIRD PARTY (INCLUDING ANY GOVERNMENTAL ENTITY) WHICH ARE
SUBJECT TO THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION 10.2 (“THIRD PARTY
CLAIMS”)

 

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SHALL BE GOVERNED BY AND CONTINGENT UPON THE FOLLOWING ADDITIONAL TERMS AND
CONDITIONS: IF AN INDEMNIFIED PARTY SHALL RECEIVE NOTICE OF ANY THIRD PARTY
CLAIM, THE INDEMNIFIED PARTY SHALL GIVE THE INDEMNIFYING PARTY NOTICE OF SUCH
THIRD PARTY CLAIM AS SOON AS REASONABLY PRACTICABLE; PROVIDED, THAT THE FAILURE
TO PROVIDE SUCH NOTICE SHALL NOT RELEASE THE INDEMNIFYING PARTY FROM ANY OF ITS
OBLIGATIONS UNDER THIS SECTION 10.2 EXCEPT TO THE EXTENT THE INDEMNIFYING PARTY
IS MATERIALLY PREJUDICED BY SUCH FAILURE.  THE INDEMNIFYING PARTY SHALL BE
ENTITLED TO ASSUME AND CONTROL THE DEFENSE OF SUCH THIRD PARTY CLAIM AT ITS
EXPENSE AND THROUGH COUNSEL OF ITS CHOICE IF IT GIVES NOTICE OF ITS INTENTION TO
DO SO TO THE INDEMNIFIED PARTY WITHIN THIRTY (30) DAYS OF THE RECEIPT OF SUCH
NOTICE FROM THE INDEMNIFIED PARTY; PROVIDED, THAT IF THE INDEMNIFIED PARTY SHALL
HAVE BEEN ADVISED BY COUNSEL THAT THERE ARE ONE OR MORE LEGAL OR EQUITABLE
DEFENSES AVAILABLE TO IT THAT ARE DIFFERENT FROM OR IN ADDITION TO THOSE
AVAILABLE TO THE INDEMNIFYING PARTY AND REPRESENTATION OF BOTH PARTIES BY THE
SAME COUNSEL WOULD BE INAPPROPRIATE DUE TO THE ACTUAL OR POTENTIAL DIFFERENCES
BETWEEN THEM, THEN THE INDEMNIFIED PARTY SHALL BE ENTITLED TO RETAIN ITS OWN
COUNSEL, AT THE EXPENSE OF THE INDEMNIFYING PARTY, SO LONG AS THE INDEMNIFYING
PARTY SHALL NOT BE OBLIGATED TO PAY THE REASONABLE FEES AND EXPENSES OF MORE
THAN ONE SEPARATE COUNSEL FOR ALL INDEMNIFIED PARTIES, TAKEN TOGETHER.  IF THE
INDEMNIFYING PARTY SHALL NOT ASSUME THE DEFENSE OF ANY THIRD PARTY CLAIM OR
LITIGATION RESULTING THEREFROM, THE INDEMNIFIED PARTY MAY DEFEND AGAINST SUCH
CLAIM OR LITIGATION IN SUCH MANNER AS IT MAY DEEM APPROPRIATE AND MAY SETTLE
SUCH CLAIM OR LITIGATION ON SUCH TERMS AS IT MAY DEEM APPROPRIATE; PROVIDED,
THAT IN SETTLING ANY CLAIM OR LITIGATION IN RESPECT OF WHICH INDEMNIFICATION IS
PAYABLE UNDER THIS ARTICLE 10, IT SHALL OBTAIN THE CONSENT OF THE INDEMNIFYING
PARTY WHICH SHALL NOT BE UNREASONABLY WITHHELD.  IN THE EVENT THE INDEMNIFYING
PARTY EXERCISES ITS RIGHT TO UNDERTAKE ANY SUCH DEFENSE AGAINST ANY SUCH THIRD
PARTY CLAIM AS PROVIDED ABOVE, THE INDEMNIFIED PARTY SHALL COOPERATE WITH THE
INDEMNIFYING PARTY IN SUCH DEFENSE, INCLUDING BY MAKING AVAILABLE TO THE
INDEMNIFYING PARTY ALL WITNESSES, PERTINENT RECORDS, MATERIALS AND INFORMATION
IN THE INDEMNIFIED PARTY’S POSSESSION OR UNDER THE INDEMNIFIED PARTY’S CONTROL
RELATING THERETO AND ALL PERSONNEL, PREMISES AND PROPERTIES OF THE INDEMNIFIED
PARTY RELATING THERETO, IN EACH CASE, AS IS REASONABLY REQUIRED BY THE
INDEMNIFYING PARTY.  SIMILARLY, IN THE EVENT THE INDEMNIFIED PARTY IS, DIRECTLY
OR INDIRECTLY, CONDUCTING THE DEFENSE AGAINST ANY SUCH THIRD PARTY CLAIM, THE
INDEMNIFYING PARTY SHALL COOPERATE WITH THE INDEMNIFIED PARTY IN SUCH DEFENSE,
INCLUDING BY MAKING AVAILABLE TO THE INDEMNIFIED PARTY ALL SUCH WITNESSES,
RECORDS, MATERIALS AND INFORMATION IN THE INDEMNIFYING PARTY’S POSSESSION OR
UNDER THE INDEMNIFYING PARTY’S CONTROL RELATING THERETO AND ALL PERSONNEL,
PREMISES AND PROPERTIES OF THE INDEMNIFYING PARTY RELATING THERETO, IN EACH
CASE, AS IS REASONABLY REQUIRED BY THE INDEMNIFIED PARTY.  THE INDEMNIFYING
PARTY SHALL NOT, WITHOUT THE WRITTEN CONSENT OF THE INDEMNIFIED PARTY,
(I) SETTLE OR COMPROMISE ANY THIRD PARTY CLAIM OR CONSENT TO THE ENTRY OF ANY
JUDGMENT WHICH DOES NOT INCLUDE AN UNCONDITIONAL WRITTEN RELEASE BY THE CLAIMANT
OR PLAINTIFF OF THE INDEMNIFIED PARTY FROM ALL LIABILITY IN RESPECT OF SUCH
THIRD PARTY CLAIM OR (II) SETTLE OR COMPROMISE ANY THIRD PARTY CLAIM IF THE
SETTLEMENT IMPOSES EQUITABLE REMEDIES OR MATERIAL OBLIGATIONS ON THE INDEMNIFIED
PARTY OTHER THAN FINANCIAL OBLIGATIONS FOR WHICH SUCH INDEMNIFIED PARTY WILL BE
INDEMNIFIED HEREUNDER.  NO THIRD PARTY CLAIM WHICH IS BEING DEFENDED IN GOOD
FAITH BY THE INDEMNIFYING PARTY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT
SHALL BE SETTLED OR COMPROMISED BY THE INDEMNIFIED PARTY WITHOUT THE WRITTEN
CONSENT OF THE INDEMNIFYING PARTY.

(F)            DEFINITION OF DAMAGES.  FOR PURPOSES OF SECTION 7.10, THIS
ARTICLE 10, SECTION 7.4(H) AND SECTION 7.21(C), THE TERM “DAMAGES” MEANS ANY AND
ALL COSTS, LOSSES, LIABILITIES, OBLIGATIONS, DAMAGES, LAWSUITS, DEFICIENCIES,
FINES, JUDGMENTS, SETTLEMENTS, PENALTIES, AND EXPENSES (WHETHER OR NOT ARISING
OUT OF THIRD PARTY CLAIMS), INCLUDING REASONABLE ATTORNEYS’

 

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FEES AND ALL AMOUNTS PAID IN INVESTIGATION, DEFENSE OR SETTLEMENT OF ANY OF THE
FOREGOING.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO
INDEMNIFYING PARTY SHALL BE REQUIRED TO INDEMNIFY OR HOLD HARMLESS ANY
INDEMNIFIED PARTY OR OTHERWISE COMPENSATE ANY INDEMNIFIED PARTY FOR DAMAGES WITH
RESPECT TO LOST PROFITS, RESTITUTION, DAMAGE TO REPUTATION, DIMINUTIONS IN
VALUE, MENTAL OR EMOTIONAL DISTRESS, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL,
SPECIAL OR PUNITIVE DAMAGES.

 

10.3.        Limits on Indemnification.  Notwithstanding anything in this
Agreement to the contrary:

 

(A)           NO AMOUNT SHALL BE PAYABLE BY MILLENNIUM PURSUANT TO
SECTION 10.2(A)(I), SECTION 10.2(A)(II), SECTION 10.2(A)(III) OR
SECTION 10.2(B) OR HOLDCO PURSUANT TO SECTION 10.2(A)(I), SECTION 10.2(A)(II),
SECTION 10.2(A)(III) OR SECTION 10.2(C), UNLESS THE AGGREGATE AMOUNT OF ALL
CLAIMS FOR DAMAGES PURSUANT TO SUCH SECTIONS COLLECTIVELY EXCEEDS $1,500,000
(THE “THRESHOLD AMOUNT”), AND THEN ONLY FOR THE AMOUNT BY WHICH SUCH DAMAGES
EXCEED THE THRESHOLD AMOUNT; PROVIDED, THAT THE THRESHOLD AMOUNT SHALL NOT APPLY
TO CLAIMS FOR DAMAGES ARISING OUT OF, RESULTING FROM OR IN CONNECTION WITH
(I) ANY FUNDAMENTAL REPRESENTATION AND (II) CLAIMS FOR FRAUD OR WILLFUL
MISREPRESENTATION, IN EACH CASE OF (I) AND (II) WHICH DAMAGES SHALL BE
INDEMNIFIED AGAINST IN THEIR ENTIRETY (BUT SHALL NOT COUNT FOR PURPOSES OF
DETERMINING WHETHER DAMAGES HAVE EXCEEDED THE THRESHOLD AMOUNT).

 

(B)           NO BUYER INDEMNIFIED PARTY MAY SEEK INDEMNIFICATION FOR ANY
DAMAGES RELATED TO THE MEADOWS PROPERTY AGAINST THE SELLERS PURSUANT TO
SECTION 10.2(A) OR SECTION 7.10 AND NO AMOUNT SHALL BE PAYABLE BY THE SELLERS
WITH RESPECT TO ANY SUCH CLAIMED DAMAGES, UNTIL THE BUYER INDEMNIFIED PARTY HAS
FIRST MADE AND RESOLVED A CLAIM FOR SUCH DAMAGES PURSUANT TO THE TERMS OF ANY
INDEMNITY AVAILABLE UNDER THE MEADOWS PURCHASE AGREEMENT AND THE HOLDBACK
AGREEMENT; PROVIDED, THAT IN SETTLING OR RESOLVING ANY SUCH CLAIM, THE BUYER
INDEMNIFIED PARTY SHALL CONSULT WITH THE SELLERS; PROVIDED, FURTHER, THAT UPON
SUCH RESOLUTION, THE SELLERS SHALL INDEMNIFY THE BUYER INDEMNIFIED PARTIES
AGAINST SUCH DAMAGES PURSUANT TO SECTION 10.2(A) OR SECTION 7.10 TO THE EXTENT
SUCH DAMAGES ARE IN EXCESS OF THE AMOUNT PAID PURSUANT TO THE RSA, THE MEADOWS
PURCHASE AGREEMENT OR THE HOLDBACK AGREEMENT AND FOR WHICH DAMAGES RELATED TO
THE MEADOWS PROPERTY ARE PAYABLE PURSUANT TO ARTICLE 10 OR SECTION 7.10.

 

(C)           THE MAXIMUM AGGREGATE AMOUNT OF DAMAGES FOR WHICH INDEMNITY MAY BE
RECOVERED FROM MILLENNIUM AND ITS REPRESENTATIVES PURSUANT TO
SECTION 10.2(A)(I), SECTION 10.2(A)(II) AND SECTION 10.2(B) AND HOLDCO AND ITS
REPRESENTATIVES PURSUANT TO SECTION 10.2(A)(I), SECTION 10.2(A)(II) AND
SECTION 10.2(C) SHALL BE AN AGGREGATE AMOUNT EQUAL TO $25,000,000 (THE
“INDEMNIFICATION CAP”); PROVIDED, THAT THE INDEMNIFICATION CAP SHALL NOT APPLY
TO CLAIMS FOR DAMAGES ARISING OUT OF, RESULTING FROM OR IN CONNECTION WITH
(I) BREACHES OF ANY FUNDAMENTAL REPRESENTATION AND (II) CLAIMS FOR FRAUD OR
WILLFUL MISREPRESENTATION, IN EACH CASE OF (I) AND (II) WHICH DAMAGES SHALL BE
INDEMNIFIED AGAINST IN THEIR ENTIRETY (AND SHALL NOT COUNT FOR PURPOSES OF
DETERMINING WHETHER DAMAGES HAVE EXCEEDED THE INDEMNIFICATION CAP).

 

(D)           IF AN INDEMNIFIED PARTY RECOVERS DAMAGES FROM AN INDEMNIFYING
PARTY UNDER SECTION 10.2 OR SECTION 7.10, THE INDEMNIFYING PARTY SHALL BE
SUBROGATED, TO THE EXTENT OF SUCH RECOVERY, TO THE INDEMNIFIED PARTY’S RIGHTS
AGAINST ANY THIRD PARTY WITH RESPECT TO SUCH RECOVERED LOSSES, SUBJECT TO THE
SUBROGATION RIGHTS OF ANY INSURER PROVIDING INSURANCE COVERAGE

 

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UNDER ONE OF THE INDEMNIFIED PARTY’S POLICIES AND EXCEPT TO THE EXTENT THAT THE
GRANT OF SUBROGATION RIGHTS TO THE INDEMNIFYING PARTY IS PROHIBITED BY THE TERMS
OF THE APPLICABLE INSURANCE POLICY.

 

(E)           AN INDEMNIFIED PARTY SHALL NOT BE ENTITLED TO MULTIPLE RECOVERY
FOR THE SAME DAMAGES.

 

10.4.        Escrow

.

(A)           ANY AND ALL CLAIMS FOR DAMAGES UNDER SECTION 10.2(A)(I),
SECTION 10.2(A)(II), SECTION 10.2(B) AND SECTION 10.2(C) BY THE BUYER
INDEMNIFIED PARTIES AGAINST THE SELLERS UP TO AN AMOUNT EQUAL TO THE INDEMNITY
ESCROW AMOUNT SHALL BE PAYABLE SOLELY FROM THE INDEMNITY ESCROW ACCOUNT WITH NO
RECOURSE BY THE BUYER INDEMNIFIED PARTIES AGAINST MILLENNIUM OR HOLDCO DIRECTLY
OR PERSONALLY OR AGAINST ANY ASSETS OF MILLENNIUM OR HOLDCO OR THEIR RESPECTIVE
AFFILIATES; PROVIDED, THAT TO THE EXTENT THE AGGREGATE AMOUNT OF DAMAGES WITH
RESPECT TO CLAIMS FOR WHICH THE BUYER INDEMNIFIED PARTIES MAY SEEK INDEMNITY
FROM MILLENNIUM PURSUANT TO SECTION 10.2(A)(I), SECTION 10.2(A)(II) OR
SECTION 10.2(B) OR HOLDCO PURSUANT TO SECTION 10.2(A)(I), SECTION 10.2(A)(II) OR
SECTION 10.2(C) IS IN EXCESS OF THE INDEMNITY ESCROW AMOUNT, THE BUYER
INDEMNIFIED PARTIES MAY PURSUE SUCH CLAIMS AGAINST MILLENNIUM OR HOLDCO DIRECTLY
AND PERSONALLY, SUBJECT TO THE TERMS OF THIS ARTICLE 10, INCLUDING
SECTION 10.2(E).  ALL OTHER CLAIMS FOR INDEMNIFICATION PURSUANT TO SECTION 10.2
AND SECTION 7.10 MAY, BUT SHALL NOT BE REQUIRED TO BE, BROUGHT BY THE BUYER
INDEMNIFIED PARTIES AGAINST THE INDEMNITY ESCROW ACCOUNT; PROVIDED, THAT CLAIMS
FOR INDEMNIFICATION PURSUANT TO SECTION 7.10 FROM AND INCLUDING THE SECOND
ANNIVERSARY OF THE CLOSING DATE TO THE END OF THE ESCROW PERIOD SHALL FIRST BE
PAYABLE FROM THE INDEMNITY ESCROW ACCOUNT AND TO THE EXTENT SUCH CLAIMS ARE IN
EXCESS OF ANY AMOUNT OF THE INDEMNITY ESCROW AMOUNT REMAINING IN THE INDEMNITY
ESCROW ACCOUNT, THE BUYER INDEMNIFIED PARTIES MAY PURSUE SUCH CLAIMS AGAINST
MILLENNIUM OR HOLDCO DIRECTLY OR PERSONALLY.

 

(B)           THE INDEMNITY ESCROW AMOUNT SHALL BE HELD FOR THREE (3) YEARS
AFTER THE CLOSING DATE (THE “ESCROW PERIOD”), EXCEPT THAT, TO THE EXTENT
PERMITTED UNDER THE ESCROW AGREEMENT, THE INDEMNITY ESCROW AMOUNT MAY BE
WITHHELD AFTER THE EXPIRATION OF THE ESCROW PERIOD TO SATISFY (I) CLAIMS FOR
INDEMNIFICATION THAT ARE THE SUBJECT OF AN INDEMNITY CLAIM BY A BUYER
INDEMNIFIED PARTY PURSUANT TO A NOTICE DELIVERED TO THE SELLERS PRIOR TO THE
EXPIRATION OF THE ESCROW PERIOD OR (II) CLAIMS FIRST BEING PURSUED AGAINST THIRD
PARTIES IN ACCORDANCE WITH SECTION 10.3(B) OR SECTION 10.7. WITHIN ONE
(1) BUSINESS DAY AFTER THE FINAL RESOLUTION OF A PARTICULAR CLAIM (SUCH FINAL
RESOLUTION TO BE EVIDENCED BY (I) JOINT WRITTEN INSTRUCTIONS TO THE ESCROW AGENT
(“JOINT INSTRUCTIONS”), OR (II) A FINAL NON-APPEALABLE ORDER OF A COURT OF
COMPETENT JURISDICTION), THE BUYERS AND THE SELLERS SHALL DELIVER JOINT
INSTRUCTIONS TO THE ESCROW AGENT TO (X) PAY TO THE BUYERS FROM THE INDEMNITY
ESCROW ACCOUNT AN AMOUNT EQUAL TO THE DAMAGES IN RESPECT OF SUCH CLAIM TO WHICH
THE BUYER INDEMNIFIED PARTIES SHALL HAVE BEEN DETERMINED TO BE ENTITLED AND, IF
SUCH FINAL RESOLUTION HAS OCCURRED AFTER THE ESCROW PERIOD, (Y) PAY TO THE
SELLERS THE EXCESS, IF ANY, OF (A) THE REMAINING AMOUNT IN THE INDEMNITY ESCROW
ACCOUNT OVER (B) THE AGGREGATE AMOUNT OF UNRESOLVED CLAIMS, IN ACCORDANCE WITH
EACH SELLER’S PAYMENT PERCENTAGE AS SET FORTH IN EXHIBIT D, BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS.

 

(C)           INSURANCE.  PAYMENTS BY THE SELLERS PURSUANT TO
SECTION 10.2(A)(I) OR SECTION 7.10 SHALL BE LIMITED TO (I) THE AMOUNT OF ANY
LIABILITY OR DAMAGE THAT REMAINS AFTER DEDUCTING THEREFROM ANY INSURANCE
PROCEEDS AND ANY INDEMNITY, CONTRIBUTION OR OTHER SIMILAR

 

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PAYMENT ACTUALLY RECOVERED BY THE BUYER FROM ANY THIRD PARTY WITH RESPECT
THERETO, NET OF ANY TAXES IMPOSED ON RECEIPT OF SUCH AMOUNTS, PLUS
(II) OUT-OF-POCKET COSTS OF COLLECTION THEREOF, CO-PAYS, INCREASES IN PREMIUMS
OR DEDUCTIBLES AND RELATED EXPENSES.

 

10.5.        Tax Benefit.  The amount of any payment to an Indemnified Party
pursuant to Article 10 or Section 7.10 shall be reduced by the amount of any Tax
Benefit Actually Realized by the Indemnified Party, which Tax Benefit is solely
attributable to the payment of the Damages upon which the claim for indemnity is
based and shall be determined as follows:

 

(A)           NO LATER THAN 45 DAYS AFTER THE FILING OF A TAX RETURN FOR ANY
TAXABLE PERIOD THAT INCLUDES A DATE UPON WHICH ANY AMOUNT WAS PAID OR ACCRUED BY
THE INDEMNIFIED PARTY IN RESPECT OF THE LIABILITY UPON WHICH THE CLAIM FOR
INDEMNITY IS BASED, THE INDEMNIFIED PARTY SHALL PROVIDE THE INDEMNIFYING PARTY A
DETAILED STATEMENT (A “TAX BENEFIT STATEMENT”) SPECIFYING THE AMOUNT, IF ANY, OF
ANY TAX BENEFIT THAT WAS ACTUALLY REALIZED BY THE INDEMNIFIED PARTY FOR SUCH TAX
PERIOD. TO THE EXTENT THAT ANY DEDUCTIONS OR OTHER TAX ITEMS THAT COULD GIVE
RISE TO A TAX REDUCTION OR SAVINGS DO NOT RESULT IN SUCH A TAX REDUCTION OR
SAVINGS BEING ACTUALLY REALIZED IN THE YEAR DESCRIBED IN THE PREVIOUS SENTENCE,
THIS SECTION 10.6(A) SHALL APPLY TO EACH SUBSEQUENT TAXABLE PERIOD OF THE
INDEMNIFIED PARTY, AS THE CASE MAY BE, UNTIL EITHER SUCH TAX SAVINGS ARE
ACTUALLY REALIZED (RESULTING IN A TAX BENEFIT) OR THE LOSSES OR OTHER
CARRYFORWARDS TO WHICH SUCH DEDUCTIONS OR OTHER TAX ITEMS GAVE RISE EXPIRE
UNUSED, IF APPLICABLE.  FOR EACH RELEVANT TAXABLE PERIOD, THE INDEMNIFYING PARTY
SHALL BE PROVIDED WITH FULL ACCESS TO THE NON-PROPRIETARY WORK PAPERS AND OTHER
MATERIALS AND INFORMATION PREPARED BY THE INDEMNIFIED PARTY OR ITS ACCOUNTANTS
IN CONNECTION WITH THE REVIEW OF THE TAX BENEFIT STATEMENT; PROVIDED, HOWEVER,
THAT IN NO EVENT SHALL AN INDEMNIFYING PARTY HAVE ANY ACCESS TO SUCH
NON-PROPRIETARY WORK PAPERS AND OTHER MATERIALS AND INFORMATION RELATED TO ANY
AFFILIATE OF PARENT OTHER THAN CROWN ONE AND CROWN TWO; AND PROVIDED, FURTHER,
THAT IN NO EVENT SHALL AN INDEMNIFYING PARTY HAVE ANY ACCESS TO PROPRIETARY WORK
PAPERS AND OTHER MATERIALS AND INFORMATION.  IF THE INDEMNIFYING PARTY DISAGREES
IN ANY RESPECT WITH THE INDEMNIFIED PARTY’S COMPUTATION OF THE AMOUNT OF THE TAX
BENEFIT ACTUALLY REALIZED, THE INDEMNIFYING PARTY MAY, ON OR PRIOR TO 45 DAYS
AFTER THE RECEIPT OF THE TAX BENEFIT STATEMENT, DELIVER A NOTICE TO THE
INDEMNIFIED PARTY SETTING FORTH IN REASONABLE DETAIL THE BASIS FOR THE
INDEMNIFYING PARTY’S DISAGREEMENT THEREWITH (THE “TAX BENEFIT DISPUTE NOTICE”). 
IF NO TAX BENEFIT DISPUTE NOTICE IS RECEIVED BY THE INDEMNIFIED PARTY ON OR
PRIOR TO THE 45TH DAY AFTER THE INDEMNIFYING PARTY’S RECEIPT OF THE TAX BENEFIT
STATEMENT FROM THE INDEMNIFIED PARTY, THE TAX BENEFIT STATEMENT SHALL BE DEEMED
ACCEPTED.

 

(B)           WITHIN 15 DAYS AFTER THE INDEMNIFIED PARTY’S RECEIPT OF A TAX
BENEFIT DISPUTE NOTICE, UNLESS THE MATTERS IN THE TAX BENEFIT DISPUTE NOTICE
HAVE OTHERWISE BEEN RESOLVED BY MUTUAL AGREEMENT OF THE PARTIES, THE INDEMNIFIED
PARTY AND THE INDEMNIFYING PARTY SHALL JOINTLY SELECT A NATIONALLY-RECOGNIZED
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT (THE “TAX BENEFIT ACCOUNTANT”);
PROVIDED, HOWEVER, THAT IF THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY ARE
UNABLE TO AGREE UPON THE TAX BENEFIT ACCOUNTANT WITHIN SUCH 15-DAY PERIOD, THEN
THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY SHALL EACH SELECT A
NATIONALLY-RECOGNIZED INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT WHICH SHALL THEN
JOINTLY CHOOSE THE TAX BENEFIT ACCOUNTANT WITHIN 15 DAYS THEREAFTER. THE TAX
BENEFIT ACCOUNTANT SHALL CONDUCT SUCH REVIEW OF THE WORK PAPERS AND SUCH OTHER
MATERIALS AND INFORMATION, AND THE TAX BENEFIT DISPUTE NOTICE, AND ANY
SUPPORTING DOCUMENTATION AS THE TAX BENEFIT ACCOUNTANT IN THE TAX BENEFIT
ACCOUNTANT’S

 

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SOLE DISCRETION DEEMS NECESSARY, AND THE TAX BENEFIT ACCOUNTANT SHALL CONDUCT
SUCH HEARINGS OR HEAR SUCH PRESENTATIONS BY THE PARTIES OR OBTAIN SUCH OTHER
INFORMATION AS THE TAX BENEFIT ACCOUNTANT IN THE TAX BENEFIT ACCOUNTANT’S SOLE
DISCRETION DEEMS NECESSARY.

 

(C)           THE TAX BENEFIT ACCOUNTANT SHALL, AS PROMPTLY AS PRACTICABLE AND
IN NO EVENT LATER THAN 45 DAYS FOLLOWING THE DATE OF THE TAX BENEFIT
ACCOUNTANT’S RETENTION, DELIVER TO THE INDEMNIFYING PARTY AND THE INDEMNIFIED
PARTY A REPORT (THE “TAX BENEFIT REPORT”) IN WHICH THE TAX BENEFIT ACCOUNTANT
SHALL, AFTER REVIEWING THE DISPUTED ITEMS SET FORTH IN THE TAX BENEFIT DISPUTE
NOTICE, DETERMINE WHAT ADJUSTMENTS, IF ANY, SHOULD BE MADE TO THE AMOUNT OF THE
TAX BENEFIT ACTUALLY REALIZED. THE TAX BENEFIT REPORT SHALL SET FORTH, IN
REASONABLE DETAIL, THE TAX BENEFIT ACCOUNTANT’S DETERMINATION WITH RESPECT TO
THE DISPUTED ITEMS OR AMOUNTS SPECIFIED IN THE TAX BENEFIT DISPUTE NOTICE, AND
THE REVISIONS, IF ANY, TO BE MADE TO THE AMOUNT OF THE TAX BENEFIT ACTUALLY
REALIZED, TOGETHER WITH SUPPORTING CALCULATIONS.  ALL FEES AND EXPENSES RELATING
TO THIS WORK OF THE TAX BENEFIT ACCOUNTANT SHALL BE BORNE EQUALLY BY THE
INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY.  THE TAX BENEFIT REPORT SHALL BE
FINAL AND BINDING UPON THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY, SHALL
BE DEEMED A FINAL ARBITRATION AWARD THAT IS BINDING ON EACH OF THE INDEMNIFIED
PARTY AND THE INDEMNIFYING PARTY, AND NO PARTY SHALL SEEK FURTHER RECOURSE TO
COURTS, OTHER ARBITRAL TRIBUNALS OR OTHERWISE.  THE AMOUNT, IF ANY, OF THE TAX
BENEFIT ACTUALLY REALIZED SET FORTH IN THE TAX BENEFIT REPORT SHALL REDUCE THE
PAYMENT OF THE LIABILITY UPON WHICH THE CLAIM FOR INDEMNITY IS BASED AND THE NET
AMOUNT OF SUCH PAYMENT SHALL BE PAID TO THE INDEMNIFIED PARTY.

 

(D)           IF THE INDEMNIFYING PARTY HAS NOT PAID THE INDEMNIFIED PARTY THE
DAMAGES ATTRIBUTABLE TO THE CLAIM GIVING RISE TO A TAX BENEFIT BEING ACTUALLY
REALIZED AT THE TIME THAT SUCH TAX BENEFIT IS ACTUALLY REALIZED AND EITHER
(I) THE TAX BENEFIT STATEMENT HAS BEEN ACCEPTED OR (II) THE TAX BENEFIT REPORT
HAS BEEN FINALIZED, AS APPLICABLE, THE AMOUNT TO BE PAID BY THE INDEMNIFYING
PARTY TO THE INDEMNIFIED PARTY SHALL BE REDUCED BY THE AMOUNT OF SUCH TAX
BENEFIT.  IF THE INDEMNIFYING PARTY HAS PAID THE CLAIM OF THE INDEMNIFIED PARTY
AT THE TIME THAT SUCH TAX BENEFIT IS ACTUALLY REALIZED AND EITHER (X) THE TAX
BENEFIT STATEMENT HAS BEEN ACCEPTED OR (Y) THE TAX BENEFIT REPORT HAS BEEN
FINALIZED, AS APPLICABLE, THE INDEMNIFIED PARTY SHALL PAY THE INDEMNIFYING PARTY
THE AMOUNT OF SUCH TAX BENEFIT NO LATER THAN TWENTY (20) BUSINESS DAYS AFTER
SUCH DATE.

 

10.6.        Intentionally Omitted

.

10.7.        Exclusive Remedy.  Other than claims for or in the nature of fraud
or willful misrepresentation, each party hereby acknowledges and agrees that,
from and after the Closing, without limitation of any available equitable
remedies, its sole remedy relating to the CCR Units, the Blocker Units, the
Business or the subject matter of this Agreement shall be pursuant to the
indemnification provisions of this Article 10, Section 7.10, Section 7.4(h) and
Section 7.21(c).  In furtherance of the foregoing, each party hereby waives,
from and after the Closing, to the fullest extent permitted by law, any and all
other rights, claims, and causes of action it may have against the other parties
or their respective Representatives and Affiliates relating to the Millennium
Units, the HoldCo Units, the Blocker Units, the Business or the subject matter
of this Agreement, other than claims for or in the nature of fraud.

 

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10.8.        Adjustment of Purchase Price.  All payments for indemnification
made pursuant to this Agreement shall be treated for all Tax purposes as an
adjustment to the Purchase Price.

 

ARTICLE 11

General

 

11.1.        Entire Agreement.  This Agreement, including the Exhibits hereto,
the Buyers and Sellers Disclosure Schedules and the other agreements, documents
and written understandings referred to herein or otherwise entered into by the
parties hereto on the date hereof (including the Escrow Agreement) and the
Confidentiality Agreement, dated March 12, 2009, between Parent and CCR (the
“Confidentiality Agreement”), constitute the entire agreement and understanding
and supersede all other prior covenants, agreements, undertakings, obligations,
promises, arrangements, communications, representations and warranties, whether
oral or written, by any party hereto or by any director, officer, employee,
agent, Affiliate or Representative of any party hereto.  Except for the
documents referred to in the immediately preceding sentence, there are no
covenants, agreements, undertakings or obligations with respect to the subject
matter of this Agreement other than those expressly set forth or referred to
herein and no representations or warranties of any kind or nature whatsoever,
express or implied, including any implied warranties of merchantability or
fitness for a particular purpose, are made or shall be deemed to be made herein
by the parties hereto except those expressly made herein.

 

11.2.        No Third Party Rights.  Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto,
any rights or remedies of any nature whatsoever under or by reason of this
Agreement or any provision of this Agreement.  This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their respective successors and permitted assigns.

 

11.3.        Counterparts.  This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  The parties agree
and acknowledge that delivery of a signature by facsimile shall constitute
execution by such signatory.

 

11.4.        Headings.  The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning, construction or interpretation of, this Agreement.

 

11.5.        Applicable Law.  This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware,
regardless of the laws that might otherwise govern under the applicable
principles of conflicts of laws.

 

11.6.        Enforcement.  The parties agree that irreparable damage would occur
and that the parties would not have any adequate remedy at law in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and

 

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provisions of this Agreement in any federal or state court located in the State
of Delaware, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of the federal and
state courts located in the State of Delaware in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court, and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal or state court
in the State of Delaware.

 

11.7.        Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

 

11.8.        Waiver of Conditions

.

(A)           NO CLAIM OR RIGHT ARISING OUT OF THIS AGREEMENT OR THE DOCUMENTS
REFERRED TO IN THIS AGREEMENT CAN BE DISCHARGED BY ONE PARTY, IN WHOLE OR IN
PART, BY A WAIVER OR RENUNCIATION OF THE CLAIM OR RIGHT UNLESS IN WRITING SIGNED
BY THE OTHER PARTY.  NO WAIVER THAT MAY BE GIVEN BY A PARTY WILL BE APPLICABLE
EXCEPT IN THE SPECIFIC INSTANCE FOR WHICH IT IS GIVEN.  NO NOTICE TO OR DEMAND
ON ONE PARTY WILL BE DEEMED TO BE A WAIVER OF ANY OBLIGATION OF SUCH PARTY OR OF
THE RIGHT OF THE PARTY GIVING SUCH NOTICE OR DEMAND TO TAKE FURTHER ACTION
WITHOUT NOTICE OR DEMAND AS PROVIDED IN THIS AGREEMENT OR THE DOCUMENTS REFERRED
TO IN THIS AGREEMENT.

 

(B)           EXCEPT AS OTHERWISE SET FORTH HEREIN, THE RIGHTS AND REMEDIES OF
THE PARTIES HERETO ARE CUMULATIVE AND NOT ALTERNATIVE. EXCEPT WHERE A SPECIFIC
PERIOD FOR ACTION OR INACTION IS PROVIDED HEREIN, NEITHER THE FAILURE NOR ANY
DELAY ON THE PART OF ANY PARTY IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE UNDER
THIS AGREEMENT OR THE DOCUMENTS REFERRED TO IN THIS AGREEMENT SHALL OPERATE AS A
WAIVER THEREOF, NOR SHALL ANY WAIVER ON THE PART OF ANY PARTY OF ANY SUCH RIGHT,
POWER OR PRIVILEGE, NOR ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER
OR PRIVILEGE, PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF
ANY OTHER SUCH RIGHT, POWER OR PRIVILEGE.  THE FAILURE OF A PARTY TO EXERCISE
ANY RIGHT CONFERRED HEREIN WITHIN THE TIME REQUIRED SHALL CAUSE SUCH RIGHT TO
TERMINATE WITH RESPECT TO THE TRANSACTION OR CIRCUMSTANCES GIVING RISE TO SUCH
RIGHT, BUT NOT TO ANY SUCH RIGHT ARISING AS A RESULT OF ANY OTHER TRANSACTIONS
OR CIRCUMSTANCES.

 

11.9.        Transaction Expenses.  Whether or not the transactions contemplated
by this Agreement or the Escrow Agreement are consummated, each party shall pay
its own fees and expenses incident to the negotiation, preparation, execution,
delivery and performance hereof and thereof, including the fees and expenses of
its counsel, accountants and other experts, except as expressly provided
herein.  All fees associated with the investment banking services provided by
Deutsche Bank and Mercanti Securities, LLC and legal services of Munger,
Tolles & Olson, LLP, Santoro, Driggs, Walch, Kearney, Holley and Thompson,
Brownsten Hyatt Farber Schreck, DLA Piper US LLP, and Fox Rothschild LLP and all
other service providers to the Sellers in connection with this Agreement and the
transactions contemplated hereby shall not be expenses of the Companies, and
shall be paid by the Sellers at the Closing.

 

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11.10.      Construction.  Each party has been represented by counsel of its
choice in the negotiation of this Agreement.  This Agreement shall be deemed to
have been drafted by each of the parties hereto jointly, and no rule of
construction shall be invoked respecting the authorship hereof.

 

11.11.      Severability.  In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such provision or provisions shall be ineffective only to the
extent of such invalidity, illegality or unenforceability, without invalidating
the remainder of such provision or provisions or the remaining provisions of
this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained
herein, unless such a construction would be unreasonable.

 

11.12.      Amendments.  This Agreement may only be amended by a written
document signed by the Buyers and the Sellers.  Until such an amendment is
signed by both parties, any other agreements, understandings, writings or oral
promises or representations that are at odds with the terms of this Agreement
will be of no effect and will not in any way be binding upon the parties.

 

11.13.      Assignments.

 

(A)           NONE OF THE BUYERS NOR THE PARENT MAY ASSIGN ANY OF THEIR RIGHTS
OR OBLIGATIONS UNDER THIS AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE
SELLERS AND ANY PURPORTED ASSIGNMENT WITHOUT SUCH CONSENT SHALL BE VOID, EXCEPT
THAT EACH BUYER MAY ASSIGN THIS AGREEMENT TO ITS DIRECT OR INDIRECT WHOLLY-OWNED
AFFILIATE.

 

(B)           THE SELLERS MAY NOT ASSIGN ANY OF THEIR RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE BUYERS AND ANY
PURPORTED ASSIGNMENT WITHOUT SUCH CONSENT SHALL BE VOID.

 

11.14.      Notices.  All notices, requests, instructions, claims, demands,
consents and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given on the date
delivered by hand or by courier service such as Federal Express, or by other
messenger (or, if delivery is refused, upon presentment) or upon receipt by
facsimile transmission (with confirmation), or upon delivery by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses:

 

If to the Buyers:

 

The Corporation Trust Company

1209 Orange Street

Wilmington, Delaware  19801

Attention:   Scott Lascala

      Service of Process Department

Facsimile:  (302) 655-7813

 

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With a copy to:

 

Crown Limited

8 Whiteman Street

Southbank, Victoria 3006

Australia

Attn: Company Secretary

Facsimile: + 61 3 9292 8815

 

and

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Patricia Moran

Facsimile: (212) 735-2000

 

If to the Parent:

 

Crown Limited

8 Whiteman Street

Southbank, Victoria 3006

Australia

Attn: Company Secretary

Facsimile: + 61 3 9292 8815

 

With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Patricia Moran

Facsimile: (212) 735-2000

 

If to the Sellers:

 

Millennium Gaming, Inc.

9107 West Russell Road

Las Vegas, Nevada 89148

Attn: Chief Executive Officer

Facsimile: (702) 856-5101

 

and

 

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OCM Holdco, LLC

333 South Grand Avenue, 28th Floor

Los Angeles, California 90071

Attn: Stephen A. Kaplan

Facsimile: (213) 830-6377

 

With a copy to:

 

Munger, Tolles & Olson LLP

355 South Grand Avenue, 35th Floor

Los Angeles, California 90071

Attn: Sandra A. Seville-Jones

Facsimile: (213) 683-5126

 

or to such other Persons or addresses as the Person to whom notice is given may
have previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).

 

11.15.      Further Assurances.  Without limiting the provisions of Section 7.4,
the parties hereto shall use commercially reasonable efforts to do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments or
documents as any other party may reasonably request in order to carry out the
intent and purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

11.16.      Confidentiality.  The disclosure of confidential or proprietary
information by the Sellers or the Buyers to the other shall be governed by the
terms and conditions of the Confidentiality Agreement.  Notwithstanding anything
to the contrary set forth herein or in any other understanding or agreement
between the parties hereto, the parties acknowledge and agree that any
obligations of confidentiality contained herein and therein shall not apply to
the tax treatment and tax structure of this Agreement upon the earlier to occur
of (i) the date of the public announcement of discussions relating to the sale
and purchase described herein, (ii) the date of the public announcement of sale
and purchase described herein, or (iii) the date of the execution of this
Agreement, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that the foregoing is not intended to affect each party’s
privilege to maintain, in its sole discretion, the confidentiality of
communications with its attorneys or with a federally authorized tax
practitioner under Section 7525 of the Internal Revenue Code.

 

11.17.      Additional Rules of Construction.  The following provisions shall be
applied wherever appropriate herein:

 

(A)           “HEREIN,” “HEREBY,” “HEREUNDER,” “HEREOF” AND OTHER EQUIVALENT
WORDS SHALL REFER TO THIS AGREEMENT AS AN ENTIRETY AND NOT SOLELY TO THE
PARTICULAR PORTION OF THIS AGREEMENT IN WHICH ANY SUCH WORD IS USED;

 

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(B)           ALL DEFINITIONS SET FORTH HEREIN SHALL BE DEEMED APPLICABLE
WHETHER THE WORDS DEFINED ARE USED HEREIN IN THE SINGULAR OR THE PLURAL;

 

(C)           ALL PRONOUNS AND ANY VARIATIONS THEREOF REFER TO THE MASCULINE,
FEMININE OR NEUTER, SINGULAR OR PLURAL, AS THE CONTEXT MAY REQUIRE;

 

(D)           THE WORDS “INCLUDE” AND “INCLUDING” AND VARIATIONS THEREOF SHALL
NOT BE DEEMED TERMS OF LIMITATION, BUT RATHER SHALL BE DEEMED TO BE FOLLOWED BY
THE WORDS “WITHOUT LIMITATION”;

 

(E)           ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP;

 

(F)            THE CAPTIONS AND DESCRIPTIVE HEADINGS HEREIN ARE INCLUDED FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL BE IGNORED IN THE CONSTRUCTION OR
INTERPRETATION HEREOF;

 

(G)           ANY REFERENCES HEREIN TO A PARTICULAR SECTION, ARTICLE, EXHIBIT OR
SCHEDULE MEANS A SECTION OR ARTICLE OF, OR AN EXHIBIT OR SCHEDULE TO, THIS
AGREEMENT UNLESS ANOTHER AGREEMENT IS SPECIFIED;

 

(H)           THE EXHIBITS AND THE SELLERS DISCLOSURE SCHEDULES ATTACHED HERETO
ARE INCORPORATED HEREIN BY REFERENCE AND SHALL BE CONSIDERED PART OF THIS
AGREEMENT AS IF FULLY SET FORTH HEREIN; AND

 

(I)            ALL REFERENCES TO “$” OR “DOLLARS” SHALL MEAN UNITED STATES
DOLLARS.

 

11.18.      Enforcement of this Agreement.  Subject to Section 11.6 above, the
parties hereto agree that money damages or other remedy at law would not be
sufficient or adequate remedy for any breach or violation of, or default under,
this Agreement by them and that in addition to all other remedies available to
them, each of them shall be entitled to the fullest extent permitted by law to
an injunction restraining such breach, violation or default and to other
equitable relief, including specific performance, with bond or other security
being required.

 

11.19.      Knowledge.  When references are made in this Agreement to
information being “to the knowledge of” a party hereto or similar language, such
knowledge shall refer to the actual knowledge of: (a) for the purposes of
Article 4 and Article 5, William Paulos, William Wortman, and Tom Lettero for
Millennium, and Stephen Kaplan and Skardon Baker for HoldCo; (b) for the
purposes of Article 5, William Paulos, William Wortman, Tom Lettero, and Guy
Hillyer; and (c) for the purposes of Article 6, Rowen Craigie and Geoff
Kleemann.  Such individuals shall be deemed to have “knowledge” of a particular
fact or other matter if such individual is actually aware of such fact or other
matter.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.

 

 

Signed for CROWN LIMITED by its

 

 

attorney under power of attorney in the

 

 

presence of:

 

 

 

 

 

/s/ Garry Besson

 

/s/Guy Jalland

Signature of witness

 

Signature of attorney

 

 

 

Garry Besson

 

Guy Jalland

Name of witness (print)

 

Name of attorney (print)

 

 

 

 

 

 

Signed for CROWN CCR GROUP

 

 

INVESTMENTS ONE, LLC by its

 

 

attorney under power of attorney in the

 

 

presence of:

 

 

 

 

 

/s/ Garry Besson

 

/s/Guy Jalland

Signature of witness

 

Signature of attorney

 

 

 

Garry Besson

 

Guy Jalland

Name of witness (print)

 

Name of attorney (print)

 

 

 

 

 

 

Signed for CROWN CCR GROUP

 

 

INVESTMENTS TWO, LLC by its

 

 

attorney under power of attorney in the

 

 

presence of:

 

 

 

 

 

/s/ Garry Besson

 

/s/Guy Jalland

Signature of witness

 

Signature of attorney

 

 

 

Garry Besson

 

Guy Jalland

Name of witness (print)

 

Name of attorney (print)

 

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

 

SELLERS:

 

MILLENNIUM GAMING, INC.

 

 

 

 

 

By:

/s/ William J. Paulos

 

Name:

William J. Paulos

 

Title:

President

 

 

 

 

 

OCM HOLDCO, LLC

 

 

 

 

 

By:

/s/ Stephen A. Kaplan

 

Name:

Stephen A. Kaplan

 

Title:

Manager

 

 

 

 

 

By:

/s/ Ronald N. Beck

 

Name:

Ronald N. Beck

 

Title:

Manager

 

 

 

COMPANY:

 

CANNERY CASINO RESORTS, LLC

 

 

 

 

 

By:

/s/ William C. Wortman

 

Name:

William C. Wortman

 

Title:

Manager

 

 

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